UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

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Check the appropriate box:

¨ Preliminary Proxy Statement

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x Definitive Proxy Statement

¨ Definitive Additional Materials

¨ Soliciting Material Pursuant to §240.14a-12

CareFusion Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

x No fee required.

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September 25, 2014

Dear Stockholders:

We cordially invite you to attend the CareFusion Corporation 2014 Annual Meeting of Stockholders. The meeting will be held on Wednesday, November 5, 2014, at 8:30 a.m. (Pacific Standard Time) at CareFusion Headquarters, located at 3750 Torrey View Court, San Diego, CA 92130.

We are pleased to be utilizing the United States Securities and Exchange Commission’s rules allowing companies to provide proxy materials to their stockholders over the Internet. We believe that this will allow us to promptly provide proxy materials to you, while lowering the costs of distribution and reducing the environmental impact of our Annual Meeting.

In accordance with these rules, we are sending stockholders of record at the close of business on September 8, 2014, a Notice of Internet Availability of Proxy Materials on or about September 25, 2014. The Notice of Internet Availability of Proxy Materials contains instructions on how to access our Proxy Statement and Annual Report for the fiscal year ended June 30, 2014. The Notice also provides instructions on how to vote by Internet or telephone and includes instructions on how to receive a paper copy of the proxy materials by mail. If you received our Annual Meeting materials by mail, the Notice of Annual Meeting of Stockholders, Proxy Statement, Annual Report and proxy card were enclosed.

The Notice of Annual Meeting of Stockholders and Proxy Statement describing the business to be conducted at the meeting accompany this letter.

I look forward to sharing information with you about CareFusion Corporation at the Annual Meeting. Whether or not you plan to attend the meeting in person, I encourage you to vote as soon as possible so that your shares will be represented at the meeting.

Very truly yours,

Kieran T. Gallahue

Chairman and Chief Executive Officer

NOTICE OF 2014 ANNUAL MEETING OF STOCKHOLDERS

To Be Held on November 5, 2014

The CareFusion Corporation 2014 Annual Meeting of Stockholders will be held on Wednesday, November 5, 2014 at 8:30 a.m. (Pacific Standard Time) at CareFusion Headquarters, located at 3750 Torrey View Court, San Diego, CA 92130, for the following purposes:

1. To elect the three Class II directors named in the attached Proxy Statement to hold office for a term of one year and until their respective successors are duly elected and qualified.

2. To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2015.

3. To hold a non-binding advisory vote on the compensation of our named executive officers.

4. To consider such other business as may properly come before the meeting and any adjournments or postponements thereof.

Our Board of Directors recommends a vote “FOR” each of the director nominees and “FOR” Proposals 2 and 3. You are entitled to vote only if you were a CareFusion Corporation stockholder as of the close of business on September 8, 2014. For ten days prior to the Annual Meeting, a complete list of the stockholders of record on September 8, 2014, will be available at our principal offices, located at 3750 Torrey View Court, San Diego, CA 92130, for examination during ordinary business hours by any stockholder for any purpose relating to the meeting.

Your vote is important. We encourage you to read the Proxy Statement and to submit a proxy so that your shares will be represented and voted even if you do not attend the Annual Meeting. You may submit your proxy by Internet, telephone or mail. If you received a paper copy of the proxy card by mail, you may sign, date and return the proxy card in the enclosed envelope. If you attend the Annual Meeting, you may revoke your proxy and vote in person.

By order of the Board of Directors,

Joan B. Stafslien

Executive Vice President,

    General Counsel and Corporate Secretary

San Diego, California

September 25, 2014

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE CAREFUSION CORPORATION 2014 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON NOVEMBER 5, 2014

The CareFusion Corporation Proxy Statement and Annual Report for the fiscal year

ended June 30, 2014 are available electronically at https://materials.proxyvote.com/14170T

IMPORTANT VOTING INFORMATION

Pursuant to New York Stock Exchange rule changes adopted by the United States Securities and Exchange Commission, your broker, bank or other financial institution is not permitted to vote on your behalf on the election of directors or on the other matters to be considered at the CareFusion Corporation 2014 Annual Meeting of Stockholders (except on the ratification of the selection of PricewaterhouseCoopers LLP as CareFusion’s independent registered public accounting firm for the 2015 fiscal year), unless you provide specific instructions as to how to vote. For your vote to be counted, you will need to communicate your voting decisions to your broker, bank or other financial institution before the date of the CareFusion Corporation 2014 Annual Meeting of Stockholders.

More Information Is Available

If you have any questions about the proxy voting process, please contact the broker, bank or other financial institution where you hold your shares. The United States Securities and Exchange Commission also has a website (www.sec.gov/spotlight/proxymatters.shtml) with more information about your rights as a stockholder. Additionally, you may contact CareFusion’s Investor Relations Department by email at ir@carefusion.com.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE CAREFUSION CORPORATION 2014 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON NOVEMBER 5, 2014

The CareFusion Corporation Proxy Statement and Annual Report for the fiscal year

ended June 30, 2014 are available electronically at https://materials.proxyvote.com/14170T

    2014 Proxy Statement Summary

To assist you in reviewing the Proxy Statement for the CareFusion Corporation 2014 Annual Meeting of Stockholders (the “Annual Meeting”), we call your attention to the following summary information about the Annual Meeting; our corporate governance framework; our business and financial performance during fiscal 2014; and key executive compensation actions and decisions during the year. For more complete information, please review the CareFusion Corporation Proxy Statement and Annual Report for the fiscal year ended June 30, 2014.

Annual Meeting of Stockholders

•  Date and Time:	November 5, 2014 at 8:30 a.m. (Pacific Standard Time)
•  Place:	CareFusion Corporation Headquarters at 3750 Torrey View Court, San Diego, CA 92130
•  Record Date:	September 8, 2014
•  Voting:	If you were a “stockholder of record” or beneficial owner of shares held in “street name” as of the Record Date, you may vote your shares. You may vote in person at the Annual Meeting or by the Internet, telephone or mail. See the “General Information About the Meeting and Voting” in the Proxy Statement for more detail regarding how you may vote your shares.
•  Admission:	You are entitled to attend the Annual Meeting if: (i) you were a CareFusion Corporation stockholder as of the Record Date (or you are attending as a named representative of a stockholder or you are an immediate family member attending as a guest of a stockholder); and (ii) you present an admission card or proof of ownership of CareFusion common stock as of the Record Date. In addition, all stockholders, immediate family member guests and representatives will be required to present government-issued photo identification (e.g., driver’s license or passport) to gain admission to the Annual Meeting. To request an admission card and register to attend the Annual Meeting, please contact the CareFusion Investor Relations Department by e-mail at ir@carefusion.com or by phone at (858) 617-4621. In addition, you can submit your request by fax at (858) 617-2311 or by mail at 3750 Torrey View Court, San Diego, CA 92130. Please be advised that all purses, briefcases, bags, etc. may be subject to inspection. The use of mobile phones, pagers, recording or photographic equipment, tablets and/or computers is not permitted in the meeting room during the Annual Meeting.

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Proposals and Voting Recommendations

	Board Vote Recommendation	Page References (for more detail)
Proposals:
(1)   Election of three Class II directors to hold office for a term of one year and until their respective successors are duly elected and qualified	FOR EACH NOMINEE	18
(2)   Ratification of appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2015	FOR	24
(3)   Non-binding advisory vote on the compensation of our named executive officers	FOR	28

Director Nominees

The following table provides summary information about each of the three directors nominated for election to serve as Class II directors for a one-year term:

Name	Age		Director Since		Principal Occupation	Experience/ Qualifications	Current Committee Memberships	Independent?
Jacqueline B. Kosecoff, Ph.D.		65		2009	Managing Partner, Moriah Partners, LLC	•   Leadership •   Industry •   Finance	•   Audit	Yes
Michael D. O’Halleran		64		2009	Senior Executive Vice President, Aon PLC	•   Leadership •   Industry •   Finance	•   Human Resources and Compensation	Yes
Supratim Bose		62		2014	Executive Vice President, Boston Scientific Corp.	•   Leadership •   Industry •   Global	—	Yes

Corporate Governance Summary Facts

During fiscal year 2014, we made a number of changes to enhance our corporate governance framework. Upon the recommendation of our Board, our stockholders approved at our 2013 Annual Meeting of Stockholders:

• amendments to our certificate of incorporation and by-laws to repeal our classified Board structure and phase-in annual director elections over a three-year period;

• an amendment to our by-laws to replace the plurality voting standard with a majority voting standard for uncontested elections of directors; and

• amendments to our certificate of incorporation and by-laws to lower the supermajority voting thresholds contained therein from 80% to 66 2/3%.

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As a result, we amended and restated our certificate of incorporation and by-laws on November 6, 2013. The following table summarizes our current Board structure and key elements of our corporate governance framework:

Size of Board*	10
Number of Independent Directors*	9
Chairman and CEO	Combined
Presiding Independent Director	Yes
Board Self-Evaluation	Annual
Review of Independence of Board	Annual
Independent Directors Meet Without Management Present	Yes
Annual Director Elections†	Yes
Voting Standard for Election of Directors in Uncontested Elections	Majority
Diverse Board (as to background, experience and skills)	Yes
Board Orientation / Education Program	Yes

* As set forth below under “Proposal 1—Election of Directors,” Mr. Robert Wayman will serve as a director until his current term expires at the Annual Meeting. Effective upon the expiration of Mr. Wayman’s term, the Board has approved a reduction in the size of the Board from ten to nine directors.

† At the 2013 Annual Meeting of Stockholders, our stockholders approved amendments to our certificate of incorporation and by-laws to declassify the Board over a three-year period. The directors elected at this Annual Meeting will serve a one-year term.

In addition, during fiscal year 2014, our Board approved an increase in the size of the Board from nine to ten directors and elected Mr. Supratim Bose as a director. Mr. Bose currently serves as Executive Vice President and President, Asia-Pacific, Middle East and Africa for Boston Scientific Corp., a global medical technology company. In connection with the Board’s regular self-assessment process, the Board determined that it would it be beneficial to recruit a new director with a healthcare industry background and direct, local experience in Asia. With the assistance of a director search firm, the Governance and Compliance Committee led a search process, and upon the recommendation of the Governance and Compliance Committee, the Board elected Mr. Bose as director in May 2014. For more information regarding Mr. Bose, please see below under “Proposal 1—Election of Directors.”

Fiscal 2014 Business and Financial Highlights

During fiscal 2014, we delivered solid growth, while making substantial investments in our future. We grew revenue 8% to $3.84 billion and grew operating cash flows from continuing operations 12% to $685 million. We introduced more than 20 new and enhanced products, and we invested $190 million in research and development activities to advance our new product pipeline and enhance our existing products. In furtherance of our strategy to accelerate global growth, we acquired two companies in fiscal 2014, and we made strategic investments in others. In addition to deploying capital for research and development and merger and acquisition activities, we also returned capital to our stockholders through our share repurchase activities. These efforts resulted in significant stockholder returns, as our stock price increased 20% in fiscal 2014.

The following is a summary of fiscal 2014 business and financial highlights:

• Strong Revenue Growth and Cash Flows. We grew revenue by 8% to $3.84 billion. Operating cash flows from continuing operations were $685 million, an increase of 12% over the prior year.

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• Product Innovation. In furtherance of our vision to improve the safety and cost of healthcare, we introduced more than 20 new and enhanced products during fiscal 2014. We launched a number of innovative products within our Procedural Solutions segment, including our new ChloraShield^® IV dressing with chlorhexidine gluconate antimicrobial, and our Chemo Safety System, which is a needle-free closed system designed to improve clinician and patient safety when preparing, handling and administering hazardous pharmaceuticals used in chemotherapy treatments. In our Medical Systems segment, we completed the roll-out of our Pyxis^® ES Platform, our next generation medication dispensing system that helps prevent medication errors, free time for patient care and reduce medication use inefficiencies.

• Global Growth. We acquired two companies and we made strategic investments in others to accelerate our global growth. In October 2013, we acquired Grupo Sendal, S.L., an infusion specialty disposables manufacturer in Spain; and in December 2013, we acquired the Vital Signs business of General Electric Company’s Healthcare division, a leading manufacturer of single-use consumables for respiratory care and anesthesiology.

• Share Repurchase Activities. During fiscal 2014, we returned $577 million to stockholders through common stock repurchases under our share repurchase program that the Board approved in August 2013. In August 2014, with a focus on enhancing stockholder value, the Board approved a new program for the repurchase of an additional $750 million of our common stock through June 2016.

Fiscal 2014 Executive Compensation Highlights

The primary objective of our executive compensation program is to align the compensation of our executive officers with our overall business goals, core values and stockholder interests. Our compensation objective is to provide a competitive pay package that motivates achievement of above-market performance and emphasizes a long-term view in creating stockholder value. Our stockholders demonstrated strong support for our executive compensation program by casting approximately 97% of their votes in favor of our “say-on-pay” proposal related to our fiscal 2013 executive compensation, and we retained the core design of our fiscal 2013 executive compensation program for fiscal 2014.

For fiscal 2014, total direct compensation of our named executive officers consisted of base salaries, annual cash incentives under our management incentive plan (“MIP”) and long-term equity-based incentive (“LTI”) awards. Consistent with our commitment to a “pay-for-performance” executive compensation program, a significant portion of the compensation of our named executive officers in fiscal 2014 was at-risk. For our Chief Executive Officer, 88% of his target total direct compensation was subject to annual performance goals or tied to the value of our common stock. For our other named executive officers as a group, 80% of their target total direct compensation was subject to annual performance goals or tied to the value of our common stock.

Fiscal 2014 Target Total Direct Compensation

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We evaluate base salaries annually based upon competitive benchmarks, responsibilities, skills, experience and individual performance. Annual cash incentive awards under the MIP are performance-based, with payouts subject to the attainment of Company-wide and individual performance goals. For fiscal 2014, we established Company-wide financial performance goals related to revenue growth and operating margin. Fiscal 2014 annual LTI awards for our named executive officers were comprised of stock options, performance stock units and restricted stock units allocated 50%, 25% and 25%, respectively, of the total LTI target award values. For fiscal 2014, we granted performance stock units to our executive officers with performance goals based on the compounded annual growth rate of the Company’s fully diluted, adjusted earnings per share over the three year performance period beginning July 1, 2013 and ending June 30, 2016.

Our executive compensation philosophy and program continue to focus on creating alignment with our stockholders and supporting our commitment to good compensation governance. The following aspects of our executive compensation program during fiscal 2014 reinforce this:

Advisory Vote on Executive Compensation	Annual
Clawback Policy for Variable Cash Compensation and Equity	Yes
Tax Gross-Ups	No
Independent Compensation Consultant	Yes
Stock Ownership Guidelines	Yes
Compensation Risk Assessment	Annual
Hedging, Pledging and Margin Activities	Prohibited
Payouts of Equity and Cash Awards upon a “Change of Control”	Double-Trigger

Additional information about our compensation philosophy and program, including compensation determinations for each of our named executive officers, can be found in the “Compensation Discussion and Analysis” commencing on page 30 of the Proxy Statement. We encourage you to read the entire Proxy Statement and to vote your shares at the Annual Meeting. If you are unable to attend the Annual Meeting in person, we encourage you to submit a proxy so that your shares will be represented and voted.

v

TABLE OF CONTENTS

GENERAL INFORMATION ABOUT THE MEETING AND VOTING	1
GOVERNANCE OF OUR COMPANY	6
Overview	6
Corporate Governance Guidelines	6
Policies on Ethics and Compliance	6
Stockholder Recommendations for Director Nominees	7
Identification and Evaluation of Director Nominees	7
Director Independence	8
Board Leadership Structure	9
Executive Sessions	10
Board and Committee Effectiveness	10
Attendance at Annual Meeting of Stockholders	10
Oversight of Risk Management	10
Communicating with the Board	11
Board and Committee Membership and Structure	11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	15
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	17
Procedures for Approval of Related Person Transactions	17
Related Person Transactions	17
PROPOSAL 1—ELECTION OF DIRECTORS	18
Nominees for Election as Directors and Directors Continuing in Office	19
PROPOSAL 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	24
Audit Related Matters	25
Report of the Audit Committee	27
PROPOSAL 3—ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS	28
COMPENSATION DISCUSSION AND ANALYSIS	30
Executive Overview	30
Introduction	33
Compensation Philosophy	34
Role of the Compensation Committee and Management	34
Role of the Compensation Consultant	35
Comparator Group and Benchmarking	35
Compensation Determinations	36
Agreements Regarding Executive Compensation	43
Severance Benefits and Payments Upon a Change in Control	44
Compensation Determinations for Fiscal 2015	46
Policies, Guidelines and Practices Related to Executive Compensation	47
Tax and Accounting Matters	48
Compensation Committee Report	49
EXECUTIVE COMPENSATION	50
Summary Compensation Table	50
Employment Agreements and Other Compensation Arrangements	52
Grants of Plan-Based Awards for Fiscal 2014	53
Compensation Plans	54
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2014	55
Option Exercises and Stock Vested for Fiscal 2014	56
Nonqualified Deferred Compensation in Fiscal 2014	57
Potential Payments on Termination or Change in Control	58
Director Compensation	65
Compensation Committee Interlocks and Insider Participation	66
ADDITIONAL INFORMATION	67
Stockholder Proposals for 2015 Annual Meeting	67
Householding of Annual Meeting Materials	67
OTHER BUSINESS	68

vi

CAREFUSION CORPORATION

3750 Torrey View Court, San Diego, California 92130

Telephone: (858) 617-2000

PROXY STATEMENT FOR THE 2014 ANNUAL MEETING OF STOCKHOLDERS

November 5, 2014

8:30 a.m. (Pacific Standard Time)

GENERAL INFORMATION ABOUT THE MEETING AND VOTING

Why am I receiving these materials?

We have made these proxy materials available to you in connection with the solicitation by the Board of Directors (the “Board”) of CareFusion Corporation (the “Company” or “CareFusion”) of proxies to be voted at the CareFusion Corporation 2014 Annual Meeting of Stockholders to be held on November 5, 2014 (the “Annual Meeting”), and at any postponements or adjournments of the Annual Meeting. If you held shares of our common stock on September 8, 2014 (the “Record Date”), you are invited to attend the Annual Meeting and vote on the proposals described below under the heading “What am I voting on?” These proxy materials are first being made available to our stockholders on or about September 25, 2014.

Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

In accordance with the rules adopted by the United States Securities and Exchange Commission (the “SEC”), we may elect to provide proxy materials, including this Proxy Statement and our Annual Report to Stockholders (the “Annual Report”), to our stockholders through the Internet instead of mailing printed copies. The majority of stockholders will not receive printed copies of the proxy materials unless they request them. Instead, we elected to mail the Notice of Internet Availability of Proxy Materials (the “Notice”) to most of our stockholders instructing them how to access and review all of the proxy materials on the Internet. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or your proxy card and to download printable versions of the proxy materials or to request and receive a printed set of the proxy materials from us. We believe that this will allow us to expeditiously provide proxy materials to our stockholders, while lowering the costs of distribution and reducing the environmental impact of our Annual Meeting.

What am I voting on?

There are three proposals scheduled to be voted on at the Annual Meeting:

• Proposal 1—To elect the three Class II directors named in this Proxy Statement to hold office for a term of one year and until their respective successors are duly elected and qualified.

• Proposal 2—To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2015.

• Proposal 3—To hold a non-binding advisory vote on the compensation of our named executive officers.

How does the Board recommend that I vote?

Our Board recommends that you vote your shares “FOR” each of the director nominees and “FOR” each of Proposals 2 and 3 included in this Proxy Statement.

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Who is entitled to vote at the Annual Meeting?

If you were a holder of CareFusion common stock, either as a stockholder of record or as the beneficial owner of shares held in street name as of the close of business on September 8, 2014, the Record Date for the Annual Meeting, you may vote your shares at the Annual Meeting. For ten days prior to the Annual Meeting, a complete list of the stockholders of record entitled to vote at the Annual Meeting will be available at CareFusion’s principal offices, located at 3750 Torrey View Court, San Diego, CA 92130, for examination during ordinary business hours by any stockholder for any purpose relating to the meeting.

As of the Record Date, there were 203,401,843 shares of our common stock outstanding, each of which is entitled to one vote. As summarized below, there are some distinctions between shares held of record and those owned beneficially in street name.

What does it mean to be a “stockholder of record”?

You are a “stockholder of record” if your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A. As a stockholder of record, you have the right to grant your voting proxy directly to CareFusion or to vote in person at the Annual Meeting. If you requested to receive printed proxy materials, we have enclosed or sent a proxy card for you to use. You may also vote by Internet or telephone, as described in the Notice and below under the heading “How do I vote my shares of CareFusion common stock?”

What does it mean to beneficially own shares in “street name”?

You are deemed to beneficially own your shares in “street name” if your shares are held in an account at a brokerage firm, bank, broker-dealer, trust, or other similar organization. If this is the case, the Notice was forwarded to you by that organization. As the beneficial owner, you have the right to direct your broker, bank, trustee, or nominee how to vote your shares, and you are also invited to attend the Annual Meeting. If you hold your shares in street name and do not provide voting instructions to your broker, bank, trustee or nominee, your shares will not be voted on any proposals on which such party does not have discretionary authority to vote (a “broker non-vote”).

Since a beneficial owner is not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank, trustee, or nominee that holds your shares giving you the right to vote the shares at the meeting. If you do not wish to vote in person or you will not be attending the Annual Meeting, you may vote by proxy. You may also vote by Internet or telephone, as described in the Notice and below under the heading “How do I vote my shares of CareFusion common stock?”

How many shares must be present or represented to conduct business at the Annual Meeting?

The quorum requirement for holding the Annual Meeting and transacting business is that holders of a majority of the voting power of the issued and outstanding common stock of CareFusion entitled to vote generally in the election of directors must be present in person or represented by proxy. Abstentions and shares represented by “broker non-votes” are counted for the purpose of determining the presence of a quorum. As of the Record Date, there were 203,401,843 shares of our common stock outstanding, and each share is entitled to one vote at the Annual Meeting.

What is the voting requirement to approve each of the proposals?

• Proposal 1 (Election of Directors). Directors are elected by a majority of votes cast, which means that a nominee will be elected only if the number of shares voted “FOR” the nominee exceeds the number of votes cast “AGAINST” that nominee.

• Proposal 2 (Ratification of Auditors). Requires the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal.

2

• Proposal 3 (Advisory Vote on the Compensation of our Named Executive Officers.) Requires the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. While this is an advisory vote and non-binding, our Board and the Human Resources and Compensation Committee will take these voting results on this proposal into consideration when making future executive compensation decisions.

How are votes counted?

For the proposal to elect the director nominees, you may vote “FOR” or “AGAINST” the election of each of the director nominees, or you may “ABSTAIN” from voting for one or more director nominees. Neither a vote to “ABSTAIN” nor a broker non-vote will count as a vote cast “FOR” or “AGAINST” a director nominee, and will have no direct effect on the outcome of the election of directors.

For each of the other proposals included in this Proxy Statement, you may vote “FOR,” “AGAINST” or “ABSTAIN” on each of these proposals. If you “ABSTAIN,” it has the same effect as a vote “AGAINST.”

As discussed above, if you hold your shares in street name and do not provide voting instructions to your broker, bank, trustee or nominee, your shares will not be voted on any proposals on which such party does not have discretionary authority to vote (a “broker non-vote”). On matters on which a broker, bank, or other financial institution is permitted to exercise discretionary voting authority, your broker, bank, or other financial institution may vote your shares in its discretion. The ratification of our independent public accountants (Proposal 2) is the only proposal for which your broker, bank or other financial institution may exercise discretionary voting authority on your behalf. Accordingly, if you do not provide voting instructions on each of the other proposals to be voted on at the Annual Meeting, your broker, bank, or other financial institution cannot vote your shares on these proposals. In tabulating the voting results for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal. For Proposals 1 through 3, broker non-votes will not affect the outcome of the voting on such proposals, assuming that a quorum is obtained.

How do I vote my shares of CareFusion common stock?

If you are a stockholder of record, you can vote in the following ways:

• By Internet: by following the Internet voting instructions included in the Notice or by following the instructions on the proxy card if you received a paper copy of the proxy materials at any time up until 11:59 p.m., Eastern Standard Time, on November 4, 2014.

• By Telephone: by following the telephone voting instructions included in the proxy card at any time up until 11:59 p.m., Eastern Standard Time, on November 4, 2014.

• By Mail: if you have received or requested a printed copy of the proxy materials from us by mail, you may vote by mail by marking, dating and signing your proxy card in accordance with the instructions on it and returning it by mail in the pre-addressed reply envelope provided with the proxy materials. The proxy card must be received prior to the Annual Meeting.

If your shares are held through a benefit or compensation plan or in street name, your plan trustee or your bank, broker or other nominee should give you instructions for voting your shares. In these cases, you may vote by Internet, telephone or mail by submitting a voting instruction form.

If you satisfy the admission requirements to the Annual Meeting, as described below under the heading “How do I attend the Annual Meeting?”, you may vote your shares in person at the meeting. Even if you plan to attend the Annual Meeting, we encourage you to vote in advance by Internet, telephone or mail so that your vote will be counted in the event you later decide not to attend the Annual Meeting. Shares held through a benefit or compensation plan cannot be voted in person at the Annual Meeting.

3

How will my shares be voted at the Annual Meeting?

If you complete and submit your proxy card or voting instructions, the persons named as proxies will follow your instructions. If you are a stockholder of record and you submit a proxy card or voting instructions but do not direct how to vote on each item, the persons named as proxies will vote as the Board recommends on each proposal.

Who will count votes at the Annual Meeting?

We have engaged Broadridge Financial Solutions to serve as the tabulator of votes and an independent representative of Broadridge to serve as the Inspector of Election at the Annual Meeting.

How do I attend the Annual Meeting?

To attend the Annual Meeting in person, you will need an admission card or proof of ownership of CareFusion common stock as of the Record Date. All stockholders planning to attend the Annual Meeting can request an admission card and register to attend by contacting the CareFusion Investor Relations Department, as set forth below. Admission to the Annual Meeting is limited to CareFusion stockholders as of the Record Date, a named representative of such a stockholder, or an immediate family member of such a stockholder attending as a guest. We reserve the right to limit the number of immediate family members or representatives who may attend the meeting. In addition to an admission card or proof of ownership as of the Record Date, stockholders and their representatives and immediate family members will be required to present government-issued photo identification (e.g., driver’s license or passport) to gain admission to the Annual Meeting.

To request an admission card and register to attend the Annual Meeting, please contact the CareFusion Investor Relations Department by e-mail at ir@carefusion.com or by phone at (858) 617-4621. In addition, you can submit your request by fax at (858) 617-2311 or by mail at 3750 Torrey View Court, San Diego, CA 92130.

Please include the following information in your request for an admission card to attend the Annual Meeting:

• your name and complete mailing address;

• whether you require special assistance at the meeting;

• the name of your immediate family member guest, if one will accompany you;

• if you will be naming a representative to attend the meeting on your behalf, the name, complete mailing address and telephone number of that individual; and

• proof that you own CareFusion common stock as of the Record Date (such as a letter from your bank, broker, or other financial institution or a photocopy of a current brokerage or other account statement).

Please be advised that all purses, briefcases, bags, etc. that are brought into the facility may be subject to inspection. The use of mobile phones, pagers, recording or photographic equipment, tablets and/or computers is not permitted in the meeting room during the Annual Meeting.

What does it mean if I receive more than one Notice of Internet Availability of Proxy Materials or set of proxy materials?

It generally means you hold shares registered in multiple accounts. To ensure that all your shares are voted, please submit proxies or voting instructions for all of your shares.

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May I change my vote or revoke my proxy?

Yes. If you are a stockholder of record, you may change your vote or revoke your proxy by:

• filing a written statement to that effect with our Corporate Secretary, at or before the taking of the vote at the Annual Meeting;

• voting again via the Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m. (Eastern Standard Time) on November 4, 2014;

• submitting a properly signed proxy card with a later date that is received at or prior to the Annual Meeting; or

• attending the Annual Meeting and voting in person.

The written statement or subsequent proxy should be delivered to CareFusion Corporation, 3750 Torrey View Court, San Diego, CA 92130, Attention: Corporate Secretary, or hand delivered to the Corporate Secretary, before the taking of the vote at the Annual Meeting. If you are a beneficial owner and hold shares through a broker, bank or other nominee, you may submit new voting instructions by contacting your broker, bank or other nominee. You may also change your vote or revoke your voting instructions in person at the Annual Meeting if you obtain a signed proxy from the record holder (broker, bank or other nominee) giving you the right to vote the shares.

Could other matters be decided at the Annual Meeting?

We are currently unaware of any matters to be raised at the Annual Meeting other than those referred to in this Proxy Statement. If other matters are properly presented at the Annual Meeting for consideration and you are a stockholder of record and have submitted your proxy, the persons named in your proxy will have the discretion to vote on those matters for you; provided that they will not vote in the election of directors for any nominee(s) for whom authority to vote has been withheld.

Who will pay for the cost of soliciting proxies?

We will pay for the cost of soliciting proxies, including the cost of preparing and mailing the Notice and the proxy materials. Proxies may be solicited on our behalf by our directors, officers or employees (for no additional compensation) in person or by telephone, electronic transmission and facsimile transmission. We have hired Morrow & Co., LLC, at an estimated cost of $10,000, plus reimbursement of reasonable expenses, to assist in the solicitation of proxies from brokers, nominees, institutions and individuals. Arrangements will also be made with custodians, nominees and fiduciaries for forwarding a Notice or printed proxy materials, as applicable, to beneficial owners of shares held of record by such custodians, nominees and fiduciaries, and we will reimburse such custodians, nominees and fiduciaries for reasonable expenses incurred in connection therewith.

How will we announce the voting results?

We will announce preliminary voting results at the Annual Meeting. We will report final results by filing a current report on Form 8-K with the SEC.

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GOVERNANCE OF OUR COMPANY

Overview

We are committed to maintaining the highest standards of business conduct and corporate governance, which we believe are fundamental to the overall success of our business, serving our stockholders well and maintaining our integrity in the marketplace. Our Corporate Governance Guidelines and Code of Conduct, together with our amended and restated certificate of incorporation (our “certificate of incorporation”), amended and restated by-laws (our “by-laws”) and the charters of our Board Committees, form the basis for our corporate governance framework. As discussed below under “—Board and Committee Membership and Structure,” our Board has established three standing committees to assist in fulfilling its responsibilities to CareFusion and its stockholders: the Audit Committee, the Human Resources and Compensation Committee and the Governance and Compliance Committee.

Our Corporate Governance Guidelines (which include our categorical standards of director independence), our Code of Conduct (which includes our policies on ethics and compliance), our Board Committee charters and other corporate governance information can be accessed in the “Investors” section of our website at www.carefusion.com, by clicking the “Corporate Governance” link. Any stockholder also may request copies of these materials in print, without charge, by contacting our Investor Relations Department at 3750 Torrey View Court, San Diego, CA 92130, or by calling (858) 617-4621.

Corporate Governance Guidelines

Our Corporate Governance Guidelines are designed to ensure effective corporate governance of our Company. Our Corporate Governance Guidelines cover topics including, but not limited to, director qualification criteria, director responsibilities (including those of the Presiding Director), director compensation, director orientation and continuing education, communications from stockholders to the Board, succession planning and the annual evaluations of the Board and its Committees. Our Corporate Governance Guidelines are reviewed regularly by the Governance and Compliance Committee of our Board and revised when appropriate. The full text of our Corporate Governance Guidelines can be accessed in the “Investors” section of our website at www.carefusion.com, by clicking the “Corporate Governance” link. A printed copy may also be obtained by any stockholder upon request to our Investor Relations Department.

Policies on Ethics and Compliance

Our Board adopted a Code of Conduct for our Company to help ensure that our business is conducted in a consistently legal and ethical manner. The Code of Conduct establishes policies pertaining to, among other things, employee conduct in the workplace, electronic communications and information security, accuracy of books, records and financial statements, securities trading, confidentiality, conflicts of interest, fairness in business practices, the Foreign Corrupt Practices Act, antitrust laws and political activities and solicitations. All of our employees, including our executive officers, as well as the members of our Board, are required to comply with our Code of Conduct. The full text of the Code of Conduct can be accessed in the “Investors” section of our website at www.carefusion.com, by clicking the “Corporate Governance” link. A printed copy may also be obtained by any stockholder upon request to our Investor Relations Department. The Audit Committee is responsible for reviewing and approving all amendments to the Code of Conduct and all waivers of the Code of Conduct for executive officers or directors, and providing for prompt disclosure of all amendments and waivers required to be disclosed under applicable law. We will disclose future amendments to our Code of Conduct, or waivers required to be disclosed under applicable law from our Code of Conduct for our principal executive officer, principal financial officer, principal accounting officer or controller, and our other executive officers and our directors, on our website, www.carefusion.com, within four business days following the date of the amendment or waiver.

In furtherance of our commitment to the highest standards of ethical practice, corporate conduct and integrity, our Board has also adopted the CareFusion Compliance Program Declaration and Description. The

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purpose of our compliance program is to increase the likelihood of preventing, detecting, and correcting violations of law or Company policy, and the declaration provides additional descriptions of compliance policies, procedures and efforts to establish an effective compliance program. The Compliance Program Declaration and Description can be accessed in the “Ethics and Compliance” section of our website at www.carefusion.com, by clicking the “Our Company” link.

In addition, we maintain a Conduct Line by which employees and third parties may report violations of the Code of Conduct or seek guidance on business conduct matters. The Conduct Line is operated by an independent, third-party company, and has multi-lingual representatives available to take calls confidentially 24 hours a day, seven days a week, and can also be accessed via the Internet at www.carefusionconductline.com.

Stockholder Recommendations for Director Nominees

In nominating candidates for election as a director, the Governance and Compliance Committee will consider a reasonable number of candidates recommended by a single stockholder who has held over 0.1% of CareFusion common stock for over one year and who satisfies the notice, information and consent provisions set forth in our by-laws and Corporate Governance Guidelines. Stockholders who wish to recommend a candidate may do so by writing to the Governance and Compliance Committee in care of the Corporate Secretary, CareFusion Corporation, 3750 Torrey View Court, San Diego, CA 92130. The Governance and Compliance Committee will use the same evaluation process for director nominees recommended by stockholders as it uses for other director nominees. A printed copy of our by-laws may be obtained by any stockholder upon request to our Investor Relations Department.

Identification and Evaluation of Director Nominees

Our Governance and Compliance Committee uses a variety of methods for identifying and evaluating director nominees. Our Governance and Compliance Committee regularly assesses the appropriate size and composition of the Board, the needs of the Board and the respective Board Committees, and the qualifications of candidates in light of these needs. Candidates may come to the attention of the Governance and Compliance Committee through stockholders, management, current members of the Board, or search firms. The evaluation of these candidates may be based solely upon information provided to the Governance and Compliance Committee or may also include discussions with persons familiar with the candidate, an interview of the candidate or other actions the Governance and Compliance Committee deems appropriate, including the use of third parties to review candidates.

While we do not have a stand-alone diversity policy, in considering whether to recommend any director nominee, including candidates recommended by stockholders, we believe that the backgrounds and qualifications of our directors, considered as a group, should provide a significant mix of experience, knowledge and abilities that will allow our Board and its Committees to fulfill their respective responsibilities. As set forth in our Corporate Governance Guidelines, these criteria generally include, among other things, an individual’s business experience and skills (including skills in core areas such as operations, management, technology, accounting and finance, strategic planning and international markets), as well as independence, judgment, knowledge of our business and industry, professional reputation, leadership, integrity and ability to represent the best interests of the Company’s stockholders. In addition, the Governance and Compliance Committee will also consider the ability to commit sufficient time and attention to the activities of the Board, as well as the absence of any potential conflicts with the Company’s interests. The Governance and Compliance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective director nominees. Our Board will be responsible for selecting candidates for election as directors based on the recommendation of the Governance and Compliance Committee.

During fiscal 2014, our Board conducted a director search process to identify a new director candidate to bring additional skills and experience to the Board. In connection with the Board’s regular self-assessment

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process, the Board determined that it would it be beneficial to recruit a new director to the Board with a healthcare industry background and direct, local experience in Asia. With the assistance of a director search firm, the Governance and Compliance Committee led the director search process. Upon the recommendation of the Governance and Compliance Committee, our Board approved an increase in the size of the Board from nine to ten directors and elected Mr. Supratim Bose as a director in May 2014. Mr. Bose currently serves as Executive Vice President and President, Asia-Pacific, Middle East and Africa for Boston Scientific Corp., a global medical technology company. In electing Mr. Bose as a director, the Board considered Mr. Bose’s executive management and leadership experience at publicly traded multinational medical device companies. Among other things, it was the Board’s view that Mr. Bose’s in-country experience building markets across Asia-Pacific, the Middle East and Africa would permit him to contribute valuable strategic management insight to the CareFusion Board of Directors, particularly as the Company continues to focus on growing its business outside the United States. For more information regarding Mr. Bose and his qualifications, please see below under “Proposal 1—Election of Directors.”

We believe that our current Board includes individuals with a strong background in executive leadership and management, accounting and finance, and Company and industry knowledge. In addition, each of our directors has a strong professional reputation and has shown a dedication to his or her profession and community. We also believe that our directors’ diversity of backgrounds and experiences, which include medicine, academia, business and finance, results in different perspectives, ideas, and viewpoints, which make our Board more effective in carrying out its duties. We believe that our directors hold themselves to the highest standards of integrity and that they are committed to representing the long-term interests of our stockholders.

The Governance and Compliance Committee and the Board believe that each of the director nominees for election at the Annual Meeting brings a strong and unique set of qualifications, attributes and skills and provides the Board as a whole with an optimal balance of experience, leadership and competencies in areas of importance to our Company. Under “Proposal 1—Election of Directors,” we provide an overview of each director nominee’s principal occupation, business experience and other directorships, together with other key attributes that we believe provide value to the Board, the Company and its stockholders.

Director Independence

The Board has established categorical standards to assist it in making its determination of director independence. As embodied in our Corporate Governance Guidelines, using standards that the Board has adopted to assist it in assessing independence and in accordance with applicable SEC rules and the listing standards of the NYSE, the Board defines an “independent director” to be a director who:

• is not and has not been during the last three years an employee of, and whose immediate family member is not and has not been during the last three years an executive officer of, the Company (provided, however, that, in accordance with NYSE listing standards, service as an interim executive officer, by itself, does not disqualify a director from being considered independent under this test following the conclusion of that service);

• has not received, and whose immediate family member has not received other than for service as an employee (who is not an executive officer), more than $120,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), in any 12-month period during the last three years (provided however, that, in accordance with NYSE listing standards, compensation received by a director for former service as an interim executive officer need not be considered in determining independence under this test);

• (a) is not a current partner or employee of a firm that is our internal or external auditor; (b) does not have an immediate family member who is a current partner of our internal or external auditor; and (c) is not and was not during the last three years, and whose immediate family member is not and was not during the last three years, a partner or employee of our internal or external auditor who personally worked on our audit within that time;

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• is not and has not been during the last three years employed, and whose immediate family member is not and has not been during the last three years employed, as an executive officer of another Company during a time when any of our present executive officers serve on that other company’s compensation committee;

• is not, and whose immediate family member is not, serving as a paid consultant or advisor to the Company or to any of our executive officers, or a party to a personal services contract with the Company or with any of our executive officers;

• is not a current employee of, and whose immediate family member is not a current executive officer of, a company that has made payments to, or received payments from, us for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues;

• is not, and whose immediate family member is not, an executive officer of a non-profit or other tax-exempt organization to which we have made contributions during the past three years that, in any single fiscal year, exceeded the greater of $1 million or 2% of the organization’s consolidated gross revenues (amounts that we contribute under matching gift programs are not included in the contributions calculated for purposes of this standard);

• has no business or personal relationships with the compensation consultant or the firm employing the consultant or with any executive officer of the compensation consultant company; and

• has no other material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us).

The Board assesses on a regular basis, and at least annually, the independence of our directors and, based on the recommendation of the Governance and Compliance Committee, makes a determination as to which directors are independent. References to “us,” “we” or “the Company” above would include any subsidiary in a consolidated group with CareFusion Corporation. The terms “immediate family member” and “executive officer” above are expected to have the same meaning specified for such terms in the NYSE listing standards.

The Board has determined that the following directors, comprising all of our non-employee directors, are independent under the listing standards of the NYSE and our Corporate Governance Guidelines: Messrs. Supratim Bose, Philip L. Francis, Robert F. Friel, J. Michael Losh, Gregory T. Lucier, Michael D. O’Halleran and Robert P. Wayman and Drs. Jacqueline B. Kosecoff and Edward D. Miller.

Board Leadership Structure

Mr. Gallahue serves as our Chief Executive Officer and Chairman of the Board. The Board has determined that combining the Chief Executive Officer and Chairman positions is the appropriate leadership structure for CareFusion at this time. The Board believes that combining these roles fosters clear accountability, effective decision-making and alignment of corporate strategy. The Board also believes that this combined role promotes effective execution of strategic goals and facilitates information flow between management and the Board.

Our Board has determined that maintaining the independence of the Company’s non-employee directors, managing the composition and function of its Committees, and appointing an independent Presiding Director having the duties described below help maintain the Board’s strong, independent oversight of management. Nine of our ten Board members are independent non-employee directors. These independent, non-employee directors meet regularly in executive session without the presence of management (i.e., without the Chief Executive Officer). In addition, each of our Board Committees consists entirely of independent non-employee directors. Our Board has also appointed a Presiding Director as a matter of good corporate governance and believes that the appointment of the Presiding Director provides a balance for effective and independent oversight of management. Pursuant to our by-laws and Corporate Governance Guidelines, the Presiding Director is selected

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annually by the independent non-employee directors. The Presiding Director presides at meetings of the non-management and independent directors, presides at all meetings of the Board at which the Chairman is not present and performs such other functions as the Board may direct, including advising on the selection of Committee chairs and advising management on the agenda for Board meetings. In addition, the Presiding Director serves as liaison between the Chairman and the independent non-employee directors and has the authority to call meetings of the independent non-employee directors.

The Board believes that this structure is in the best interest of CareFusion and its stockholders at this time, and provides an environment in which its independent directors are fully informed, have significant input into the content of Board meetings and are able to provide objective and thoughtful oversight of management. Nevertheless, the Board intends to carefully evaluate from time to time whether our Chief Executive Officer and Chairman positions should continue to be combined based on what the Board believes is best for the Company and its stockholders.

Executive Sessions

Executive sessions of independent non-employee directors are held in connection with each regularly scheduled Board meeting and at other times as necessary, and are chaired by the Presiding Director. The Board’s policy is to hold executive sessions without the presence of management, including the Chief Executive Officer and other non-independent directors, if any. The Committees of our Board also generally meet in executive session at the end of each Committee meeting.

Board and Committee Effectiveness

The Board and each of its Committees performs an annual self-assessment to evaluate their effectiveness in fulfilling their obligations. The Governance and Compliance Committee also conducts an individual evaluation of each director at least once every three years, the results of which are shared with such individual director. The Board, Committee and individual director evaluations cover a wide range of topics, including, among others, the fulfillment of the Board and Committee responsibilities identified in the Corporate Governance Guidelines and charters for each Committee.

Attendance at Annual Meeting of Stockholders

We encourage all of our directors to attend each annual meeting of stockholders. All nine of the directors serving on our Board at the 2013 Annual Meeting of Stockholders attended the meeting.

Oversight of Risk Management

The Board as a whole has responsibility for oversight of the Company’s risk management policies and procedures, with the primary responsibility for identifying and managing risk at the Company resting with senior management. The Board and its Committees are informed of and review, as appropriate, various areas of risk, including financial risks, strategic and operational risks and risks relating to regulatory and legal compliance.

While the Board as a whole has responsibility for oversight of the Company’s risk management policies and procedures, each of the Committees has a role in fulfilling the Board’s risk oversight responsibilities, as follows:

• The Audit Committee considers risks related to financial accounting and reporting, internal accounting controls, auditing compliance and other related matters. The Audit Committee discusses with management the Company’s major risk exposures and the steps management has taken to monitor and control such exposures, including the guidelines and policies to govern the process by which risk assessment and risk management are undertaken.

• The Governance and Compliance Committee considers risks related to quality and regulatory matters, ethics and compliance matters and other related matters. The Governance and Compliance Committee

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discusses with management the Company’s policies, practices and compliance efforts regarding compliance with pharmaceutical and medical device laws and other laws and regulations affecting the manufacture, distribution and sale of the Company’s products worldwide, as well as compliance with anti-bribery laws, competition laws and interactions with healthcare professionals.

• The Human Resources and Compensation Committee considers risks related to the design of the Company’s compensation programs. The Human Resources and Compensation Committee discusses with management the Company’s policies and practices related to compensation, including the annual compensation risk assessment. For more information on the interaction between risk and our compensation practices, see below under the heading “Compensation Discussion and Analysis—Role of the Compensation Committee and Management.”

In fiscal year 2014, the Company took a number of steps to enhance its risk management policies and procedures. Among other things, in accordance with compliance best practices, the Company determined to separate the roles of the General Counsel and Chief Compliance Officer. In January 2014, our Vice President, Ethics & Compliance, assumed the role of Chief Compliance Officer, reporting directly to our Chief Executive Officer. Under this framework, our General Counsel and our Chief Compliance Officer both work closely with the Company’s senior management to identify risks material to the Company and report regularly to the Chief Executive Officer and the Board and its Committees, as appropriate, regarding the Company’s risk management policies and procedures. In addition, our Executive Vice President, Quality, Regulatory and Medical Affairs plays an important role in the Company’s risk management efforts, by focusing on the comprehensive government regulation of the healthcare industry. We have invested heavily in our quality systems to maintain compliance with regulatory requirements, understand and meet the needs of our customers, effectively resolve quality issues, and improve our products and services. Our Executive Vice President, Quality, Regulatory and Medical Affairs reports regularly to the Chief Executive Officer and the Governance and Compliance Committee on these matters to ensure appropriate oversight.

Communicating with the Board

Our Corporate Governance Guidelines establish procedures by which stockholders and other interested parties may communicate with the Board, any Board Committee, any individual director (including the Presiding Director) or the independent non-employee directors as a group. Such parties can send communications by mail to the Board in care of the Corporate Secretary, CareFusion Corporation, 3750 Torrey View Court, San Diego, CA 92130. In addition, such parties can contact the Board by emailing the Corporate Secretary at corporatesecretary@carefusion.com. The name or title of any specific recipient or group should be noted in the communication. Communications from stockholders are distributed by the Corporate Secretary to the Board or to the Committee or director(s) to whom the communication is addressed, however the Corporate Secretary will not distribute items that are unrelated to the duties and responsibilities of the Board, such as spam, junk mail and mass mailings, business solicitations and advertisements, and communications that advocate the Company’s engaging in illegal activities or that, under community standards, contain offensive, scurrilous or abusive content.

Board and Committee Membership and Structure

Our Board has three standing Committees, comprised of the Audit Committee, the Human Resources and Compensation Committee and the Governance and Compliance Committee. Each Committee acts pursuant to a written charter, each of which can be accessed in the “Investors” section of our website at www.carefusion.com, by clicking the “Corporate Governance” link. Each Committee reviews its charter on an annual basis. In addition to the three standing Committees, the Board may approve from time to time the creation of special committees to assist the Board in carrying out its duties.

The Board held five meetings during the fiscal year ended June 30, 2014, and each director attended 75% or more of the meetings of the Board and Committees on which he or she served during the fiscal year. As discussed above, Mr. Bose was elected to the Board in May 2014. During fiscal year 2014, Mr. Bose did not serve on any of the Board Committees. Subject to his re-election as a director at the Annual Meeting, it is expected that Mr. Bose will be appointed to serve on the Governance and Compliance Committee.

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The following table summarizes the current membership of each of the standing Committees, as well as the number of times each of the Committees met during the fiscal year ended June 30, 2014.

	Audit Committee	Human Resources and Compensation Committee	Governance and Compliance Committee	Independent Non-Employee Director
Committee Members
Kieran T. Gallahue (Chairman)	—	—	—	—
J. Michael Losh (Presiding Director)		—	—	—
Edward D. Miller, M.D.	—	—		—
Jacqueline B. Kosecoff, Ph.D.		—	—	—
Michael D. O’Halleran	—		—	—
Robert P. Wayman		—		—
Philip L. Francis		—		—
Robert F. Friel	—		—	—
Gregory T. Lucier	—		—	—
Supratim Bose	—	—	—	—
Number of Committee Meetings	5	6	4

Committee Member Committee Chair

Audit Committee. The main function of our Audit Committee, which was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is to oversee our accounting and financial reporting processes, internal systems of control, independent auditor relationships, and the audits of our financial statements. As set forth in its charter, the Audit Committee’s responsibilities include, among others:

• reviewing and reporting to the Board on the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;

• selecting an independent auditor;

• reviewing the independent auditor’s qualifications and independence;

• pre-approving all audit services, internal control-related services and permitted non-audit services to be performed for us by our independent auditor;

• meeting with our independent auditor to review the nature and scope of their proposed financial audit and quarterly reviews, as well as their results and recommendations upon the completion of the audit and such quarterly reviews;

• overseeing the performance of our internal audit function, including the performance of the senior executive in charge of the Company’s internal audit function; and

• overseeing compliance with our internal controls and risk management policies.

The Audit Committee is comprised of Dr. Kosecoff, Mr. Francis, Mr. Wayman and Mr. Losh (Chair). The Board has determined that each member of the Audit Committee is an “audit committee financial expert” for purposes of the rules of the SEC. In reaching this determination, the Board considered, among other things, the prior experience of each of Messrs. Losh and Wayman as a chief financial officer and the prior experience of each of Dr. Kosecoff and Mr. Francis as a chief executive officer. The Board also made a qualitative assessment

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of our other non-employee directors, to determine their financial knowledge and experience, and determined that they each would also qualify as an “audit committee financial expert” for purposes of the rules of the SEC should they become a member of the Audit Committee in the future. In addition, the Board has determined that Mr. Losh’s simultaneous service on the audit committees of more than two other public companies does not impair his ability to effectively serve on the Audit Committee. In reaching this determination, the Board considered Mr. Losh’s ability to devote sufficient and substantial time to serve on the Audit Committee. In addition, the Board has determined that each of the members of the Audit Committee is “independent,” consistent with the NYSE listing standards, Section 10A(m)(3) of the Exchange Act and in accordance with our Corporate Governance Guidelines.

Additional information regarding the Audit Committee is set forth in the Report of the Audit Committee, which can be found on page 27 of this Proxy Statement.

Human Resources and Compensation Committee. The main function of our Human Resources and Compensation Committee is to assist the Board in discharging its responsibilities relating to our compensation programs. As set forth in its charter, the Human Resources and Compensation Committee’s responsibilities include, among others:

• reviewing and approving our executive compensation policy;

• reviewing and making recommendations to the Board with respect to compensation for our Chief Executive Officer, and reviewing and approving compensation for our other executive officers;

• reviewing and approving any employment agreements or arrangements with our executive officers, including with respect to any perquisites and other personal benefits;

• reviewing the adoption and terms of equity-based compensation, incentive compensation and other employee benefit plans that are subject to Board approval;

• acting on behalf of the Board in administering equity-based compensation and other employee benefit plans approved by the Board and/or stockholders in a manner consistent with the terms of such plans;

• reviewing the compensation of directors for service on the Board and its Committees and recommending changes to the Board as appropriate;

• overseeing the management succession process for our Chief Executive Officer and selected senior executives; and

• reviewing the disclosures in the Company’s Compensation Discussion and Analysis with management and making recommendations to the Board as to the inclusion of the Compensation Discussion and Analysis in the Company’s annual public filings, as applicable.

The Human Resources and Compensation Committee is comprised of Mr. Friel, Mr. O’Halleran and Mr. Lucier (Chair). The Board has determined that each member of the Human Resources and Compensation Committee is “independent,” consistent with the NYSE listing standards and in accordance with our Corporate Governance Guidelines. In addition, the members of the Human Resources and Compensation Committee qualify as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Tax Code”). Additionally, in accordance with the listing standards of the NYSE MKT, the Human Resources and Compensation Committee evaluated the independence of each compensation consultant, outside counsel and advisor retained by or providing advice to the Human Resources and Compensation Committee.

The Compensation Discussion and Analysis included in this Proxy Statement provides additional information regarding the Human Resources and Compensation Committee’s processes and procedures for considering and determining executive officer compensation.

Governance and Compliance Committee. The main function of our Governance and Compliance Committee is to identify and recommend individuals qualified to become members of the Board and its

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Committees, take a general leadership role in our corporate governance, and provide compliance oversight of the Company’s compliance programs as they relate to quality and regulatory matters, ethics and compliance matters and other related matters. As set forth in its charter, the Governance and Compliance Committee’s responsibilities include, among others:

• developing and recommending to the Board criteria for identifying, evaluating and recommending candidates for the Board;

• establishing a procedure for and considering any nominations of director candidates validly made by our stockholders in accordance with our by-laws and Corporate Governance Guidelines;

• recommending candidates for election or reelection to the Board at each annual meeting of stockholders, which will include assessing the contributions and independence of individual incumbent directors;

• making recommendations to the Board concerning the structure, size, composition and functioning of the Board and its Committees;

• overseeing the annual evaluation of the Board’s effectiveness and performance, and periodically conducting an individual evaluation of each director;

• overseeing the Company’s compliance programs related to quality and regulatory matters, ethics and compliance matters and other related matters, including the Company’s policies, procedures and practices designed to ensure compliance with applicable laws and regulations related to federal healthcare program requirements; the Federal Food, Drug, and Cosmetic Act; the Fraud and Abuse Laws and other pharmaceutical and medical device laws; laws related to advertising and promotion of pharmaceutical and medical device products; the Foreign Corrupt Practices Act; the Anti-Kickback Statute and other anti-bribery and anti-corruption laws; laws related to competition and conflicts of interest; and other laws and regulations affecting the Company’s manufacture, distribution and sale of its products worldwide;

• evaluating matters relating to the Company’s policies, practices and compliance efforts regarding public policy and/or social responsibility matters that may have a significant impact on the Company; and

• developing procedures for stockholders and other interested parties to communicate with the Board.

The Governance and Compliance Committee is comprised of Dr. Miller, Mr. Wayman and Mr. Francis (Chair). The Board has determined that each member of the Governance and Compliance Committee is “independent,” consistent with the NYSE listing standards and in accordance with our Corporate Governance Guidelines.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common stock as of September 8, 2014 (unless otherwise indicated below), with respect to (1) each person who is known by us who beneficially owns more than 5% of our common stock, (2) each director and named executive officer and (3) all of our directors and executive officers as a group. The address of each director and executive officer shown in the table below is c/o CareFusion Corporation, 3750 Torrey View Court, San Diego, CA 92130. We determined beneficial ownership under rules promulgated by the SEC, based on information obtained from questionnaires, Company records and filings with the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares which the individual or entity has the right to acquire within 60 days of September 8, 2014. For our directors and executive officers, this includes shares subject to stock options, restricted stock units and/or performance stock units that can be acquired (including as a result of expected vesting and/or delivery) within 60 days of September 8, 2014, which we refer to as presently vested equity. All percentages are based on our shares outstanding as of September 8, 2014. Except as noted below, each holder has sole voting and investment power with respect to all shares listed as beneficially owned by that holder.

Name and Address of Beneficial Owner	Number of Shares of Common Stock		Percent of Common Stock
The Vanguard Group, Inc.1		14,715,639		7.2	%
T. Rowe Price Associates, Inc.2		14,415,868		7.1	%
Kieran T. Gallahue3		1,847,590			*
James F. Hinrichs3		627,999			*
Thomas J. Leonard3		305,254			*
Vivek Jain		7,765			*
Joan B. Stafslien3		245,181			*
Gordon M. LaFortune3,4		139,178			*
Supratim Bose		2,059			*
Philip L. Francis5,6		71,380			*
Robert F. Friel5,7		34,103			*
Jacqueline B. Kosecoff, Ph.D.5		34,103			*
J. Michael Losh5,7,8		62,335			*
Gregory T. Lucier5,7		34,103			*
Edward D. Miller, M.D.5,7		34,103			*
Michael D. O’Halleran5,7,9		67,719			*
Robert P. Wayman5		34,103			*
All directors and executive officers as a group (17 persons)10		3,728,210		1.8	%

* Less than 1%.

¹  Based on information obtained from a Form 13F filed with the SEC on August 11, 2014 by The Vanguard Group, Inc. (“Vanguard”) on behalf of itself and its wholly owned subsidiaries, Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd. Vanguard reported that, as of June 30, 2014, it had sole voting power with respect to 348,548 shares of our common stock, sole dispositive power with respect to 14,383,735 shares of our common stock, shared dispositive power with respect to 331,904 shares of our common stock, and that the shares are beneficially owned by Vanguard and its wholly owned subsidiaries identified above. The address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355. The number of shares held by Vanguard and its related entities may have changed since the filing of the Form 13F.

²  Based on information obtained from a Form 13F filed with the SEC on August 11, 2014 by T. Rowe Price Associates, Inc. (“Price Associates”). Price Associates reported that, as of June 30, 2014, it had sole voting power with respect to 3,692,095 shares of our common stock and sole dispositive power with respect to 14,415,868 shares of our common stock. The address of Price Associates is 100 E. Pratt Street, Baltimore, Maryland 21202. The number of shares held by Price Associates may have changed since the filing of the Form 13F.

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³  Common stock and the percent of class listed as beneficially owned by our named executive officers include presently vested equity, as follows: Mr. Gallahue—1,488,559 shares; Mr. Hinrichs—592,956 shares; Mr. Leonard—265,121 shares; Ms. Stafslien—211,435 shares; and Mr. LaFortune—113,763 shares.

⁴  Prior to fiscal 2014, Mr. LaFortune met the eligibility requirements for retirement under the terms of the Company’s 2009 Long-Term Incentive Plan (“LTIP”). Due to his retirement eligibility and pursuant to the terms of the LTIP and the agreements for his equity awards, his rights to certain stock options and restricted stock units that would not have otherwise vested pursuant to the vesting schedule for such awards have vested; provided, however, that such awards will only become exercisable or payable, as the case may be, in accordance with their original vesting schedules. Accordingly, the 45,460 shares subject to these awards are not reflected in the above table as beneficially owned by Mr. LaFortune.

⁵  Common stock and the percent of class listed as beneficially owned by the listed director includes presently vested equity, as follows: Mr. Bose—2,059 shares Mr. Francis—16,905 shares; Mr. Friel—4,275 shares; Dr. Kosecoff—4,275 shares; Mr. Losh—23,711 shares; Mr. Lucier—4,275 shares; Dr. Miller—4,275 shares; Mr. O’Halleran—26,433 shares; and Mr. Wayman— 4,275 shares.

⁶  Includes 975 shares of common stock held by Mr. Francis’ spouse for the benefit of Mr. Francis’ daughter and 53,500 shares held in a trust for Mr. Francis’ benefit.

⁷  Common stock and the percent of class listed as beneficially owned includes shares for which delivery has been deferred, as follows: Mr. Friel—24,295 shares; Mr. Losh—28,570 shares; Mr. Lucier—28,570 shares; Dr. Miller—14,809 shares; and Mr. O’Halleran—13,761 shares.

⁸  Includes 750 shares of common stock held in a trust for the benefit of Mr. Losh’s daughters.

⁹  Includes 3,750 shares of common stock held in a trust for Mr. O’Halleran’s benefit.

¹⁰  Common stock and percent of class listed as beneficially owned by all directors and executive officers as a group include presently vested equity with respect to an aggregate of 2,914,476 shares of common stock.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under Section 16(a) of the Securities Exchange Act of 1934 and rules and regulations promulgated by the SEC, our directors, executive officers and beneficial owners of more than 10% of any class of equity security are required to file periodic reports of their ownership, and changes in that ownership, with the SEC. Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that during the fiscal year ended June 30, 2014, our directors, executive officers, and 10% stockholders complied with all Section 16(a) filing requirements.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Procedures for Approval of Related Person Transactions

The Board has adopted a written Related Person Transaction Policy and Procedures, which requires the approval or ratification by the Audit Committee of any transaction or series of transactions exceeding $120,000 in any year, in which we are a participant and any related person has a direct or indirect material interest. Related persons include our directors, nominees for election as a director, persons controlling over 5% of our common stock and executive officers and the immediate family members of each of these individuals.

Once a transaction has been identified as requiring such approval, the Audit Committee will review all of the relevant facts and circumstances and approve or disapprove of the transaction. The Audit Committee will take into account such factors as it considers appropriate, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances, the extent of the related person’s interest in the transaction and whether the transaction would be likely to impair (or create an appearance of impairing) the judgment of a director or executive officer to act in the best interests of the Company.

If advance Audit Committee approval of a transaction is not feasible, the transaction will be considered for ratification at the Audit Committee’s next regularly scheduled meeting. If a transaction relates to a director, that director will not participate in the Audit Committee’s deliberations. In addition, the Audit Committee Chair may pre-approve or ratify any related person transactions in which the aggregate amount is expected to be less than $500,000.

Related Person Transactions

During fiscal 2014, there were no transactions, or currently proposed transactions, in which we were or are to be a participant involving an amount exceeding $120,000, and in which any related person had or will have a direct or indirect material interest.

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PROPOSAL 1—ELECTION OF DIRECTORS

At the Annual Meeting, we are asking our stockholders to elect three individuals nominated for election as Class II directors. Our Board of Directors currently consists of ten members and is divided into three classes. At the 2013 Annual Meeting of Stockholders, our stockholders approved the amendment of our certificate of incorporation and by-laws to declassify our Board over three years. Commencing with this Annual Meeting, directors standing for election will be elected to serve for one-year terms. Accordingly, the Class II directors elected at the Annual Meeting will hold office for a term of one year.

Our current Class II directors are Supratim Bose, Jacqueline B. Kosecoff, Ph.D., Michael D. O’Halleran and Robert P. Wayman, and each of their terms as a director will expire at the Annual Meeting. On August 6, 2014, our Board, upon recommendation of our Governance and Compliance Committee, nominated Messrs. Bose and O’Halleran and Dr. Kosecoff for re-election as directors. Mr. Wayman will serve as a director until his current term expires at the Annual Meeting. Effective upon the expiration of Mr. Wayman’s term, the Board has approved a reduction in the size of the Board from ten to nine directors. If elected at the Annual Meeting, each of Messrs. Bose and O’Halleran and Dr. Kosecoff, will serve as Class II directors until the 2015 Annual Meeting of Stockholders, and in each case until their respective successors are duly elected and qualified.

If any of the nominees declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although we know of no reason to anticipate that this will occur), the proxies may be voted for such substitute nominees as we may designate.

In accordance with the amendments to our certificate of incorporation and by-laws approved by our stockholders in November 2013, annual director elections will be phased in over a three-year period, commencing with the 2014 Annual Meeting. As set forth above, the Class II directors elected at the 2014 Annual Meeting will hold office for a term of one year. At our 2015 Annual Meeting of Stockholders, our Class II and Class III directors standing for election will be elected to serve for one-year terms. From and after the expiration of the current term of our Class I directors at the 2016 Annual Meeting of Stockholders, all of our directors will be elected for one-year terms. The Class II director nominees, as well as the Class I and Class III directors who are continuing to serve, are listed below together with information as of September 8, 2014 regarding each director’s principal occupation, business experience and other directorships, together with the qualifications, attributes and skills that led our Board to the conclusion that each of our directors should serve as a director.

Vote Required for Approval

Directors are elected by a majority of the votes cast at the Annual Meeting. A majority of votes cast means that the number of shares voted “FOR” a nominee exceeds the number of votes cast “AGAINST” that nominee. Votes to “ABSTAIN” and broker non-votes are not counted as votes cast with respect to that director, and will have no direct effect on the outcome of the election of directors. All of the director nominees have indicated their willingness to serve if elected, but if any should be unable or unwilling to stand for election, the shares represented by proxies may be voted for a substitute as CareFusion may designate, unless a contrary instruction is indicated in the proxy. As each of the nominees is an incumbent director, if a nominee fails to receive “FOR” votes representing a majority of votes cast, the director shall promptly tender his or her resignation to the Board, subject to acceptance by the Board. The Governance and Compliance Committee of the Board would then be charged with making a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Board will act on the tendered resignation, taking into account the recommendation of the Governance and Compliance Committee, and publicly disclose its decision regarding the tendered resignation and the rationale behind the decision. If the Board determines not to accept the resignation of the incumbent director, the incumbent director will continue to serve until the next annual meeting and until his or her successor is duly elected, or his or her earlier resignation or removal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF JACQUELINE B. KOSECOFF, SUPRATIM BOSE AND MICHAEL D. O’HALLERAN TO THE BOARD OF DIRECTORS.

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Nominees for Election as Directors and Directors Continuing in Office

The following sets forth information, as of September 8, 2014, regarding the members of our Board, including the director nominees for election at the Annual Meeting, related to his or her business experience and service on other boards of directors. In addition, we discuss below the qualifications, attributes and skills that led our Board to the conclusion that each of our directors should serve as a director of CareFusion. As discussed above under “Governance of Our Company—Identification and Evaluation of Director Nominees,” we believe that our current Board includes individuals with a strong background in executive leadership and management, accounting and finance, and Company and industry knowledge. In addition, each of our directors has a strong professional reputation and has shown a dedication to his or her profession and community. We also believe that our directors’ diversity of backgrounds and experiences, which include medicine, academia, business and finance, results in different perspectives, ideas, and viewpoints, which make our Board more effective in carrying out its duties. We believe that our directors hold themselves to the highest standards of integrity and that they are committed to representing the long-term interests of our stockholders.

Class II Directors—Nominees for Election at the 2014 Annual Meeting of Stockholders

SUPRATIM BOSE Director   Executive Vice President, Boston Scientific Corp. (age 62) Mr. Bose has been a director of the Company since May 2014. Mr. Bose has served as Executive Vice President and President, Asia-Pacific, Middle East and Africa for Boston Scientific Corporation since January 2013. Mr. Bose joined Boston Scientific in December 2011 as Executive Vice President and President, Asia-Pacific and served in that role until he also assumed responsibility for the company’s Middle East and Africa international units. Before joining Boston Scientific, Mr. Bose was Founder and Chief Executive Officer of Singapore-based Bose Consulting Group, which specialized in strategic management consulting services for the health care industry, from January 2010 to December 2011. Previously, he worked for nearly 30 years at Johnson & Johnson, where he concluded his tenure as Company Group Chairman of its Medical Devices and Diagnostics business in 2009. Mr. Bose joined Johnson & Johnson Ltd. India in 1981, and held a variety of management positions of increasing responsibility.   Qualifications: We believe Mr. Bose’s qualifications to serve on our Board of Directors include his executive management and leadership experience at publicly traded multinational medical device companies. In addition, we believe Mr. Bose’s in-country experience in building markets across Asia-Pacific, the Middle East and Africa, will permit him to contribute valuable strategic management insight to our Board, particularly as we continue to focus on growing our business outside the United States.

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JACQUELINE B. KOSECOFF, PH.D. Director Managing Partner, Moriah Partners, LLC (age 65)

Dr. Kosecoff has been a director of the Company since 2009. Dr. Kosecoff has served as managing partner of Moriah Partners, LLC, a private equity firm focused on health services and technology, and as a senior advisor to Warburg Pincus LLC, a global private equity company since March 2012. From October 2007 to November 2011, Dr. Kosecoff served as chief executive officer of OptumRx (formerly Prescriptions Solutions), a pharmacy benefits management company and subsidiary of UnitedHealth Group, and continued to serve as a senior advisor to OptumRx from December 2011 to February 2012. She served as chief executive officer of Ovations Pharmacy Solutions, a subsidiary of UnitedHealth Group providing health and well-being services for people ages 50+, from December 2005 to October 2007. From July 2002 to December 2005, she served as executive vice president, Specialty Companies of PacifiCare Health Systems, Inc., a consumer health organization. She is a director of Sealed Air Corporation, Steris Corporation and athenahealth, Inc. Qualifications: We believe Dr. Kosecoff’s qualifications to serve on our Board of Directors include her extensive knowledge of the healthcare industry and executive leadership experience, including her prior position as chief executive officer of OptumRx. In addition, her service on other public company boards permits her to make valuable contributions to our Board.

MICHAEL D. O’HALLERAN Director Senior Executive Vice President, Aon PLC (age 64)

Mr. O’Halleran has been a director of the Company since 2009. Mr. O’Halleran has served as senior executive vice president of Aon PLC, a provider of risk management, insurance and consulting services, since September 2004. From 1999 to 2004, Mr. O’Halleran served as president and chief operating officer of Aon Corporation. Mr. O’Halleran joined Aon in 1987 to lead its reinsurance division. Since that time, he has served in several significant management positions within the Aon group of companies including, since August 2007, as the executive chairman of Aon Benfield, the division of Aon Corporation that provides reinsurance and brokerage services. During the prior five years, Mr. O’Halleran served on the board of Cardinal Health, Inc. Qualifications: We believe Mr. O’Halleran’s qualifications to serve on our Board of Directors include his extensive knowledge of our business and industry due to his prior service on the board of directors of Cardinal Health. In addition, his many years of executive leadership experience at Aon PLC and Aon Benfield, including his international business experience, make Mr. O’Halleran a valuable member of our Board.

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Class III Directors Continuing in Office—Terms Expiring at the 2015 Annual Meeting of Stockholders

PHILIP L. FRANCIS Director Former Chairman and Chief Executive Officer, PetSmart, Inc. (age 67)	Mr. Francis has been a director of the Company since 2009. Mr. Francis most recently served as executive chairman of PetSmart, Inc., a specialty pet retailer, from June 2009 until his retirement in January 2012. He previously served as chairman and chief executive officer of PetSmart from 1999 until his appointment as executive chairman. Mr. Francis is a director of SUPERVALU INC. During the prior five years, Mr. Francis served on the boards of PetSmart, Inc. and Cardinal Health, Inc. Qualifications: We believe Mr. Francis’ qualifications to serve on our Board of Directors include his many years of business, operational and executive management experience, including his prior experience as chairman and chief executive officer of PetSmart. Mr. Francis also brings significant Company and industry knowledge to our Board, due to his prior service on the board of directors of Cardinal Health. In addition, his current and prior service on other public company boards permit him to contribute valuable strategic management insight to our Board.
ROBERT F. FRIEL Director Chairman and Chief Executive Officer, PerkinElmer, Inc. (age 58)	Mr. Friel has been a director of the Company since 2009. Mr. Friel has served as president and chief executive officer of PerkinElmer, Inc., a global leader focused on improving the health and safety of people and the environment, since February 2008. He has also served as a director of PerkinElmer since January 2006, serving as vice chairman until he was appointed as chairman in April 2009. He joined PerkinElmer in 1999, serving as senior vice president and chief financial officer from February 1999 to October 2004, as executive vice president and chief financial officer from October 2004 to January 2006, as president of the Life and Analytical Sciences unit from January 2006 through August 2007, and as president and chief operating officer from August 2007 through February 2008. Mr. Friel is a director of Xylem Inc. During the prior five years, Mr. Friel also served on the boards of Fairchild Semiconductor International, Inc. and Millennium Pharmaceuticals, Inc. Qualifications: We believe Mr. Friel’s qualifications to serve on our Board of Directors include his executive and financial leadership experience in the healthcare industry, including his current position as president and chief executive officer of PerkinElmer. Additionally, his current and prior service on other public company boards permits him to make valuable contributions to our Board.
GREGORY T. LUCIER Director Former Chairman and Chief Executive Officer, Life Technologies Corporation (age 50)	Mr. Lucier has been a director of the Company since 2009. Mr. Lucier most recently served as chairman of the board and chief executive officer of Life Technologies Corporation, a global biotechnology company, from November 2008 until it was acquired by Thermo Fisher Scientific Inc. in February 2014. Previously, he served as chief executive officer of Invitrogen Corporation from May 2003 to November 2008. Mr. Lucier is a director of Nuvasive, Inc. During the prior five years, Mr. Lucier served on the board of Life Technologies. Qualifications: We believe Mr. Lucier’s qualifications to serve on our Board of Directors include his management and operational experience in the healthcare industry, including his prior experience as chairman and chief executive officer of Life Technologies. His leadership and business experience make his input valuable to our Board.

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Class I Directors Continuing in Office—Terms Expiring at the 2016 Annual Meeting of Stockholders

KIERAN T. GALLAHUE Chairman of the Board Chief Executive Officer, CareFusion Corporation (age 51)

Mr. Gallahue has been the Chairman of our Board of Directors and our Chief Executive Officer since 2011. Prior to joining us in January 2011, he was the president, chief executive officer and a director of ResMed Inc., a medical device firm serving the sleep disordered breathing and respiratory markets. Mr. Gallahue joined ResMed in January 2003 as president and chief operating officer of the Americas and was promoted to ResMed’s president in September 2004. He served in that role until he was named president, chief executive officer and a director of ResMed in January 2008. Prior to joining ResMed, from January 1998 to December 2002, he held positions of increasing responsibility at Nanogen, Inc., a DNA research and medical diagnostics company, including president and chief financial officer. Prior to 1998, Mr. Gallahue held various marketing, sales and financial positions within Instrumentation Laboratory, The Procter & Gamble Company and General Electric Company. He is a director of Volcano Corporation. During the prior five years, Mr. Gallahue also served on the board of directors of ResMed. Qualifications: We believe Mr. Gallahue’s qualifications to serve on our Board of Directors include his extensive executive management experience at medical device companies, including his current position as our Chief Executive Officer, as well as leadership experience from serving on other public company boards. In addition, Mr. Gallahue’s prior experience as a public company chief financial officer and as a member of a public company audit committee permit him to contribute valuable financial and accounting skills to our Board.

J. MICHAEL LOSH Presiding Director Former Chief Financial Officer, Cardinal Health, Inc. and General Motors Corporation (age 68)

Mr. Losh has been a director of the Company since 2009, and serves as the Presiding Director of our Board of Directors. He most recently served as interim chief financial officer of Cardinal Health from July 2004 to May 2005. Previously, he was the chief financial officer of General Motors Corporation, an automobile manufacturer, from 1994 to 2000. He is a director of ProLogis Inc. (ProLogis and AMB Property Corporation merged in June, 2011), Aon PLC, H.B. Fuller Company, Masco Corporation, and TRW Automotive Holdings Corporation. During the prior five years, Mr. Losh also served on the boards of AMB Property Corporation and Cardinal Health, Inc. Qualifications: We believe Mr. Losh’s qualifications to serve on our Board of Directors include his business, leadership and financial experience, including his prior positions as chief financial officer of General Motors and Cardinal Health. Mr. Losh also brings significant Company and industry knowledge to our Board, due to his long history with Cardinal Health. In addition, his current and prior positions on other public company boards and extensive experience serving on other public company audit committees, including on the audit committee of Cardinal Health prior to the spinoff, permit him to contribute valuable financial and accounting skills to our Board.

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EDWARD D. MILLER, M.D. Director   Former Chief Executive Officer, Johns Hopkins Medicine (age 71) Dr. Miller has been a director of the Company since 2009. Dr. Miller is currently a professor of anesthesiology and critical care medicine at The Johns Hopkins University School of Medicine. He previously served as chief executive officer of Johns Hopkins Medicine, which encompasses The Johns Hopkins University School of Medicine and The Johns Hopkins Health System and Hospital, and as dean of the medical faculty of The Johns Hopkins University School of Medicine from January 1997 until his retirement in June 2012. Dr. Miller joined Johns Hopkins in 1994 as a professor and director of the department of anesthesiology and critical care medicine. Prior to joining Johns Hopkins, Dr. Miller held positions as a professor, researcher and clinician at various hospitals and academic institutions. He is a director of PNC Mutual Funds, Inc. During the prior five years, he also served on the board of PNC Alternative Strategies Fund LLC.   Qualifications: We believe Dr. Miller’s qualifications to serve on our Board of Directors include his experience in the medical field and his prior position as chief executive officer of Johns Hopkins Medicine. His experience as a physician and clinician, and his awareness of the complexities that health care providers face, make Dr. Miller’s input and perspective valuable to our Board.

Non-continuing Director

ROBERT P. WAYMAN Director   Former Chief Financial Officer, Hewlett-Packard Company (age 69) Mr. Wayman has been a director of the Company since 2009 and will serve until the 2014 Annual Meeting of Stockholders. Mr. Wayman served as chief financial officer of the Hewlett-Packard Company (“HP”), a computer and electronics company, from 1984 until his retirement in December 2006. He also served as executive vice president, finance and administration of HP from 1992 until his retirement after 37 years with the company. He served as interim chief executive officer of HP from February 2005 through March 2005. He is a director of Affymetrix, Inc. and Textura Corporation. During the prior five years, Mr. Wayman also served on the board of Sybase, Inc.

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PROPOSAL 2—RATIFICATION OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Audit Committee has selected PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm (the “independent auditor”) to audit our financial statements for the fiscal year ending June 30, 2015. At the Annual Meeting, we are asking our stockholders to ratify the appointment of PricewaterhouseCoopers LLP as our independent auditor because we value our stockholders’ views on the Company’s independent auditor, even though the ratification is not required by our by-laws or otherwise. If our stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain PricewaterhouseCoopers LLP as our independent auditor or whether to consider the selection of a different firm. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent auditor at any time during the fiscal year ending June 30, 2015.

A representative of PricewaterhouseCoopers LLP is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he or she desires to do so, and will be available to respond to appropriate questions.

Ernst & Young LLP was our independent registered public accounting firm for the fiscal year ended June 30, 2013. As previously disclosed, during fiscal 2013, the Audit Committee conducted a competitive process to determine the Company’s independent auditor for the fiscal year ending June 30, 2014. As a result of this process, the Audit Committee approved the appointment of PricewaterhouseCoopers LLP as the Company’s independent auditor for the fiscal year ending June 30, 2014. Ernst & Young LLP concluded its engagement as the Company’s independent auditor in connection with the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2013, as discussed further below.

Vote Required for Approval

Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2015 requires the affirmative “FOR” vote of a majority of the shares of common stock of the Company present in person or represented by proxy at the Annual Meeting and entitled to vote. A vote to “ABSTAIN” will have the same effect as a vote “AGAINST” the proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS

VOTE “FOR” THE RATIFICATION OF OUR SELECTION OF

PRICEWATERHOUSECOOPERS LLP

AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR

THE FISCAL YEAR ENDING JUNE 30, 2015.

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Audit Related Matters

Audit and Non-Audit Fees. The following table presents the fees for professional services earned by PricewaterhouseCoopers LLP (“PwC”) and Ernst & Young LLP (“EY”) for services rendered to the Company for the fiscal years ended June 30, 2014 and 2013, respectively:

	PwC 2014		EY 2013
Audit Fees1	$	4,060,385	$	4,449,883
Audit-Related Fees2		336,596		2,600
Tax Fees3		3,544,990		61,400
All Other Fees4		—		—
Total	$	7,941,971	$	4,513,883

¹  Audit Fees include services relating to the integrated audit of the consolidated annual financial statements and internal control over financial reporting, the review of financial statements included in the Company’s quarterly reports on Form 10-Q and statutory and regulatory filings or engagements.

²  Audit-Related Fees include services relating to employee benefit plan audits, accounting consultations and reviews, and due diligence services.

³  Tax Fees include services relating to tax compliance, tax advice, and tax planning.

⁴  All Other Fees consist of fees for products and services other than the services reported above.

Change in Independent Auditor. As discussed above, the Audit Committee approved a change in our independent auditor for the fiscal year ending June 30, 2014. As reported in the Company’s Form 8-K/A filed with the SEC on August 9, 2013 (the “Form 8-K/A”), Ernst & Young LLP concluded its engagement as our independent registered public accounting firm in connection with the filing on August 9, 2013 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2013 (the “2013 Form 10-K”).

The reports of Ernst &Young LLP on our financial statements for each of the two fiscal years ended June 30, 2012 and 2013 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. In connection with the audits of our financial statements for the fiscal years ended June 30, 2012 and June 30, 2013 and in the subsequent interim period through August 9, 2013, there were no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K) with Ernst &Young LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures which, if not resolved to the satisfaction of Ernst &Young LLP would have caused Ernst &Young LLP to make reference to the matter in their report. There was a “reportable event” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K) during the fiscal years ended June 30, 2012 and June 30, 2013, related to the material weakness in the Company’s internal control over financial reporting disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2012 (the “2012 Form 10-K”). As disclosed in our 2012 Form 10-K, we concluded that a material weakness existed as of June 30, 2012 in the design and operating effectiveness of the Company’s internal control over financial reporting related to its accounting for sales-type leases associated with its Pyxis medication and supply dispensing products. Ernst &Young LLP’s report on the effectiveness of the Company’s internal control over financial reporting as of June 30, 2012, which was included in the 2012 Form 10-K, contained an adverse opinion thereon. The Audit Committee discussed the material weakness in the Company’s internal control over financial reporting with Ernst &Young LLP, and authorized Ernst &Young LLP to respond fully to the inquiries of PricewaterhouseCoopers LLP concerning such material weakness.

During our fiscal years ended June 30, 2012 and 2013 and through August 9, 2013, we did not consult PricewaterhouseCoopers LLP regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to our financial statements, and neither where a written report or oral advice was provided to us by PricewaterhouseCoopers LLP that PricewaterhouseCoopers LLP concluded was an important factor considered

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by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a “disagreement” or “reportable event” as those terms are defined in Item 304(a)(1) of Regulation S-K.

We provided Ernst & Young LLP with a copy of the foregoing disclosures. We provided Ernst & Young LLP with a copy of the Form 8-K/A reporting the change in our independent auditor for the fiscal year ending June 30, 2014 containing substantially the same disclosure as above and requested that Ernst & Young LLP provide the Company with a letter addressed to the Securities and Exchange Commission stating whether or not Ernst & Young LLP agreed with the disclosures contained therein. A copy of Ernst &Young LLP’s letter, dated August 9, 2013, is filed as Exhibit 16.1 to the Form 8-K/A.

Policy Regarding Pre-Approval of Services Provided by the Independent Auditor. The Audit Committee has established an Audit and Non-Audit Services Compliance Policy (the “Policy”) requiring pre-approval of all audit and permissible non-audit services performed by the independent auditor to monitor the auditor’s independence from the Company. The Policy provides for the annual pre-approval of specific types of services pursuant to policies and procedures adopted by the Audit Committee, and gives detailed guidance to management as to the specific services that are eligible for such annual pre-approval.

The Policy requires the specific pre-approval of all other permitted services. For both types of pre-approval, the Audit Committee considers whether the provision of a non-audit service is consistent with the SEC’s rules on auditor independence. Additionally, the Audit Committee considers whether the independent auditor is best positioned to provide the most effective and efficient service, for reasons such as its familiarity with the Company’s business, people, culture, accounting systems, risk profile and other factors, and whether the service might enhance the Company’s ability to manage or control risk or improve audit quality. Also, unless a service is a pre-approved service set forth in the Policy and within the established guidelines, it will require approval by the Audit Committee in order for it to be provided by the independent auditor. In its review, the Audit Committee will also consider the relationship between fees for audit and non-audit services in deciding whether to pre-approve such services.

As provided under the Sarbanes-Oxley Act of 2002 and the SEC’s rules, the Audit Committee has delegated pre-approval authority to the Chair of the Audit Committee to address certain requests for pre-approval of services for up to $250,000, and the Chair must report his or her pre-approval decisions to the Audit Committee at its next regular meeting. The Policy is designed to help ensure that there is no delegation by the Audit Committee of authority or responsibility for pre-approval decisions to management. The Audit Committee monitors compliance by requiring management to report to the Audit Committee on a regular basis regarding the pre-approved services rendered by the independent auditor. Management has also implemented internal procedures to promote compliance with the Policy.

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Report of the Audit Committee

The Audit Committee has reviewed and discussed the annual consolidated financial statements with management and PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm (the “independent auditor”) for the fiscal year ended June 30, 2014. Management is responsible for the financial reporting process, the system of internal controls, including internal control over financial reporting, risk management and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The independent auditor is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America, as well as expressing an opinion on the effectiveness of internal control over financial reporting.

The Audit Committee met on five occasions in the fiscal year ended June 30, 2014. The Audit Committee met with the independent auditor, with and without management present, to discuss the results of its audits and quarterly reviews of the Company’s financial statements. The Audit Committee also discussed with the independent auditor the matters required to be discussed by the Auditing Standard No. 16, as adopted by the Public Company Accounting Oversight Board in PCAOB Release No. 2012-004 and approved by the SEC in Release No. 34-68453. The Audit Committee also received from the Company’s independent auditor the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding their communications with the Audit Committee concerning independence and has discussed with the independent auditor its independence from the Company. The Audit Committee also has considered whether the provision of non-audit services to the Company is compatible with the independence of the independent auditor.

In performing its functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of the Company’s management, internal audit group and independent auditor, which, in their reports, express opinions on the conformity of the Company’s annual financial statements with U.S. generally accepted accounting principles.

Based on the review of the consolidated financial statements and discussions referred to in this Report, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2014, for filing with the SEC. The Audit Committee also engaged PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2015 and is seeking ratification of such selection by the Company’s stockholders.

Submitted by the Audit Committee of the Board of Directors:

J. Michael Losh, Chair

Robert P. Wayman

Philip L. Francis

Jacqueline B. Kosecoff, Ph.D.

Pursuant to the Instruction to Item 407(d), the foregoing Report of the Audit Committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates such information by reference in such filing.

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PROPOSAL 3—ADVISORY VOTE ON THE COMPENSATION OF OUR

NAMED EXECUTIVE OFFICERS

At the Annual Meeting, our stockholders will be asked to approve, on a non-binding advisory basis, the compensation of our named executive officers. At our 2011 Annual Meeting of Stockholders, our stockholders recommended that we hold an advisory vote to approve the compensation of our named executive officers on an annual basis. The Board of Directors determined to follow the recommendation of our stockholders and hold the vote on an annual basis until the next required advisory vote on the frequency of such advisory votes, which is expected to occur at our 2017 Annual Meeting of Stockholders. Accordingly, the Board of Directors is requesting that our stockholders approve, pursuant to a non-binding vote, the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis, the compensation tables, narrative disclosures and related footnotes included in this Proxy Statement.

As discussed in the Compensation Discussion and Analysis, the primary objective of our executive compensation program is to align the compensation of our executive officers with our overall business goals, core values and stockholder interests. Our compensation objective is to provide a competitive pay package that motivates achievement of above-market performance and emphasizes a long-term view in creating stockholder value. Our stockholders demonstrated strong support for our executive compensation program by casting approximately 97% of their votes in favor of our “say-on-pay” proposal related to our fiscal 2013 executive compensation, and we retained the core design of our fiscal 2013 executive compensation program for fiscal 2014.

Compensation actions taken in fiscal 2014 demonstrate our continued commitment to pay-for-performance, with a substantial portion of each named executive officer’s compensation being at-risk and subject to important performance measures aligned with long-term stockholder value. In particular, our executive compensation program links a significant portion of executive compensation to the value of our common stock, which is intended to align the interests of our named executive officers with our stockholders. We also have established stock ownership guidelines that require our named executive officers to acquire and hold a meaningful ownership interest in our Company. We believe that this emphasizes a longer-term view in creating stockholder value.

In addition, we endeavor to maintain good governance standards with respect to our executive compensation practices. We utilize benchmarking and peer company analysis to set compensation for our named executive officers consistent with market practice, and we seek to establish compensation practices that are reasonable and do not contain features that would be considered problematic or egregious.

Our executive compensation philosophy and program continue to focus on creating alignment with our stockholders and supporting our commitment to good compensation governance. The following aspects of our executive compensation program during fiscal 2014 reinforce this:

Advisory Vote on Executive Compensation	Annual
Clawback Policy for Variable Cash Compensation and Equity	Yes
Tax Gross-Ups	No
Independent Compensation Consultant	Yes
Stock Ownership Guidelines	Yes
Compensation Risk Assessment	Annual
Hedging, Pledging and Margin Activities	Prohibited
Payouts of Equity and Cash Awards upon a “Change of Control”	Double-Trigger

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The Board of Directors believes that CareFusion’s executive compensation program is designed to meet the objectives discussed above and in more detail in the Compensation Discussion and Analysis. Accordingly the Board recommends that stockholders vote in favor of the following resolution:

RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation awarded to the named executive officers, as described in the Compensation Discussion and Analysis, tabular disclosures, and other narrative compensation disclosures in the Proxy Statement.

Vote Required for Approval

Approval of this resolution requires the affirmative “FOR” vote by a majority of the shares of common stock of the Company present in person or represented by proxy at the Annual Meeting and entitled to vote. A vote to “ABSTAIN” will have the same effect as a vote “AGAINST” the resolution. Because broker non-votes are not counted as votes “FOR” or “AGAINST” this resolution, they will have no effect on the outcome of the vote.

Because your vote is advisory, it will not be binding upon the Company, the Board of Directors or the Human Resources and Compensation Committee. However, our Board of Directors and Human Resources and Compensation Committee value the opinions of our stockholders. To the extent that there is any significant vote against the compensation of our named executive officers, they will consider our stockholders’ concerns and will evaluate what actions, if any, may be appropriate to address those concerns.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS AS STATED IN THE ABOVE RESOLUTION.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes CareFusion’s executive compensation philosophy and program for the fiscal year ended June 30, 2014 (“fiscal 2014”). It should be read in conjunction with our tabular disclosures regarding the compensation of our named executive officers for fiscal 2014, which can be found starting on page 50 of this Proxy Statement under the heading “Executive Compensation.”

Executive Overview

In this Compensation Discussion and Analysis, we summarize our objectives regarding the compensation of our named executive officers, including how we determine the elements and amounts of executive compensation. Included below are discussions regarding our compensation philosophy, our compensation approach, our compensation determinations, and our policies and practices related to executive compensation. Our executive compensation program reflects a commitment to (1) align compensation with our overall business goals, core values and stockholder interests, (2) motivate and retain our key executives, (3) reinforce consistent attainment of above-market performance and (4) emphasize a long-term view in creating stockholder value.

Fiscal 2014 Business and Financial Highlights. During fiscal 2014, we delivered solid growth, while making substantial investments in our future. We grew revenue 8% to $3.84 billion and grew operating cash flows from continuing operations 12% to $685 million. We introduced more than 20 new and enhanced products, and we invested $190 million in research and development activities to advance our new product pipeline and enhance our existing products. In furtherance of our strategy to accelerate global growth, we acquired two companies in fiscal 2014, and we made strategic investments in others. In addition to deploying capital for research and development and merger and acquisition activities, we also returned capital to our stockholders through our share repurchase activities. These efforts resulted in significant stockholder returns, as our stock price increased 20% in fiscal 2014.

The following is a summary of fiscal 2014 business and financial highlights:

• Strong Revenue Growth and Cash Flows. We grew revenue by 8% to $3.84 billion. Operating cash flows from continuing operations were $685 million, an increase of 12% over the prior year.

• Product Innovation. In furtherance of our vision to improve the safety and cost of healthcare, we introduced more than 20 new and enhanced products during fiscal 2014. We launched a number of innovative products within our Procedural Solutions segment, including our new ChloraShield^® IV dressing with chlorhexidine gluconate antimicrobial, and our Chemo Safety System, which is a needle-free closed system designed to improve clinician and patient safety when preparing, handling and administering hazardous pharmaceuticals used in chemotherapy treatments. In our Medical Systems segment, we completed the roll-out of our Pyxis^® ES Platform, our next generation medication dispensing system that helps prevent medication errors, free time for patient care and reduce medication use inefficiencies.

• Global Growth. We acquired two companies and we made strategic investments in others to accelerate our global growth. In October 2013, we acquired Grupo Sendal, S.L., an infusion specialty disposables manufacturer in Spain; and in December 2013, we acquired the Vital Signs business of General Electric Company’s Healthcare division, a leading manufacturer of single-use consumables for respiratory care and anesthesiology.

• Share Repurchase Activities. During fiscal 2014, we returned $577 million to stockholders through common stock repurchases under our share repurchase program that the Board approved in August 2013. In August 2014, with a focus on enhancing stockholder value, the Board approved a new program for the repurchase of an additional $750 million of our common stock through June 2016.

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Fiscal 2014 Executive Compensation Program. In determining the compensation of our named executive officers, the Human Resources and Compensation Committee of our Board of Directors (the “Compensation Committee”) evaluates various factors, including the following:

• the Company’s overall business and financial performance and/or the performance of the business unit or function for which the individual is responsible;

• the individual’s performance, experience and skills;

• the terms of employment agreements or other arrangements with the individual;

• compensation previously paid or awarded to the individual;

• competitive market data for similar positions based on the Company’s comparator group; and

• voting results from the prior year’s advisory vote on the compensation of our named executive officers.

For fiscal 2014, the Compensation Committee approved an executive compensation program that consists of three principal elements: base salary, annual cash incentives under our management incentive plan (“MIP”) and long-term equity-based incentive (“LTI”) awards. Our Compensation Committee believes that, by allocating compensation among these elements, our overall executive compensation program appropriately balances compensation-related risk and the desire to focus our named executive officers on specific short-term and long-term goals important to our overall success. Consistent with our pay-for-performance philosophy, a significant portion of the compensation of our named executive officers in fiscal 2014 was variable or at-risk. For our Chief Executive Officer, 88% of his target total direct compensation was subject to annual performance goals or tied to the value of our common stock. For our other named executive officers as a group, 80% of their target total direct compensation was subject to annual performance goals or tied to the value of our common stock.

Fiscal 2014 Target Total Direct Compensation

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The following table summarizes total direct compensation for our named executive officers in fiscal 2014:

	Base Salary					MIP Award				LTI Award
Name and Principal Position	2014 Base Salary		Percent Change1			2014 MIP Award Target		2014 MIP Award Payout		2014 LTI Award Target Value		Percent Change1
Kieran T. Gallahue Chairman and CEO	$	1,200,000		4	%	$	1,500,000	$	1,750,000	$	7,800,000		4	%
James F. Hinrichs Chief Financial Officer	$	562,754		3	%	$	450,203	$	495,224	$	2,532,393		3	%
Thomas J. Leonard President, Medical Systems	$	498,000		3	%	$	398,400	$	414,336	$	1,618,500		11	%
Joan B. Stafslien EVP, General Counsel and Corporate Secretary	$	495,706		3	%	$	346,994	$	402,513	$	1,239,265		14	%
Gordon M. LaFortune EVP, EMEA/ANZ Commercial Operations and Global Infusion Disposables	$	400,000		—		$	280,000	$	291,200	$	720,000		—
Vivek Jain2 Former President, Procedural Solutions	$	498,000		4	%	$	398,400	$	—	$	1,618,500		23	%

¹  Reflects percent change relative to fiscal 2013.

²  The MIP target award value reflects fiscal 2014 MIP target based on full year of service. As Mr. Jain left the Company in February 2014, he did not receive a MIP payment for fiscal 2014.

As set forth in the table above, our named executive officers received an increase in base salary for fiscal 2014 of up to 4%, consistent with annual merit increases provided to our employees generally, and based on their performance during fiscal 2013. Most executives were provided an increase in LTI award target value consistent with the increase in their base salary. Ms. Stafslien received a larger increase in her target LTI award value based on market data, as well as her performance during fiscal 2013. In the case of Messrs. Leonard and Jain, their LTI award targets were increased based on market data, and a desire to create parity in the value of the LTI awarded to each of our two business segment presidents. Following these fiscal 2014 compensation changes, the base salary, MIP award target and LTI award target for Messrs. Leonard and Jain were identical.

Annual cash incentive awards under the MIP are performance-based, with payouts subject to the attainment of Company-wide and individual performance goals. We established Company-wide financial performance goals for fiscal 2014 related to revenue growth and operating margin. Based on our financial performance in fiscal 2014 relative to these goals, our MIP funded at 100% of target. As discussed below under “Compensation Determinations—Annual Cash Incentive Awards,” MIP payouts to our named executive officers ranged between 104%-117% of target, based on their achievement of individual performance goals.

Consideration of 2013 Advisory Vote on Executive Compensation. We evaluate our executive compensation program annually, taking into account, among other things, the outcome of our most recent “say-on-pay” vote. At our 2013 Annual Meeting of Stockholders on November 6, 2013, our stockholders voted in support of our “say-on-pay” proposal related to our fiscal 2013 executive compensation, with approximately 97% of votes cast in favor of the proposal, and we retained the core design of our fiscal 2013 executive compensation program for fiscal 2014.

Commitment to Good Compensation Governance Practices. In designing our executive compensation program, we have implemented programs and policies to create alignment with our stockholders and that support our commitment to good compensation governance as follows:

• Annual Advisory Vote to Approve Compensation of our Named Executive Officers. We provide our stockholders with the ability to vote annually on the compensation of our named executive officers.

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• Clawback Policy. We have the authority to require repayment of certain annual cash incentives, or subject outstanding equity incentive awards to forfeiture, in instances of executive misconduct.

• “Double-Trigger” Equity Award Agreements. Prior to June 2012, our standard forms of equity grant agreements provided for “single-trigger” vesting, meaning they would vest in full upon a change in control of the Company. In June 2012, the Compensation Committee approved new forms of equity grant agreements, that include “double-trigger” vesting, meaning that vesting (and exercisability in the case of stock options) would be accelerated only if the recipient’s employment is terminated by the Company other than for “cause” or by the recipient for “good reason,” in either case within two years following a change of control of the Company (if the awards are assumed in the transaction). All of our LTI awards granted in fiscal 2013 and fiscal 2014 include “double-trigger” vesting provisions.

• No Tax Gross-Ups. Tax gross-ups are not provided to our executive officers for personal expenses or in the event that excise taxes are incurred following a qualifying termination in connection with a change in control.

• Independent Compensation Consultant. The Compensation Committee has engaged Frederic W. Cook & Co., Inc. as its independent compensation consultant. Frederic W. Cook & Co., Inc. provides services only to the Compensation Committee and provided no other services to the Company during fiscal 2014.

• Stock Ownership Guidelines. We have established stock ownership guidelines to further align our executive officers’ interests with those of our stockholders. The guidelines require our named executive officers to acquire and hold a meaningful ownership interest in our Company.

• Compensation Risk Assessment. The Compensation Committee oversees and evaluates an annual risk assessment of the Company’s compensation programs. Based on the fiscal 2014 risk assessment, it was concluded that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

• Prohibitions on Hedging, Pledging and Margin Activities. Our insider trading policy prohibits hedging transactions by Company employees. Under the policy, all short-term, speculative or hedging transactions in CareFusion securities are prohibited by all employees. In addition, the policy specifically prohibits the use of CareFusion securities for pledging and margin activities.

The Compensation Committee believes that the programs and policies described above clearly demonstrate the Company’s commitment to, and consistent execution of, an effective performance-oriented executive compensation program.

Introduction

In accordance with SEC rules and regulations, our named executive officers for fiscal 2014 include our Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers serving as executive officers on June 30, 2014, as follows:

• Kieran T. Gallahue, Chairman and Chief Executive Officer

• James F. Hinrichs, Chief Financial Officer

• Thomas J. Leonard, President, Medical Systems

• Joan B. Stafslien, Executive Vice President, General Counsel and Corporate Secretary

• Gordon M. LaFortune, Executive Vice President, EMEA/ANZ Commercial Operations and Global Infusion Disposables

In addition, SEC rules require that we include as named executive officers up to two former employees who would have otherwise been included as a named executive officer had they not left the Company during the fiscal year ended June 30, 2014. As a result, Vivek Jain, who served as our President, Procedural Solutions through February 11, 2014 is also a named executive officer for fiscal 2014.

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For a complete list of our executive officers, see Part III, Item 10 in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014, filed with the SEC on August 11, 2014.

Compensation Philosophy

We believe that our named executive officers play a critical role in creating long-term value for our stockholders. The primary objective of our executive compensation program is to align compensation with our overall business goals, core values and stockholder interests. Our compensation objective is to provide a competitive pay package that motivates achievement of above-market performance with a long-term view in creating stockholder value. To this end, our executive compensation philosophy reflects:

• a pay-for-performance model that delivers pay based on overall Company, business and individual performance;

• an emphasis on long-term equity-based incentive awards that link a meaningful portion of executive compensation to the value of our common stock; and

• benchmarking of our pay levels and compensation practices against a comparator group that is reasonable and appropriate for our Company.

Because we believe strongly in pay-for-performance, a substantial portion of our executive compensation program is comprised of performance-based compensation, including annual cash incentives and long-term equity-based incentives. We also believe in the importance of aligning executives’ interests with the interests of our stockholders, and accordingly we established stock ownership guidelines that require our executive officers to acquire and hold a meaningful ownership interest in our Company, as discussed below under the heading “Policies, Guidelines and Practices Related to Executive Compensation—Stock Ownership Guidelines.”

For fiscal 2014, our executive compensation program included the following elements:

• base salary;

• annual cash incentive awards; and

• long-term equity-based incentive awards, comprised of stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”).

In addition to these elements of our executive compensation program, which together we refer to as “total direct compensation,” our named executive officers are eligible for limited benefits and perquisites, as discussed below under “Compensation Determinations—Other Benefits and Perquisites.” Our named executive officers are also eligible to participate in employee benefit programs generally offered to our other U.S. employees. Mr. LaFortune, who is a U.S. employee working overseas, receives certain expatriate benefits under our overseas assignment policy that are consistent with benefits provided to other Company expatriates. Our Compensation Committee believes that, by allocating compensation among these elements, our overall executive compensation program appropriately balances compensation-related risk and the desire to focus our named executive officers on specific short-term and long-term goals important to our overall success.

Role of the Compensation Committee and Management

The Compensation Committee oversees our executive compensation policies and determines the amounts and elements of compensation for our executive officers. A discussion of the Compensation Committee’s responsibilities and a summary of the Compensation Committee charter can be found on page 13 of this Proxy Statement under the heading “Governance of Our Company—Board and Committee Membership and Structure— Human Resources and Compensation Committee.”

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Compensation determinations for our named executive officers other than our Chief Executive Officer are made by the Compensation Committee with input provided by the Chief Executive Officer, which the Compensation Committee considers with the assistance of its independent compensation consultant (see below under “Role of the Compensation Consultant”). With respect to compensation for our Chief Executive Officer, the Compensation Committee makes recommendations to the Board for approval. Members of management may also provide input, make recommendations and provide ongoing assistance to the Compensation Committee with respect to the design, operation, objectives and values of the various elements of our compensation program in order to provide appropriate performance and retention incentives for our named executive officers.

In addition, the Compensation Committee acts as the administrator of our equity and non-equity incentive plans covering executive officers and other employees. As it relates to employees who are not executive officers, the Compensation Committee may delegate its authority for administration of the plans to executive officers and other key employees.

The Compensation Committee also oversees an annual risk assessment of the Company’s compensation programs to determine whether such programs are reasonably likely to have a material adverse effect on the Company. Based on a review conducted by the independent compensation consultant (see below under “Role of the Compensation Consultant”), the Compensation Committee concluded that the Company’s compensation programs were appropriately balanced to mitigate compensation-related risk with cash and stock elements, financial and non-financial goals, formal goals and discretion, and short-term and long-term rewards. The Company also has policies to mitigate compensation-related risk, including stock ownership guidelines, clawback provisions and prohibitions on employee hedging activities. Furthermore, the Compensation Committee believes that the Company’s policies on ethics and compliance along with its internal controls also mitigate against unnecessary or excessive risk taking.

Role of the Compensation Consultant

The Compensation Committee uses a compensation consultant primarily to provide input on compensation trends and developments and to assist with executive compensation benchmarking. The compensation consultant also provides a valuable outside perspective on executive compensation practices.

In establishing executive compensation for fiscal 2014, the Compensation Committee engaged Frederic W. Cook & Co., Inc. to serve as its independent compensation consultant. During fiscal 2014, Frederic W. Cook & Co., Inc. advised our Compensation Committee on executive compensation matters, including the selection of a comparator group for compensation benchmarking, competitive market analysis for executive compensation and plan design for our annual and long-term incentive programs. Frederic W. Cook & Co., Inc. also provided a competitive market analysis of non-employee director compensation, regular updates on compensation trends and developments and regulatory matters, and conducted a risk assessment of our executive compensation programs. As previously mentioned, Frederic W. Cook & Co., Inc. was engaged directly by the Compensation Committee and does not provide any other unrelated products or services to the Company.

Comparator Group and Benchmarking

For fiscal 2014, the Compensation Committee, with the assistance of Frederic W. Cook & Co., Inc., selected the following 21 companies to use as a comparator group to benchmark and set compensation for our named executive officers:

Alere Inc.	Covidien Ltd.	PerkinElmer, Inc.
Allergan, Inc.	Dentsply International Inc.	ResMed Inc.
Bard (C.R.) Inc.	Edwards Lifesciences Corp.	St. Jude Medical Inc.
Becton, Dickinson and Co.	Hologic Inc.	STERIS Corp.
Biogen Idec, Inc.	Hospira, Inc.	Stryker Corp.
Boston Scientific Corp.	Life Technologies Corp.	Varian Medical Systems Inc.
Covance Inc.	Mylan Inc.	Zimmer Holdings, Inc.

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On an annual basis, the Compensation Committee reviews the comparator group for compensation benchmarking. Based on an analysis conducted by Frederic W. Cook & Co., Inc. of the Company’s comparator group for fiscal 2013, the Compensation Committee determined that it was appropriate to maintain the same comparator group for fiscal 2014 compensation benchmarking. In determining to maintain the existing comparator group, the Compensation Committee considered the benefit of maintaining consistency for comparability of competitive analysis.

In determining the comparator group, the Compensation Committee used objective criteria for selecting peers to include companies in the healthcare industry that focus primarily on medical technology and devices with revenues, earnings, and market capitalizations that are generally aligned with CareFusion. At the time the Compensation Committee approved the comparator group for fiscal 2014 compensation benchmarking and planning purposes, CareFusion’s revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) and market capitalization approximated the median of the companies in the peer group.

Compensation determinations for our executive officers were based on the executive compensation study conducted by Frederic W. Cook & Co., Inc., which included an analysis of executive compensation data for companies in the comparator group. Generally, Frederic W. Cook & Co., Inc. utilized market data compiled from proxy statements by companies in the comparator group to prepare its compensation analysis for our executive officers. When the roles and responsibilities for an executive officer at CareFusion did not match up with a similar position at companies within the comparator group, or when market data for a position was not publicly available, F.W. Cook & Co., Inc. used survey data to supplement the comparator group data. For fiscal 2014, we considered Radford Global Technology and Towers Watson Executive survey data in setting compensation for Mr. LaFortune and Ms. Stafslien. The analysis of Frederic W. Cook & Co., Inc. included a review of each element of total direct compensation for each of our executive officers. Using this analysis, we established a goal to provide total direct compensation to our named executive officers for fiscal 2014 competitive with the comparator group, as discussed below under “Compensation Determinations.”

Compensation Determinations

Our Compensation Committee made compensation determinations for our named executive officers for fiscal 2014 based on the analysis of pay levels compared to the comparator group, as discussed above. In making these determinations, our general approach is to position the target compensation for our named executive officers based on the comparator group, as follows:

• Base salaries are generally positioned at the 50th percentile;

• Annual cash incentive awards are generally positioned at the 65th percentile; and

• Long-term equity-based incentive awards are generally positioned at the 65th percentile.

In determining the target amounts for each element of compensation, the Compensation Committee considers positioning relative to the comparator group and takes into account individual performance, experience and skills, as well as the terms of any employment arrangements. As a result, target compensation for each of our named executive officers may fall below or above positioning relative to the comparator group for a particular element of compensation. For Mr. Gallahue, the Compensation Committee set target total direct compensation at the 70th percentile of the comparator group. On average, target total direct compensation of our other named executive officers is generally positioned at the 70th percentile of the comparator group.

A substantial portion of the compensation for our named executive officers is comprised of at-risk performance-based compensation, including annual cash incentives and long-term equity-based incentives. Furthermore, we do not provide any material retirement benefits, such as defined-benefit pensions, and instead rely on LTI awards, our 401(k) Savings Plan and our Deferred Compensation Plan to provide a competitive package for wealth accumulation and retirement and to motivate and retain our named executive officers.

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Certain compensation decisions are formula-driven, while others require more judgment and discretion. For instance, the Compensation Committee considers market data and individual performance in determining a named executive’s base salary. For fiscal 2014, target annual cash incentives and LTI awards were established based on a multiple of base salary and were set using competitive market data. The Compensation Committee uses quantitative and qualitative metrics and exercises judgment in determining achievement of the overall Company performance goals, as well as when assessing the individual performance of a named executive officer. In making compensation determinations, the Compensation Committee must also consider the terms of employment agreements or other arrangements with our named executive officers. As discussed below under the heading “Agreements Regarding Executive Compensation,” we are a party to employment agreements and offer letters with certain of our named executive officers that set forth compensation and other benefits.

Base Salary. In determining base salaries for our named executive officers, the Compensation Committee considered the market data for similar positions based on the comparator group and took into account individual performance, experience and skills, as well as the terms of employment agreements and offer letters with our named executive officers.

The following table sets forth the determinations of our Compensation Committee in August 2013 with respect to base salary rates for our named executive officers for fiscal 2014:

Name	Position	Fiscal 2013 Base Salary Rate1		Fiscal 2014 Base Salary Rate1		Percent Change
Kieran T. Gallahue	Chairman and CEO	$	1,150,000	$	1,200,000		4	%
James F. Hinrichs	Chief Financial Officer	$	546,364	$	562,754		3	%
Thomas J. Leonard	President, Medical Systems	$	483,890	$	498,000		3	%
Joan B. Stafslien	EVP, General Counsel and Corporate Secretary	$	481,268	$	495,706		3	%
Gordon M. LaFortune	EVP, EMEA/ANZ Commercial Operations and Global Infusion Disposables	$	400,000	$	400,000		—
Vivek Jain	Former President, Procedural Solutions	$	478,950	$	498,000		4	%

¹  Fiscal 2013 base salary rate reflects annual salary rate in effect at the end of fiscal 2013. Actual salary paid for fiscal 2013 and fiscal 2014 may differ from the salary rates reflected above based on the number of days of service by the named executive officer during the fiscal year, as well as the timing of any salary increase during the fiscal year.

As set forth in the table above, our named executive officers received an increase in base salary for fiscal 2014 of up to 4%, consistent with annual merit increases provided to our employees generally, and based on their performance during fiscal 2013.

Annual Cash Incentive Awards. The CareFusion Corporation Management Incentive Plan (the “MIP”) provides for annual cash incentive awards to eligible employees, including our named executive officers. MIP awards are performance-based, and payouts for fiscal 2014 were subject to the attainment of Company-wide and individual performance goals. The Compensation Committee established a MIP target award value for each of our named executive officers for fiscal 2014 based on competitive market data for similar positions. Target awards are set based on a percentage of base salary. In establishing the MIP target award value, the Compensation Committee targeted the 65th percentile of short-term cash incentive targets of the comparator group, which reflected the anticipated difficulty of achieving the performance goals. For fiscal 2014, MIP target awards represented a significant portion of target total cash compensation for our named executive officers.

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Fiscal 2014 Target Total Cash Compensation

The following table sets forth the determinations of our Compensation Committee in August 2013 with respect to MIP targets for fiscal 2014, as well as the actual amount of the cash incentive awards received by our named executive officers upon payout of the fiscal 2014 MIP in September 2014:

Name	Position	Fiscal 2014 MIP Target			Fiscal 2014 MIP Award Payout
		Percentage of Base Salary Rate	Award Value
Kieran T. Gallahue	Chairman and CEO	125%	$	1,500,000	$	1,750,000
James F. Hinrichs	Chief Financial Officer	80%	$	450,203	$	495,224
Thomas J. Leonard	President, Medical Systems	80%	$	398,400	$	414,336
Joan B. Stafslien	EVP, General Counsel and Corporate Secretary	70%	$	346,994	$	402,513
Gordon M. LaFortune	EVP, EMEA/ANZ Commercial Operations and Global Infusion Disposables	70%	$	280,000	$	291,200
Vivek Jain1	Former President, Procedural Solutions	80%	$	398,400	$	—

¹  As Mr. Jain left the Company in February 2014, he did not receive a MIP payment for fiscal 2014.

For fiscal 2014, our named executive officers were eligible to receive a cash award of 0%—200% of their respective MIP target awards based on the achievement of Company-wide financial performance goals. In addition, the Compensation Committee may assign an individual performance factor of 0%—150% related to the individual performance of the named executive officer, which can result in an increase or decrease in actual MIP payment, provided that no MIP payment shall exceed 200% of an executive officer’s MIP target. In setting Company-wide MIP performance goals for fiscal 2014, the Compensation Committee determined to maintain the same financial performance criteria used for fiscal 2013. Accordingly, for fiscal 2014, the Compensation Committee selected financial metrics related to revenue growth and operating margin. Given the Company’s strategic focus on these metrics, and their importance to investors, the Compensation Committee determined to continue to use them to create alignment with management performance goals under the MIP.

The Compensation Committee approved a MIP funding matrix for fiscal 2014, which established different funding levels based on performance against pre-established targets for “Revenue Growth of Continuing Operations” and “Adjusted Operating Margin,” calculated as follows:

• “Revenue Growth of Continuing Operations,” calculated by subtracting 1.00 from the quotient of our revenue from continuing operations for fiscal 2014, divided by our revenue from continuing operations for fiscal 2013

• “Adjusted Operating Margin,” calculated by dividing our adjusted operating earnings for fiscal 2014 by revenue for fiscal 2014

In calculating Revenue Growth of Continuing Operations, we exclude from revenue in fiscal 2014 any revenue associated with acquisitions and divestitures completed during fiscal 2014, and we exclude from revenue in fiscal 2013 any revenue associated with divestitures in fiscal 2014 that do not qualify for discontinued operations treatment. In calculating Adjusted Operating Margin, we use adjusted operating earnings, which

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exclude certain one-time items such as restructuring charges; impairments; gains and losses on the sale of assets; merger, acquisition and divestiture charges; amortization of acquired intangible assets; and other one-time charges as recommended by management and approved by the Board. In both calculations, we also exclude the impact of foreign currency exchange rate fluctuations. We exclude these items from the calculations in order to better measure core growth in revenue and operating margin and to facilitate comparisons to the prior year period. By excluding certain one-time items from the calculations, the Compensation Committee sought to reward management for operating performance results, without distortion from one-time items and non-operating factors.

The following table shows the Company-wide MIP performance goals at minimum, target and maximum performance levels for fiscal 2014:

Performance Metric	Minimum Performance			Target Performance			Maximum Performance
Revenue Growth of Continuing Operations		0.0	%		2.50	%		5.0	%
Adjusted Operating Margin		18.0	%		21.5	%		24.5	%

Revenue Growth of Continuing Operations and Adjusted Operating Margin are equally weighted at 50% and are evaluated within a funding matrix based on whether actual performance meets the minimum, target or maximum performance levels for each metric. If target performance is achieved for both metrics, MIP funding would be calculated at the target. If maximum performance is achieved for both metrics, MIP funding would be calculated at 200% of target. If the minimum performance level is not met for one or more of the metrics, the Compensation Committee has the discretion to fund the MIP at zero. For performance between the minimum and maximum levels for each metric, the MIP funding calculation is determined on an interpolated basis from 50% to 200%.

In July 2014, the Compensation Committee reviewed our financial performance and determined Revenue Growth of Continuing Operations to be 3.8% and Adjusted Operating Margin to be 19.6 % for purposes of the fiscal 2014 MIP calculation. While our actual revenue growth in fiscal 2014 was 8%, for purposes of the MIP calculation, which excludes the impact of certain acquisition and divestiture transactions, Revenue Growth of Continuing Operations was 3.8%. Relative to the MIP performance goals, we exceeded our target for Revenue Growth of Continuing Operations and fell short of the target for Adjusted Operating Margin. Based on these results, the Compensation Committee calculated the MIP payout under the MIP funding matrix, which resulted in a formulaic outcome of just over 100%.

In establishing the MIP award payouts for our named executive officers, the Compensation Committee assigned individual performance factors, which had the effect of increasing the MIP payouts above target. As discussed above, the Compensation Committee may assign an individual performance factor of 0%—150% related to the individual performance of the officer, which can result in an increase or decrease in actual MIP payment. The amounts set forth in the table above reflect MIP award payouts to our named executive officers between 104%—117% of target based on their individual performance. In determining the individual performance factors for our named executive officers, the Compensation Committee considered the roles and relative contributions of our named executive officers in driving the Company’s strong financial results for fiscal 2014, our product innovation achievements, and our global growth initiatives, including our successful merger and acquisition activities, as discussed above under “Executive Overview—Fiscal Year 2014 Business and Financial Highlights.” In awarding Mr. Gallahue a MIP payout at 117% of target, the Compensation Committee also recognized the Company’s total stockholder return performance, as well as his success in leading efforts to better align the Company’s culture and capabilities with its long-term business strategy.

MIP award payouts to our named executive officers are designed to be performance-based compensation, and therefore to be fully tax deductible under the Tax Code. For fiscal 2014, our Compensation Committee established an overall Company performance criterion of $313 million of earnings before interest and taxes (“EBIT”), which had to be satisfied before any payout could be made to our named executive officers under the MIP. For fiscal 2014, the Compensation Committee established a MIP framework whereby, if this performance

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criterion was met, each of our named executive officers could be awarded a MIP bonus up to 200% of his or her MIP target, subject to the Compensation Committee’s negative discretion to award incentive payments in lesser amounts. For fiscal 2014, the Company generated EBIT in excess of the threshold, which allowed the Compensation Committee to approve the MIP payouts discussed above. The Compensation Committee exercised its discretion to approve MIP payouts less than 200% based on Company performance relative to the MIP funding matrix and the additional considerations discussed above.

Long-Term Equity-Based Incentive Awards. Under the CareFusion Corporation 2009 Long-Term Incentive Plan (the “LTIP”), we may grant stock options, restricted stock, RSUs, performance cash, PSUs and other equity-based awards. We intend to grant long-term equity-based incentive awards under the LTIP to our eligible employees on an annual basis in connection with our compensation planning process each August. On August 15, 2013, we granted eligible employees, including our named executive officers, equity-based awards under the LTIP as part of our fiscal 2014 annual LTI award.

Fiscal 2014 annual LTI awards for our named executive officers were comprised of stock options, PSUs and RSUs allocated 50%, 25% and 25%, respectively, of the total LTI target award values. The following table sets forth the determinations of our Compensation Committee in August 2013 with respect to the fiscal 2014 annual LTI awards for our named executive officers:

Name	Position	Total LTI Target Award Value ($)		Stock Options1 (# shares)		RSUs1 (# shares)		PSUs1,2 (# shares)
Kieran T. Gallahue	Chairman and CEO	$	7,800,000		399,645		53,912		53,912
James F. Hinrichs	Chief Financial Officer	$	2,532,393		129,751		17,503		17,503
Thomas J. Leonard	President, Medical Systems	$	1,618,500		82,926		11,187		11,187
Joan B. Stafslien	EVP, General Counsel and Corporate Secretary	$	1,239,265		63,496		8,566		8,566
Gordon M. LaFortune	EVP, EMEA/ANZ Commercial Operations and Global Infusion Disposables	$	720,000		36,890		4,976		4,976
Vivek Jain	Former President, Procedural Solutions	$	1,618,500		82,926		11,187		11,187

¹  The fiscal 2014 annual LTI award was granted on August 15, 2013 pursuant to the LTIP. Stock options and RSUs vest over a period of three years, with 33 1/3% of the shares subject to the award vesting on each of the first three anniversaries of the grant date. Stock options granted as part of the fiscal 2014 annual LTI award have an exercise price of $36.17, the closing price of our common stock on the NYSE on the date of grant, and have a term of seven years. RSUs granted as part of the fiscal 2014 annual LTI award are designed to be performance-based compensation under the Tax Code and to be fully tax deductible, and they include a performance condition of $313 million of EBIT for the performance period July 1, 2013 to June 30, 2014, which must be satisfied before the RSUs will vest. The 2014 annual LTI award amounts are based on the total award value, allocated to stock options, RSUs and PSUs, as discussed above. The share amounts for stock options were determined by dividing the award value allocated to stock options by the grant date fair value associated with an option to purchase our common stock using a Black-Scholes-Merton valuation model. The share amounts for RSUs and PSUs were determined by dividing the award values allocated to RSUs and PSUs by $36.17, the closing price of our common stock on the NYSE on the date of grant.

²  Reflects target number of shares subject to PSUs, assuming all performance goals and other requirements are met. As discussed below, the PSUs will be earned from 0%—200% of target based on the achievement of performance goals related to the Company’s ability to grow its earnings per share, with payment in shares following the conclusion of the three-year performance period.

In connection with the fiscal 2014 annual LTI award, we established target award values for each of our named executive officers using competitive market data for similar positions based on the comparator group and

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considering differences in individual performance, pay history, experience in role and internal equitability. We believe that this is consistent with a business emphasizing long-term growth and innovation. To accomplish the compensation objectives discussed above, we granted our named executive officers a combination of stock options, RSUs and PSUs during fiscal 2014.

Stock Options. Stock options are intended to align executives with the interests of stockholders in increasing sustainable, long-term stockholder value. We view stock options as an element of performance-based compensation because a stock option provides no realizable value upon grant. These instruments only deliver value to a recipient if the price of our common stock increases above the price at the time of grant and vesting requirements have been met. Our stock options are granted with an exercise price equal to the closing market price for our common stock on the date of grant and provide no benefit if the option is not exercised when the price of the stock exceeds the grant price during the option’s term. Our stock options typically vest over a period of three years, with 33 1/3% of the shares subject to the award vesting on each of the first three anniversaries of the grant date, and have a term of seven years.

RSUs. We grant our executives RSUs primarily to ensure that our executives maintain an ownership stake in the Company. By providing an ownership stake in the Company, RSUs align executives’ financial interests with stockholders’ interests. We believe RSUs also aid in retention and provide value to our executives, given that we do not provide pensions. Our RSUs typically vest over a period of three years, with 33 1/3% of the shares subject to the award vesting on each of the first three anniversaries of the grant date. The RSUs that we grant to our named executive officers are designed to be performance-based compensation under the Tax Code and to be fully tax deductible. For the RSUs granted to our named executive officers in August 2013 as part of the fiscal 2014 annual LTI award, our Compensation Committee established a performance condition of $313 million of EBIT for the performance period July 1, 2013 to June 30, 2014, which had to be satisfied before the RSUs would vest. As this performance condition was satisfied, these RSUs will vest and payout as to 33 1/3% of the shares subject to the award on each of the first three anniversaries of the grant date.

PSUs. PSUs are intended to reward our executives for the achievement of specified multi-year performance goals. As performance-based compensation, PSUs will only vest if the performance goals are achieved during the specified performance period. In fiscal 2014, we granted PSUs to our executive officers with performance goals based on the achievement of the compounded annual growth rate (“CAGR”) of the Company’s fully diluted, adjusted earnings per share over the three year performance period beginning July 1, 2013 and ending June 30, 2016. The payout amount for these PSUs will vary between 0%—200% of a target number of shares of common stock based on performance relative to the CAGR target established for the performance period. If the performance target is achieved, these awards will “cliff-vest” on the third anniversary of the grant date. If the Company does not meet the minimum performance target, then the PSUs will not vest and no shares will be delivered to the executive officer. As a general matter, achievement of targeted performance goals is difficult, requiring significant and sustained effort on the part of our executives. Achievement of the targeted performance goals for our PSUs requires superior performance relative to underlying market growth rates.

In January 2011, when Mr. Gallahue joined us as Chairman and Chief Executive Officer, we agreed to grant him a sign-on equity award in the form of PSUs, which we granted to Mr. Gallahue on February 15, 2011. We established performance goals for Mr. Gallahue’s PSUs based on absolute Company stock price appreciation over a three-year period. Based on the satisfaction of the performance goals associated with these PSUs, these PSUs vested and were paid out to Mr. Gallahue on February 15, 2014. The PSUs were issued in five separate tranches with respect to an aggregate of 450,094 shares, with vesting of each tranche subject to the achievement of closing price targets for each tranche (ranging from $30.00 to $50.00 per share of CareFusion common stock) and Mr. Gallahue remaining in continuous service with CareFusion through February 15, 2014. As Mr. Gallahue remained in continuous service through February 15, 2014, and CareFusion common stock achieved the closing price targets with respect to three of the five tranches, these PSUs vested and were paid to Mr. Gallahue with respect to 246,697 shares.

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In August 2011, as part of our fiscal 2012 annual LTI award, we granted PSUs to our executive officers with performance goals based on the CAGR of the Company’s fully diluted, adjusted earnings per share over the three year performance period beginning July 1, 2011 and ending June 30, 2014. Based on the satisfaction of the performance goals associated with these PSUs, these PSUs vested and were paid out to our named executive officers on August 5, 2014. These PSUs were issued based on a target number of shares, with vesting and payout of between 0%—200% of target subject to performance relative to the CAGR goals established for the performance period. The Compensation Committee established CAGR goals within a range of 7%—15%, such that a CAGR of below 7% would result in a payout of zero, and a CAGR of 15% or more would result in a maximum payout at 200% of target. Under the structure approved by the Compensation Committee, earnings associated with acquisitions are only included in the CAGR calculation if the acquisition occurs in the first or second year of the performance period. Earnings associated with transactions completed in the third year of the performance period are excluded from the calculation. Accordingly, the financial results associated with Sendal and Vital Signs, which we acquired in fiscal 2014, were excluded from our adjusted earnings for purposes of the CAGR calculation. In calculating adjusted earnings, we also exclude certain one-time items such as restructuring charges; impairments; gains and losses on the sale of assets; merger, acquisition and divestiture charges; and other one-time charges as recommended by management and approved by the Board. In August 2014, the Compensation Committee reviewed our financial performance and determined that the CAGR of the Company’s fully diluted, adjusted earnings per share over the three year performance period beginning July 1, 2011 and ending June 30, 2014 for purposes of the PSUs was 8.0%. Based on these results relative to the CAGR goals established by the Compensation Committee, these PSUs vested and were paid out to our executives at 64% of target.

Other Benefits and Perquisites. Our named executive officers are eligible to participate in employee benefit programs generally offered to our other U.S. employees. Mr. LaFortune, who is a U.S. employee working overseas, receives certain expatriate benefits under our overseas assignment policy that are consistent with benefits provided to other Company expatriates. In addition, we provide certain other perquisites to our named executive officers that are not generally available to other employees, as described below. These perquisites are reported in the “Summary Compensation Table” included in the Executive Compensation section of this Proxy Statement.

Company Aircraft. The Company utilizes corporate-owned aircraft for business purposes to help increase the productivity of its global business operations, while also providing transportation flexibility and security. The Company maintains an aircraft utilization policy that sets forth the guidelines and procedures for use of the aircraft by Company executives and members of the Board. While personal use of the corporate-owned aircraft is permitted, our executives generally do not utilize the aircraft for extensive personal travel. During fiscal 2014, Mr. Gallahue and Mr. Hinrichs were the only named executive officers to utilize the aircraft for personal travel, and the “Summary Compensation Table” included in the Executive Compensation section of this Proxy Statement reflects $14,642 and $1,788, respectively, as related to such personal use.

Deferred Compensation Plan. We maintain a non-qualified Deferred Compensation Plan to allow executives to accumulate wealth on a tax-deferred basis and to be competitive in recruiting and retaining executive talent. We do not provide for wealth accumulation for retirement through defined benefit pensions or supplemental executive retirement plans. For Cardinal Health employees who became our employees following the spinoff, including our named executive officers, we assumed the obligations for benefits accrued while they were Cardinal Health employees under the Cardinal Health Deferred Compensation Plan. Our Deferred Compensation Plan permits certain management employees to defer payment and taxation of a portion of salary and bonus and receive an investment return on the deferred amount based on several investment alternatives. In addition, we typically make additional matching and fixed contributions to the deferred balances of employees, including our named executive officers, subject to limits discussed below under the heading “Executive Compensation—Nonqualified Deferred Compensation in Fiscal 2014.” Contributions made by CareFusion with respect to our named executive officers are set forth in the “Summary Compensation Table” included in the Executive Compensation section of this Proxy Statement.

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Financial Planning and Assistance. For fiscal year 2014, we began providing members of senior management, including our named executive officers, financial planning and assistance services. We have established relationships with financial advisors, who work with our executives to develop financial plans and assist them with tax planning, estate planning, retirement planning, and other related services. Under this program, we pay for the first $10,000 in fees associated with the services obtained by each of our executives.

Expatriate Assignment and Relocation Program. We maintain an expatriate assignment and relocation program, which includes our overseas assignment policy, to facilitate the Company’s global business needs in temporarily relocating employees, including executive officers, with special or unique skills to countries where those skills may not be readily available. To enable an expatriate to maintain a reasonable standard of living in countries where living expenses are higher than his or her home country, we pay for a housing allowance and utility expenses, education support, cost of living adjustments, a home leave allowance to enable an expatriate to travel to and from their home country, a transportation allowance, a wire transfer allowance and tax preparation expenses. We also pay for certain expenses upon an employee’s return home. In addition, expatriates benefit from our tax equalization program, whereby we make certain tax equalization payments or reimbursements, which is intended to neutralize the tax effect of an expatriate assignment. During fiscal 2014, Mr. LaFortune was the only named executive officer on an expatriate assignment. For more detailed information regarding Mr. LaFortune’s expatriate benefits, see the “Summary Compensation Table” included in the Executive Compensation section of this Proxy Statement.

All other perquisites that we provide to our named executive officers are minimal. During fiscal 2014, certain of our named executive officers and their spouses participated in our annual sales incentive award trips for high-performing members of our sales team at Company expense. Participation by these named executive officers was part of their management responsibility and was intended to enhance the overall value and meaningfulness of the sales award trips for our top sales performers. Our named executive officers are also eligible for reimbursement for executive physical examinations and related health services, and they participate in programs generally offered to our other employees, including medical insurance, dental insurance, life insurance and long-term disability insurance and our 401(k) Savings Plan. For more detailed information regarding benefits and perquisites provided to our named executive officers, see the “Summary Compensation Table” included in the Executive Compensation section of this Proxy Statement.

Agreements Regarding Executive Compensation

The Compensation Committee reviews and approves, or makes recommendations to the Board to approve, any employment agreements or offer letters with our named executive officers relating to compensation or separation payments. During fiscal 2011, we entered into an employment agreement with Mr. Gallahue when we hired him to become our Chairman and Chief Executive Officer, and we entered into an offer letter with Mr. Hinrichs in connection with his promotion to the position of Chief Financial Officer. These agreements serve to clarify terms of employment and establish baseline compensation and benefits levels, which we believe has helped us to attract, retain and motivate our named executive officers.

Kieran T. Gallahue. On January 29, 2011, we entered into an employment agreement with Mr. Gallahue with respect to his employment as our Chairman and Chief Executive Officer. The agreement provides for an initial term of three years and will automatically renew thereafter for consecutive one-year terms unless earlier terminated by either party upon 180 days’ advance notice. The agreement provides that, during the term of the agreement, Mr. Gallahue will receive an annual base salary of not less than $1,150,000 and be eligible for a target annual bonus under the MIP of not less than 120% of his annual base salary payable based on performance objectives to be determined by the Compensation Committee. The agreement also provides that Mr. Gallahue will be eligible to participate in the Company’s employee benefits programs, which include retirement savings, nonqualified deferred compensation, health and welfare, and perquisite programs, and will be given paid vacation, in accordance with plans and policies in effect for other senior executives. We also agreed to reimburse Mr. Gallahue for legal fees and expenses up to $45,000 in connection with his diligence of the Company and the negotiation and execution of the agreement.

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Pursuant to the agreement, Mr. Gallahue received a sign-on cash bonus, as well as a sign-on equity award in the form of PSUs. As discussed above under the heading “Compensation Determinations—Long-Term Equity-Based Incentive Awards”, Mr. Gallahue’s sign-on PSUs vested in February 2014. In addition, to compensate Mr. Gallahue for the forfeiture of the value of equity grants from his previous employer, the agreement provided for the grant of buy-out equity awards comprised of stock options and RSUs. The agreement also provided that Mr. Gallahue would be eligible for the annual LTI award in fiscal 2012 and for future annual LTI awards consistent with the Company’s practices for equity grants to management then in effect. Pursuant to the agreement, Mr. Gallahue also agreed to a number of restrictive covenants during the term of the agreement and for a period thereafter. The agreement also establishes the amount of severance payments to be paid in connection with a termination of employment of Mr. Gallahue during the term of the agreement, as discussed below in the Executive Compensation section of this Proxy Statement under the heading “Potential Payments on Termination or Change in Control—Kieran T. Gallahue.”

James F. Hinrichs. On November 29, 2010, we entered into an offer letter with Mr. Hinrichs with respect to his employment as our Chief Financial Officer. The offer letter provides for an initial annual base salary of $515,000 and a target annual bonus under the MIP of 80% of his annual base salary. In addition, pursuant to the offer letter, Mr. Hinrichs was granted a sign-on equity award in the form of stock options The offer letter also provided that Mr. Hinrichs would be eligible for an annual LTI award in fiscal 2012, and the target expected value would be 450% of his base salary. The offer letter also establishes the amount of severance payments to be paid in connection with a termination of employment of Mr. Hinrichs during the term of the agreement, as discussed below in the Executive Compensation section of this Proxy Statement under the heading “Potential Payments on Termination or Change in Control—James F. Hinrichs.”

Severance Benefits and Payments Upon a Change in Control

For our named executive officers with employment agreements or offer letters, severance and change in control benefits are generally included in these agreements, as discussed above. For our named executive officers who are not covered by specific agreements or arrangements, we maintain Executive Severance Guidelines, which establish indicative amounts of severance payments and benefits payable to executives in connection with a termination of employment by the Company without cause or by an executive for good reason, and an Executive Change in Control Severance Plan, which provides for severance payments and benefits to executives who experience an eligible termination within 24 months following a change in control of the Company. In addition, in June 2012, our standard forms of equity grant agreements were amended to include “double-trigger” vesting, which provide that vesting (and exercisability in the case of stock options) would be accelerated if the recipient’s employment is terminated by the Company other than for “cause” or by the recipient for “good reason,” in either case within two years following a change of control of the Company (if the awards are assumed in the transaction). All of our LTI awards granted in fiscal 2013 and fiscal 2014 include “double-trigger” vesting provisions. You can find additional information regarding severance payments and benefits, as well as a tabular summary of these benefits, below in the Executive Compensation section of this Proxy Statement under the heading “Potential Payments on Termination or Change in Control.”

The Executive Severance Guidelines are considered by the Compensation Committee in providing severance payments and benefits to certain executive-level employees in the event of a termination of employment by the Company without “cause” or by the executive for “good reason.” The Executive Severance Guidelines are intended to establish an indicative amount of severance, and actual payments and benefits may be higher or lower than as recommended in the Executive Severance Guidelines, as determined in the sole discretion of the Compensation Committee. In June 2012, the Compensation Committee approved the amendment and restatement of our Executive Severance Guidelines, effective July 1, 2012. The amendment and restatement of the Executive Severance Guidelines was intended to reduce the number of executives subject to the guidelines and reduce the amount of severance payable under the guidelines. The Executive Severance Guidelines now provide for guideline cash severance payments to eligible executives in an amount equal to one year of their base salary plus a potential additional payment in an amount up to the average of the prior two years’ annual cash

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incentive awards under the MIP. The Executive Severance Guidelines also allow for health benefits continuation and outplacement services for a period of one year. All payments and benefits actually provided under the Executive Severance Guidelines are conditioned upon the receipt by the Company of a waiver and release of claims.

The Executive Change in Control Severance Plan (the “CIC Plan”) provides for benefits to our named executive officers in connection with a termination of employment following a change in control of the Company. The purpose of the CIC Plan is to establish severance benefits for key executives in the event of a change in control, so they will continue to serve and provide objective advice and counsel to the Company and contribute meaningfully to change in control transactions that are in the best interests of the Company’s stockholders. In June 2012, the Compensation Committee approved the amendment and restatement of the CIC Plan, effective July 1, 2012. The amendment and restatement of the CIC Plan was intended to reduce the number of executives subject to the plan, provide additional clarity around various provisions, and reduce the amount of severance payable under the plan. Under the amended and restated CIC Plan, upon an involuntary termination without cause or a voluntary termination for good reason within 24 months following a change in control, our executives will receive cash severance equal to a multiple of their annual base salary and target annual MIP award, as well as a pro-rated MIP award for the year of termination. For executives at or above the level of executive vice president, the severance multiple is equal to two times their annual base salary and target annual MIP award; for executives at the level of senior vice president, the severance multiple is equal to 1.5 times their annual base salary and target annual MIP award; and for certain executives at the level of vice president, the severance multiple is equal to one times their annual base salary and target annual MIP award. The CIC Plan does not provide for tax gross-up payments relating to the payment of any excise tax on the extent to which an executive’s severance constitutes excess parachute payments under Sections 4999 and 280G of the Tax Code. However, the CIC Plan does provide for a “cutback,” so that to the extent severance payments to an executive under the CIC Plan would trigger the excise tax, payments will be reduced to the extent necessary to prevent any portion of the payments from becoming nondeductible by us under Section 280G of the Tax Code or subject to the excise tax imposed under Section 4999 of the Tax Code, but only if, by reason of that reduction, the net after-tax benefit received by the executive exceeds the net after-tax benefit the executive would receive if no reduction was made.

In addition, our named executive officers may receive accelerated vesting of their LTI awards in connection with a change in control. Prior to June 2012, our standard forms of agreements for equity awards granted under the LTIP contained a “single-trigger” vesting provision, meaning they will vest in full upon a change in control. Single-trigger treatment of equity awards can ensure that ongoing employees are treated the same as terminated employees with respect to outstanding equity awards. In addition, single-trigger equity awards can assist in retaining key employees in the face of a potential change of control by providing a benefit if they remain with the Company through the date of the change of control. Our Compensation Committee recognizes that equity awards with a “double-trigger” vesting provision, meaning they will vest in full only if there is a change in control and an award recipient’s employment is terminated, can be a valuable retention tool. Such provisions can help ensure that executives remain with the Company before, during, and after a change in control, which can help protect the interests of the Company’s stockholders, but which can also provide value to an acquirer. In June 2012, the Compensation Committee approved new forms of LTI agreements for equity grants to all employees, including our named executive officers, which replaced the existing single-trigger vesting provision with double-trigger vesting. Under these new agreements, the vesting of the awards (and exercisability in the case of stock options) will be accelerated only if the recipient’s employment is terminated by the Company other than for “cause” or by the recipient for “good reason,” in either case within two years following the “change of control” (as such terms are defined in the amended agreements for the awards). All of our LTI awards granted in fiscal 2013 and fiscal 2014 include “double-trigger” vesting provisions.

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Compensation Determinations for Fiscal 2015

In August 2014, our Compensation Committee considered the compensation of our named executive officers for fiscal 2015. The Compensation Committee determined not to modify the base salary for Mr. Gallahue for fiscal 2015. For our other named executive officers, the Compensation Committee approved an increase of 3% from fiscal 2014 levels, primarily as a result of the U.S. merit budget funding for annual base salary increases for the Company’s workforce generally. MIP targets as a percentage of base salary for our named executive officers were unchanged, except for Mr. Gallahue and Ms. Stafslien, whose MIP targets were each increased by five percentage points. For fiscal 2015, the Compensation Committee revised the structure for the MIP, including the financial metrics. MIP funding for fiscal 2015 will be based on Company performance relative to targets established by the Compensation Committee for adjusted earnings per share, with a modifier that can increase or decrease funding based on the extent to which the Company grows revenues.

The following table sets forth the determinations of our Compensation Committee with respect to our named executive officers for fiscal 2015 base salaries and fiscal 2015 MIP targets:

		Annual Base Salary Rate					Fiscal 2015 MIP Target
Name	Position	Fiscal 2014		Fiscal 2015		Percent Change	Percentage of Base Salary Rate	Total Award Value
Kieran T. Gallahue	Chairman and CEO	$	1,200,000	$	1,200,000	—	130%	$	1,560,000
James F. Hinrichs	Chief Financial Officer	$	562,754	$	579,637	3%	80%	$	463,710
Thomas J. Leonard	President, Medical Systems	$	498,000	$	512,940	3%	80%	$	410,352
Joan B. Stafslien	EVP, General Counsel and Corporate Secretary	$	495,706	$	510,577	3%	75%	$	382,933
Gordon M. LaFortune	EVP, EMEA/ANZ Commercial Operations and Global Infusion Disposables	$	400,000	$	412,000	3%	70%	$	288,400

In August 2014, our Compensation Committee also approved the fiscal 2015 annual LTI award, which included equity-based awards for our named executive officers. The Compensation Committee granted stock options, RSUs and PSUs as part of the fiscal 2015 annual LTI award, with the stock options and RSUs subject to three-year vesting as to 33 1/3% of the shares subject to the award on each of the first three anniversaries of the grant date. Consistent with the prior year, the RSUs are designed to be performance-based compensation under the Tax Code and to be fully tax deductible, and they include a performance condition of $313 million of EBIT for the performance period July 1, 2014 to June 30, 2015, which must be satisfied before the RSUs will vest. For the fiscal 2015 annual LTI award, the Compensation Committee revised the structure for the PSUs, including the financial metrics. The Compensation Committee established performance targets for the PSUs based on the Company’s total stockholder return relative to the component companies of the S&P 500 Health Care Index during the performance period beginning August 15, 2014 and ending June 30, 2017. In connection with the revised structure and financial metrics, the Compensation Committee approved various changes to the form of grant agreement for the PSUs. Among other things, the revised agreement provides that the PSUs shall be earned based on achievement of the performance targets, but that payout and delivery of shares shall be deferred until the fourth anniversary of the grant date, subject to potential earlier payout in the case of death, disability, retirement or change in control.

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Consistent with fiscal 2014, the fiscal 2015 annual LTI awards granted to our named executive officers were comprised of stock options, RSUs and PSUs, allocated 50%, 25% and 25%, respectively, of the total award values. The following table sets forth the determinations of our Compensation Committee in August 2014 with respect to our named executive officers for the fiscal 2015 annual LTI award:

Name	Position	Total LTI Target Award Value ($)		Stock Options1 (# shares)		RSUs1 (# shares)		PSUs1,2 (# shares)
Kieran T. Gallahue	Chairman and CEO	$	7,800,000		350,997		44,348		44,859
James F. Hinrichs	Chief Financial Officer	$	2,608,367		117,375		14,830		15,001
Thomas J. Leonard	President, Medical Systems	$	1,795,290		80,787		10,207		10,325
Joan B. Stafslien	EVP, General Counsel and Corporate Secretary	$	1,276,443		57,439		7,257		7,341
Gordon M. LaFortune	EVP, EMEA/ANZ Commercial Operations and Global Infusion Disposables	$	741,600		33,372		4,217		4,265

¹  The fiscal 2015 annual LTI award was granted on August 15, 2014 pursuant to the LTIP. Stock options and RSUs vest over a period of three years, with 33 1/3% of the shares subject to the award vesting on each of the first three anniversaries of the grant date. These stock options have an exercise price of $43.97, the closing price of our common stock on the NYSE on the date of grant, and have a term of seven years. These RSUs are designed to be performance-based compensation under the Tax Code and to be fully tax deductible, and they include a performance condition of $313 million of EBIT for the performance period July 1, 2014 to June 30, 2015, which has to be satisfied before the RSUs will vest. The 2015 annual LTI award amounts are based on the total award value, allocated to stock options, RSUs and PSUs, as discussed above. The share amounts for stock options were determined by dividing the award value allocated to stock options by the grant date fair value associated with an option to purchase our common stock using a Black-Scholes-Merton valuation model. The share amounts for RSUs were determined by dividing the award values allocated to RSUs by $43.97, the closing price of our common stock on the NYSE on the date of grant. The share amounts for PSUs were determined by dividing the award value allocated to PSUs by the grant date fair value associated with a PSU using a Monte Carlo valuation model.

²  Reflects target number of shares subject to PSUs, assuming all performance goals and other requirements are met. As discussed above, the PSUs will be earned from 0%—200% of target based on the achievement of performance targets based on the Company’s total stockholder return relative to the component companies of the S&P 500 Health Care Index during the performance period beginning August 15, 2014 and ending June 30, 2017.

Policies, Guidelines and Practices Related to Executive Compensation

Stock Ownership Guidelines. To more closely align our executive officers’ and directors’ interests with the interests of our stockholders, we maintain a set of stock ownership guidelines that require:

• our Chief Executive Officer to accumulate and hold a number of shares of common stock valued at five times his base salary within five years after becoming an officer;

• our other executive officers to accumulate and hold a number of shares of common stock valued at three times their base salaries within five years after becoming an officer; and

• our non-employee directors to accumulate and hold a number of shares of common stock valued at five times the annual Board cash retainer within five years after joining our Board.

In addition to direct holdings, shares owned jointly or separately from a spouse and/or children, shares held in trust, shares subject to deferred delivery, and unvested RSUs are also counted for purposes of the stock ownership guidelines. As of June 30, 2014, all of our non-employee directors, with the exception of Mr. Bose,

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held shares valued in excess of five times the annual cash retainer. Mr. Bose joined the Board in May 2014 and is expected to satisfy the ownership requirements within five years after joining the Board in accordance with the guidelines. In addition, as of June 30, 2014, all of our named executive officers are in compliance with their required stock ownership amounts.

Potential Impact on Compensation from Executive Misconduct. Under the LTIP and MIP, we have the authority to require repayment, or subject outstanding awards to forfeiture, in certain instances of executive officer misconduct. Under the LTIP and MIP, we can seek recovery when a payment was based on the achievement of financial results that were subsequently restated if the executive officer engaged in misconduct that caused or contributed to the need for the restatement of previously filed financial statements.

Under our standard form of stock option agreement, an unexercised option is forfeited if the holder has engaged in specified conduct, as described below, while employed by us or for a period of three years following termination of employment, and we may require the holder to repay the gross option gain realized from the exercise of the options exercised within three years prior to such conduct. Under our standard form of RSU and PSU agreements, unvested and deferred awards that vested within the look-back period (three years) are forfeited if the holder has engaged in specified conduct, described below, while employed by us or for three years after termination of employment. Moreover, we may require the holder to repay the value of the RSUs and PSUs settled within three years prior to such conduct. The specified conduct includes:

• disclosure or use of confidential information;

• violation of our policies;

• solicitation of business or our employees;

• disparagement;

• breach of any provision of an employment agreement or severance agreement; and

• competitive actions (during employment and for a period of 12 months following termination of employment).

We may also terminate all vested stock options if the executive’s employment is terminated for cause. We may also seek damages for breach of contract or seek other equitable relief.

Equity Grant Practices. Our fiscal year ends on June 30, and we expect to grant an annual LTI award to eligible employees, including our named executive officers, on or about August 15 of each year. In the event of grants related to new hires, promotions, or other off-cycle awards, the grants are generally made on the 15th day of the month or the first business day to follow the 15th day of the month.

Policy on Stock Hedging, Pledging and Margin Activities. Our policy on buying and selling stock and securities prohibits hedging transactions by Company employees. Under the policy, all short-term, speculative or hedging transactions in CareFusion securities are now prohibited by all employees. In addition, the policy specifically prohibits the use of CareFusion securities for pledging and margin activities.

Tax and Accounting Matters

Section 162(m) of the Tax Code places a limit of $1,000,000 on the amount of compensation that we may deduct in any one year with respect to certain named executive officers. There is an exception to the $1,000,000 limitation for performance-based compensation meeting certain requirements. Our LTIP and MIP are also structured generally to allow for the payment of performance-based compensation meeting those requirements and, as such, to be fully deductible. In order to preserve the deductibility under Section 162(m) of the Tax Code of the compensation payable under our MIP and LTIP, we obtained stockholder approval of these plans at our November 3, 2010, annual meeting of stockholders to satisfy the requirements of Section 162(m) of the Tax

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Code. It is the Compensation Committee’s general policy to endeavor to minimize the adverse effect of Section 162(m) of the Tax Code on the deductibility of compensation expense; however, the Compensation Committee maintains flexibility in compensating executive officers in a manner designed to promote varying company goals.

The Compensation Committee also considers the impact of Section 409A of the Tax Code, and the compensation plans, programs and agreements are, in general, designed to be exempt from or comply with the requirements of that section so as to avoid possible adverse tax consequences that may result from noncompliance with Section 409A.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with the Company’s management. Based on this review and its discussions with management, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

Submitted by the Human Resources and Compensation Committee of the Board of Directors:

Gregory T. Lucier, Chair

Michael D. O’Halleran

Robert F. Friel

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EXECUTIVE COMPENSATION

The following tables contain compensation information for our named executive officers for the fiscal year ended June 30, 2014. The information included in the tables below should be read in conjunction with the Compensation Discussion and Analysis, which can be found on page 30 of this Proxy Statement.

Summary Compensation Table

Name and Principal Position	Year		Salary		Bonus		Stock Awards1		Option Awards2		Non- Equity Incentive Plan Compen- sation3		Change in Pension Value and Non- qualified Deferred Compensation Earnings		All Other Compen- sation4		Total
Kieran T. Gallahue Chairman and CEO		2014	$	1,190,385	$	—	$	3,899,994	$	3,900,002	$	1,750,000	$	—	$	42,111	$	10,782,492
		2013	$	1,150,000	$	—	$	3,750,010	$	3,749,997	$	948,750	$	—	$	29,391	$	9,628,149
		2012	$	1,150,000	$	—	$	3,750,010	$	3,749,630	$	1,282,969	$	—	$	34,003	$	9,966,612
James F. Hinrichs Chief Financial Officer		2014	$	559,602	$	—	$	1,266,167	$	1,266,197	$	495,224	$	—	$	25,533	$	3,612,723
		2013	$	543,915	$	—	$	1,229,340	$	1,229,320	$	288,480	$	—	$	24,246	$	3,315,301
		2012	$	528,073	$	—	$	1,193,499	$	1,193,393	$	360,706	$	—	$	35,320	$	3,310,991
Thomas J. Leonard President, Medical Systems		2014	$	498,000	$	—	$	809,268	$	809,247	$	414,336	$	—	$	24,838	$	2,555,689
		2013	$	479,676	$	—	$	725,848	$	725,837	$	229,945	$	—	$	22,654	$	2,183,960
		2012	$	450,115	$	—	$	570,601	$	570,566	$	372,504	$	—	$	41,738	$	2,005,524
Joan B. Stafslien EVP, General Counsel and Corporate Secretary		2014	$	492,929	$	—	$	619,664	$	619,636	$	402,513	$	—	$	19,269	$	2,154,011
		2013	$	477,742	$	—	$	541,426	$	541,423	$	222,346	$	—	$	11,516	$	1,794,453
		2012	$	456,296	$	—	$	515,647	$	515,592	$	272,718	$	—	$	28,085	$	1,788,338
Gordon M. LaFortune EVP, EMEA/ANZ Commercial Operations and Global Infusion Disposables		2014	$	400,000	$	—	$	359,964	$	359,997	$	291,200	$	—	$	539,982	$	1,951,143
Vivek Jain5 Former President, Procedural Solutions		2014	$	325,783	$	—	$	809,268	$	809,247	$	—	$	—	$	13,969	$	1,958,267
		2013	$	478,950	$	—	$	658,552	$	658,557	$	316,107	$	—	$	17,287	$	2,129,453
		2012	$	476,804	$	—	$	598,666	$	598,630	$	260,549	$	—	$	53,820	$	1,988,469

¹  Stock awards consist of restricted stock units (“RSUs”) and performance stock units (“PSUs”). Amounts shown reflect the grant date fair value computed in accordance with Accounting Standards Codification (“ASC”) Topic 718 (without regard to estimates of forfeitures related to service-based vesting), rather than an amount paid to or realized by the named executive officer. RSU and PSU awards were valued as of the grant date by multiplying the closing price of the common stock on the NYSE on that date by the number of shares subject to the awards. PSUs are displayed assuming performance goals are achieved and PSUs are paid out in shares at the target amount. For fiscal 2014, the following amounts represent the target PSU value included in the table by individual: Mr. Gallahue: $1,949,997; Mr. Hinrichs: $633,084; Mr. Leonard: $404,634; Ms. Stafslien: $309,832; Mr. LaFortune: $179,982 and Mr. Jain: $404,634. The actual payout amount of the PSUs will vary between 0%—200% of the target number of shares of common stock based on performance relative to the pre-established target (see “Grants of Plan-Based Awards for Fiscal 2014” table below).

²  Amounts shown reflect the grant date fair value computed in accordance with ASC Topic 718 (without regard to estimates of forfeitures related to service-based vesting), rather than an amount paid to or realized by the named executive officer. The stock option awards were valued as of the grant date by multiplying the closing price of the common stock on the NYSE on that date by the number of shares subject to the awards, and applying a Black-Scholes-Merton value. All options have a term of seven years. For a discussion of the calculation of the award value of these stock options, including assumptions and methodologies to value these stock options, please see Note 20—Share-Based Compensation to the Company’s financial statements included with the Company’s Annual Report on Form 10-K, filed with the SEC on August 11, 2014.

³  Amounts represent payments under the CareFusion Corporation Management Incentive Plan (the “MIP”).

⁴  The elements of compensation included in “All Other Compensation” for fiscal 2014 are set forth in the table below.

⁵  Mr. Jain’s employment with the Company ended in February 2014.

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The amounts shown for “All Other Compensation” for fiscal 2014 include (1) contributions to the named executive officer’s account under the CareFusion 401(k) Savings Plan; (2) contributions to the named executive officer’s account under the CareFusion Deferred Compensation Plan; (3) perquisites and other personal benefits; and (4) tax reimbursements and equalization in the following amounts:

Name	401(k) Plan Contributions		Deferred Compensation Plan Contributions		Perquisites and Other Personal Benefits1			Tax Reimbursements and Equalization			Total
Kieran T. Gallahue	$	10,369	$	4,000	$	27,742	2,3,4,5	$	—		$	42,111
James F. Hinrichs	$	9,617	$	4,128	$	11,788	2,3	$	—		$	25,533
Thomas J. Leonard	$	10,838	$	4,000	$	10,000	3	$	—		$	24,838
Joan B. Stafslien	$	9,269	$	—	$	10,000	3	$	—		$	19,269
Gordon M. LaFortune	$	10,200	$	4,000	$	326,674	4,6	$	199,108	7	$	539,982
Vivek Jain	$	10,259	$	—	$	3,710	4,5	$	—		$	13,969

¹  This column represents the total amount of other perquisites and personal benefits provided. These other benefits include: (i) personal use of corporate aircraft; (ii) financial planning services; (iii) certain benefits provided in connection with participation in our sales incentive award trip; (iv) reimbursement for annual executive physical examinations and related health services; and (v) certain benefits associated with expatriate assignments. The incremental cost of all perquisites and personal benefits is their actual cost, except for personal use of corporate aircraft, as discussed below.

²  We own and operate our own aircraft, which is used to facilitate business travel of our senior executives in as safe a manner as possible and with the best use of their time. Incremental cost is variable operating cost, which includes fuel per flight hour, “deadhead” flights (i.e., empty flights to and from the Company’s hangar or any other location), engine reserves per flight hour (engine reserves are an accrued expense for future maintenance on the aircraft engines), average repair and maintenance costs, travel expenses for flight crew and temporary pilot costs, and actual per flight hangar and parking ramp fees, landing fees, catering and miscellaneous handling charges for flights that actually transport executives, as well as any applicable federal excise tax. Fixed costs, such as flight crew salaries, wages and other employment costs, employee seminars and training, depreciation, building/hangar rent, aircraft lease expense, utilities, general liability insurance and other insurance costs, are not included in the calculation of incremental cost because we incur these expenses regardless of the personal use of the corporate aircraft by our executives. No tax reimbursements are provided to any of our executives for taxes on income attributed to their personal use or immediate family members’ personal use of our corporate aircraft. Amounts associated with personal use of our personal aircraft in fiscal 2014 were as follows: Mr. Gallahue: $14,642; and Mr. Hinrichs: $1,788.

³  Our named executive officers are eligible to receive Company-paid financial planning and related services for up to an aggregate of $10,000 annually through a Company-approved third-party service provider. Amounts associated with these financial planning services in fiscal 2014 were as follows: Mr. Gallahue: $10,000; Mr. Hinrichs: $10,000; Mr. Leonard: $10,000; and Ms. Stafslien: $10,000.

⁴  During fiscal 2014, Messrs. Gallahue, Jain and LaFortune and their spouses participated in our sales incentive award trip for high-performing members of our sales team at Company expense. Participation by Messrs. Gallahue, Jain and LaFortune was part of their management responsibility and was intended to enhance the overall value and meaningfulness of the sales incentive award trip. Messrs. Gallahue, Jain and LaFortune and their spouses participated in meetings and facilitated discussions during this trip regarding our business, products, culture, vision and strategy. Amounts included in the “Perquisites and Other Personal Benefits” column represent the incremental cost to us of meals, entertainment and other expenses for Messrs. Gallahue, Jain and LaFortune and their spouses incurred between meetings and outside the business scope of the trip. Tax reimbursements were not provided to Messrs. Gallahue, Jain and LaFortune with respect to the imputed income associated with the sales incentive award trip.

⁵  Our named executive officers are eligible for an annual reimbursement for executive physical examinations and related health services. Amounts associated with these benefits in fiscal 2014 were as follows: Mr. Gallahue: $2,500; and Mr. Jain $3,112.

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⁶  Mr. LaFortune receives certain benefits associated with his expatriate assignment in Switzerland, which are consistent with the benefits we provide to our U.S. employees who relocate overseas on expatriate assignments. In fiscal 2014, the benefits associated with Mr. LaFortune’s expatriate assignment were as follows: $209,214 for housing and utilities; $6,507 for education payments; $55,751 for cost of living adjustment; $16,047 for home leave allowance; $36,565 for transportation allowance; $500 for tax preparation fees; and $1,300 for wire transfer fees. Any benefits paid in Swiss francs (CHF) were converted to U.S. dollars on a quarterly basis using the following exchange rates for the period Mr. LaFortune received expatriate benefits in fiscal 2014: July and August—1.07 CHF per dollar; September, October and November—1.09 CHF per dollar; December, January and February—1.11 CHF per dollar; and March, April, May and June—1.13 CHF per dollar.

⁷  This amount represents the tax reimbursements and equalization made to and on behalf of Mr. LaFortune in connection with his expatriate assignment in Switzerland, which is consistent with the benefits we provide to our U.S. employees who relocate overseas on expatriate assignments. Our overseas assignment policy provides that we will be responsible for any additional U.S. or foreign taxes due as a direct result of an employee’s international assignment, and that the employee remains financially responsible for the amount of taxes he or she would have incurred if he or she had continued to live and work in the United States.

Employment Agreements and Other Compensation Arrangements

We entered into an employment agreement with Mr. Gallahue in January 2011 related to his employment as our Chairman and Chief Executive Officer, and we entered into an offer letter with Mr. Hinrichs in November 2010 in connection with his promotion to the position of Chief Financial Officer. These agreements are discussed in the Compensation Discussion and Analysis under the heading “Agreements Regarding Executive Compensation.”

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Grants of Plan-Based Awards for Fiscal 2014

The following table supplements the Summary Compensation Table by providing additional information about plan-based compensation for fiscal 2014:

Name	Grant Date		Estimated Potential Payouts Under Non-Equity Incentive Plan Awards1						Estimated Potential Payouts Under Equity Incentive Plan Awards2						All Other Stock Awards: Number of CareFusion Stock or Units3		All Other Option Awards: Number of Securities Underlying CareFusion Options4		Exercise or Base Price of Option Awards5		Grant Date Fair Value of Stock and Option Awards
			Threshold		Target		Maximum		Threshold		Target		Maximum
Kieran T. Gallahue
MIP		7/1/2013	$	0	$	1,500,000	$	3,000,000
Stock Options		8/15/2013																399,645	$	36.17	$	3,900,002
RSUs		8/15/2013														53,912					$	1,949,997
PSUs		8/15/2013								0		53,912		107,824							$	1,949,997
James F. Hinrichs
MIP		7/1/2013	$	0	$	450,203	$	900,406
Stock Options		8/15/2013																129,751	$	36.17	$	1,266,197
RSUs		8/15/2013														17,503					$	633,084
PSUs		8/15/2013								0		17,503		35,006							$	633,084
Thomas J. Leonard
MIP		7/1/2013	$	0	$	398,400	$	796,800
Stock Options		8/15/2013																82,926	$	36.17	$	809,247
RSUs		8/15/2013														11,187					$	404,634
PSUs		8/15/2013								0		11,187		22,374							$	404,634
Joan B. Stafslien
MIP		7/1/2013	$	0	$	346,994	$	693,988
Stock Options		8/15/2013																63,496	$	36.17	$	619,636
RSUs		8/15/2013														8,566					$	309,832
PSUs		8/15/2013								0		8,566		17,132							$	309,832
Gordon M. LaFortune
MIP		7/1/2013	$	0	$	280,000	$	560,000
Stock Options		8/15/2013																36,890	$	36.17	$	359,997
RSUs		8/15/2013														4,976					$	179,982
PSUs		8/15/2013								0		4,976		9,952							$	179,982
Vivek Jain
MIP		7/1/2013	$	0	$	398,400	$	796,800
Stock Options		8/15/2013																82,926	$	36.17	$	809,247
RSUs		8/15/2013														11,187					$	404,634
PSUs		8/15/2013								0		11,187		22,374							$	404,634

¹  This information relates to award opportunities granted during fiscal 2014 under the MIP with respect to fiscal 2014 performance. The threshold, target and maximum potential payout amounts reflect 0%, 100% and 200% of target, respectively, based on achievement of Company-wide financial performance goals. As discussed in the Compensation Discussion and Analysis, MIP payouts may be increased or decreased at the discretion of the Compensation Committee based on individual performance using a multiplier of between 0%—150%, provided that no MIP payment shall exceed 200% of an executive officer’s MIP target. MIP award payouts to our named executive officers are designed to be performance-based compensation under the Tax Code and to be tax deductible in accordance with Section 162(m) of the Tax Code. For fiscal 2014, our Compensation Committee established an overall Company performance criterion of $313 million of EBIT, which must be satisfied before any payout could be made to our named executive officers under the MIP. For fiscal 2014, the Compensation Committee established a MIP framework whereby, if this performance criterion was met, each of our named executive officers could be awarded a MIP bonus up to 200% of his or her MIP target, subject to the Compensation Committee’s discretion to award bonuses in lesser amounts. For fiscal 2014, the Company generated EBIT in excess of the threshold, and the Compensation Committee exercised its discretion to approve MIP payouts less than 200% based on the performance factors discussed in the Compensation Discussion and Analysis under the heading “Compensation Determinations—Annual Cash Incentive Awards.”

²  PSUs granted during the fiscal year under the LTIP are subject to the satisfaction of performance criteria during the three-year performance period beginning on July 1, 2013 and ending on June 30, 2016. The threshold, target and maximum potential payout amounts reflect 0%, 100% and 200% of target, respectively, based on achievement of the performance criteria. Our Compensation Committee established performance goals for the PSUs based on the achievement of the Compounded Annual Growth Rate (“CAGR”) of fully diluted, adjusted earnings per share. The payout amount of the PSUs will vary between 0%—200% of the target number of shares of common stock based on performance relative to the target established for CAGR during the performance period. If the performance target is achieved, these awards will “cliff-vest” on the third anniversary of the grant date. If the Company does not meet the minimum target, then the PSUs will not vest and no shares will be delivered to the named executive officer. The grant date fair value of the PSUs is based on the closing price of CareFusion common stock on the NYSE on the grant date.

³  All stock awards are RSUs granted during the fiscal year under the LTIP. RSUs granted on August 15, 2013, as part of the fiscal 2014 annual LTI award are structured to allow for the deduction of the RSU award value in accordance with Section 162(m) of the Tax Code. For the RSUs granted to our named executive officers as part of the fiscal 2014 annual LTI award, our Compensation Committee established a performance condition of

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$313 million of EBIT, which had to be satisfied before the RSUs would vest. For fiscal 2014, the Company generated EBIT in excess of the threshold. Since the performance condition has been satisfied, the RSUs will vest as to 33 1/3% of the shares subject to the award on each of the first three anniversaries of the grant date.

⁴  All stock option awards are nonqualified stock options granted during the fiscal year under the LTIP, and generally vest over a period of three years, with 33 1/3% of the shares subject to the award vesting on each of the first three anniversaries of the grant date. All stock options have a term of seven years.

⁵  Options have an exercise price equal to the closing price of CareFusion common stock on the NYSE on the grant date.

Compensation Plans

Management Incentive Plan. The MIP is intended to advance the interests of the Company and its stockholders by providing our executive officers and other key employees with an annual bonus incentive to achieve strategic objectives of the Company and its subsidiaries; focus our executive officers and other key employees on measures that drive superior financial and management performance and value creation; provide compensation opportunities that are externally competitive and internally consistent with the Company’s strategic objectives and total rewards strategy; and provide bonus opportunities that reward our executive officers and other employees who are in positions to make significant contributions to the overall success of the Company. For a discussion of our fiscal 2014 MIP performance goals, our performance relative to our goals and our determinations of MIP payouts for fiscal 2014, please see page 32 of this Proxy Statement under the heading “Compensation Discussion and Analysis—Compensation Determinations—Annual Cash Incentive Awards.”

Long-Term Incentive Plan. The LTIP permits the issuance of long-term incentive awards to our employees, directors and employees of our subsidiaries to encourage alignment with stockholders’ interest and share in the Company’s success. Awards under the LTIP may be made in the form of stock options, restricted stock, RSUs, performance cash, PSUs and other equity-based awards. The LTIP is also intended to assist the Company in attracting and retaining individuals in key and critical positions. As set forth in the “Grants of Plan-Based Awards for Fiscal 2014” table above, during fiscal 2014 we granted stock options, RSUs, and PSUs to our named executive officers. For more information regarding the LTIP and the types of awards granted in fiscal 2014 pursuant to the LTIP, please see the discussion commencing on page 40 of this Proxy Statement under the heading “Compensation Discussion and Analysis—Compensation Determinations—Long-Term Equity-Based Incentive Awards.”

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Outstanding Equity Awards at Fiscal Year-End for Fiscal 2014

The following table shows the number of CareFusion shares underlying exercisable and unexercisable stock options and unvested RSUs and PSUs held by our named executive officers on June 30, 2014:

	Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options – Exercisable		Number of Securities Underlying Unexercised Options – Unexercisable1		Option Exercise Price		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested1			Market Value of Shares or Units of Stock That Have Not Vested2		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested1			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested2
Kieran T. Gallahue		533,110		—	$	27.84		2/15/2018
		335,537		167,7693	$	25.56		8/15/2018
		159,464		318,9284	$	26.79		8/15/2019
		—		399,6455,*	$	36.17		8/15/2020
		—		—		—		—		125,025	6,*	$	5,544,859		197,258	7,*	$	8,748,392
James F. Hinrichs		41,764		—	$	20.71		9/15/2016
		50,630		—	$	22.59		8/16/2017
		192,574		—	$	24.41		12/15/2017
		106,791		53,3963	$	25.56		8/15/2018
		52,275		104,5514	$	26.79		8/15/2019
		—		129,7515,*	$	36.17		8/15/2020
		—		—		—		—		40,582	6,*	$	1,799,812		63,794	7,*	$	2,829,264
Thomas J. Leonard		8,798		—	$	29.25		7/15/2015
		10,923		—	$	31.90		8/15/2015
		29,141		—	$	20.71		9/15/2016
		70,022		—	$	22.59		8/16/2017
		51,057		25,5293	$	25.56		8/15/2018
		30,865		61,7314	$	26.79		8/15/2019
		—		82,9265,*	$	36.17		8/15/2020
		—		—		—		—		23,940	6,*	$	1,061,739		35,896	7,*	$	1,591,988
Joan B. Stafslien		75,016		—	$	22.59		8/16/2017
		46,138		23,0693	$	25.56		8/15/2018
		23,023		46,0474	$	26.79		8/15/2019
		—		63,4965,*	$	36.17		8/15/2020
		—		—		—		—		18,666	6,*	$	827,837		28,758	7,*	$	1,275,417
Gordon M. LaFortune		10,378		—	$	20.71		9/15/2016
		19,765		—	$	22.59		8/16/2017
		27,137		13,5693	$	25.56		8/15/2018
		15,308		30,6184	$	26.79		8/15/2019
		—		36,8905,*	$	36.17		8/15/2020
		—		—		—		—		11,270	6,*	$	499,825		17,628	7,*	$	781,802
Vivek Jain8		—		—	$	—		—		—		$	—		—		$	—

^*  Indicates equity awards that are reported in the “Grants of Plan-Based Awards for Fiscal 2014” table.

¹  Prior to fiscal 2014, Mr. LaFortune met the eligibility requirements for retirement under the terms of the LTIP. Due to his retirement eligibility, rights to certain of the stock options, RSUs and PSUs granted to Mr. LaFortune vested in full six months following the grant date for such awards; provided, however, that the awards will only become exercisable or payable, as the case may be, in accordance with their original vesting schedules and, in the case of RSUs and PSUs, to the extent the performance targets contained therein are satisfied. Amounts set forth above for “Unexercised Options—Unexercisable” include stock options that have vested as result of retirement eligibility, but that are not yet exercisable. Amounts set forth above for “Shares or Units of Stock That Have Not Vested” do not include RSUs that have vested as a result of retirement eligibility. Amounts set forth above for “Unearned Shares, Units or Other Rights That Have Not Vested” do not include PSUs that have vested as a result of retirement eligibility.

²  The market value is equal to the product of $44.35, the closing price of CareFusion’s common stock on the NYSE on June 30, 2014, and the number of unvested CareFusion RSUs or PSUs, as applicable.

³  These awards were granted to our named executive officers on August 15, 2011. Stock options vest over a period of three years, with 33 1/3% of the shares subject to the award vesting on each of the first three anniversaries of the grant date.

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⁴  These awards were granted to our named executive officers on August 15, 2012. Stock options vest over a period of three years, with 33 1/3% of the shares subject to the award vesting on each of the first three anniversaries of the grant date.

⁵  These awards were granted to our named executive officers on August 15, 2013. Stock options vest over a period of three years, with 33 1/3% of the shares subject to the award vesting on each of the first three anniversaries of the grant date.

⁶  Reflects RSUs granted in fiscal 2012 and/or 2013 that have not yet vested. Includes RSUs that are also reported in the “Grants of Plan Based Awards for Fiscal 2014” table as follows: Mr. Gallahue (53,912), Mr. Hinrichs (17,503), Mr. Leonard (11,187), Ms. Stafslien (8,566) and Mr. LaFortune (4,976). The RSUs granted in fiscal 2014 included a performance condition of $313 million of EBIT, which must be satisfied before the RSUs would vest. For fiscal 2014, the Company generated EBIT in excess of the threshold. Since the performance condition has been satisfied, the RSUs will vest as to 33 1/3% of the shares subject to the award on each of the first three anniversaries of the grant date. See “Grants of Plan Based Awards for Fiscal 2014.”

⁷  Reflects PSUs granted to our named executive officers (i) on August 15, 2011, which are subject to the satisfaction of performance criteria during the three-year performance period beginning on July 1, 2011 and ending on June 30, 2014; (ii) on August 15, 2012, which are subject to the satisfaction of performance criteria during the three-year performance period beginning on July 1, 2012 and ending on June 30, 2015; and (iii) on August 15, 2013, which are subject to the satisfaction of performance criteria during the three-year performance period beginning on July 1, 2013 and ending on June 30, 2016. Our Compensation Committee established performance goals for the PSUs based on the achievement of the compounded annual growth rate (“CAGR”) of fully diluted, adjusted earnings per share. The payout amount of the PSUs will vary between 0%—200% of the target number of shares of common stock based on performance relative to the target established for CAGR during the performance period.

⁸  Mr. Jain’s employment with the Company ended in February 2014, and he held no outstanding equity awards at the end of fiscal 2014.

Option Exercises and Stock Vested for Fiscal 2014

The following table shows stock options exercised and RSUs and PSUs that vested during the fiscal year ended June 30, 2014:

	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise		Value Realized on Exercise		Number of Shares Acquired on Vesting		Value Realized on Vesting1
Kieran T. Gallahue		100,000	$	1,513,630		421,155	$	16,948,586
James F. Hinrichs		50,413	$	807,204		20,667	$	767,276
Thomas J. Leonard		30,000	$	665,516		11,858	$	439,446
Joan B. Stafslien		33,846	$	626,335		10,610	$	392,378
Gordon M. LaFortune2		72,698	$	1,091,746		4,976	$	220,686
Vivek Jain		267,837	$	4,291,524		11,902	$	440,737

¹  Under the terms of the LTIP, we calculate value realized on vesting using the closing price of our common stock on the NYSE on the day prior to the vesting date. The amounts set forth above reflect the value calculated by multiplying this closing price by the number of shares acquired on the vesting date before withholding taxes.

²  Prior to fiscal 2014, Mr. LaFortune met the eligibility requirements for retirement under the terms of the LTIP. Due to his retirement eligibility, rights to certain of the stock options, RSUs and PSUs granted to Mr. LaFortune vested in full six months following the grant date for such awards; provided, however, that the awards will only become exercisable or payable, as the case may be, in accordance with their original vesting schedules and, in the case of RSUs and PSUs, to the extent the performance targets contained therein are satisfied. “Number of Shares Acquired on Vesting” reflects 4,976 RSUs granted to Mr. LaFortune on August 15, 2013 that contained a performance target for the performance period July 1, 2013 to June 30, 2014. Subject to the satisfaction of the performance target at the end of the performance period, these RSUs are subject to vesting and payout as to 33 1/3% of the shares subject to the award on August 15, 2014, August 15, 2015 and August 15, 2016. Because Mr. LaFortune met the eligibility requirements for retirement and satisfied the six month holding period for these RSUs, and the performance period for these RSUs ended during fiscal 2014, these RSUs are included in the table above as having vested during fiscal 2014. The value realized for these RSUs was calculated by multiplying the number of shares subject to these RSUs by the closing price of our common stock on the NYSE on June 30, 2014 ($44.35). As RSUs granted in August 2010, 2011 and 2012 would have similarly vested in prior year periods due to Mr. LaFortune’s retirement eligibility, these RSUs are not reflected as having vested in 2014, notwithstanding the fact that portions of these RSUs were paid in fiscal 2014.

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Nonqualified Deferred Compensation in Fiscal 2014

We maintain a nonqualified Deferred Compensation Plan, (the “DCP”), which is further described below. The following table provides information regarding the participation of our named executive officers in the DCP:

Name	Executive Contributions in Last FY1		Registrant Contribution in Last FY2		Aggregate Earnings in Last FY3		Aggregate Withdrawals/ Distributions4		Aggregate Balance at Last FYE
Kieran T. Gallahue
DCP Cash	$	290,870	$	4,000	$	34,716	$	—	$	580,530
James F. Hinrichs
DCP Cash	$	42,404	$	4,128	$	104,876	$	—	$	629,160
Thomas J. Leonard
DCP Cash	$	42,806	$	4,000	$	60,624	$	—	$	374,854
Joan B. Stafslien
DCP Cash	$	12,393	$	—	$	34,722	$	—	$	223,157
Gordon M. LaFortune
DCP Cash	$	84,948	$	4,000	$	155,439	$	—	$	829,913
Vested Stock Awards (unpaid)5	$	220,686	$	—	$	33,967	$	277,877	$	499,825
Vivek Jain
DCP Cash	$	—	$	—	$	6,780	$	—	$	38,884

¹  Executive contributions for DCP cash are deducted from the salary we pay to our executives. Accordingly, executive contributions for DCP cash are included in the “Salary” column in the “Summary Compensation Table” above.

²  Registrant contributions for DCP cash are included in the “All Other Compensation” column of the Summary Compensation Table. Registrant contributions include the employer match and employer discretionary contributions under the DCP, as described further below. Registrant contributions for DCP cash included in the Summary Compensation Table for prior years are as follows:

	2013		2012
Kieran T. Gallahue	$	4,000	$	960
James. F. Hinrichs	$	5,342	$	12,642
Thomas J. Leonard	$	3,354	$	10,609
Joan B. Stafslien	$	—	$	6,285
Vivek Jain	$	1,147	$	5,133

³  The aggregate earnings with respect to DCP cash is calculated based upon the change in value of the investment options selected by the named executive officer during the year, as described in more detail below. The aggregate earnings with respect to Vested Stock Awards (unpaid) reflects the change in value of shares subject to RSUs granted to Mr. LaFortune in prior years that vested due to his retirement eligibility under the terms of the LTIP, as discussed further below in note 5. The amount of earnings was calculated based upon the change in price of CareFusion common stock from the later of the vesting date or July 1, 2013 to the last day of the fiscal year. The aggregate earnings set forth above are not included in the Summary Compensation Table.

⁴  As discussed further below in note 5, Mr. LaFortune meets the eligibility requirements for retirement under the terms of the LTIP. Shares subject to RSUs granted to Mr. LaFortune in prior years that vested due to his retirement eligibility are reflected as Vested Stock Awards (unpaid). Amounts included for “Aggregate Withdrawals/Distributions” reflect the value of these RSUs that were paid in fiscal 2014. The value of these RSUs was calculated by multiplying the number of shares subject to these RSUs by the closing price of our common stock on the NYSE on the payout date. In addition, includes the value of shares of common stock subject to Vested Stock Awards (unpaid) retained by the Company to satisfy tax withholding obligations. The value for these shares was calculated by multiplying the number of shares withheld by the closing price of our common stock on the NYSE on the withholding date.

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⁵  Prior to fiscal 2014, Mr. LaFortune met the eligibility requirements for retirement under the terms of the LTIP. Due to his retirement eligibility, rights to certain of the stock options, RSUs and PSUs granted to Mr. LaFortune vested in full six months following the grant date for such awards; provided, however, that the awards will only become exercisable or payable, as the case may be, in accordance with their original vesting schedules and, in the case of RSUs and PSUs, to the extent the performance targets contained therein are satisfied. “Vested Stock Awards (unpaid)” reflects 4,976 RSUs granted to Mr. LaFortune on August 15, 2013 that contained a performance target for the performance period July 1, 2013 to June 30, 2014. Subject to the satisfaction of the performance target at the end of the performance period, these RSUs are subject to vesting and payout as to 33 1/3% of the shares subject to the award on August 15, 2014, August 15, 2015 and August 15, 2016. Because Mr. LaFortune met the eligibility requirements for retirement and satisfied the six month holding period for these RSUs, and the performance period for these RSUs ended during fiscal 2014, these RSUs are included in the table above as an executive contribution during fiscal 2014. The value of the executive contribution was calculated by multiplying the number of shares subject to these RSUs by the closing price of our common stock on the NYSE on June 30, 2014 ($44.35).

The DCP permits eligible employees, including our named executive officers, to defer a portion of their cash compensation into any of several investment alternatives. Participants in the DCP may defer between 1% and 50% of their base salary and between 1% and 100% of their incentive compensation. In addition, we may, at our discretion, make additional matching or fixed contribution credits to the deferred balances of participating employees. In general, matching contribution credits may be made at the same rate applicable to the employee under our 401(k) Savings Plan. We may also credit to a participant’s account an amount (not to exceed $100,000) equal to a percentage of cash compensation which is greater than the dollar limitation in effect for the year under the Tax Code as a discretionary employer contribution credit. Contributions made with respect to our named executive officers are set forth in the “Summary Compensation Table” above.

To measure the amount of the Company’s obligation to each participant under the DCP, we maintain a separate bookkeeping record, which we refer to as an account, for each participant. The participants are permitted to direct the investment of the portion of the accounts allocable to that participant in the same manner the participant is permitted to direct the investment of the participant’s account under our 401(k) Savings Plan. The notional investment options available under the DCP are substantially the same investment options that are available under the 401(k) Savings Plan. We then credit or debit the participant’s account with the actual earnings or losses based upon the performance results of the notional investment options selected by the participant. The participant may change the allocation of his or her account among the investment alternatives then available under the DCP.

For eligible employees, deferred balances are paid upon retirement, termination from employment, death or disability. Some contributions made by us and other account credits are subject to vesting provisions requiring that the participant has completed three years of service with the Company, which are fully accelerated upon a change in control (defined as described under “Potential Payments Upon Termination or Change in Control” below). If the participant terminates employment with us due to retirement, death, total disability, or pursuant to a change in control, all amounts subject to such vesting requirements shall vest. If a participant terminates employment before satisfying the vesting requirements, all amounts subject to the vesting requirements are forfeited.

DCP account balances are paid in cash. The plan is not intended to qualify under Section 401(a) of the Tax Code and is exempt from many of the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) as a “top hat” plan for a select group of management or highly compensated employees.

Potential Payments on Termination or Change in Control

We entered into agreements and maintain plans that provide for compensation to our named executive officers upon certain triggering events that result in termination of employment (including termination following a change in control of the Company). The “Potential Payments on Termination or Change in Control” table

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below includes information for each of Messrs. Gallahue, Hinrichs, Leonard and LaFortune and Ms. Stafslien related to potential payments assuming that a triggering event occurred as of June 30, 2014 and, if applicable, based on our closing stock price on that date. Mr. Jain’s employment with the Company ended in February 2014, and he did not receive any post-termination payments or benefits.

The following paragraphs describe the provisions of our various plans, including the LTIP and the MIP, and the benefits under these plans in the event of each triggering event and the assumptions that were used in creating the table.

Non-Compete and Non-Solicitation Agreements. Our standard stock option, RSU and PSU award agreements provide that if a named executive officer violates the provisions contained in the award agreements with respect to: (i) competitive actions, then unexercised stock options and unvested RSUs and PSUs will be forfeited, and we may seek repayment of gains realized or obtained by the named executive officer from vested stock options, RSUs and PSUs during a look-back period of one to three years from the violation, or (ii) confidentiality, non-disparagement or non-solicitation of business or our employees (during employment and for a period of 12 months following termination), or breaches our policies, then unexercised stock options and unvested RSUs and PSUs will be forfeited, we may seek repayment of gains realized or obtained by the named executive officer from vested stock options, RSUs and PSUs during a look-back period of one to three years from the violation, and we may bring an action for breach of contract or seek other equitable relief. Under the terms of the LTIP and MIP, all or a portion of a final award may be subject to an obligation of repayment to the Company if the named executive officer violates an applicable non-competition and/or confidentiality covenant.

Termination For Cause. Termination for cause under the LTIP and MIP means termination of employment on account of any act of fraud or intentional misrepresentation or embezzlement, misappropriation or conversion of assets of the Company or any subsidiary, or the intentional and repeated violation of our written policies or procedures. Our standard stock option, RSU and PSU award agreements provide that if a named executive officer is terminated for cause, then unexercised stock options and unvested RSUs and PSUs will be forfeited. Under the MIP, if a named executive officer is terminated for cause, then all rights to any bonus payment for such performance period will be forfeited. We may also seek repayment of gains realized or obtained by the named executive officer from MIP payments or equity awards under the LTIP during a look-back period.

Involuntary Termination Without Cause. Under the Executive Severance Guidelines, executive officers that are terminated by us, other than for cause, are eligible to receive a payment of one year of their base salary plus a potential additional payment in an amount up to the average of the prior two years’ annual cash incentive awards under the MIP. As this additional payment is not intended to be duplicative of payments that would be otherwise payable under the MIP, the Executive Severance Guidelines provide that any such payment shall be reduced to the extent the executive receives a payment under the MIP with respect to the year in which termination of employment occurs. In addition, the Executive Severance Guidelines provide for 12 months of outplacement assistance and health benefits continuation. The Executive Severance Guidelines generally apply only in circumstances where an executive officer is not party to an individual severance or employment agreement that provides for severance payments in connection with a termination without cause. Our standard stock option, RSU and PSU award agreements provide that if the employment of a named executive officer is terminated without cause, then unvested stock options, RSUs and PSUs will be forfeited.

Termination by Reason of Retirement. Generally, retirement means the termination of employment (other than by death or disability and other than in the event of termination for cause) by an employee after attaining the age of 55 and having at least 10 years of continuous service with the Company (including service with an affiliate of the Company prior to the time that such affiliate became an affiliate of the Company). Our standard stock option agreement provides that, if after six months from the date of grant, a named executive officer is or becomes retirement eligible, then rights to the unvested portion of such awards will generally vest in full, provided, that the options will only become exercisable in accordance with their original vesting schedules. For RSUs granted to our named executive officers (which contain a performance condition as discussed above under

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“Compensation Discussion and Analysis—Compensation Determinations—Long-Term Equity-Based Incentive Awards”) and for PSUs, rights to such awards will vest upon retirement eligibility, provided, that the payment of shares subject to such RSUs and PSUs would occur only in accordance with the original payment schedule, to the extent the associated performance conditions are satisfied. In addition, vested stock options will remain exercisable through the remaining term of the option. Under the MIP, if employment is terminated due to retirement during the performance period, the final payout will be pro-rated based upon the length of time that the participant was employed during the performance period.

Termination by Reason of Disability. Our long-term disability plan currently provides that, to be considered disabled because of an illness or injury, the executive must: continuously be unable to perform substantial and material duties of the executive’s own job; not be gainfully employed in any occupation for which the executive is qualified by education, training or experience; and be under the regular care of a licensed physician. Our standard stock option and RSU agreements provide that, if after six months from the date of grant of a stock option or RSU, the employment of a named executive officer is terminated by reason of disability, then rights to the unvested portion of such awards will generally vest in full, and such awards shall become exercisable or payable, as the case may be, on the date of such termination. Rights to PSUs would similarly vest, provided, that the number of shares payable upon vesting would be calculated based on the timing of the termination event relative to the performance period for such PSUs, assuming a payout at target and pro-rated for such service period. In addition, vested stock options will remain exercisable through the remaining term of the option. Under the MIP, if employment is terminated due to disability during the performance period, the final payout will be pro-rated based upon the length of time that the participant was employed during the performance period.

Termination by Death. Our standard stock option and RSU agreements provide that, if after six months from the date of grant of a stock option or RSU, the employment of a named executive officer is terminated by reason of death, then rights to the unvested portion of such awards will generally vest in full, and such awards shall become exercisable or payable, as the case may be, on the date of such termination. Rights to PSUs would similarly vest, provided, that the number of shares payable upon vesting will be calculated based on the timing of the termination event relative to the performance period for such PSUs, assuming a payout at target and pro-rated for such service period. Under the MIP, if employment is terminated due to death during the performance period, the final payout will be pro-rated based upon the length of time that the participant was employed during the performance period.

Change of Control of the Company. Under the LTIP, unless an award agreement specifically provides otherwise, all stock options, RSUs, PSUs and other awards granted under the LTIP will generally vest in full upon a change of control, and such awards shall become exercisable or payable, as the case may be, on the date of such change of control; provided that the number of shares payable upon vesting of PSUs will be calculated based on the timing of the change of control event relative to the performance period for such PSUs. As discussed above in the Compensation Discussion and Analysis, the Compensation Committee approved amended forms of LTI award agreements in June 2012, and for the annual LTI awards granted in August 2012 and August 2013, such awards will vest in full, and become exercisable or payable, as the case may be, only in the event of a qualifying termination that occurs within 24 months following a change of control. The MIP does not establish a separate payment framework related to a change of control. Accordingly, if a termination occurred in connection with a change of control of the Company, any payments under the MIP would be made in accordance with the termination provisions discussed above. Under the LTIP, a “change of control” means any of the following:

• the acquisition by any entity of beneficial ownership of 25% or more of either our outstanding common stock or the combined voting power of the Company’s then-outstanding voting securities (other than any acquisition directly from the Company or any of our affiliates or employee benefit plans and any Non-Control Acquisition, defined below); or

• a change in a majority of the members of our Board of Directors, other than directors approved by a vote of at least a majority of the incumbent directors (other than any director whose initial assumption of office resulted from an actual or threatened election or proxy contest); or

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• a reorganization, merger or consolidation or other sale of all or substantially all of our assets or our acquisition of assets or shares of another corporation, unless such transaction is a Non-Control Acquisition; or

• our stockholders approve a complete liquidation or dissolution of the Company.

A “Non-Control Acquisition” means a business combination where: (1) the beneficial owners of our outstanding common stock and voting securities immediately prior to such business combination beneficially own more than 50% of the outstanding common and the combined voting power of the then-outstanding voting securities of the resulting corporation (including a corporation which as a result of such transaction owns the Company or all or substantially all of our assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such business combination; (2) no person beneficially owns 25% or more of our then-outstanding common stock or combined voting power of the resulting corporation (unless such ownership existed prior to the business combination); and (3) at least a majority of the members of the board of directors of the corporation resulting from the business combination were members of our Board of Directors (who were approved by a vote of at least a majority of the incumbent directors) at the time of the execution of the initial agreement, or the action of our Board of Directors, providing for such business combination.

Executive Change in Control Severance Plan. The CIC Plan provides for certain severance benefits to executives upon a termination of employment by the Company without “cause” or by the executive for “good reason” (as defined in the CIC Plan), in each case within 24 months following a change in control event affecting the Company (i.e., a “double-trigger” scenario). The CIC Plan provides for cash severance equal to a multiple of the sum of base salary and target bonus, a pro-rated target bonus for the year of termination, and health benefits continuation and outplacement services in varying amounts depending on the executive’s position with the Company. Under the CIC Plan as in effect at the end of fiscal 2014, our named executive officers would have been eligible to receive cash severance equal to two times their annual base salary and target annual bonus. The CIC Plan does not provide for tax gross-up payments relating to the payment of any excise tax on the extent to which an executive’s severance constitutes excess parachute payments under Sections 4999 and 280G of the Tax Code. However, the CIC Plan does provide for a “cutback,” so that to the extent severance payments to an executive under the CIC Plan would trigger the excise tax, payments will be reduced to the extent necessary to prevent any portion of the payments from becoming nondeductible by us under Section 280G of the Tax Code or subject to the excise tax imposed under Section 4999 of the Tax Code, but only if, by reason of that reduction, the net after-tax benefit received by the executive exceeds the net after-tax benefit the executive would receive if no reduction was made.

Additional Assumptions and Valuation Methodology. For purposes of the table below, the following assumptions have been made:

• the date of termination of employment is June 30, 2014, the end of our most recent fiscal year; and

• the price of our common stock on the date of termination was $44.35 per share, the closing price of our common stock reported by the NYSE on June 30, 2014.

Stock options, RSUs and PSUs that were already vested as of June 30, 2014 are not reflected in the table below. For stock options subject to accelerated vesting upon termination or change in control, the value included in the table below is the difference between the closing price of our common stock on June 30, 2014 and the exercise price for each stock option for which vesting is accelerated. For RSUs and PSUs subject to accelerated vesting upon termination or change in control, the value included in the table below reflects the closing price of our common stock on June 30, 2014 multiplied by the number of RSUs and PSUs accelerated.

The table below reflects amounts that would have been payable as of June 30, 2014 to our named executive officers under our existing plans and employment agreements and arrangements. Benefits that are available to all our salaried employees on retirement, death or disability, including the 401(k) Savings Plan and other deferred

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compensation distributions, group and supplemental life insurance benefits and short-term and long-term disability benefits are not included. Please see the “Nonqualified Deferred Compensation in Fiscal 2014” table for payments or benefits payable in connection with triggering events. Under the DCP, some contributions made by us and other account credits are subject to vesting provisions requiring that the participant has completed three years of service with us. If the participant terminates employment with us due to retirement, death or disability or there has been a change in control, all amounts subject to such vesting requirements will vest. The table below includes only increased payments and the value of vesting and acceleration under the DCP in connection with the triggering events.

Kieran T. Gallahue. Under the terms of Mr. Gallahue’s employment agreement, in the event the Company terminates his employment without “cause” or Mr. Gallahue terminates his employment for “good reason” (each as defined in the Agreement), Mr. Gallahue will be entitled to (i) accrued and unpaid base salary through the termination date; (ii) a prorated MIP bonus payment for the year in which the termination occurs, (iii) a severance payment equal to the sum of (A) two times his annual base salary plus (B) two times his two-year average actual MIP bonus payment; and (iv) continued group health plan coverage through COBRA for 18 months. In the event of such a termination, Mr. Gallahue would also benefit from additional vesting of his equity awards, as discussed in the Compensation Discussion and Analysis under the heading “Employment Agreement and Other Compensation Arrangements—Kieran T. Gallahue.”

James F. Hinrichs. Under the offer letter with Mr. Hinrichs, in the event the Company terminates his employment without “cause” or Mr. Hinrichs terminates his employment with “good reason” (each as defined in the offer letter), Mr. Hinrichs will be entitled to accrued and unpaid base salary through the termination date and any severance payments provided for under the Company’s severance guidelines as in effect on the termination date, as discussed above in the Compensation Discussion and Analysis under the heading “Employment Agreement and Other Compensation Arrangements—James F. Hinrichs.”

As we have not entered into individually negotiated arrangements with Messrs. Leonard or LaFortune or Ms. Stafslien that establish post-termination benefits and payments, any benefits or payments provided to them in connection with a termination or change in control would be made in accordance with our plans, policies and guidelines discussed above.

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Potential Payments on Termination or Change in Control

Name and Type of Payment/Benefit1	Retirement2 or Termination by executive without “Good Reason”		Termination without “Cause” or by executive with “Good Reason”		Termination due to Death or Disability		Change in Control3
							Without Termination		Termination
Kieran T. Gallahue
Base salary	$	—	$	2,400,000	$	—	$	—	$	2,400,000
Pro-rata fiscal 2014 MIP4	$	—	$	1,500,000	$	1,500,000	$	—	$	1,500,000
Fiscal 2014 MIP target5	$	—	$	2,698,750	$	—	$	—	$	3,000,000
Value of accelerated equity awards6	$	—	$	—	$	23,686,433	$	7,490,253	$	26,315,102
Health benefits7	$	—	$	21,798	$	—	$	—	$	43,595
Outplacement assistance	$	—	$	—	$	—	$	—	$	8,000
Tax cutback8									$	—
Total	$	—	$	6,620,548	$	25,186,433	$	7,490,253	$	33,266,697
James F. Hinrichs
Base salary	$	—	$	562,754	$	—	$	—	$	1,125,508
Pro-rata fiscal 2014 MIP4	$	—	$	450,203	$	450,203	$	—	$	450,203
Fiscal 2014 MIP target9	$	—	$	—	$	—	$	—	$	900,406
Value of accelerated equity awards6	$	—	$	—	$	7,672,971	$	2,383,926	$	8,529,665
Health benefits7	$	—	$	14,532	$	—	$	—	$	29,063
Outplacement assistance	$	—	$	8,000	$	—	$	—	$	8,000
Tax cutback8									$	—
Total	$	—	$	1,035,489	$	8,123,174	$	2,383,926	$	11,042,845
Thomas J. Leonard
Base salary	$	—	$	498,000	$	—	$	—	$	996,000
Pro-rata fiscal 2014 MIP4	$	—	$	398,400	$	398,400	$	—	$	398,400
Fiscal 2014 MIP target9	$	—	$	—	$	—	$	—	$	796,800
Value of accelerated equity awards6	$	—	$	—	$	4,364,715	$	1,139,751	$	4,895,748
Health benefits7	$	—	$	14,534	$	—	$	—	$	29,067
Outplacement assistance	$	—	$	8,000	$	—	$	—	$	8,000
Tax cutback8									$	—
Total	$	—	$	918,934	$	4,763,115	$	1,139,751	$	7,124,015
Joan B. Stafslien
Base salary	$	—	$	495,706	$	—	$	—	$	991,412
Pro-rata fiscal 2014 MIP4	$	—	$	346,994	$	346,994	$	—	$	346,994
Fiscal 2014 MIP target9	$	—	$	—	$	—	$	—	$	693,988
Value of accelerated equity awards6	$	—	$	—	$	3,462,050	$	1,029,974	$	3,864,704
Health benefits7	$	—	$	15,999	$	—	$	—	$	31,997
Outplacement assistance	$	—	$	8,000	$	—	$	—	$	8,000
Tax cutback8									$	—
Total	$	—	$	866,699	$	3,809,044	$	1,029,974	$	5,937,095
Gordon M. LaFortune
Base salary	$	—	$	400,000	$	—	$	—	$	800,000
Pro-rata fiscal 2014 MIP4	$	280,000	$	280,000	$	280,000	$	—	$	280,000
Fiscal 2014 MIP target9	$	—	$	—	$	—	$	—	$	560,000
Value of accelerated equity awards6,10	$	220,686	$	—	$	2,129,547	$	605,814	$	2,376,000
Health benefits7	$	—	$	24,653	$	—	$	—	$	49,305
Outplacement assistance	$	—	$	8,000	$	—	$	—	$	8,000
Tax cutback8									$	—
Total	$	500,686	$	712,653	$	2,409,547	$	605,814	$	4,073,305

¹  For purposes of this table, the following compensation levels are assumed: Mr. Gallahue: base salary of $1,200,000 and annual MIP target of $1,500,000; Mr. Hinrichs: base salary of $562,754 and annual MIP target of $450,203; Mr. Leonard: base salary of $498,000 and annual MIP target of 398,400; Ms. Stafslien: base salary of $495,706 and annual MIP target of $346,994; and Mr. LaFortune: base salary of $400,000 and annual MIP target of $280,000.

²  Under the Company’s employee benefits plans, a named executive officer would generally be considered retirement eligible only after attaining the age of 55 and having at least 10 years of continuous service with the Company (including service with an affiliate of the Company prior to the time that such affiliate became an affiliate of the Company). Mr. LaFortune is the only named executive officer who met the requirements for retirement eligibility as of June 30, 2014.

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³  In general, (i) equity awards granted pursuant to the LTIP prior to August 2012 contain “single-trigger” vesting provisions and vest in full in the event of a change in control, regardless of whether employment is terminated, and (ii) equity awards granted pursuant to the LTIP in August 2012 and August 2013 have “double-trigger” vesting provisions and vest in connection with a change in control only if employment is terminated. A change in control without termination of employment would not have triggered additional cash payments to any of the named executive officers. As discussed above, the Company also maintains the CIC Plan, which provides for certain severance benefits to executives upon a termination of employment by the Company without “cause” or termination by the executive for “good reason” within 24 months following a change in control. Under the CIC Plan, the named executive officers would have been eligible to receive cash severance equal to two times annual salary and target annual bonus, plus a pro-rated MIP target payment for the current year upon such a termination. In addition, the named executive officers would be eligible for 12 months of outplacement assistance and health benefits continuation for up to 24 months (36 months in the case of Mr. Gallahue).

⁴  Amount presented reflects fiscal 2014 MIP target. A MIP participant who is terminated by the Company other than for “cause” during the fourth quarter of the fiscal year is eligible to receive a pro-rated MIP bonus based on actual performance and subject to the Compensation Committee’s exercise of negative discretion. In addition, in the case of a termination in connection with a “Change in Control,” the CIC Plan provides for payment of a pro-rated MIP bonus for the year of termination.

⁵  Amounts included in the “Termination without Cause or by executive with Good Reason” column reflect two times the average of actual MIP payments for fiscal 2014 and fiscal 2013. Amounts included in the “Termination” column in connection with a change in control reflect two times the MIP target for fiscal 2014.

⁶  Value of accelerated equity awards reflects number of unvested stock options, RSUs and PSUs that would have vested as of June 30, 2014, as a result of the applicable triggering event. The value of these RSUs and PSUs was calculated by multiplying the number of shares subject to these awards by the closing price of our common stock on the NYSE on June 30, 2014 ($44.35). The value of these stock options was calculated by multiplying these stock options by the difference between the exercise price and the closing price of our common stock on the NYSE on June 30, 2014 ($44.35). In the case of a termination due to death or disability, the number of shares subject to the PSUs reflects a payout at target, pro-rated for the service period prior to such termination event. In the case of a termination in connection with a change in control, the number of shares subject to the PSUs reflects a payout at target (without any pro-ration). See note 3.

⁷  Value of health benefits calculated based on the cost to the Company of current benefits elections for each executive multiplied by the number of months specified by the applicable employment agreement or employment arrangement. Actual costs of providing these benefits may vary from amounts reflected above.

⁸  Pursuant to the CIC Plan, as amended, to the extent severance payments would subject our named executive officers to an excise tax under Sections 4999 and 280G of the Tax Code, the payments will be reduced to the extent necessary to prevent any portion of the payments from becoming nondeductible by us under Section 280G of the Tax Code or subject to the excise tax imposed under Section 4999 of the Tax Code, but only if, by reason of that reduction, the net after-tax benefit received by the executive exceeds the net after-tax benefit the executive would receive if no reduction was made.

⁹  As discussed above, under the Executive Severance Guidelines, if the employment of an executive is terminated by the Company without “cause” or by the executive for “good reason,” the executive would be eligible to receive a severance payment equal to one year of base salary, plus a potential additional payment in an amount up to the average of the executive’s prior two years’ actual MIP payments. As this additional payment is not intended to be duplicative of payments that would be otherwise payable under the MIP, the Executive Severance Guidelines provide that any such payment shall be reduced to the extent the executive receives a payment under the MIP with respect to the year in which termination of employment occurs. Because the average of the prior two years’ actual MIP payments for each of the executives in the table above is less than their respective fiscal 2014 MIP targets, no additional amounts have been included in the “Termination without Cause or by executive with Good Reason” column. See note 4.

¹⁰  As of June 30, 2014, Mr. LaFortune was the only named executive officer who met the eligibility requirements for retirement under the terms of the LTIP. Due to his retirement eligibility, rights to certain of the stock options, RSUs and PSUs granted to Mr. LaFortune vested in full six months following the grant date for such awards; provided, however, that the awards will only become exercisable or payable, as the case may be, in accordance with their original vesting schedules and, in the case of RSUs and PSUs, to the extent the performance targets contained therein are satisfied. Amounts included under “Retirement or Termination by executive without ‘Good Reason’” reflect the value of LTI awards that would have vested had Mr. LaFortune retired as of June 30, 2014; provided, however, that the value of LTI awards that vested prior to June 30, 2014 due Mr. LaFortune’s retirement eligibility are not included. Amounts included under “Retirement or Termination by executive without ‘Good Reason’” reflects 4,976 RSUs granted to Mr. LaFortune on August 15, 2013 that contained a performance target for the performance period July 1, 2013 to June 30, 2014. Subject to the satisfaction of the performance target at the end of the performance period, these RSUs are subject to vesting and payout as to 33 1/3% of the shares subject to the award on August 15, 2014, August 15, 2015 and August 15, 2016. Because Mr. LaFortune met the eligibility requirements for retirement and satisfied the six month holding period for these RSUs, and the performance period for these RSUs ended during fiscal 2014, these RSUs are included in the table above. The value of these RSUs was calculated by multiplying the number of shares subject to these RSUs by the closing price of our common stock on the NYSE on June 30, 2014 ($44.35).

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Director Compensation

On an annual basis, the Compensation Committee reviews comparative market data and recommendations from its compensation consultant with regard to the structure of our non-employee director compensation program and the amounts paid to our non-employee directors. In November 2013, based on the analysis of Frederic W. Cook & Co., Inc. and the recommendation of the Compensation Committee, our Board of Directors approved a $10,000 increase in the annual grant of RSUs to each non-employee director for fiscal 2014.

The table below summarizes the elements and amount of compensation we paid to our non-employee directors for Board and Committee service in fiscal 2014:

Compensation Element	Amount
Annual Retainer	$	100,000
Additional Retainer for the Presiding Director	$	25,000
Additional Retainer for Committee Service:
Audit Committee (member /chair)	$	10,000 / $ 25,000
Human Resources and Compensation Committee (member /chair)	$	10,000 / $ 25,000
Governance and Compliance Committee (member /chair)	$	5,000 / $ 15,000
Equity Grant1
RSUs (annual award)	$	165,000

¹  On an annual basis, we grant each of our non-employee directors an equity award in the form of RSUs for a number of shares of our common stock on the grant date equal to a Board approved dollar value. Director RSUs are generally granted on the date of our annual meeting of stockholders in November of each year and vest in full one year from the date of grant.

In fiscal 2012, 2013 and 2014, directors were given the option to defer payment of their cash retainers and their RSUs into our DCP, and going forward, we intend to continue to allow directors to make such deferral elections. For directors, deferred cash balances under the DCP are paid upon termination from board service, death or disability. Payments generally will commence at least six months after the event triggering the payment, except in the case of death or disability. For RSUs, which would otherwise be settled in shares of common stock on the date of vesting, directors can defer delivery of the shares until after termination from Board service or until a fixed future date. We also reimburse directors for their reasonable out-of-pocket travel expenses incurred in connection with attendance at Board and committee meetings and attendance at director education programs. We may also reimburse directors for out-of-pocket expenses incurred by the director’s spouse in connection with spousal participation in occasional board-related activities. As set forth above, we do not provide a “gross-up” or otherwise reimburse directors for payment of taxes related to such reimbursement.

The following table reflects all compensation awarded to, earned by or paid to the Company’s non-employee directors during fiscal 2014:

Name	Fees Earned or Paid in Cash1($)		Stock Awards2($)		Total ($)
Supratim Bose3	$	25,000	$	82,500	$	107,500
Philip L. Francis	$	125,000	$	165,000	$	290,000
Robert F. Friel	$	110,000	$	165,000	$	275,000
Jacqueline Kosecoff, Ph.D.	$	110,000	$	165,000	$	275,000
J. Michael Losh	$	150,000	$	165,000	$	315,000
Gregory T. Lucier	$	125,000	$	165,000	$	290,000
Edward D. Miller, M.D.	$	105,000	$	165,000	$	270,000
Michael D. O’Halleran	$	110,000	$	165,000	$	275,000
Robert P. Wayman	$	115,000	$	165,000	$	280,000

¹  Reflects cash retainer amounts paid quarterly in connection with the regularly-scheduled meetings of the Board and Board Committees held during fiscal 2014.

²  With the exception of Mr. Bose, reflects RSUs granted on November 6, 2013 pursuant to the LTIP that vest in full one year from the date of grant. Based on the award values set forth above, each RSU was granted

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with respect to 4,275 shares of CareFusion common stock. The share amounts for these RSU awards were determined by dividing the award value by $38.60, the closing price of our common stock on the NYSE on the date of grant. Amounts shown reflect the increase in the size of the equity grant discussed above and grant date fair value computed in accordance with Accounting Standards Codification Topic 718, rather than an amount paid to or realized by the director.

³  Mr. Bose joined the Board in May 2014, and the amounts set forth above reflect pro-rated compensation for his Board service. Mr. Bose received a pro-rated RSU award with respect to 2,059 shares of CareFusion common stock with a value of $82,500 on the date of grant (May 7, 2014). These RSUs will vest in full on November 6, 2014.

The following table shows the number of stock awards and stock option awards outstanding for each non-employee director as of June 30, 2014:

Name	Unvested Stock Awards1		Vested Stock Awards Subject to Deferred Delivery2		Stock Option Awards3
Supratim Bose		2,059		—		—
Philip L. Francis		4,275		—		12,630
Robert F. Friel		4,275		24,295		—
Jacqueline Kosecoff, Ph.D.		4,275		—		—
J. Michael Losh		4,275		24,295		19,436
Gregory T. Lucier		4,275		24,295		—
Edward D. Miller, M.D.		4,275		10,534		—
Michael D. O’Halleran		4,275		13,761		22,158
Robert P. Wayman		4,275		—		—

¹  With the exception of Mr. Bose, reflects RSUs granted on November 6, 2013 that vest in full one year from the date of grant. Amount shown for Mr. Bose reflects RSUs granted in connection with his election to the Board on May 7, 2014, which will vest in full on November 6, 2014.

²  Reflects vested RSUs for which delivery has been deferred.

³  Reflects stock options that were granted as replacement awards in connection with the spinoff with respect to stock options originally granted by Cardinal Health. Replacement awards have substantially the same terms, vesting conditions and other restrictions as the original award. All of the stock options in the table above are fully vested and exercisable, provided, however, that the exercise price for certain of these stock options exceeded the closing price of the Company’s common stock on the NYSE on June 30, 2014.

As discussed above in the Compensation Discussion and Analysis, we maintain stock ownership guidelines that apply to our executive officers and our non-employee directors. Under our stock ownership guidelines, our non-employee directors are required to accumulate and hold a number of shares of common stock valued at five times the annual cash retainer within five years after joining our Board of Directors. As of June 30, 2014, all of our non-employee directors held shares valued in excess of five times the annual cash retainer, with the exception of Mr. Bose, who joined the Board in May 2014. For more information about the shares of CareFusion common stock beneficially owned by our non-employee directors, please refer to “Security Ownership of Certain Beneficial Owners and Management” on page 15 of this Proxy Statement.

Compensation Committee Interlocks and Insider Participation

During fiscal 2014 and as of the date of this Proxy Statement, none of the members of the Compensation Committee has been an officer or employee of CareFusion or had a relationship with the Company requiring disclosure under Item 404 of Regulation S-K, and none of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or our Compensation Committee.

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ADDITIONAL INFORMATION

Stockholder Proposals for 2015 Annual Meeting

Stockholders interested in submitting a proposal for consideration at our 2015 Annual Meeting must do so by sending such proposal to our Corporate Secretary at CareFusion Corporation, 3750 Torrey View Court, San Diego, CA 92130, Attention: General Counsel. Under the SEC’s proxy rules, the deadline for submission of proposals to be included in our proxy materials for the 2015 Annual Meeting is May 28, 2015. Accordingly, in order for a stockholder proposal to be considered for inclusion in our proxy materials for the 2015 Annual Meeting, any such stockholder proposal must be received by our Corporate Secretary on or before May 28, 2015, and comply with the procedures and requirements set forth in Rule 14a-8 under the Securities Exchange Act of 1934. Any stockholder proposal received after May 28, 2015 will be considered untimely, and will not be included in our proxy materials. In addition, stockholders interested in submitting a proposal outside of Rule 14a-8 must properly submit such a proposal in accordance with our by-laws.

Our by-laws require advance notice of business to be brought before a stockholders’ meeting, including nominations of persons for election as directors. To be timely, notice to our Corporate Secretary must be received at our principal executive offices not less than 90 days but not more than 120 days prior to the anniversary date of the preceding year’s annual meeting and must contain specified information concerning the matters to be brought before such meeting and concerning the stockholder proposing such matters. Therefore, to be presented at our 2015 Annual Meeting, such a proposal must be received by the Company on or after July 8, 2015 but no later than August 7, 2015. If the date of the 2015 Annual Meeting is advanced by more than 30 days, or delayed by more than 70 days, from the anniversary date of the 2014 Annual Meeting, notice must be received not earlier than the 120th day prior to the 2015 Annual Meeting and not later than the close of business on the later of the 90th day prior to the 2015 Annual Meeting or, if the first public announcement of the date of the 2015 Annual Meeting is less than 100 days prior to the date of the 2015 Annual Meeting, the 10th day following the day on which the public announcement of the date of the 2015 Annual Meeting is first made.

Householding of Annual Meeting Materials

We have adopted “householding,” a procedure approved by the SEC under which CareFusion stockholders who share an address will receive a single copy of the Annual Report, Proxy Statement or Notice, as applicable, or a single notice addressed to those stockholders. This procedure reduces printing costs and mailing fees, while also reducing the environmental impact of the distribution. If you reside at the same address as another CareFusion stockholder and wish to receive a separate copy of the applicable materials, you may do so by making a written or oral request to: 3750 Torrey View Court, San Diego, CA 92130, Attention: Investor Relations or by calling, (858) 617-4621. Upon your request, we will promptly deliver a separate copy to you. The Proxy Statement and our Annual Report are also available at https://materials.proxyvote.com/14170T.

Some brokers household proxy materials, delivering a single proxy statement or notice to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, please notify your broker directly. You may also call (800) 542-1061 or write to: Householding Department, Broadridge, 51 Mercedes Way, Edgewood, New York 11717, and include your name, the name of your broker or other nominee, and your account number(s). Any stockholders who share the same address and currently receive multiple copies of the Annual Report, Proxy Statement or Notice, as applicable, who wish to receive only one copy in the future may contact their bank, broker, or other holder of record, or CareFusion’s Investor Relations at the contact information listed above, to request information about householding.

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OTHER BUSINESS

The Board does not know of any other matters to be brought before the meeting. If other matters are presented, the proxy holders have discretionary authority to vote all proxies in accordance with their best judgment.

By order of the Board of Directors,

Joan B. Stafslien

Executive Vice President,

    General Counsel and Corporate Secretary

San Diego, California

September 25, 2014

We make available, free of charge on our website, all of our filings that are made electronically with the SEC, including Forms 10-K, 10-Q and 8-K. These materials can be accessed in the “Investors” section of our website at www.carefusion.com, by clicking the “Financial Information” link and then the “SEC Filings” link. Copies of our Annual Report on Form 10-K for the fiscal year ended June 30, 2014, including financial statements and schedules thereto, filed with the SEC, are also available without charge to stockholders upon written request addressed to:

Corporate Secretary

CareFusion Corporation

3750 Torrey View Court

San Diego, CA 92130

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2014 Annual Meeting of Stockholders

November 5, 2014 at 8:30 a.m. (Pacific Standard Time)

CareFusion Headquarters

3750 Torrey View Court, San Diego, CA 92130

Meeting Attendance Instructions

To attend the CareFusion Corporation 2014 Annual Meeting of Stockholders in person, you will need an admission card or proof of ownership of CareFusion common stock as of September 8, 2014, the record date for the Annual Meeting. We encourage all stockholders planning to attend the Annual Meeting to request an admission card and register to attend by contacting the CareFusion Investor Relations Department by e-mail at ir@carefusion.com or by phone at (858) 617-4621. In addition, you can submit your request by fax at (858) 617-2311 or by mail at 3750 Torrey View Court, San Diego, CA 92130. To gain admission to the Annual Meeting, attendees will also be required to present government-issued photo identification (e.g., driver’s license or passport).

If you submit your proxy by Internet or telephone, you do not need to return your proxy card.

Thank you for your proxy submission.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com/14170T.

CAREFUSION CORPORATION

Annual Meeting of Stockholders

November 5, 2014 at 8:30 a.m. PST

This proxy is solicited on behalf of the Board of Directors

The stockholder(s) hereby appoint(s) James F. Hinrichs and Joan B. Stafslien, or either of them, as proxies, each with the power to appoint his or her substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of CAREFUSION CORPORATION that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:30 a.m. PST on November 5, 2014, at CareFusion Headquarters, 3750 Torrey View Court, San Diego, CA 92130, and any adjournment or postponement thereof.

This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted by the proxy holders in accordance with the Board of Directors’ recommendations.

If any other business may properly come before the meeting, the proxies are authorized to vote in their discretion, provided that they will not vote in the election of directors for any nominee(s) for whom authority to vote as been withheld.

Continued and to be signed on reverse side

CAREFUSION CORPORATION 3750 TORREY VIEW COURT SAN DIEGO, CA 92130	VOTE BY INTERNET - www.proxyvote.com
	Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
	ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
	If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
	VOTE BY PHONE - 1-800-690-6903
	Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions.
	VOTE BY MAIL
	Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:	M52242-P33879	KEEP THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.		DETACH AND RETURN THIS PORTION ONLY

CAREFUSION CORPORATION
	The Board of Directors recommends you vote FOR the following:
	1.	Election of Directors
		Nominees:		For	Against	Abstain
		1a.  Jacqueline B. Kosecoff, Ph.D.		¨	¨	¨
		1b.  Michael D. O’Halleran		¨	¨	¨
		1c.   Supratim Bose		¨	¨	¨
	The Board of Directors recommends you vote FOR proposals 2 and 3								For	Against	Abstain
	2.	Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2015.							¨	¨	¨
	3.	Approval of a non-binding advisory vote on the compensation of our named executive officers.							¨	¨	¨
	NOTE: IN THEIR DISCRETION, THE PROXY HOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
	Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
	Signature [PLEASE SIGN WITHIN BOX]		Date				Signature (Joint Owners)	Date