Diplomat Pharmacy,Inc. (NYSE:DPLO) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Executive Severance Plan
On March7, 2019 (the “Effective Date”), the Board approved the Diplomat Pharmacy,Inc. Executive Severance Plan (the “Plan”).
The Plan provides severance benefits to certain key management employees of the Company and its subsidiaries who are selected by the Plan Administrator and have entered into a Participation and Restrictive Covenant Agreement (which contains certain restrictive covenants being agreed to as a condition of participation) with the Company (each, a “Participant”), and whose employment is terminated in a “Qualifying Termination,” meaning a termination without “Cause” or resignation with “Good Reason”. On March7, 2019, the Company’s currently serving named executive officers (Chief Executive Officer “CEO”; Chief Financial Officer “CFO”; and Executive Vice President “EVP”), were each designated as Participants under the Plan. All capitalized terms used but not defined herein shall have the meanings as set forth in the Plan.
If a Participant’s employment terminates in a Qualifying Termination, he or she will receive the following severance benefits:
(i) an amount equal to the (x)“Severance Multiple” multiplied by (y)the Participant’s “Monthly Severance Amount”, with such amount payable in substantially equal installments over the “Severance Period”; provided that in the event the Qualifying Termination occurs within one year following a “Change in Control”, an enhanced “CIC Severance Multiple,” “Monthly CIC Severance Amount” and “CIC Severance Period” will apply.
(a) The “Monthly Severance Amount” for the CEO, CFO and EVP will equal such Participant’s monthly base salary in effect immediately prior to a Qualifying Termination and, in the case of the CEO and CFO, 1/12 of such Participant’s target annual cash bonus for the calendar year in which the Qualifying Termination occurs. The Severance Multiple and Severance Period for the CEO, CFO and EVP are as follows:
(iii) an amount equal to the Participant’s target annual cash bonus of the calendar year in which the Qualifying Termination occurs prorated based on the number of days Participant remained an employee, to be paid within 60 days of the Qualifying Termination;
(iv) accrued benefits under any Retirement Plan or Welfare Plan; and
(v) if the Participant timely elects COBRA continuation coverage, reimbursement from the Company equal to the difference between the cost of such COBRA continuation coverage and the amount active employees pay for health coverage through the earlier of the end of the Severance Period and the Participant becoming eligible for health insurance coverage under another employer’s plan.
In the event a Participant holds any equity awards granted under the Diplomat Pharmacy,Inc. 2014 Omnibus Incentive Plan or Diplomat Pharmacy,Inc. 2007 Stock Option Plan (each an “Equity Plan”), the treatment of such equity awards in the event of a Qualifying Termination shall continue to be governed by the terms of the applicable Equity Plan and the applicable award agreements.
If any payments and benefits to be paid or provided to a Participant, whether to the terms of the Plan or otherwise, would be subject to “golden parachute” excise taxes under the Internal Revenue Code, the payments and benefits will be reduced to the extent necessary to avoid such excise taxes, but only if such a reduction of pay or benefits would result in a greater after-tax benefit to the eligible employee.
Upon at least 12 months’ (or, in connection with or following a Change in Control, upon at least 24 months’) prior written notice to all Participants, the Plan may be terminated or amended by the Compensation Committee of the Board, provided that any termination or amendment of the Plan may not materially impair the rights of a Participant whose Qualifying Termination occurs prior to such termination or amendment.
The foregoing summary is qualified in its entirety by reference to the Diplomat Pharmacy,Inc. Executive Severance Plan attached hereto as Exhibit10.1 and incorporated herein by reference.
Leadership Team Update
On March7, 2019, the Company determined that GaryRice, Executive Vice President, should no longer be classified as an officer or executive officer under the Securities Exchange Act of 1934, as amended.
Item 9.01Financial Statements and Exhibits.
(d)Exhibits
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No. |
Description |
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10.1 |
Diplomat Pharmacy,Inc. Executive Severance Plan |
Diplomat Pharmacy, Inc. Exhibit
EX-10.1 2 a19-6509_1ex10d1.htm EX-10.1 Exhibit 10.1 DIPLOMAT PHARMACY,…
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About Diplomat Pharmacy,Inc. (NYSE:DPLO)
Diplomat Pharmacy, Inc. operates a specialty pharmacy business, which stocks, dispenses and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. The Company’s primary focus is on medication management programs for individuals with chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialized infusion therapy, and various other serious and/or long-term conditions. The Company operates through specialty pharmacy services segment. The Company offers various services, such as specialty drug dispensing, retail specialty services, hospital and health system services, and hub services. Its specialty drug dispensing services include patient care coordination, clinical services, compliance and persistency programs, patient financial assistance, specialty pharmacy training/consulting (Diplomat University), benefits investigation, prior authorization and risk evaluation and medication strategy (REMS).