EXHIBIT 10.02
FORM OF DIRECTORS' STOCK OPTION AGREEMENT
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UNDER THE
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AMENDED AND RESTATED EQUITY INCENTIVE PLAN
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Cardinal Health, Inc., an Ohio corporation (the "Company"), has granted
to _______________ (the "Grantee"), an option (the "Option") to purchase 2,019
Common Shares, without par value (the "Shares"), of the Company for a total
purchase price (the "Option Price") of $129,014.10 (i.e., the equivalent of
$63.90 for each full Share). The Option has been granted pursuant to the
Cardinal Health, Inc. Amended and Restated Equity Incentive Plan, as amended
(the "Plan") and shall include and be subject to all provisions of the Plan,
which are hereby incorporated herein by reference, and shall be subject to the
following provisions of this agreement. Capitalized terms used herein which are
not specifically defined herein shall have the meanings ascribed to such terms
in the Plan. This option shall be exercisable at any time on or after November
7, 2001 and prior to November 7, 2011.
Section 1. METHOD OF EXERCISE. At any time when the Option is
exercisable under the Plan, the Option shall be exercisable from time to time by
written notice to the Company (the date such notice is received by the Company,
the "Exercise Date") which shall:
(a) state that the Option is thereby being exercised, the
number of Shares with respect to which the Option is
being exercised, each person in whose name any
certificates for the Shares should be registered and
his or her address and social security number;
(b) be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by
anyone other than the Grantee, be accompanied by proof
satisfactory to counsel for the Company of the right of
such person or persons to exercise the Option under the
Plan and all applicable laws and regulations; and
(c) contain such representations, warranties and agreements
with respect to the investment intent of such person or
persons in form and substance satisfactory to counsel
for the Company.
Section 2. PAYMENT OF EXERCISE PRICE. The full exercise price for the
Option shall be paid to the Company: (i) in cash, (ii) by delivery of Shares
with a fair market value equal to the total exercise price at the time of
exercise, (iii) by attestation of ownership of such already-owned Shares, (iv)
by delivery of cash on the extension of credit by a broker-dealer to whom the
Grantee (or other person authorized to exercise the Option) has submitted a
notice of exercise or an irrevocable election to effect such extension of
credit, or (v) by a combination of the preceding
methods. Any Shares delivered or attested to in payment of an exercise price
shall be valued as of the Exercise Date.
Section 3. TRANSFERABILITY. The Option shall be transferable (I) at the
Grantee's death, by the Grantee by will or pursuant to the laws of descent and
distribution, and (II) by the Grantee during the Grantee's lifetime, without
payment of consideration, to (a) the spouse, former spouse, parents,
stepparents, grandparents, parents-in-law, siblings, siblings-in-law, children,
stepchildren, children-in-law, grandchildren, nieces, or nephews of the Grantee,
or any other persons sharing the Grantee's household (other than tenants or
employees) ("Family Members"), (b) a trust or trusts for the primary benefit of
the Grantee or such Family Members, (c) a foundation in which the Grantee or
such Family Members control the management of assets, or (d) a partnership in
which the Grantee or such Family Members are the majority or controlling
partners, provided that subsequent transfers of the transferred Option shall be
prohibited except (X) if the transferee is an individual, at the transferee's
death by the transferee by will or pursuant to the laws of descent and
distribution and (Y) without payment of consideration to the individuals or
entities listed in subitems II(a), (b), or (c), above, with respect to the
original Grantee. The Committee may, in its discretion, permit transfers to
other persons and entities as permitted by the Plan. Neither a transfer under a
domestic relations order in settlement of marital property rights nor a transfer
to an entity in which more than fifty percent of the voting interests are owned
by the Grantee or Family Members in exchange for an interest in that entity
shall be considered to be a transfer for consideration. Within ten days of any
transfer, the Grantee shall notify the Stock Option Administrator of the Company
in writing of the transfer. Following transfer, the Option shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer and, except as otherwise provided in the Plan or this agreement,
references to the original Grantee shall be deemed to refer to the transferee.
The events of Grantee's termination from the Board of Directors of the Company
(the "Board") provided in Section 4 hereof shall continue to be applied with
respect to the original Grantee, following which the Option shall be exercisable
by the transferee only to the extent, and for the periods, specified in Section
4. The conduct prohibited of Grantee in Section 6 hereof shall continue to be
prohibited of Grantee following transfer to the same extent as immediately prior
to transfer and the Option (or its economic value, as applicable) shall be
subject to forfeiture by the transferee and recoupment from the Grantee to the
same extent as would have been the case of the Grantee had the Option not been
transferred. The Company shall have no obligation to notify any transferee of
the Option of the Grantee's termination as a member of the Board for any reason.
The Grantee shall remain subject to the recoupment provisions of Section 6 of
this agreement and tax withholding provisions of Section 13(d) of the Plan
following transfer of the Option.
Section 4. TERMINATION OF RELATIONSHIP. If a Grantee ceases to be a
member of the Board for any reason, then all Options or any unexercised portion
of such Options which otherwise are exercisable by such Grantee (or any
transferee) shall remain exercisable until expiration of the original term of
such Option.
Section 5. TERMINATION FOR CAUSE. Notwithstanding any provision to the
contrary in the Plan or in this agreement, upon the discharge of the Grantee as
a director of the Company for Cause
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(as defined in the Plan), all unexercised Options awarded to such Grantee
(whether then held by Grantee or any transferee) shall immediately lapse and be
of no further force or effect.
Section 6. SPECIAL FORFEITURE/REPAYMENT RULES. For so long as Grantee
continues as a Director of the Company and for three years following Grantee's
termination as a Director of the Company, Grantee agrees not to engage in
Triggering Conduct. If Grantee engages in such "Triggering Conduct" or in
Competitor Triggering Conduct during such time, then: (a) the Option (or any
part thereof that has not been exercised) shall immediately and automatically
terminate, be forfeited, and shall cease to be exercisable at any time; and (b)
the Grantee shall, within 30 days following written notice from the Company, pay
to the Company an amount equal to the gross option gain realized or obtained by
the Grantee or any transferee resulting from the exercise of such Option,
measured at the date of exercise (i.e., the difference between the market value
of the Option Shares on the exercise date and the exercise price paid for such
Option Shares), with respect to any portion of the Option that has already been
exercised at any time within three years prior to the Triggering Conduct (the
"Look-Back Period"), less $1.00. If Grantee engages only in Competitor
Triggering Conduct, then the Look-Back Period shall be shortened to exclude any
period more than one year prior to Grantee's termination of service as a
Director of the Company, but including any period between the time of Grantee's
termination and engagement in Competitor Triggering Conduct.
As used herein, "Triggering Conduct" shall include disclosing or
using in any capacity other than as necessary in the performance of duties as a
Director of the Company any confidential information, trade secrets or other
business sensitive information or material concerning the Company or its
subsidiaries (collectively, the "Cardinal Group"); violation of Company
policies, including conduct which would constitute a breach of the then-most
recent version of the Certificate of Compliance with Company Policies and/or
Certificate of Compliance with Company Business Ethics Policies signed by the
Grantee; directly or indirectly employing, contacting concerning employment, or
participating in any way in the recruitment for employment (whether as an
employee, officer, director, agent, consultant or independent contractor) any
person who was or is an employee, representative, officer, or director of the
Cardinal Group at any time within the twelve months prior to the termination of
service with the Cardinal Group; any action by Grantee and/or Grantee's
representatives that either does or could reasonably be expected to undermine,
diminish or otherwise damage the relationship between the Cardinal Group and any
of its customers, and/or potential customers, vendors and/or suppliers that were
known to Grantee; and breaching any provision of any benefit or severance
agreement with a member of the Cardinal Group. As used herein, "Competitor
Triggering Conduct" shall include, either during or within one year following
Grantee's termination of service as a Director of the Company, accepting
employment with or serving as a consultant, advisor, or any other capacity to an
entity that is in competition with the business conducted by any member of the
Cardinal Group (a "Competitor") including, but not limited to, employment or
another business relationship with any Competitor if Grantee has been introduced
to trade secrets, confidential information or business sensitive information
during Grantee's service as a Director of the Company and such information would
aid the Competitor because the threat of disclosure of such information is so
great that, for purposes of this agreement, it must be assumed that such
disclosure would occur. The Committee shall resolve in good faith any disputes
concerning
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whether particular conduct constitutes Triggering Conduct or Competitor
Triggering Conduct, and any such determination by the Committee shall be
conclusive and binding on all interested persons. The Grantee may be released
from Grantee's obligations under this Section 6 only if the Committee (or its
duly appointed agent) determines, in writing and in its sole discretion, that
such action is in the best interests of the Company.
Nothing in this Section 6 constitutes a so-called "noncompete"
covenant. However, this Section 6 does prohibit certain conduct while Grantee is
associated with the Cardinal Group and thereafter and does provide for the
forfeiture or repayment of the benefits granted by this agreement under certain
circumstances, including but not limited to the Grantee's acceptance of
employment with a Competitor. Grantee agrees to provide the Company with at
least ten days written notice prior to directly or indirectly accepting
employment with or serving as a consultant, advisor, or in any other capacity to
a Competitor, and further agrees to inform any such new employer, before
accepting employment, of the terms of this Section 6 and of the Grantee's
continuing obligations contained herein.
No provision of this agreement shall diminish, negate, or otherwise
impact any separate noncompete agreement to which Grantee may be a party.
Grantee acknowledges and agrees that the provisions contained in this Section 6
are being made for the benefit of the Company in consideration of Grantee's
receipt of the Option, in consideration of exposing Grantee to the Company's
business operations and confidential information, and for other good and
valuable consideration, the adequacy of which consideration is hereby expressly
confirmed. Grantee further acknowledges that the receipt of the Option and
execution of this agreement are voluntary actions on the part of Grantee, and
that the Company is unwilling to provide the Option to Grantee without including
this Section 6. Further, the parties agree and acknowledge that the provisions
contained in this Section 6 are ancillary to or part of an otherwise enforceable
agreement at the time the agreement is made.
Section 7. RIGHT OF SET-OFF. By accepting this Option, the Grantee
consents to a deduction from and set-off against any amounts owed to the Grantee
by any member of the Cardinal Group from time to time (including but not limited
to amounts owed to the Grantee as Director fees, severance payments, or other
fringe benefits) to the extent of the amounts owed to the Cardinal Group by the
Grantee under this agreement.
Section 8. RESTRICTIONS ON EXERCISE. The Option is subject to all
restrictions in this agreement or in the Plan. As a condition of any exercise of
the Option, the Company may require the Grantee or his transferee or successor
to make such representation and warranties and to enter into such agreements as
are necessary to comply with any applicable law or regulation or to confirm any
factual matters reasonably requested by counsel for the Company.
Section 9. GOVERNING LAW/VENUE. This agreement shall be governed by the
laws of the State of Ohio, without regard to principles of conflicts of laws,
except to the extent superceded by the laws of the United States of America. The
Parties agree and acknowledge that the laws of the State of Ohio bear a
substantial relationship to the parties and/or this agreement and that the
Option and benefits granted herein would not be granted without the soverance of
the agreement
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by the laws of the State of Ohio. In addition, all legal actions or proceedings
relating to this agreement shall be brought in state or federal courts located
in Franklin County, Ohio, and the parties executing this agreement hereby
consent to the personal jurisdiction of such courts. Grantee acknowledges that
the covenants contained in Section 6 of this agreement are reasonable in nature,
are fundamental for the protection of the Company's legitimate business and
proprietary interests, and do not adversely affect the Grantee's ability to earn
a living in any capacity that does not violate such covenants. The parties
further agree that, in the event of any violation by Grantee of any such
covenants, the Company will suffer immediate and irreparable injury for which
there is no adequate remedy at law. In the event of any violation or attempted
violations of Section 6 of this agreement, the Company shall be entitled to
specific performance and injunctive relief or other equitable relief without any
showing of irreparable harm or damage, and Grantee hereby waives any requirement
for the securing or posting of any bond in connection with such remedy, without
prejudice to the rights and remedies afforded the Company hereunder or by law.
In the event that it becomes necessary for the Company to institute legal
proceedings under this agreement, Grantee shall be responsible to the Company
for all costs and reasonable legal fees incurred by the Company with regard to
such proceedings. Any provision of this agreement which is determined by a court
of competent jurisdiction to be invalid or unenforceable should be construed or
limited in a manner that is valid and enforceable and that comes closest to the
business objectives intended by such provision, without invalidating or
rendering unenforceable the remaining provisions of this agreement.
Section 10. ACTION BY THE COMMITTEE. The parties agree that the
interpretation of this agreement shall rest exclusively and completely within
the good faith province and discretion of the Committee. The parties agree to be
bound by the decisions of the Committee with regard to the interpretation of
this agreement and with regard to any and all matters set forth in this
agreement. The Committee may delegate its functions under this agreement to an
officer of the Cardinal Group designated by the Committee (hereinafter the
"designee"). In fulfilling its responsibilities hereunder, the Committee or its
designee may rely upon documents, written statements of the parties, or such
other material as the Committee or its designee deems appropriate. The parties
agree that there is no right to be heard or to appear before the Committee or
its designee and that any decision of the Committee or its designee relating to
this agreement, including without limitation whether particular conduct
constitutes Triggering Conduct or Competitor Triggering Conduct, shall be final
and binding unless such decision is arbitrary and capricious.
CARDINAL HEALTH, INC.
DATE OF GRANT: November 7, 2001 By:
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Xxxx X. Xxxxxxxx
Executive Vice President and
Chief Legal Officer
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ACCEPTANCE OF AGREEMENT
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The Grantee hereby: (a) acknowledges receiving a copy of the Plan,
which has either been previously delivered or is attached to this Agreement, and
represents that he/she is familiar with all provisions of the Plan; and (b)
accepts this Agreement and the Option granted to him/her under this Agreement
subject to all provisions of the Plan and this Agreement. The Grantee further
acknowledges receiving a copy of the Company's most recent Annual Report to
Shareholders and communications routinely distributed to the Company's
shareholders and a copy of the Plan Description dated August 8, 2001, pertaining
to the Plan.
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Grantee Signature
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Social Security Number
