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Exhibit 10.13
EMPLOYMENT AGREEMENT
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This is an agreement between Cardinal Health, Inc., an Ohio
corporation (the "Company" ) and Xxxxx X. Xxxxxx (the "Executive"), dated as of
the 12th day of May, 1998.
1. Employment Period. The Company shall employ the Executive,
and the Executive hereby accepts such employment, on the terms and conditions
set forth in this Agreement, for the period commencing on May 12, 1998 (the
"Effective Date") and ending on the third anniversary of the Effective Date (the
"Employment Period").
2. Position and Duties. (a) During the Employment Period, the
Executive shall be employed by the Company, and shall perform such duties and
responsibilities of an executive nature as may be determined from time to time
by the Company's Board of Directors (the "Board") or its lawfully designated
representative.
(b) During the Employment Period, the Executive shall devote
his full time and attention to the business and affairs of the Company, and
shall use his best efforts to promote and establish the business of the Company
and to carry out faithfully and efficiently the responsibilities assigned to him
under this Agreement. It shall not be considered a violation of the foregoing
for the Executive to (i) serve on corporate boards with the approval of
Cardinal, (ii) serve on civic or charitable boards or committees, and (iii)
manage personal investments, so long as such activities do not interfere with
the performance of the Executive's responsibilities under this Agreement.
3. Compensation. (a) Base Salary. During the Employment
Period, the Company shall pay the Executive a base salary (the "Base Salary") at
an annual rate of $314,449, payable in accordance with the Company's payroll
practices for management personnel, as in effect from time to time (but not less
frequently than monthly). During the Employment Period, the Base Salary shall be
reviewed for possible increase annually in accordance with the Company's normal
payroll practices for management personnel. Any increase in the Base Salary
shall not limit, expand or reduce any other obligation of the Company under this
Agreement.
(b) Annual Bonus. In addition to the Base Salary, during the
Employment Period the Executive shall be eligible to receive annual bonuses
(each, regardless of whether for a 12-month period or a different period, an
"Annual Bonus") pursuant to this Section 3(b). The Annual Bonus shall be
determined and paid at the sole discretion of the Company pursuant to the terms
and conditions of the Company's standard Management Incentive Plan as in effect
from time to time, or any successor thereto (the "MIP"), with an MIP potential
equal to 75 percent of the Base Salary.
(c) Other Benefits. During the Employment Period, the
Executive shall be entitled to participate in the group health, life, disability
insurance, retirement savings and other employee benefit plans (collectively,
"Group Plans") generally offered to the Company's employees in accordance with
the standard terms and conditions of such plans as in effect from time to time.
In addition, the Executive shall be eligible to participate in the Company's
Equity Incentive Plan or any successor thereto (the "Cardinal Stock Plan"),
although the actual awards and benefits, if any,
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to be granted to the Executive thereunder shall be in the sole discretion of the
Compensation and Personnel Committee of the Company's Board of Directors. The
Employee shall at all times comply with the Company's policies on option
exercises and the selling and buying of Company stock.
(d) Expenses. The Company shall reimburse the Executive for
all reasonable business expenses incurred by the Executive in the performance of
his services hereunder for the Company, which expenses shall be substantiated to
the reasonable satisfaction of the Company, in a manner similar to that
applicable to other management personnel of the Company, and the Executive shall
provide all necessary records to reflect the reasonable business expenses
incurred.
(e) Vacation. During the Employment Period, the Executive
shall be entitled to annual paid vacations as provided in the Company's vacation
policy as in effect as of the Effective Date, as it may be revised thereafter
from time to time.
4. Termination of Employment. (a) Death or Disability. The
Executive's employment shall terminate automatically upon the Executive's death
during the Employment Period. The Company shall be entitled to terminate the
Executive's employment because of the Executive's Disability during the
Employment Period. "Disability" means the illness or disability of the Executive
which prevents or hampers the performance of his obligations hereunder, and
which continues for a consecutive period of one hundred and twenty (120) days or
longer or an aggregate period of one hundred and eighty (180) days or longer, in
either instance during the Employment Period. A termination of the Executive's
employment by the Company for Disability shall be communicated to the Executive
by written notice, and shall be effective upon receipt of such notice by the
Executive (the "Disability Effective Date").
(b) By the Company. The Company may terminate the Executive's
employment during the Employment Period for Cause or without Cause. "Cause"
shall mean (A) fraud, misappropriation, embezzlement or material misconduct on
the part of the Executive, (B) the Executive's (x) failure to substantially
perform his duties for the Company when and to the extent requested by the Board
or its lawfully designated representative to do so and (y) failure to correct
same within five (5) business days after notice from the Board or its lawfully
designated representative requesting the Executive to do so, or (C) the
Executive's breach of any material provision of this Agreement, the Certificate
of Compliance with Company Policies then applicable to management personnel of
the Company, or other agreements between the Executive and the Company and such
breach continues for a period of five (5) business days after notice from the
Board or its lawfully designated representative of such breach. A termination of
the Executive's employment by the Company without Cause shall be effected by
giving the Executive five (5) business days written notice of the termination.
(c) Good Reason. (i) The Executive may terminate employment
for Good Reason or without Good Reason. "Good Reason" means:
(A) the assignment to the Executive of duties
inconsistent in any material respect with Section 2(a) of this
Agreement, other than any such action
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that is remedied by the Company within five (5) business days
after receipt of notice thereof from the Executive; or
(B) any failure by the Company to comply with any
provision of Section 3 of this Agreement other than any such
failure that is remedied by the Company within five (5)
business days after receipt of notice thereof from the
Executive.
(ii) A termination of employment by the Executive for Good
Reason shall be effectuated by giving the Company written notice ("Notice of
Termination for Good Reason") of the termination, setting forth in reasonable
detail the specific conduct of the Company that constitutes Good Reason and the
specific provision(s) of this Agreement on which the Executive relies. A
termination of employment by the Executive for Good Reason shall be effective on
the fifth business day following the date when the Notice of Termination for
Good Reason is given, unless the notice sets forth a later date (which date
shall in no event be later than 30 days after the notice is given); provided,
that such a termination of employment shall not become effective if the Company
shall have substantially corrected the circumstance giving rise to the Notice of
Termination within such period.
(d) Date of Termination. The "Date of Termination" means the
date of the Executive's death, the Disability Effective Date, the date on which
the termination of the Executive's employment by the Company for Cause or by the
Executive for Good Reason is effective, the date on which the Company gives the
Executive notice of a termination of employment without Cause, or the date on
which the Executive gives the Company notice of a termination of employment
without Good Reason, as the case may be.
5. Obligations of the Company upon Termination. (a) Death,
Disability, Cause; Without Good Reason. If, during the Employment Period, the
Executive's employment is terminated because of death, Disability, for Cause, or
by the Executive without Good Reason, then the Executive shall not be entitled
to any compensation provided for under this Agreement, other than Base Salary
through the Termination Date, benefits under any long-term disability insurance
coverage in the case of termination because of Disability, and (without limiting
the provisions of Section 6 hereof) vested benefits, if any, required to be paid
or provided by law.
(b) Without Cause; Good Reason. If, during the Employment
Period, the Executive's employment is terminated by the Company without Cause or
by the Executive for Good Reason (collectively, an "Eligible Termination"), the
Executive shall not be entitled to any compensation provided for under this
Agreement except as set forth in the following three sentences. If the Eligible
Termination occurs prior to the second anniversary of the Effective Date, then
the Company (i) shall continue to pay the Executive his Base Salary, at the rate
then in effect, for and with respect to the period beginning on the date of such
termination of employment and ending on the last day of the Employment Period
(hereinafter, the "Continuation Period") in the same manner as specified in
Section 3(a) hereof; and (ii) shall pay the Executive, in lieu of annual bonuses
pursuant to Section 3(b), an annual amount equal to the Executive's most recent
previous annual bonus actually paid at the same time and in the same manner as
such annual
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bonuses would have been paid during the Continuation Period pursuant to Section
3(b). If the Eligible Termination occurs on or after the second anniversary of
the Effective Date, then the Company (i) shall continue to pay the Executive his
Base Salary, at the rate then in effect, for and with respect to the period
beginning on the date of such termination of employment and ending on the first
anniversary of such date; and (ii) shall pay the Executive, in lieu of an annual
bonus pursuant to Section 3(b), an amount equal to the Executive's most recent
previous annual bonus actually paid at the same time and in the same manner as
such annual bonus would have been paid had the Executive continued to be
employed by the Company during such one year period.
6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company for which the Executive may
qualify, nor, subject to Section 9(f), shall anything in this Agreement limit or
otherwise affect such rights as the Executive may have under any agreement with
the Company. Vested benefits and other amounts that the Executive is otherwise
entitled to receive under any plan, policy, practice or program of, or any
contract or agreement with, the Company on or after the Date of Termination
shall be payable in accordance with such plan, policy, practice, program,
contract or agreement, as the case may be, except as explicitly modified by this
Agreement.
7. Confidential Information; Business Interference; Noncompetition;
Inventions. (a) Both during his association with the Company or the Affiliated
Companies (as defined below) and at all times thereafter, Executive shall not
disclose to anyone else, directly or indirectly, any confidential, proprietary
or business-sensitive information or trade secrets concerning or relating to the
business of the Company or the Affiliated Companies (collectively, "Confidential
Information") or use, or permit or assist, by acquiescence or otherwise, anyone
else to use, directly or indirectly, any such Confidential Information.
"Confidential Information" is information not generally known to the public and
which, if released to unauthorized persons, could be detrimental to the
reputation or business interests of the Company or the Affiliated Companies or
parties with which the Company or the Affiliated Companies contract, or which
could permit such unauthorized persons to benefit improperly. Examples of
Confidential Information include, but are not limited to, the following:
strategic business plans; computer materials such as software programs or
documentation; information concerning the Company's and the Affiliated
Companies' customers and potential customers, including their identities,
contact persons, requirements, preferences, pricing or contract terms; marketing
and sales information; research and development plans or data; budgets and
unpublished financial statements; pricing information and cost data; information
concerning the skills and compensation of other employees of the Company or the
Affiliated Companies; and information concerning the suppliers of the Company
and the Affiliated Companies. The foregoing restrictions shall not apply to
disclosure of information by the Executive as may be required in the proper
conduct of his duties on behalf of the Company or the Affiliated Companies or as
may be specifically authorized in writing by the Company's chief executive
officer, president, or chief financial officer. Upon termination of employment
with the Company for any reason, Executive shall promptly deliver to the Company
all property belonging to the Company and the Affiliated Companies and shall not
retain any copies or reproductions of correspondence, reports, proposals, lists,
computer
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programs or files, or other information relating in any way to the affairs of
the Company or the Affiliated Companies.
(b) Both during his association with the Company and at all
times thereafter, Executive shall not take any action which is intended to or
would disparage or diminish the reputation of the Company or the Affiliated
Companies. In addition, while associated with the Company and for a period of
two (2) years after expiration or termination of employment or other association
with the Company, Executive shall not directly or indirectly, employ, contact
concerning employment, or participate in any way in the recruitment for
employment (whether as an employee, officer, director, agent, consultant or
independent contractor) of any person who was or is at any time during the
previous 12 months an employee, representative, officer, or director of the
Company or any of the Affiliated Companies.
(c) During the Noncompetition Period (as defined below), the
Executive shall not, without the prior written consent of the Board, engage in
or become associated with a Competitive Activity. For purposes of this Section
7(c): (i) the "Noncompetition Period" means (A) the period during which the
Executive is employed by the Company, plus (B) one year; (ii) a "Competitive
Activity" means any business or other endeavor, in the United States or Canada
or any other country, of a kind then being conducted by the Company or any of
the Affiliated Companies in such country; and (v) the Executive shall be
considered to have become "associated with a Competitive Activity" if he becomes
directly or indirectly involved as an owner, principal, employee, officer,
director, independent contractor, representative, stockholder, financial backer,
agent, partner, advisor, lender, or in any other individual or representative
capacity with any individual, partnership, corporation, other organization or
entity that is engaged in a Competitive Activity. Notwithstanding the foregoing,
the Executive may make and retain investments during the Employment Period in
not more than five percent of the equity of any entity engaged in a Competitive
Activity, if such equity is listed on a national securities exchange or
regularly traded in an over-the-counter market. Should this provision be
unenforceable in any jurisdiction because it is deemed too broad, as to time,
area, subject matter, or otherwise, this provision shall be deemed modified to
the extent necessary to be enforceable in such jurisdiction.
(d) As special consideration for the Executive's agreement to
be bound by the provisions of Section 7(c), the receipt and adequacy of which is
hereby confirmed and acknowledged, he is receiving, as of the Effective Date, a
special grant of restricted shares pursuant to the Cardinal Stock Plan.
(e) All plans, discoveries and improvements, whether
patentable or unpatentable, made or devised by the Executive, whether by himself
or jointly with others, from the date of the Executive's initial employment by
the Company and continuing until the end of the Employment Period and any
subsequent period when the Executive is employed by the Company or any of the
Affiliated Companies, relating or pertaining in any way to his employment with
or the business of the Company or any of the Affiliated Companies, shall be
promptly disclosed in writing to the Board and are hereby transferred to and
shall redound to the benefit of the Company, and shall become and remain its
sole and exclusive property. The Executive agrees to execute any assignments to
the Company or its nominee, of his entire right, title and interest in and to
any such
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discoveries and improvements and to execute any other instruments and documents
requisite or desirable in applying for and obtaining patents or copyrights, at
the expense of the Company, with respect thereto in the United States and in all
foreign countries. The Executive further agrees, during and after the Employment
Period, to cooperate to the extent and in the manner required by the Company, in
the prosecution or defense of any patent or copyright claims or any litigation,
or other proceeding involving any trade secrets, processes, discoveries or
improvements covered by this Agreement, but all necessary expenses thereof shall
be paid by the Company.
(f) The Executive acknowledges and agrees that the Company's
remedy at law for any breach of the Executive's obligations under this Section 7
would be inadequate and agrees and consents that temporary and permanent
injunctive relief may be granted in any proceeding which may be brought to
enforce any provision of such Section without the necessity of proof of actual
damage. With respect to any provision of this Section 7 finally determined by a
court of competent jurisdiction to be unenforceable, the Executive and the
Company hereby agree that such court shall have jurisdiction to reform this
Agreement or any provision hereof so that it is enforceable to the maximum
extent permitted by law, and the parties agree to abide by such court's
determination.
8. Successors. (a) This Agreement is personal to the
Executive, and he may not assign any interest herein in any manner whatsoever.
Any purported assignment by the Executive shall be void.
(b) In addition to assignments by operation of law, the
Company shall have the right to assign this Agreement to any person, firm or
corporation, controlling, controlled by or under common control with the Company
(including without limitation any of the Affiliated Companies), or acquiring
substantially all of its assets, but such assignment shall not release the
Company from its obligations under this Agreement.
9. Miscellaneous. (a) The provisions of Sections 5, 6, 7, 8,
and 9 of this Agreement shall survive any expiration or termination of this
Agreement.
(b) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Ohio, without reference to principles
of conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified except by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(c) All notices, requests, consents and other communications
required or provided under this Agreement shall be in writing and shall be
deemed sufficient if delivered by facsimile, overnight courier, or certified or
registered mail, return receipt requested, postage prepaid, and shall be
effective upon delivery as follows:
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If to the Executive:
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Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
If to the Company:
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Cardinal Health, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Either party may change the address and/or facsimile number to which notices are
to be sent to that party by giving written notice of such change of address to
the other party in the same manner above provided for giving notice.
(d) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective, but only to the extent of such prohibition or unenforceability,
without invalidating the other provisions hereof or without affecting the
validity or unforceability of such provision in any other jurisdiction.
(e) Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
(f) As of the Effective Date, this Agreement shall constitute
the entire agreement between the parties relative to the subject matter
contained herein, superseding, canceling and replacing all prior agreements. No
promises, covenants or representations of any character or nature other than
those expressly stated herein have been made to induce either party to enter
into this Agreement. This Agreement shall not be modified, waived or discharged
except in writing duly signed by each of the parties or their authorized
assignees.
(g) The Executive's or the Company's failure to insist upon
strict compliance with any provision of, or to assert any right under, this
Agreement shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement except to the extent any
other party hereto is materially prejudiced by such failure.
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(h) The term "Affiliated Companies" means all companies
controlled by, controlling or under common control with the Company.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and the Company has caused this Agreement to be executed in its
name on its behalf, all as of the day and year first above written.
/s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
CARDINAL HEALTH, INC.
By /s/ XXXX X. XXXX
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Title President
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