PHARMERICA CORPORATION (NYSE:PMC) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

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PHARMERICA CORPORATION (NYSE:PMC) 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.
2017 Short-Term Incentive Program CEO
On March 24, 2017, the Board of Directors of PharMerica
Corporation (the Corporation), upon recommendation of the
Compensation Committee, adopted the 2017 Short-Term Incentive
Program (the CEO STIP) under the PharMerica Corporation 2015
Omnibus Incentive Plan, as amended (the Omnibus Plan), for the
Corporations Chief Executive Officer, Mr. Gregory Weishar. The
CEO STIP provides for a performance-based annual cash award to
Mr. Weishar.
Performance Cycle. The STIP performance cycle is for the current
year, beginning on January 1, 2017 and ending on December 31,
2017.
Maximum Award. If the Corporations Adjusted EBITDA (as defined
below) is equal to or greater than a target Adjusted EBITDA for
the 2017 fiscal year, then Mr. Weishar is eligible to receive a
payment under the CEO STIP equal to the lesser of (i) 2.2% of
Adjusted EBITDA for the 2017 fiscal year or (ii) $2 million (the
Maximum Award). The Compensation Committee, in its sole
discretion, may decrease the Maximum Award based on its
assessment of the Corporations performance or any other factors
it considers relevant, however in no event may the Compensation
Committee reduce the Maximum Award below the annual bonus amount
for the Chief Executive Officer (the Bonus Amount).
Bonus Amount. The target Bonus Amount for Mr. Weishar is 125% of
his 2017 base salary. Eighty percent (80%) of the target Bonus
Amount is based on the Corporations Adjusted EBITDA (as defined
below), and twenty percent (20%) of the target Bonus Amount is
based on the Corporations adjusted diluted earnings per share
(Adjusted Diluted EPS).
The Corporations performance will be measured by comparing the
Corporations annual earnings before interest, taxes, depreciation
and amortization, and other amounts as reported in the
Corporations disclosures in its Form 10-K as of and for the year
ended December 31, 2017 (Adjusted EBITDA), to a target Adjusted
EBITDA for the entire 2017 fiscal year set by the Compensation
Committee and by comparing the Corporations Adjusted Diluted EPS
as reported in the Corporations disclosures in its Form 10-K as
of and for the year ended December 31, 2017 to a target Adjusted
Diluted EPS for the entire 2017 fiscal year set by the
Compensation Committee.
The actual Bonus Amount is based on the percentage of the
performance target achieved.
Generally, the percentage of the Bonus Amount earned at the end
of the performance cycle based on the Adjusted EBITDA performance
target will be determined according to the following schedule;
however the actual Bonus Amount will be interpolated between the
percentages set forth in the chart based on actual results:
Adjusted EBITDA Performance Achievement
Payout Level
80.0% of Performance Target
0.0% of Award Target
80.0% of Performance Target
50.0% of Award Target
90.0% of Performance Target
75.0% of Award Target
95.0% of Performance Target
90.0% of Award Target
100.0% of Performance Target
100.0% of Award Target
105.0% of Performance Target
115.0% of Award Target
110.0% of Performance Target
125.0% of Award Target
115.0% of Performance Target
135.0% of Award Target
120.0% of Performance Target
175.0% of Award Target
120.0% of Performance Target
150% of Award Target
Generally, the percentage of the award earned at the end of the
performance cycle based on the percentage of the Adjusted
Diluted EPS performance target achieved shall be determined
according to the following schedule; however, the actual CEO
STIP award payout will be interpolated between the percentages
set forth in the chart based on actual results:
Adjusted Diluted EPS Performance Achievement
Payout Level
70.0% of Performance Target
0.0% of Award Target
70.0% of Performance Target
50.0% of Award Target
80.0% of performance Target
60.0% of Award Target
90.0% of Performance Target
70.0% of Award Target
100.0% of Performance Target
100.0% of Award Target
110.0% of Performance Target
110.0% of Award Target
120.0% of Performance Target
125.0% of Award Target
130.0% of Performance Target
150.0% of Award Target
2017 Short-Term Incentive Program
On March 24, 2017, the Board of Directors of the Corporation,
upon recommendation of the Compensation Committee, adopted the
2017 Short-Term Incentive Program (the STIP) under the Omnibus
Plan. The STIP provides for performance-based annual cash
awards to the Corporations executive officers, and certain
other officers and employees of the Corporation. The STIP
advances the Corporations commitment to performance-based
compensation practices by providing participants an opportunity
to earn annual cash bonuses upon achievement of certain
pre-established short-term performance objectives.
Eligibility. Officers and employees of the Corporation may
receive STIP cash awards as determined by the Board of
Directors or the Compensation Committee.
Performance Cycle. The STIP performance cycle is for the
current year, beginning on January 1, 2017 and ending on
December 31, 2017.
Award Targets. The amount of the awards under the STIP are
based on individual participant bonus targets. Individual
participant bonus targets are established for each
participant by the Compensation Committee, in the case of the
senior executive officers reporting to the Chief Executive
Officer, and by the Chief Executive Officer, for other
participants, based upon a determination of the appropriate
bonus target amounts which will enable the Corporation to
remain competitive, to retain and recruit top employees, and
to align such employees interests with certain strategic
initiatives of the Corporation. Individual non-executive
participant bonus targets range from 5% to 100% of base
salary on December 31, 2017, with targets for the
Corporations executive officers between 25% and 125% of base
salary.
The Compensation Committee established the bonus targets
under the STIP for the Corporations named executive officers
(the Named Executive Officers), other than the Chief
Executive Officer, as follows:
Executive
Title
Bonus Target
Robert Dries
Executive Vice President, Treasurer and Chief Financial
Officer
75% of base salary
Suresh Vishnubhatla
Executive Vice President of Long Term Care Operations
80% of base salary
Robert McKay
Senior Vice President of Purchasing and Trade Relations
65% of base salary
Thomas Caneris
Senior Vice President, General Counsel, and Secretary
70% of base salary
Performance Criteria. The performance criteria under the STIP
is divided into company performance-based components and
individual/group performance-based components for different
employees. The breakdown for the Named Executive Officers,
other than the Chief Executive Officer, is as set forth in
the chart below.
Executive
Title
Company
Performance
Adjusted
EBITDA
Company
Performance
Adjusted
Diluted EPS
Individual/
Group
Performance
Robert Dries
Executive Vice President, Treasurer and Chief Financial
Officer
%
%
%
Suresh Vishnubhatla
Executive Vice President of Long Term Care Operations
%
%
%
Robert McKay
Senior Vice President of Purchasing and Trade Relations
%
%
%
Thomas Caneris
Senior Vice President, General Counsel, and Secretary
%
%
%
Under the STIP for Executive Vice Presidents and Senior Vice
Presidents noted above, company performance will be measured
by comparing the Corporations Adjusted EBITDA as reported in
the Corporations disclosures in its Form 10-K as of and for
the year ended December 31, 2017 to a target Adjusted EBITDA
for the entire 2017 fiscal year set by the Compensation
Committee and by comparing the Corporations Adjusted Diluted
EPS as reported in the Corporations disclosures in its Form
10-K as of and for the year ended December 31, 2017 to a
target Adjusted Diluted EPS for the entire 2017 fiscal year
set by the Compensation Committee.
Individual/group performance will be measured by comparing
certain individual/group performance metrics to target
individual/group performance metrics established by the
Corporations Compensation Committee in consultation with
the Chief Executive Officer for the Named Executive
Officers other than the Chief Executive Officer.
Award Payouts. Award payout levels are based on the
percentage of the performance target achieved. Generally,
the percentage of the award earned at the end of the
performance cycle based on the Adjusted EBITDA performance
target will be determined according to the following
schedule; however, the actual award payout will be
interpolated between the percentages set forth in the chart
based on actual results:
Performance Achievement
Payout Level
80.0% of Performance Target
0.0% of Award Target
80.0% of Performance Target
50.0% of Award Target
90.0% of Performance Target
75.0% of Award Target
95.0% of Performance Target
95.0% of Award Target
100.0% of Performance Target
100.0% of Award Target
105.0% of Performance Target
110.0% of Award Target
110.0% of Performance Target
125.0% of Award Target
120.0% of Performance Target
150.0% of Award Target
Generally, the percentage of the award earned at the end of
the performance cycle based on the percentage of the
Adjusted Diluted EPS performance target achieved shall be
determined according to the following schedule; however,
the actual award payout will be interpolated between the
percentages set forth in the chart based on actual results:
Performance Achievement
Payout Level
70.0% of Performance Target
0.0% of Award Target
70.0% of Performance Target
50.0% of Award Target
80.0% of Performance Target
60.0% of Award Target
90.0% of Performance Target
70.0% of Award Target
100.0% of Performance Target
100.0% of Award Target
120.0% of Performance Target
125.0% of Award Target
130.0% of Performance Target
150.0% of Award Target
Under the STIP, the Corporation must at least meet
threshold Adjusted EBITDA of 80% of Adjusted EBITDA
target in order for any payment to be made to a Named
Executive Officer under the individual/group
performance-based components of the STIP.
Payment of Awards. Payment of STIP awards will be made in
cash. Awards will be paid on a specific date by which the
Compensation Committee reasonably expects that the
performance target applicable to such award was met. The
Corporation will make the payment of the STIP awards to
participants as soon as administratively practicable
following the date of the award determination.
Vesting and Forfeiture. STIP participants must remain
continuously employed full-time by the Corporation until
the award payment date in order to be entitled to receive
a payout of an STIP award. Exceptions may be provided for
termination of employment by reason of death, disability,
without cause, retirement and change in control.
Other Terms Provisions. STIP participants are not
permitted to transfer STIP awards, except by will or the
laws of descent and distribution. The Corporation is
entitled to withhold from any payments of awards under
the STIP any and all amounts required to be withheld for
federal, state and local withholding taxes. The
Compensation Committee has the discretion to change terms
and conditions of STIP awards as it deems necessary to
ensure that the STIP awards satisfy all requirements for
performance-based compensation within the meaning of
Section 162(m)(4)(c) of the Internal Revenue Code.
2017 Long-Term Incentive Program
On March 24, 2017, the Board of Directors of the
Corporation, upon recommendation of the Compensation
Committee, adopted the 2017 Long-Term Incentive Program
(the LTIP) under the Omnibus Plan to provide restricted
stock units and performance share unit awards to the
Corporations executives and certain other officers and
employees based on pre-established performance objectives
and goals. The LTIP advances the Corporations commitment
to performance-based compensation practices by providing
participants an opportunity to earn equity-based awards
upon the achievement of certain pre-established long-term
performance objectives. The LTIP also is designed to
drive consistent growth of the Corporation over a
multiple-year performance period.
Performance Cycle. LTIP performance cycle begins on
January 1, 2017 and ends on December 31, 2019.
Award Targets. The amount of the awards under the LTIP
are based on individual participant bonus targets and
company performance criteria. Individual participant
bonus targets are established by the Compensation
Committee for each participant based upon the
Compensation Committees determination of the appropriate
bonus target amounts that will enable the Corporation to
remain competitive and retain and recruit top employees.
The Compensation Committee established the bonus targets
under the LTIP for the Corporations principal executive
officer, principal financial officer, and other Named
Executive Officers as follows:
Executive
Title
Bonus Target
Gregory S. Weishar
Chief Executive Officer
250% of base salary
Suresh Vishnubhatla
Executive Vice President of Long Term Care
Operations
175% of base salary
Robert McKay
Senior Vice President of Purchasing and Trade
Relations
115% of base salary
Thomas Caneris
Senior Vice President, General Counsel, and
Secretary
138% of base salary
The Compensation Committee established the 2017 LTIP
awards for the Named Executive Officers in the
following amounts as a percentage of the bonus target:
50% restricted stock units and 50% performance share
units.
On March 24, 2017, the Board of Directors, upon
recommendation of the Compensation Committee, awarded
restricted stock units under the LTIP for the
Corporations principal executive officer, and other
Named Executive Officers as follows:
Executive
Title
Restricted Stock
Units
(50% of Bonus
Target)
Gregory S. Weishar
Chief Executive Officer
50,080
Suresh Vishnubhatla
Executive Vice President of Long Term Care
Operations
14,676
Robert McKay
Senior Vice President of Purchasing and Trade
Relations
7,659
Thomas Caneris
Senior Vice President, General Counsel, and
Secretary
9,998
In addition, Robert Dries was granted 28,226
performance share units and on January 31, 2017, when
he was hired, he was granted 28,226 restricted stock
units.
Performance Criteria. The LTIP performance criteria for
the performance share units are tied to company
performance. With respect to all Named Executive
Officers, company performance will be measured for
purposes of the performance share units by comparing
the Corporations Adjusted Corporations Adjusted EBITDA
as reported in the Corporations disclosures in its Form
10-K as of and for the year ended December 31, 2019 to
a target Adjusted EBITDA for the entire 2019 fiscal
year set by the Compensation Committee and by comparing
the Corporations Adjusted Diluted EPS as reported in
the Corporations disclosures in its Form 10-K as of and
for the year ended December 31, 2019 to a target
Adjusted Diluted EPS for the entire 2019 fiscal year
set by the Compensation Committee. With respect to all
Named Executive Officers, the Adjusted EBITDA target
accounts for 70% of their respective performance target
and the remaining 30% is determined by achievement of a
target measure of Adjusted Diluted EPS.
Award Payouts. Award payouts for the performance share
units are based on the percentage of the performance
target achieved. Generally, the percentage of the award
earned at the end of the performance cycle based on the
Adjusted EBITDA performance target shall be determined
according to the following schedule; however, the
actual LTIP award payout will be interpolated between
the percentages set forth in the chart based on actual
results:
Performance Level
Payout Level
80.0% of Performance Target
0.0% of Award Target
80.0% of Performance Target
50.0% of Award Target
90.0% of Performance Target
75% of Award Target
100.0% of Performance Target
100.0% of Award Target
110.0% of Performance Target
125.0% of Award Target
115.0% of Performance Target
135.0% of Award Target
120.0% of Performance Target
150.0% of Award Target
Generally, the percentage of the award earned at the
end of the performance cycle based on the percentage
of the Adjusted Diluted EPS performance target
achieved shall be determined according to the
following schedule; however, the actual LTIP award
payout will be interpolated between the percentages
set forth in the chart based on actual results:
Performance Level
Payout Level
80.0% of Performance Target
0.0% of Award Target
80.0% of Performance Target
50.0% of Award Target
90.0% of Performance Target
85.0% of Award Target
100.0% of Performance Target
100.0% of Award Target
105.0% of Performance Target
110.0% of Award Target
115.0% of Performance Target
130.0% of Award Target
120.0% of Performance Target
150.0% of Award Target
Award Agreements. Awards of restricted stock units
and performance share units are made under the LTIP
to award agreements with each recipient on the terms
described in this Current Report on Form 8-K.
Payment of Awards. Performance share unit awards
shall be made in stock and will be distributed on a
specific date by which the Compensation Committee
reasonably expects it will be able to determine
whether and the extent that the performance target
applicable to such award was met. The Corporation
will make the distribution of the performance share
unit awards to participants as soon as
administratively practicable following the date of
the award determination.
Vesting and Forfeiture. Recipients of LTIP awards
generally must remain continuously employed full-time
by the Corporation until the date designated for
payout under the applicable award agreement for the
LTIP period. Exceptions may be provided for
termination of employment by reason of death,
disability, without cause, retirement and change in
control. The restricted stock units will generally
cliff vest on the third anniversary of the grant
date.
Change in Control. In the event of a change in
control (CIC), acceleration of vesting of
restricted stock units will occur if an employee is
terminated by the Company without cause or the
employee voluntarily terminates employment with
good reason during the 24 month period following a
CIC (Qualifying Termination). Vesting of restricted
stock units will accelerate immediately regardless
of a Qualifying Termination if the acquirer does
not assume the restricted stock unit awards. If the
acquirer assumes the restricted stock unit awards,
restricted stock units will continue to vest
according to their original vesting schedules;
provided that vesting will subsequently accelerate
upon a Qualifying Termination within 24 months
after the CIC, and unvested restricted stock units
would be forfeited upon any other termination
(unless otherwise specified by the terms of an
employment agreement). With respect to performance
share units, in the event of a Qualifying
Termination, performance share units will be
converted to time-based restricted stock units at
the CIC assuming achievement of 100% the
performance targets. Such restricted stock units
will have the same terms of the restricted stock
units granted to the 2017 LTIP and shall be deemed
to have been granted as of March 24, 2017.
Other Terms Provisions. Participants are not
permitted to transfer LTIP awards, except by will
or the laws of descent and distribution. The
Corporation is entitled to withhold from any
payments of awards under the LTIP or the Omnibus
Plan any and all amounts required to be withheld
for federal, state and local withholding taxes. The
Compensation Committee has the discretion to change
terms and conditions of LTIP awards as it deems
necessary to ensure that the LTIP awards satisfy
all requirements for performance-based compensation
within the meaning of Section 162(m)(4)(c) of the
Internal Revenue Code. In addition to the above
conditions, payment of any incentive award is
contingent upon the participant executing a written
agreement to protect company assets.
The foregoing summary does not purport to be
complete and is qualified in its entirety by
reference to the form of Restricted Stock Unit
Award Agreement, and the form of Performance Share
Award Agreement for the Chief Executive Officer and
the Executive Vice Presidents, including the
Adjusted EBITDA and Adjusted Diluted EPS
performance targets.


About PHARMERICA CORPORATION (NYSE:PMC)

PharMerica Corporation is an institutional pharmacy services company. The Company services healthcare facilities, provides pharmacy management services to hospitals, provides specialty infusion services to patients outside a hospital setting and offers the national oncology pharmacy in the United States. It has three segments: institutional pharmacy, specialty infusion services and specialty oncology pharmacy. Its institutional pharmacy segment provides pharmacy products and services to residents and patients in skilled nursing facilities, nursing centers, assisted living facilities, hospitals and other long-term alternative care settings. Its specialty infusion services segment provides specialty infusion services focused on providing pharmaceutical products and clinical services to patients in client facilities, hospice and outside of hospital. Its specialty oncology pharmacy segment provides dispensing of oncology drugs, care management and other related services.

PHARMERICA CORPORATION (NYSE:PMC) Recent Trading Information

PHARMERICA CORPORATION (NYSE:PMC) closed its last trading session down -0.45 at 23.05 with 107,008 shares trading hands.

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