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Exhibit A
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RESTRICTED SHARES AGREEMENT
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Cardinal Health, Inc., an Ohio corporation (the "Company"), hereby
grants, pursuant to the Cardinal Health, Inc. Amended and Restated Equity
Incentive Plan, as amended (the "Plan"), to Kathy Brittain WHITE (the
"Executive") that number of common shares in the Company (the "Additional
Incentive Shares") equal to the quotient of (a) the sum of (i) one half of the
Executive's Base Salary as in effect on February 9, 2000 and (ii) one half of
the Executive's target annual bonus for fiscal year 2000 under the Bonus Plan
calculated on a full year basis based upon the target bonus percentage in effect
on February 9, 2000, divided by (b) the closing NYSE sales price per common
share on the Grant Date (rounded down to the nearest whole share). The
Additional Incentive Shares are subject to all provisions of the Plan, which are
hereby incorporated herein by reference, and shall be subject to the provisions
of this Agreement. This Agreement also hereby incorporates by reference the
Agreement of the Executive and the Company, dated as of February 9, 2000 (the
"Agreement"), and any reference to "this Agreement" herein includes this
Restricted Shares Agreement and the Agreement. Any capitalized terms used in
this Restricted Shares Agreement that are not specifically defined herein shall
have the meanings ascribed to such terms in the Agreement.
1. VESTING. Except as otherwise provided in this Agreement, 100% of the
Additional Incentive Shares shall vest on February 9, 2002 (which date shall be
the "Vesting Date").
2. PURCHASE PRICE. The purchase price of Additional Incentive Shares
shall be $0.00.
3. TRANSFERABILITY. Prior to the Vesting Date, the Executive shall not
be permitted to sell, transfer, pledge, assign or otherwise encumber the
Additional Incentive Shares. The Additional Incentive Shares will be held by the
Company; provided, however, that the Company will deliver certificates
representing those Additional Incentive Shares that have fully vested within a
reasonable time after being requested in writing to do so.
4. TERMINATION OF SERVICE. If the Executive's employment with the
Cardinal Group terminates prior to the Vesting Date, all of the Restricted
Shares shall be forfeited. Notwithstanding the foregoing, if the Executive's
employment with the Company is terminated before the end of the Employment
Period by the Company without Cause or by the Executive for Good Reason, the
Additional Incentive Shares shall nevertheless vest on the Vesting Date unless
the Executive has violated any of the provisions of Section 4 of the Participant
Agreement. If the Executive's employment with the Company terminates prior to
the vesting of the Additional Incentive Shares by reason of the Executive's
death or disability, then the restrictions with respect to a ratable portion of
the Additional Incentive Shares shall lapse and such shares shall not be
forfeited, unless the Executive has violated any of the provisions of Section 4
of the Participant Agreement. Such ratable portion shall be an amount equal to
the number of Additional Incentive Shares multiplied by the portion of the
period between February 9, 2000 and the second anniversary thereof that has
expired at the date of the Executive's death or disability.
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5. SPECIAL FORFEITURE/CLAWBACK RULES. Notwithstanding the foregoing, if
at any time prior to the Vesting Date, the Executive violates any of the
provisions of Section 4 of the Participant Agreement, the Additional Incentive
Shares shall be forfeited by the Executive. In addition, if at any time the
Executive violates any of the provisions of Section 4 of the Participant
Agreement, the Executive is subject to being required to pay the Clawback Amount
to the Company, as more fully set forth in Section 2(c) of the Agreement. No
provision of this Agreement shall diminish, negate, or otherwise affect any
separate noncompete agreement to which the Executive may be a party. The
Executive acknowledges and agrees that the provisions contained in this item 5
are being made for the benefit of the Cardinal Group in consideration of the
Executive's receipt of the Additional Incentive Shares, in consideration of
employment, in consideration of exposing the Executive to the Cardinal Group's
business operations and confidential information, and for other good and
valuable consideration, the adequacy of which consideration is hereby expressly
confirmed. The Executive further acknowledges that the receipt of the Additional
Incentive Shares and execution of this Agreement are voluntary actions on the
part of the Executive, and that the Company is unwilling to provide the
Additional Incentive Shares to the Executive without their being subject to this
item 5.
6. RIGHT OF SET-OFF. By accepting these Additional Incentive Shares,
the Executive consents to a deduction from and set-off against any amounts owed
to the Executive by the Cardinal Group from time to time (including but not
limited to amounts owed to the Executive as wages, severance payments, or other
fringe benefits) to the extent of the amounts so owed.
7. SHAREHOLDER RIGHTS AND RESTRICTIONS. Except with regard to the
disposition of Additional Incentive Shares, the Executive shall generally have
all rights of a shareholder with respect to the Additional Incentive Shares from
the date of grant, including, without limitation, the right to receive dividends
with respect to the Additional Incentive Shares and the right to vote the
Additional Incentive Shares, but subject, however, to those restrictions in this
Agreement or in the Plan.
8. WITHHOLDING TAX. The Company shall have the right to require the
Executive to pay to the Company the amount of any taxes which the Company
determines that it is required to withhold with respect to the Additional
Incentive Shares (including the amount of any taxes which the Company is
required to withhold with respect to dividends on the Additional Incentive
Shares) or, in lieu thereof, to retain, or sell without notice, a sufficient
number of Additional Incentive Shares to cover the amount required to be
withheld. The Company shall also have the right to facilitate withholding by any
other method permitted by the Plan.
9. GOVERNING LAW/VENUE. This Agreement shall be governed by the laws of
the State of Ohio, without regard to principles of conflicts of law, except to
the extent superseded by the laws of the United States of America. In addition,
all legal actions or proceedings relating to this Restricted Shares 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. The Executive acknowledges that the covenants
contained in item 5 of this Restricted Shares Agreement and in Section 4 of the
Participant Agreement are reasonable in nature, are fundamental for the
protection of the Cardinal Group's legitimate business and proprietary
interests, and do not adversely affect the Executive'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
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violation by the Executive of any such covenants, the Cardinal Group 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 such covenants, the
Cardinal Group shall be entitled to specific performance and injunctive relief
or other equitable relief without any showing of irreparable harm or damage, and
the Executive 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 Cardinal Group hereunder or by law. In the event that it
becomes necessary for the Cardinal Group to institute legal proceedings under
this Agreement, the Executive shall be responsible to the Cardinal Group for all
costs and reasonable legal fees incurred by the Cardinal Group with regard to
such proceedings. Any provision of this Agreement that 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.
10. PROMPT ACCEPTANCE OF AGREEMENT. The Additional Incentive Shares
grant evidenced by this Agreement shall, at the discretion of the Committee, be
forfeited if this Agreement is not executed by the Executive and returned to the
Company within sixty days of the grant date set forth below.
CARDINAL HEALTH, INC.
DATE OF GRANT: February 9, 2000 By:
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Steven Alan Bennett
Executive Vice President
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ACCEPTANCE OF AGREEMENT
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The Executive hereby: (a) acknowledges that the Executive has received
a copy of (i) the attached Restricted Shares Agreement, (ii) the Company's most
recent Annual Report and other communications routinely distributed to the
Company's shareholders, (iii) the Agreement, (iv) the Plan, and (vi) the most
recent summary description of the Plan issued by the Company; and (b) accepts
this Agreement and the Additional Incentive Shares granted to the Executive
under this Agreement subject to all provisions of the Restricted Shares
Agreement, the Plan, and the Agreement; (c) represents and warrants to the
Company that the Executive is purchasing the Additional Incentive Shares for the
Executive's own account, for investment, and not with a view to or any present
intention of selling or distributing the Additional Incentive Shares either now
or at any specific or determinable future time or period or upon the occurrence
or nonoccurrence of any predetermined or reasonably foreseeable event; and (d)
agrees that no transfer of the Additional Incentive Shares shall be made unless
the Additional Incentive Shares have been duly registered under all applicable
federal, state, local and foreign securities laws pursuant to a then-effective
registration that contemplates the proposed transfer or unless the Company has
received a written opinion of, or satisfactory to, its legal counsel that the
proposed transfer is exempt from such registration.
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Executive's Signature
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Executive's Social Security Number
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Date
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AGREEMENT
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THIS AGREEMENT, dated and effective as of the 9th day of February,
2000, is made and entered into by and between Cardinal Health, Inc., an Ohio
corporation (the "Company"), and Kathy Brittain White (the "Executive").
WHEREAS, the Company and the Executive desire to set forth in a written
agreement the terms and conditions under which the Executive will render
services to the Company;
WHEREAS, the Executive is covered by the Allegiance Change in Control
Plan ("Allegiance Plan") and the Executive's Participant Agreement ("Participant
Agreement") thereunder (together, the "Allegiance Arrangement") and the Company
and the Executive desire to clarify certain aspects of the Allegiance
Arrangement;
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, agree as follows:
1. ADDITIONAL INCENTIVE AWARDS. If the Executive remains employed by
the Company through February 9, 2002, the Executive shall be paid an amount (the
"Additional Incentive Bonus") equal to one-half of the sum of (i) the
Executive's Base Salary as in effect on February 9, 2000 and (ii) the
Executive's target annual bonus for fiscal year 2000 under the Company bonus
plan for which the Executive is then eligible calculated on a full year basis
based upon the target bonus percentage in effect on February 9, 2000. The
Additional Incentive Bonus, if payable, shall be paid as soon as
administratively practicable but in no case later than March 31, 2002. In
addition, the Executive is simultaneously herewith being granted restricted
stock (the "Additional Incentive Shares"), pursuant to the Restricted Shares
Agreement attached to this Agreement as Exhibit A (the "Restricted Shares
Agreement").
2. EMPLOYMENT TERMINATION. (a) CONSEQUENCES OF TERMINATION BY THE
COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE FOR GOOD REASON. If, at any time prior
to February 9, 2002, the Executive's employment is terminated by the Company
without Cause or by the Executive for Good Reason (each within the meaning of
Section 7 of the Participant Agreement), the Executive shall not be entitled to
any further compensation or benefits provided for under this Agreement except as
provided in the Restricted Shares Agreement and the Allegiance Arrangement, if
any, and except for any unpaid portion of the Additional Incentive Bonus,
provided that the Executive has complied with all of the Executive's obligations
under Section 4 of the Participant Agreement.
(b) OTHER EMPLOYMENT TERMINATIONS. If the Executive's employment is
terminated for any reason other than by the Company without Cause or by the
Executive for Good Reason, the Executive shall not be entitled to any
compensation provided for under this
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Agreement, other than, in the case of termination because of disability or
death, the benefits provided for in the Allegiance Arrangement and the
Restricted Shares Agreement, if any.
(c) ACKNOWLEDGMENT AND ENFORCEMENT. (i) The Executive acknowledges and
agrees that: (A) the purpose of Section 4 of the Participant Agreement is to
protect the goodwill, trade secrets and other confidential information of the
Company; (B) because of the nature of the businesses in which the Company and
all of its subsidiaries, partnerships, joint ventures, limited liability
companies, and other affiliates (collectively, the "Cardinal Group") are engaged
and because of the nature of the confidential information to which the Executive
has access, the Company would suffer irreparable harm and it would be
impractical and excessively difficult to determine the actual damages of the
Cardinal Group in the event the Executive breached any of the covenants of
Section 4 of the Participant Agreement; and (C) remedies at law (such as
monetary damages) for any breach of the Executive's obligations under Section 4
of the Participant Agreement would be inadequate. The Executive therefore agrees
and consents that if the Executive commits any breach of a covenant under
Section 4 of the Participant Agreement or threatens to commit any such breach,
the Company shall have the right (in addition to, and not in lieu of, any other
right or remedy that may be available to it) to temporary and permanent
injunctive relief from a court of competent jurisdiction, without posting any
bond or other security and without the necessity of proof of actual damage.
(ii) In addition, in the event of a violation of Section 4 of
the Participant Agreement, the Company shall have no obligation to pay
the Additional Incentive Bonus, if it has not previously been paid, and
shall have the right to cause the Additional Incentive Shares to be
forfeited (if they have not previously vested) as provided in the
Restricted Shares Agreement and to require the Executive to pay to the
Company all or any portion of the Clawback Amount (as defined below)
within 30 days following written notice by the Company to the Executive
(the "Company Notice") that it is imposing such requirement. The
"Clawback Amount" means the sum of:
A. the Additional Incentive Bonus, if it has
previously been paid;
B. the amount equal to the gross gain realized or
obtained by the Executive resulting from the vesting of the
Additional Incentive Shares, measured at the date of vesting
(i.e., the market value of the Additional Incentive Shares on
the vesting date); and
C. if (x) the Executive has sold or otherwise
disposed of any of the Additional Incentive Shares, an amount
equal to the excess of (I) the fair market value thereof on
the date of the sale or disposition over (II) the fair market
value thereof on the date such shares vested, and if (y) the
Executive has not sold or otherwise disposed of the Additional
Incentive Shares, an amount equal to the excess of (I) the
fair market value thereof on the 30th day following the date
of the Company Notice over (II) the fair market value thereof
on the date such shares vested.
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(iii) With respect to any provision of this Section 2 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. If any of the
covenants of this Section 2 are determined to be wholly or partially
unenforceable in any jurisdiction, such determination shall not be a
bar to or in any way diminish the Company's right to enforce any such
covenant in any other jurisdiction.
3. INTERACTION WITH ALLEGIANCE ARRANGEMENT. This Agreement incorporates
by reference the Allegiance Arrangement, and, with regard solely to the
Executive, supersedes the Allegiance Arrangement to the extent the Allegiance
Arrangement is inconsistent with this Agreement. Any capitalized term used but
not defined herein shall have the meaning ascribed to it in the Allegiance Plan.
This Agreement is intended to be interpreted and applied consistent with the
terms of the Allegiance Arrangement unless specifically indicated otherwise
herein. With respect to the Executive, the employment period covered by the
Allegiance Arrangement ceases on January 31, 2001 and shall not apply with
respect to any Change in Control other than that arising from the merger of
Allegiance Corporation with the Company.
4. 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 Cardinal Group for which the
Executive may qualify, nor, subject to Section 3 of this Agreement and Section 4
of the Participant Agreement, shall anything in this Agreement limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Cardinal Group. 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 Cardinal Group 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. Notwithstanding the foregoing, the
Executive waives all of the Executive's rights to receive severance payments and
benefits under any severance plan, policy or practice of the Cardinal Group or
any entity merged with or into the Cardinal Group (or any part thereof), except
for those severance benefits, if any, provided for under the Allegiance
Arrangement.
5. ENTIRE AGREEMENT. This Agreement, together with the Allegiance
Arrangement to the extent it is not inconsistent with this Agreement,
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements, arrangements, or
understandings with respect thereto.
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IN WITNESS WHEREOF, the Executive has hereunto set her hand and,
pursuant to the authorization of its Board of Directors, 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.
EXECUTIVE
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Kathy Brittain White
CARDINAL HEALTH, INC.
By
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Robert D. Walter
Chief Executive Officer
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