January 7, 2009 PERSONAL AND CONFIDENTIAL To: R. David Yost
Exhibit 10.7
January 7, 2009
PERSONAL AND CONFIDENTIAL
To: X. Xxxxx Xxxx
This letter is being provided to you because you recently entered into an amended and restated
employment agreement with AmerisourceBergen Corporation (the “Company”) dated November 24,
2008 (the “Agreement”). The amendment and restatement of your employment agreement was
undertaken principally to ensure that the terms of the agreement are structured to enable you to
avoid the adverse tax consequences that would result from a violation of Section 409A of the
Internal Revenue Code (“Section 409A”). This letter is intended to clarify and supplement
your rights under the Agreement in the event the Company terminates your employment without Cause
or you resign your employment with the Company for Good Reason. All capitalized terms used in this
letter that are not defined in this letter shall have the meanings ascribed to them in the
Agreement.
1. For the eighteen month period following your Separation From Service (subject to
earlier termination as described below), if you elect to receive continuation coverage under
the Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985 (“COBRA”), you shall be entitled to: (i) waiver by the Company of the COBRA
premium costs of medical, prescription, dental and vision coverage, if any, under the
Company’s group health plans (as in effect from time to time) for you and, to the extent
permitted under COBRA, your spouse and eligible dependents, if any, for the first two
calendar months of the 18-month continuation period; and (ii) following the initial
two-month period, you shall be entitled to reimbursement from the Company for the COBRA
premium costs of medical, prescription, dental and vision coverage, if any, under the
Company’s group health plans for you and, to the extent permitted under COBRA, your spouse
and eligible dependents, if any, with such reimbursement not to exceed the COBRA rates for
such coverage; provided, however, that you shall be required to submit to the Company
reasonable evidence of payment by you of any such COBRA premiums in order to obtain
reimbursement from the Company and you may not submit any requests for reimbursement of such
payments more than once per calendar month; and provided, further, that entitlement to
reimbursement of any such payments shall terminate should you become ineligible for coverage
under COBRA for any reason prior to the end of such 18-month period, including, without
limitation, by reason of your commencement of eligibility under the group health plan of any
other employer and your commencement of eligibility for Medicare benefits under Title XVIII
of the Social Security Act. If you remain on COBRA coverage for the entire 18-month
period
in which you are entitled to reimbursement for the premiums associated with such coverage,
the Company will make monthly payments to you for the 6-month period immediately following
the expiration of the 18-month COBRA period equal to the amount of premiums that the Company
would have reimbursed to you had you been eligible to continued coverage under COBRA
following the expiration of the 18-month
COBRA period. Any amounts that are paid on your behalf, reimbursed to you by the
Company or paid directly to you as supplemental severance payments will be considered
taxable income to the Executive and any taxes on such amounts will be your responsibility
and subject to applicable tax withholding. Notwithstanding anything to the contrary set
forth above, the Company, in its sole discretion, may discontinue any coverage contemplated
hereunder in the event that such continuation is not permitted under or would adversely
affect the tax status of the plan or plans of the Company pursuant to which the coverage is
provided, in which case the Company shall make supplemental severance payments to you in
monthly amounts equal to the amounts to which you otherwise would have been entitled to
reimbursement hereunder in respect of such coverage for the remainder of the period that the
Company otherwise would have been obligated to make reimbursements hereunder to you.
2. In addition, although the Agreement provides that a resignation by you for Good
Reason shall be effective on the 60th business day following the date when the Notice of
Termination for Good Reason is given, the Agreement shall be construed to mean that such a
termination of employment shall be effective on the 60th calendar day following
the date when the Notice of Termination for Good Reason is given.
If within 10 days after the date of this letter you do not notify the Company of an objection
to the clarifications and revisions described in this letter, this letter shall constitute an
addendum to the Agreement and shall supersede any conflicting provisions in the Agreement. The
Company reserves the right to revise the provisions of this letter in order to ensure compliance
with, or exemption from, the provisions of Section 409A.
Because this letter constitutes an amendment of the Agreement, you should retain a copy of
this letter with your records.
| AMERISOURCEBERGEN CORPORATION |
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| By: | /s/ Xxxx X. Xxxx | |||
| Name: | Xxxx X. Xxxx | |||
| Title: | Senior Vice President, General Counsel & Secretary | |||
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