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EXHIBIT 10.12
FORM OF EMPLOYMENT AGREEMENT WITH OFFICERS
This EMPLOYMENT AGREEMENT ("Agreement") made effective as of
____________, 19__ by and between PharMerica, Inc., a Delaware corporation (the
"Company"), and _________________________. (the "Executive").
In consideration of the mutual covenants contained in this Agreement,
the parties hereby agree as follows:
SECTION I
EMPLOYMENT
The Company agrees to employ the Executive, and the Executive agrees to
be employed by the Company for the Period of Employment as provided in Section
III.A. below upon the terms and conditions provided in the Agreement.
SECTION II
POSITION AND RESPONSIBILITIES
During the Period of Employment, the Executive agrees to serve as
______________________________ and to be responsible for the typical management
responsibilities expected of an officer holding such positions and such other
responsibilities as may be assigned to the Executive from time to time by the
Board of Directors of the Company.
SECTION III
TERMS AND DUTIES
A. Period of Employment
The period of Executive's employment under this Agreement, will
commence as of ________________, and shall continue through _________________,
subject to extension or termination as provided in this Agreement (the "Period
of Employment").
B. Duties
During the Period of Employment, the Executive shall devote all of his
business time, attention and skill to the business and affairs of the Company
and its subsidiaries. The Executive will perform faithfully the duties which may
be assigned to him from time to time by the Board of Directors.
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SECTION IV
COMPENSATION AND BENEFITS
A. Compensation
For all services rendered by the Executive in any capacity during the
Period of Employment, the Company shall pay the Executive an annual base salary
("Base Salary") as follows: Of at least _____________________________ ($_______)
per year through _________________; ___________________________________
($_______) for the period from ________________ through _________________; and
_____________________________ ($_______) for the period from ________________
through _________________. Such Base Salary shall be payable according to the
customary payroll practices of the Company but in no event less frequently than
once each month.
B. Annual Incentive Award; Signing Bonus
The Executive will be eligible for an annual incentive compensation
award ("Annual Incentive Award") with a target range of __% of the Executive's
Base Salary tied to objective criteria to be established by the Board of
Directors or the Compensation Committee by agreement with the Executive. The
Company will pay the Executive a one time signing bonus of
_____________________________ ($______), payable by the Company upon signing of
this Agreement.
C. Options
The Company will take all actions necessary to grant to Executive, as
of the date of this Agreement (the "Grant Date") the Executive an option to
purchase at least _______ shares of the Company stock (total options including
converted Xxxxxxx options will equal at least ______________). One-third of the
options will vest on the Grant Date, one-third will vest on the first
anniversary of the Grant Date, and the remaining one-third will vest on the
second anniversary of the Grant Date. The option shall be in the form approved
by the Board of Directors or Compensation Committee of the Company and shall be
governed by the terms and provisions of the Company 1995 Incentive and
Nonqualified Stock Option Plan for Key Personnel and Directors (the "Plan").
D. Additional Benefits
The Executive will be entitled to participate in all compensation or
employee benefit plans or programs and receive all benefits and perquisites for
which any salaried employees are eligible under any existing or future plan or
program established by the Company for salaried employees. The Executive will
participate to the extent permissible under the terms and provisions of such
plans or programs in accordance with program provisions. These may include group
hospitalization, health, dental care, life or other insurance, tax qualified
pension, savings, thrift and profit sharing plans, termination pay programs,
sick leave plans, travel or accident insurance, disability insurance, and
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contingent compensation plans including capital accumulation programs,
restricted stock programs, stock purchase programs and stock option plans.
Nothing in this Agreement will preclude the Company from amending or terminating
any of the plans or programs applicable to salaried employees or senior
executives. The Executive will be entitled to an annual paid vacation of four
weeks per year.
E. Automobile Allowance
Executive shall receive an automobile allowance of $______ per month.
F. Continuing Medical Education
It is recognized that Executive must do 50 hours of Continuing Medical
Education in order to maintain licensure in good and regular standing. Company
agrees that such time and the expense connected therewith is a corporate
obligation.
G. Insurance
The Company shall provide Executive at least $________ of group term
life insurance under the Company's life insurance plans.
SECTION V
BUSINESS EXPENSES
The Company will reimburse the Executive for all reasonable travel and
other expenses incurred by the Executive in connection with the performance of
his duties and obligations under this Agreement. The Company will provide
Executive with a corporate credit card billed to the Company. Executive must
support all expenditures with customary receipts and expense reports subject to
review by the Chief Financial Officer.
SECTION VI
DISABILITY
A. Payments; Vesting of Options Upon Disability
In the event of disability of the Executive during the period of
Employment, the Company will continue to pay the Executive according to the
compensation provisions of this Agreement during the period of his disability,
until such time as the Executive's long-term disability insurance benefits are
available. However, in the event the Executive is disabled for a continuous
period of six (6) months after the Executive first becomes disabled, the Company
may terminate the employment of the Executive. Upon such termination, ordinary
compensation will no longer be paid, except for earned but unpaid Base Salary
and any Annual Incentive Award that would be payable on a pro-rated basis for
the year in which the disability occurred. In the event of such termination, all
unvested stock options held by the Executive shall be deemed fully vested on the
date of such termination. The term "disability" shall, for the purposes of this
Agreement, have the same
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meaning as under any disability insurance provided to the Executive pursuant to
this Agreement or otherwise.
B. Assistance to the Company
During the period the Executive is receiving payments of either regular
compensation or disability insurance described in this Agreement and as long as
he is physically and mentally able to do so, the Executive will furnish
information and assistance to the Company and from time to time will make
himself available to the Company to undertake assignments consistent with his
prior position with the Company and his physical and mental health.
SECTION VII
DEATH
In the event of the death of the Executive during the Period of
Employment, the Company's obligation to make payments under this Agreement shall
cease as of the date of death, except for earned but unpaid Base Salary and
Incentive Compensation Awards which will be paid on a pro-rated basis for that
year. The Executive's designated beneficiary will be entitled to receive the
proceeds of any life or other death benefit programs provided in this Agreement.
SECTION VIII
EFFECT OF TERMINATION OF EMPLOYMENT
A. Termination Without Cause
If the Company terminates Executive's employment Without Cause, as
defined in this Agreement, or if Executive terminates his employment for Good
Reason, as defined in this Agreement, the Company will pay the Executive in a
lump sum upon such Termination an amount equal to _______% of his then current
Base Salary paid by the Company to Executive. Earned but unpaid Base Salary will
be paid in a lump sum at the time of such termination. The benefits and
perquisites described in this Agreement as in effect at the date of termination
of employment will be continued for twelve(12) months upon such termination. If
the Executive's employment terminates Without Cause, or for Good Reason, or
pursuant to Section XI, all stock options ("Options") granted to the Executive
under the Plan or any other stock option program shall be deemed vested, and the
Company shall cause the Options to remain exercisable for twelve (12) months
from the date of termination.
B. Termination With Cause
If the Company terminates Executive With Cause, earned but unpaid Base
Salary will be paid on a pro-rated basis for the year in which the termination
occurs. No other payments will be made or benefits provided by the Company.
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C. Effect of Certain Terminations
Upon termination of the Executive's employment for reasons other than
due to death, disability, or pursuant to Paragraph A of this Section or Section
XI, or upon Executive's resignation (other than for Good Reason or in connection
with a Change in Control), the Period of Employment and the Company's obligation
to make payments under this Agreement will cease as of the date of the
termination except as expressly defined in this Agreement.
D. Definitions
For this Agreement, the following terms have the following meanings:
(1) Termination "With Cause" means termination of the
Executive's employment by the Company's Board of Directors acting in good faith
by the Company by written notice to the Executive specifying the event relied
upon for such termination, due to the Executive's serious, willful misconduct
with respect to his duties under this Agreement, including, but not limited to,
conviction for a felony or perpetration of a common law fraud, which has
resulted or is likely to result in material economic damage to the Company.
(2) Termination "Without Cause" means termination by the
Company of the Executive's employment other than due to death, disability,
termination With Cause, or pursuant to Section XI.
(3) Termination for "Good Reason" means either (i) the
Executive is not elected, reelected or otherwise continued in the office of the
Company or any of its subsidiaries which he held immediately prior to the Change
in Control Date, (ii) the Executive's duties, responsibilities or authority as
an employee are materially reduced or diminished from those in effect on the
Change in Control Date without the Executive's consent; (iii) the Executive's
duties, responsibilities or authority as an employee are materially reduced or
diminished from those in effect on the date hereof without the Executive's
consent; (iv) the Executive's compensation or benefits are reduced without the
Executive's consent, unless all executive officers have their salaries reduced
in the same percentage amount; (v) the Company reduces the potential earnings of
the Executive under any performance-based bonus or incentive plan of the Company
in effect immediately prior to the Change in Control Date; (vi) the Company
requires that the Executive's employment be based other than at Tampa, Florida,
without his consent; (vii) any purchaser, assign, surviving corporation, or
successor of the Company or its business or assets (whether by acquisition,
merger, liquidation, consolidation, reorganization, sale or transfer of assets
or business, or otherwise) fails or refuses to expressly assume in writing this
Agreement and all of the duties and obligations of the Company hereunder
pursuant to Section XIV hereof, or (viii) the Company breaches any of the
provisions of this Agreement.
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SECTION IX
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE PERIOD OF EMPLOYMENT
A. Cooperation During and After Employment
The Executive will, with reasonable notice during or after the Period
of Employment, furnish information as may be in his possession and cooperate
with the Company as may reasonable be requested in connection with any claims or
legal actions in which the Company is or may become a party.
B. Confidential Information
The Executive recognizes and acknowledges that all information
pertaining to the affairs, business, clients, customers or other relationships
of the Company, as hereinafter defined, is confidential and is a unique and
valuable asset of the Company. Access to and knowledge of this information are
essential to the performance of the Executive's duties under this Agreement. The
Executive will not during the Period of Employment or after, except to the
extent reasonably necessary in performance of the duties under this Agreement,
give to any person, firm, association, corporation or governmental agency any
information concerning the affairs, business, clients, customers or other
relationships of the Company, except as required by law. The Executive will not
make use of this type of information for his own purposes or for the benefit of
any person or organization other than the Company. The Executive will also use
his best efforts to prevent the disclosure of this information by others. All
records, memoranda, etc, relating to the business of the Company, whether made
by the Executive or otherwise coming into his possession, are confidential and
will remain the property of the Company.
C. Certain Restricted Activities
During the Period of Employment and for a twelve (12) month period
thereafter, the Executive will not use his status with the Company to obtain
goods or services from another organization on terms that would not be available
to him in the absence of his relationship to the Company. During the Period of
Employment and for a twelve (12) month period following termination of the
Period of Employment, other than termination Without Cause or for Good Reason:
the Executive will not make any statements or perform any acts intended to
advance the interest of any existing or prospective competitors of the Company
in any way that will injure the interest of the Company; the Executive, without
prior express written approval by the Board of Directors of the Company, will
not directly or indirectly own or hold any proprietary interest in or be
employed by or receive compensation from any party engaged in the same or any
similar business in the same geographic areas the Company does business; and the
Executive, without express prior written approval from the Board of Directors,
will not solicit any members of the then current clients of the Company or
discuss with any employee of the Company information or operation of any
business intended to compete with the Company. For the purposes of the
Agreement, proprietary interest means legal or equitable ownership, whether
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through stock holdings or otherwise, of a debt or equity interest (including
options, warrants, rights and convertible interest) in a business firm or
entity, or ownership of more than 5% of any class of equity interest in a
publicly-held company. The Executive acknowledges that the covenants contained
herein are reasonable as to geographic and temporal scope. For a twelve (12)
month period after termination of the Period of Employment for any reason, the
Executive will not directly or indirectly hire any employee of the Company or
solicit or encourage any such employee to leave the employ of the Company.
D. Remedies
The Executive acknowledges that his breach or threatened or attempted
breach of any provision of Section IX would cause irreparable harm to the
Company not compensable in monetary damages and that the Company shall be
entitled, in addition to all other applicable remedies, to a temporary and
permanent injunction and a decree for specific performance of the terms of
Section IX without being required to prove damages or furnish any bond or other
security. The Executive hereby acknowledge the necessity of protection against
the competition of, and certain other possible adverse actions by, the Executive
and that the nature and scope of such protection has been carefully considered
by the parties. The period provided and the area covered are expressly
represented and agreed to be fair, reasonable and necessary. If, however, any
court or arbitrator determines that the restrictions described herein are not
reasonable, the court or arbitration panel may modify, rewrite or interpret such
restrictions to include as much of their nature and scope as will render them
enforceable.
E. Effect of Material Default
The Executive shall not be bound by the provisions of Section IX in the
event of the material default by the Company in its obligations under this
Agreement which are to be performed upon or after termination of this Agreement.
SECTION X
INDEMNIFICATION, LITIGATION
The Company will indemnify the Executive to the fullest extent
permitted by the laws of the state of incorporation in effect at that time, or
certificate of incorporation and by-laws of the Company whichever affords the
greater protection to the Executive.
SECTION XI
CHANGE IN CONTROL
A. Effect of Change in Control
In the event there is a Change in Control and within the twenty-four
(24) month period following such event Executive is terminated or Executive
elects to resign for Good Reason, or within the six (6) month period following
such event Executive elects to resign
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for other than Good Reason, the Company shall pay to the Executive the amounts
described in (1), (2), and (3) below.
(1) The Company shall pay to the Executive in a lump sum upon
such termination an amount equal to ___% of the sum of his Base Salary and the
greater of the most recent Annual Incentive Award paid or earned by Executive or
the current Annual Incentive Award target in effect at the time of such
termination or resignation. In addition, any stock options granted to the
Executive prior to termination pursuant to the Plan, but subject to vesting
restrictions, will be fully vested upon a Change in Control whether or not the
Executive is terminated or resigns and shall remain exercisable for one year
following vesting. The benefits and perquisites described in this Agreement as
in effect at the date of termination of employment will also be continued for
thirty-six (36) months from the effective date of termination or resignation
pursuant to a Change of Control, except for life insurance then in effect which
will be provided for lifetime and long term disability insurance coverage for
thirty-six (36) months. Executive shall also have COBRA continuation rights for
healthcare coverage, beginning after the end of such thirty-six (36) month
period. The obligation of Company to pay for Executive's COBRA premiums during
the thirty-six (36) month period shall terminate upon Executive obtaining other
employment to the extent such insurance is provided by Executive's new employer.
Company matching payments for corporate retirement plans will become fully
vested. Company will reimburse Executive for expenses in moving Executive to the
location of his choice in the United States under the terms and conditions of
the Company's Executive moving policy, within three (3) years from such
termination or resignation.
(2) The Company shall pay to Executive upon such termination,
as a retention bonus for services actually rendered on and after the date of the
Change in Control, a lump sum payment equal to __% of the sum of his Base Salary
and the greater of the most recent Annual Incentive Award paid or earned by
Executive or the current Annual Incentive Award target in effect at the time of
such termination or resignation.
(3) The Company shall pay to executive upon such termination,
in exchange for Executive agreeing not to solicit any of the then current
customers or employees of the Company for a period of twelve (12) months
following his termination of employment, a lump sum payment equal to ___% of the
sum of his Base Salary and the greater of the most recent Annual Incentive Award
paid or earned by Executive or the current Annual Incentive Award target in
effect at the time of such termination or resignation.
Notwithstanding the above, no amount shall be payable hereunder to the
extent that it would result in the imposition of an excise tax under Internal
Revenue Code Section 4999, and the payments otherwise due hereunder shall be
automatically reduced in order to avoid such result. The determination of any
reduction in the amounts otherwise payable hereunder pursuant to the foregoing
sentence shall be made by the Executive in good faith, and such determination
shall be conclusive and binding on the Company.
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B. Definition of Change In Control
A "Change in Control" shall be deemed to have occurred if (i) a tender
offer shall be made and consummated for the ownership of more than 50% of the
outstanding voting securities of the Company, (ii) the Company shall be merged
or consolidated with another corporation and as a result of such merger or
consolidation less than 50% of the outstanding voting securities of the
surviving or resulting corporation shall be owned in the aggregate by the former
shareholders of the Company, as the same shall have existed immediately prior to
such merger or consolidation, (iii) the Company shall sell all or substantially
all of its assets to another corporation which is not a wholly-owned subsidiary
or affiliate, (iv) as the result of, or in connection with, any contested
election for the Board of Directors of the Company, or any tender or exchange
offer, merger or business combination or sale of assets, or any combination of
the foregoing (a "Transaction"), the persons who were Directors of the Company
before the Transaction shall cease to constitute a majority of the Board of
Directors of the Company, or any successor thereto, or (v) a person, within the
meaning of Section 3(a)(9) or of Section 13(d)(3) (as in effect on the date
hereof) of the Securities and Exchange Act of 1934 ("Exchange Act"), other than
any employee benefit plan then maintained by the Company, shall acquire more
than 50% of the outstanding voting securities of the Company (whether directly,
indirectly, beneficially or of record). For purposes hereof, ownership of voting
securities shall take into account and shall include ownership as determined by
applying the provisions of Rule 13d-3(d)(1)(i)(as in effect on the date hereof)
pursuant to the Exchange Act.
SECTION XII
WITHHOLDING TAXES
The Company may directly or indirectly withhold from any payments under
this Agreement all federal, state, city or other taxes that shall be required
pursuant to any law or governmental regulation.
SECTION XIII
EFFECTIVE PRIOR AGREEMENTS
This Agreement contains the entire understanding between the Company
and the Executive with respect to the subject matter and supersedes any prior
employment, severance, or other similar agreements between the Company, its
predecessors and its affiliates, and the Executive.
SECTION XIV
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Agreement shall preclude the Company from consolidating
or merging into or with, or transferring all or substantially all of its assets
to, another corporation which assumes this Agreement and all obligations and
undertakings of the company hereunder. Upon such a Consolidation, Merger or Sale
of Assets, the term "the
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Company" as used will mean the other corporation and this Agreement shall
continue in full force and effect. This Section XIV is not intended to modify or
limit the rights of the Executive hereunder, including without limitation, the
rights of Executive under Section XI.
SECTION XV
MODIFICATION
This Agreement may not be modified or amended except in writing signed
by the parties. No term or condition of this Agreement will be deemed to have
been waived, except in Writing by the party charged with waiver. A waiver shall
operate only as to the specific term or condition waived and will not constitute
a waiver for the future or act on anything other than that which is specifically
waived.
SECTION XVI
GOVERNING LAW; ARBITRATION
This Agreement has been executed and delivered in the State of Delaware
and its validity, interpretation, performance and enforcement shall be governed
by the laws of that state.
Any dispute among the parties hereto shall be settled by arbitration in
accordance with the then applicable rules of the American Arbitration
Association and judgment upon the award rendered may be entered in any court
having jurisdiction thereof.
SECTION XVII
NOTICES
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or
mailed first-class postage prepaid by registered mail, return receipt requested,
or when delivered if by hand, overnight delivery service or confirmed facsimile
transmission, to the following:
(a) If to the Company, at:
PharMerica, Inc.
0000 Xxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
or at such other address as may have been furnished to the Executive by the
Company in writing, copy to Xxxx Manner, Xxxxxxx, Xxxxxx, Xxxx, Xxxxxxx &
Manner, P.C., 1800 First American Center, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000; or
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(b) If to the Executive, at
or such other address as may have been furnished to the Company by the Executive
in writing.
SECTION XVIII
BINDING AGREEMENT
This Agreement shall be binding on the parties' successors, heirs and
assigns.
SECTION XIX
Additional Payment Due to Dispute. Notwithstanding anything to the
contrary herein, and without limiting the Executive's rights at law or in
equity, if the Company fails or refuses to timely pay to the Executive the
benefits due under Section VIII or XI hereof, then the compensation under
Section VIII A. and XI A. shall be increased, and the benefits under Section
VIII A. and XI A. shall be continued, in each case, by one additional day for
each day of any such failure or refusal of the Company to pay.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY
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PHARMERICA, INC.
By:
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Title:
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EXECUTIVE
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