Exhibit 10.06
FIRST AMENDMENT
THIS FIRST AMENDMENT TO THE RETENTION AGREEMENT (this "Amendment")
is made as of November 2, 2005 by and among ALARIS Medical Systems, Inc.,
(which has been given the legal designation of Cardinal Health 303, Inc.) a
Delaware corporation (the "Company") and David L. Schlotterbeck (the "Employee,"
and, together with the Company, the "Parties").
WITNESSETH:
WHEREAS, the Parties are the parties to a Retention Agreement dated
August 31, 2004 (the "Agreement"), and desire to amend the Agreement as set
forth herein (all capitalized terms set forth in this Amendment but not defined
herein shall have the meanings ascribed to them in the Agreement).
NOW, THEREFORE, the Parties agree as follows:
1. Target Date. The Agreement is hereby amended to provide that all
references to the "Target Date" (other than those in Section 1 of the Agreement,
which shall continue to refer to June 28, 2006) shall refer to January 25, 2008,
and the definition of Target Date in Section 1 of the Agreement shall be
superseded by this Section 1 of this Amendment and deemed deleted. Nothing in
this First Amendment to the Retention Agreement shall modify the vesting and
termination payment provisions with respect to the Retention Bonus in the
Agreement.
2. Section 1. Section 1 is hereby amended to provide that if the
Retention Bonus is earned, it shall, instead of being paid within 15 days
following June 28, 2006, be paid (with interest accruing from June 28, 2006
through the Retention Bonus Deferred Payment Date at the RATE OF 6.00%) as soon
as practicable following the first to occur of (x) the Employee's death or (y)
within 15 days following the first date after June 30, 2008 on which Employee
could be paid the Retention Bonus without the Company being subject to the
limitations on deductibility imposed by Section 162(m) of the Code. The final
sentence of Section 1 of the Agreement shall be restated in its entirety as
follows: "In addition, if at anytime after June 28, 2006 (the "Target Date") the
Employee voluntarily departs from the Company, the Company shall pay to the
Employee a one time lump sum cash bonus equal to one hundred percent (100%) of
the Employee's base annual pay as of the date of termination, as soon as
practicable following the date of termination (or if the Employee is a
"specified employee" (as defined in Section 409A(a)(2)(B)(i) of the Code), the
six-month anniversary of the date of termination)."
3. 2008 Payouts. In the event that the Employee terminates
employment on or subsequent to the Target Date (during the fiscal year
concluding on June 30, 2008), the Employee shall be entitled to receive (1) at
the same time that annual bonuses are distributed to other participants in the
annual bonus plan in which the Employee is participating for such fiscal year, a
prorated bonus payment (calculated based on application of the same factors that
the Company utilizes with respect to annual bonuses of similarly situated plan
participants for such fiscal year), and (2) at the same time any cash incentive
payments are distributed to participants in any then applicable cash incentive
plans (in addition to the annual bonus plan) in which the Employee is then
participating, a prorated cash payout of an amount (calculated based on
application
of the same factors that the Company utilizes with respect to similarly situated
plan participants with respect to such plan). In the event the Employee receives
any payments pursuant to this paragraph, each such payment shall be in lieu of
any payment to which the Employee may be entitled with respect to the applicable
annual bonus or other cash incentive plans. The parties will work in good faith
to establish the specific provisions of any incentive awards potentially subject
to this paragraph in a manner that avoids imposition of taxes pursuant to
Section 409A.
4. Section 4(b)(ii). The Agreement is hereby amended to provide that
Section 4(b)(ii) thereof shall have no application with respect to any Payment
Termination that occurs subsequent to June 28, 2006.
5. Miscellaneous. This Amendment may be executed by facsimile and in
one or more counterparts, all of which shall be considered one and the same
agreement. Except as expressly amended hereby, the terms and conditions of the
Agreement shall remain in full force and effect. This Amendment shall be
governed by and construed in accordance with the choice of law and dispute
resolution provisions of the Agreement.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
Parties have executed the foregoing Amendment as of the 2nd day of November,
2005.
CARDINAL HEALTH 303, INC.
By: /s/ George L. Fotiades
--------------------------
Name: George L. Fotiades
Title: President and Chief
Operating Officer
Cardinal Health, Inc.
/s/ David L. Schlotterbeck
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David L. Schlotterbeck
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