PATTERSON COMPANIES, INC. (NASDAQ:PDCO) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02
(b), (c), (d) and (e)On October23, 2017, Patterson Companies, Inc. (the “Company”) announced that its Board of Directors (“Board”) has appointed Mark S. Walchirk as the Company’s President and Chief Executive Officer, effective November20, 2017 (the “Effective Date”), and that James W. Wiltz, who has been serving as the Company’s Interim President and Chief Executive Officer since June1, 2017, will step down from such positions at that time. Mr.Walchirk will become a member of the Board as of the Effective Date. Mr.Wiltz will continue to serve on the Board.
Mr.Walchirk, age 51, served as President of U.S. Pharmaceutical at McKesson Corporation since October 2012, where he held responsibility for McKesson’s U.S. Pharmaceutical sales, distribution and customer service operations. Mr.Walchirk joined McKesson in April 2001 and held various leadership positions including President of McKesson Specialty Care Solutions and Chief Operating Officer of McKesson U.S. Pharmaceutical. Before joining McKesson, he spend 13 years in medical-surgical distribution and manufacturing with Baxter Healthcare, Allegiance Healthcare and Encompass Group, holding various leadership positions in sales, marketing, operations and business development. There are no familial relationships between Mr.Walchirk and any other director or executive officer of the Company. There are no transactions in which Mr.Walchirk has an interest requiring disclosure under Item 404(a) of Regulation S-K.
In connection with his employment, Mr.Walchirk and the Company entered into an Employment Agreement, dated October23, 2017, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Under the terms of the agreement, Mr.Walchirk’s employment will continue until the third anniversary of the Effective Date, at which time, unless notice to the contrary has been provided, the term will renew for successive 12-month periods.
The agreement provides for an annual base salary of $850,000 as well as participation in the Company’s other employee benefit plans and reimbursement for business expenses. Mr.Walchirk also is eligible to earn annual cash incentive compensation, which is payable if a threshold level of performance is achieved, to the Company’s Management Incentive Compensation Plan (“MICP”). If performance at target under the MICP is achieved, Mr.Walchirk’s annual cash incentive compensation would be $437,500 for fiscal year 2018 (representing a pro-rata share) and $1,050,000 for any full year of employment thereafter. In addition, Mr.Walchirk is eligible to receive annual long-term equity-based incentive compensation to the Company’s 2015 Omnibus Incentive Plan (“Omnibus Plan”), or any successor plan thereto, which awards currently consist of 50% performance stock units, 25% stock options, and 25% restricted stock units, with an aggregate target value of $1,291,666 for fiscal year 2018 (representing a pro-rata share) and $3,100,000 for any full year of employment thereafter. The equity awards for fiscal year 2018 will be granted on December1, 2017. Mr.Walchirk’s base salary, annual cash incentive compensation, and annual long-term equity-based incentive compensation will be reviewed on an annual basis and may be increased by the Board.
The agreement also provides for an inducement award. On December1, 2017, Mr.Walchirk will be granted a restricted stock unit award outside the Omnibus Plan covering a number of shares of the Company’s common stock with a value of $2,000,000 based on the per-share closing price of the Company’s common stock on the date of grant. Such award will vest, assuming continued employment, to the extent of 50% of the award on the first anniversary of the date of grant and the remaining 50% of the award on the second anniversary of the date of grant. The other terms and conditions of the inducement award are set forth in the Inducement RSU Award Agreement, to be dated December1, 2017, the form of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein. In addition, within ten business days of the Effective Date, Mr.Walchirk will receive a lump-sum cash bonus of $100,000.
If, during the term, the Company terminates Mr.Walchirk without cause, Mr.Walchirk would be entitled to severance benefits including 24 months of base salary, cash incentive compensation equal to an average of the last three years of actual MICP incentives, proration of the current year MICP incentive based on actual performance, and 18 months of COBRA. With a change in control, such severance benefits would include 36 months of base salary, cash incentive compensation equal to his then current target MICP incentive, proration of the current year MICP incentive based on target performance, and 18 months of COBRA.
Mr.Walchirk has also agreed to certain nondisclosure and non-disparagement provisions during the term and any time thereafter, and certain non-competition and non-solicitation provisions during the term and for three years thereafter.
| Item 5.02 | Regulation FD Disclosure. |
A copy of the press release issued by the Company on October24, 2017 announcing the leadership change described herein is furnished as Exhibit 99 to this Current Report on Form 8-K and is incorporated by reference herein. The information in Exhibit 99 shall not be deemed “filed” for purposes of Section18 of the Exchange Act and shall not be deemed incorporated by reference into any filing under the Securities Act.
| Item 5.02 | Financial Statements and Exhibits. |
(d) Exhibits
PATTERSON COMPANIES, INC. ExhibitEX-10.1 2 d450640dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 Employment Agreement This Employment Agreement (Agreement) is entered into as of October 23,…To view the full exhibit click here
About PATTERSON COMPANIES, INC. (NASDAQ:PDCO)
Patterson Companies, Inc. is a distributor serving the dental, veterinary and rehabilitation supply markets. The Company operates through three segments: dental supply, veterinary supply and rehabilitation supply. The dental supply segment provides a range of consumable dental products, clinical and laboratory equipment, and value-added services to dentists, dental laboratories, institutions and other dental healthcare providers across North America. The veterinary supply segment is a distributor of veterinary supplies, primarily to companion-pet (dogs, cats and other common household pets) and equine veterinary clinics. The rehabilitation supply segment provides a range of distributed and self-manufactured rehabilitation medical supplies and assistive products to acute care hospitals, long-term care facilities, rehabilitation clinics, dealers and schools. The Company’s operating units include Patterson Dental, Patterson Veterinary and Patterson Medical.