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Exhibit 10.13
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") made effective as of
_______________ 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
_____________________ of the Company and to be responsible for the typical
management responsibilities expected of an officer holding such positions and
such other responsibilities consistent with those positions as may be assigned
to the Executive from time to time by the Board of Directors of the Company
including, but not limited to, evaluating and responding to the Company's
finance, accounting, treasury, tax, investor relations, and mergers and
acquisitions issues.
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
substantially 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. This agreement does not restrict Executive's right while
employed by the Company to make passive investments in other businesses that do
not require any active services or participation on his part or to engage in the
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business activities described on Appendix A to this Agreement or any other
business activities approved by the Board of Directors or the Compensation
Committee of the Board of Directors, so long as those authorized business
activities do not interfere with the performance of his employment duties in
this Agreement. Schedule A will be updated to reflect any additional business
activities that are approved by the Board of Directors or the Compensation
Committee of the Board of Directors. The Company does not have any interest in
the gains, profits, or income the Executive derives from his passive investments
or authorized business activities.
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") of _______________ Dollars ($__________) per year, subject to
increases approved by the Board of Directors or the Compensation Committee of
the Board of Directors. Such Base Salary shall be payable according to the
customary payroll practices of the Company but in no event less frequently than
once each month.
B. Annual Incentive Award; Signing Bonus
The Executive will be eligible for an annual incentive compensation
award ("Annual Incentive Award") for each fiscal year during the Period of
Employment with a target amount equal to __% of the Executive's then current
Base Salary and tied to objective criteria to be established annually by the
Board of Directors or the Compensation Committee by agreement with the
Executive. The Company shall pay to Executive his Annual Incentive Award in cash
within five day after it is approved by the Board of Directors or the
Compensation Committee of the Board of Directors, but in no event later than the
90th day after the end of each fiscal year. For the period ending December 31,
1998 the Company guarantees that the Executive's Annual Incentive Award will be
_________ Dollars ($_______) and will be paid on December 31, 1998. As an
inducement to enter into this Agreement, the Company shall extend to the
Executive a one-time interest-free loan through December 31, 1998 of __________
Dollars ($________). The loan will be canceled, discharged and forgiven on the
earlier of (a) December 31, 1998 but only if Executive is employed by the
Company on that date, (b) the effective date of the termination of Executive's
employment with the Company, if Executive's employment under this Agreement is
terminated by the Company Without Cause (as defined in subsection VIII.D below)
or by Executive for Good Reason (as defined in subsection VIII.D below), or (c)
on the effective date of a Change in Control (as defined in subsection XI.C
below). If Executive resigns his employment with the Company before December 31,
1998, Executive shall repay the loan to the Company on the last of employment.
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C. Options
The Company will take all actions necessary to grant to Executive,
promptly after the date of this Agreement, non-qualified options to purchase
________ shares of the Company common stock, $.001 par value. The options will
be exercisable as to one-third of the shares on the grant date, an additional
one-third of the shares on the first anniversary of the grant date, and the
remaining one-third of the shares on the second anniversary of the grant date.
The options shall be in the form attached as Appendix B to this Agreement 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").
Each option will allow all or any part of the exercise price and any applicable
tax withholding for any shares to be purchased pursuant to exercise of the
options to be paid by any combination of the following methods: (a) by a cash
payment to the Company; (b) by Executive delivering to the Company his written
election for the Company to withhold a portion of the shares otherwise issuable
to Executive pursuant to the exercise of the option; (c) by transferring to the
Company outstanding shares of Employer's common stock that have been owned by
Executive for more than six months on the exercise date of the option; or (d) to
the extent approved in advance by the committee that administers the Plan, by
delivering to the Company a copy of irrevocable instructions that have been
provided by Executive to a financial institution or a securities broker-dealer
to pay promptly to the Company all or a portion of the proceeds from either a
sale of the share to be purchased pursuant to the exercise of the option or a
loan to be secured by a pledge of all or a portion of those shares. Share that
are transferred to, or withheld by, the Company in payment of the exercise price
or any tax withholding will be valued for purposes of payment at their market
value on the exercise date of the option.
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 that
are provided to the Chief Executive Officer of the Company and also 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
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. To the extent that periods of service are relevant for purposes of
eligibility, vesting accrual, or determining the level of benefits payable under
any employee benefit, welfare, or compensation plan, trust, program, practice,
agreement, or arrangement that is sponsored or maintained by Company and
provides benefits to Executive, other than the Plan (a "Company Benefit Plan"),
the Company shall use its best
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efforts to cause Executive to be given full credit for his respective periods of
previous service with Pharmacy Corporation of America and Pharmacy Management
Services, Inc. In addition, the Company shall use commercially reasonable
efforts to assure that any Company Benefit Plan that provides dental, vision,
medical, or other healthcare benefits to Executive (a) gives Executive full
credit toward its deductibles and co-insurance amounts for deductibles and
co-insurance payments incurred or satisfied by the employee for the same period
under any similar plan under which Executive participated before becoming
employed by the Company, and (b) waives any preexisting condition limitation for
Executive or any dependent of Executive to the extent that the person was
covered for that condition under any plan providing healthcare benefits under
which Executive and his dependents participated before becoming employed by the
Company. The Executive will be entitled to an annual paid vacation of four weeks
per year, which will be accrued ratably during each year. Any unused annual
vacation time will accumulate in accordance with the Company's vacation policy.
Upon termination of Executive's employment with the Company, the Company shall
compensate Executive for accumulated but unused vacation time in accordance with
Company policy. In addition to vacation time, Executive may have additional days
of paid holiday or absence as determined in accordance with the Company's policy
or as approved by the Board of Directors or the Compensation Committee of the
Board of Directors.
E. Automobile Allowance
Executive shall receive an automobile allowance of $_____ per month,
beginning in August, 1998. Executive shall maintain an automobile of his choice
for his use in the conduct of the Company's business.
F. Professional Dues, Fee and Memberships
The Company shall pay or promptly reimburse Executive for all
professional dues, fees, and costs, including all costs of continuing
professional education required to maintain his license as a certified public
accountant and memberships in professional associations and organizations.
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.
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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 meaning as under any disability insurance provided to
the Executive pursuant to this Agreement or otherwise.
B. Assistance to the Company
Following a termination of Executive's employment attributable to his
disability, and for so long as he is physically and mentally able to do so and
is continuing to receive payment of his Base Salary and/or disability insurance
benefits as provided above, 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
Annual Incentive Awards which will be paid on a pro-rated basis for that year
(based on the ratio of the number of days in the year on and before the date of
his death to the number of days in the year after the date of his death). The
Executive's designated beneficiary will be entitled to receive the proceeds of
any life or other death benefit programs provided in this Agreement.
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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 on or before the effective date of the termination of Executive's
employment (the "Severance Date") the following: (i) any and all earned but
unpaid Base Salary and Annual Incentive Award that is owed to Executive through
the Severance date; plus (ii) compensation for any accumulated but unused
vacation time as of the Severance Date according to Company policy; plus (iii)
severance compensation in an amount equal to 150% of Executive's Base Salary as
of the Severance Date, plus (iv) a pro rata portion of Executive's target Annual
Incentive Award for the fiscal year ending on or after the Severance Date (based
on the ratio of the number of days in the fiscal year on and before the
Severance Date to the number of days in the fiscal year after the Severance
Date). Furthermore, the Company shall contribute to its retirement plan for the
account of Executive for the year ending on or after the Severance date the
entire amount that it would have contributed for that year in the absence of the
termination of Executive's employment (but in no event less than the percentage
contribution that it made for Executive in the immediately preceding year),
increased to reflect the additional year of service and taking into account
Executive's annualized rate of compensation for purposes of the retirement plan,
the percentage of that compensation that Executive was contributing to the
retirement plan as of the Severance Date, and the Company's matching
contribution rate for that year (or, if greater the preceding year). The amounts
payable to Executive pursuant to this subsection VIII.A will not be reduced by
the amount of any income that Executive earns or could earn from alternative
employment during the remainder of the Employment Period. The Company waives any
duty that Executive might have under law to mitigate his damages by seeking
alternative employment. In addition, the Company shall continue to provide to
Executive for eighteen (18) consecutive months following the Severance Date the
benefits and perquisites described in this Agreement as in effect at the
Severance Date. If the Executive's employment terminates Without Cause, or for
Good Reason, or pursuant to Section XI, all stock options granted to the
Executive under the Plan or any other stock option program ("Options") shall be
deemed fully vested and immediately exercisable, and the Company shall cause the
Options to remain exercisable for twelve (12) months from the Severance Date.
B. Termination With Cause
If Executive resigns or the Company terminates Executive With Cause,
the Company shall pay to Executive on or before the Severance Date the
following: (i) any and all earned but unpaid Base Salary that is owed to
Executive through the Severance Date; plus (ii) compensation for any accumulated
but unused vacation time as of the
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Severance Date according to Company policy. No other payments will be made or
benefits provided by the Company.
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 written notice by the Company 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, that 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 a Change in Control as described in
Section XI.
(3) Termination for "Good Reason" means either (i) the
Executive is removed or not elected, reelected or otherwise continued in the
office of the Company or any of its subsidiaries which he held immediately prior
to his removal or failure to be elected, reelected, or otherwise continued in
that office, (ii) 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; (iii) 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, not to
exceed 15%; (iv) the Company reduces the potential earnings of the Executive
under any performance-based bonus or incentive plan of the Company that remains
in effect; (v) without his written consent, the Company compels that the
Executive's employment be based other than at Tampa, Florida, whether the change
in the location of Executive's principal place of work is mandated by the
Company or required to avoid continual commuting to perform corporate duties and
responsibilities assigned to him by the Company; (vi) any successor in interest
of the Company or all or substantially all 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
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all of the duties and obligations of the Company hereunder pursuant to Section
XIV hereof, (vii) the Company breaches any of the provisions of this Agreement,
any stock option or other agreement with Executive, (viii) the Company fails to
furnish to Executive during the Employment Period furnished office space, a
full-time secretary who is acceptable to him and such other services, amenities,
facilities, and clerical support as are adequate for the performance of his
duties and commensurate with his positions with the Company; (ix) the Company
assigns to Executive or asks him to perform, without his written approval, any
employment duties that are materially inconsistent with those customarily
associated with the responsibilities of an executive vice president and chief
financial officer of a publicly held Corporation.
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 for five (5) years
thereafter, 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 or to comply with a request by a court or a governmental authority to be
disclosed (pursuant to a subpoena or otherwise), but only if Executive promptly
notifies the Company of the required or requested disclosure so the Company may
seek a protective order to prevent disclosure of the information, and except for
information that (i) has been disclosed by the Company to anyone else on a
non-confidential basis, (ii) is generally available to the public other than as
a result of a disclosure by Executive or any person to whom Executive disclosed
the information in violation of this Agreement or (iii) is available to
Executive on a non- confidential basis from a source other than the Company, a
person acting on behalf of the Company, or a person who has a legal duty (by
agreement or otherwise) to keep the information confidential, so long as
Executive does not provide to anyone (by access or photocopy) any document that
was obtained from the Company. The Executive will not make use of this type of
information for his own purposes or for the benefit of any person
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or organization other than the Company. The Executive will also use commercially
reasonable 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, subject to the exceptions provided
above.
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 for the
purpose of diverting, soliciting, or accepting any business in competition with
the Company or discuss with any employee of the Company information or operation
of any business intended to compete with the Company for the purpose of
terminating her or his employment to work for a competitor of the Company. For
the purposes of the Agreement, proprietary interest means legal or equitable
ownership, whether 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 to work for a competitor of the Company or solicit or encourage any
such employee to leave the employ of the Company for the purpose of working for
a competitor 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, except as otherwise required by law. The Executive hereby acknowledge
the necessity of protection against the competition of, and certain
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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 a breach by the Company of any material obligations under this
Agreement that is to be performed upon or after termination of Executive's
employment with the Company or if Executive's employment under this Agreement is
terminated by the Company Without Cause or by Executive for Good Reason (other
than pursuant to section XI).
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. In addition, the Company shall enter into a
separate indemnity agreement with Executive in substantially the form attached
as Appendix D to this Agreement.
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 With Cause or
Without Cause or Executive elects to resign for Good Reason, or within the six
(6) month period following such event Executive elects to resign with or without
Good Reason, the Company shall pay to the Executive within ten days after the
termination of his employment with the Company the amounts described in (1),
(2), and (3) below.
(1) The Company shall pay to the Executive in a lump sum upon
such termination or resignation an amount equal to 150% of the sum of his Base
Salary on the date of resignation or termination (or, if higher, on the date of
the Change in Control) plus 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 pursuant to the Plan prior to his resignation
or termination will become fully vested and immediately exercisable upon a
Change in Control whether or not the Executive is terminated or resigns and
shall remain exercisable for one year following the Change in Control. The
benefits and
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perquisites described in this Agreement as in effect at the date of resignation
or termination of employment (or at the date of the Change in Control, if the
benefits and perquisites are reduced thereafter) will also be continued for
thirty-six (36) months from the effective date of Executive's termination or
resignation pursuant to a Change of Control. Executive shall also have COBRA
continuation rights for healthcare coverage, beginning after the end of such
thirty-six (36) month period and the Company shall pay all premiums or other
costs of healthcare coverage for Executive and his dependents during the COBRA
continuation period. The obligation of Company to pay for Executive's COBRA
healthcare coverage costs 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. The 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 resignation
or 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 50% of the sum of
his Base Salary on the date of resignation or termination (or, if higher, on the
date of the Change in Control) 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 resignation
or termination, in exchange for Executive agreeing not to solicit any of the
then current customers or employees of the Company on behalf of any competitor
of the Company for a period of twelve (12) months following his resignation or
termination of employment, a lump sum payment equal to 100% of the sum of his
Base Salary on the date of resignation or termination (or, if higher, on the
date of the Change in Control) 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.
B. Excise Tax Indemnification.
If the Internal Revenue Service asserts, or if Executive or the Company
is advised in writing by a "Big Five" accounting firm, that any payment in the
nature of compensation to, or for the benefit of, Executive from the Company (or
any successor in interest) constitutes an "excess parachute payment" under
section 280G of the Code, whether paid pursuant to this Agreement or any other
agreement, and including property transfers pursuant to stock options and other
employee benefits that vest upon a change in the ownership of effective control
of the Company (collectively, the "Excess Parachute Payments") the Company shall
pay to Executive, on demand, a cash sum sufficient (on a grossed-up basis) to
indemnify Executive and hold him harmless from the following (the "Tax Indemnity
Payment"):
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(i) The amount of excise tax under section 4999 of the Code on
the entire amount of the Excess Parachute Payments and all Tax
Indemnity Payments to Executive pursuant to this subsection B:
(ii) The amount of all estimated local, state, and federal
income taxes on all Tax Indemnity Payments to Executive
pursuant to this subsection B (determined in each case at the
highest marginal tax rate);
(iii) The amount of any fines, penalties, or interest that
have been or potentially will be, assessed in respect of any
excise or income tax described in the preceding clauses (a) or
(b);
so the amounts of Excess Parachute Payments received by Executive will not be
diminished by an excise tax imposed under section 4999 of the Code or by any
local, state, or federal income tax payable in respect of the Tax Indemnity
Payments received by Executive pursuant to this subsection B.
C. 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.
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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, except for the Indemnity
Agreement between Executive and the Company that is dated the same date as this
Agreement, the Agreement dated December 8, 1995, between Executive and Xxxxxxx
Enterprises, Inc. ("Xxxxxxx") (which provides for indemnification of Executive),
Section 3.12 of the Agreement and Plan of Merger dated December 26, 1994, as
amended May 19, 1995 between Xxxxxxx and Pharmacy Management Services, Inc,
(which provides for indemnification of Executive), and the Change in Control
Severance Agreement dated as of December 5, 1995, between Executive and Xxxxxxx,
as amended by the First Amendment to Change in Control Severance Agreement
between Executive and Xxxxxxx.
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 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.
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SECTION XVI
GOVERNING LAW; ARBITRATION
This Agreement has been executed and delivered in the State of Florida
and its validity, interpretation, performance and enforcement shall be governed
by the laws of that state, excluding the laws of those jurisdictions pertaining
to resolution of conflicts with laws of other jurisdictions. If any dispute
arises between Executive and the Company with respect to this Agreement, either
party may elect (but is not obligated) to submit the dispute to arbitration
before a panel of arbitrators in accordance with the Florida Arbitration Code by
giving the other party a written notice of arbitration in accordance with
section XVII of this Agreement. If a party elects to arbitrate a dispute before
a lawsuit is filed with respect to the subject matter of the dispute,
arbitration will be the sole and exclusive method of resolving the dispute, the
other party must arbitrate the dispute, and each party will be barred from
filing a lawsuit concerning the subject matter of the arbitration, except to
obtain an equitable remedy. A party's right to submit a dispute to arbitration
does not restrict its right to institute litigation to obtain any legal or
equitable remedy. The filing of a lawsuit by either party before the other party
has elected that a dispute be submitted to arbitration will bar and preclude
both Executive and the Company from submitting the subject matter of the lawsuit
to arbitration while the lawsuit is pending.
The arbitration panel will consist of one arbitrator who is mutually
acceptable to Executive and the Company, or if they cannot agree on a single
arbitrator within ten days after the effective date of the written demand for
arbitration, three arbitrators, with one arbitrator selected by the Company, the
second selected by Executive, and the third, neutral arbitrator selected by
agreement of the first two arbitrators. If the arbitration panel will consist of
three arbitrators, each party shall select an arbitrator and notify the other
party of the selection within 15 days after the effective date of the notice of
arbitration and the two arbitrators selected by the parties shall select the
third arbitrator within 30 days after the effective date of the notice of
arbitration. A party who fails to select an arbitrator within the prescribed
15-day period waives the right to select an arbitrator or to have an additional,
neutral arbitrator selected by the arbitrator selected by the other party, and
the arbitrator chosen by the other party will constitute the "arbitration panel"
for purposes of the Agreement.
Every arbitrator must be independent (not a relative of Executive or an
officer, director, employee, or shareholder of the Company or any subsidiary)
without any economic or financial interest of any kind in the outcome of the
arbitration. Each arbitrator's conduct will be governed by the Code of Ethics
for Arbitrators in Commercial Disputes (1985) that has been approved and
recommended by the American Bar Association and the America Arbitration
Association.
Within 120 days after the effective date of the notice arbitration, the
arbitration panel shall convene a hearing for the dispute to be held on such
date and at such time and place in Tampa, Florida, as the arbitration panel
designates upon 60 days' advance notice to Executive and the Company. The
arbitration panel shall render its decision within 30 days
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after the conclusion of the hearing. The decision of the arbitration panel will
be binding and conclusive as to Executive and the Company and, upon the pleading
of either party, any court having jurisdiction may enter a judgment of any award
rendered in the arbitration, which may include an award of damages. The
arbitration panel shall hear and decide the dispute based on the evidence
produced, notwithstanding the failure or refusal to appear by a party who has
been duly notified of the date, time and place of the hearing.
The parties to this Agreement (a) consent to the personal jurisdiction
of the state and federal courts having jurisdiction over Hillsborough County,
Florida, (b) stipulate that the proper, exclusive, and convenient venue for
every legal proceeding arising out of Executive's employment with the Company is
Hillsborough County, Florida, in the case of state trial court proceedings, and
the Middle District of Florida, Tampa Division, in the case of federal district
court proceedings, and (c) waive any defense, whether asserted by motion or
pleading, that Hillsborough County, Florida, or the Middle District of Florida,
Tampa Division, is an improper or inconvenient venue. In an mediation,
arbitration or legal proceeding arising out of Executive's employment with the
Company, the losing party shall reimburse the prevailing party, on demand, for
all costs incurred by the prevailing party in enforcing, defending, or
prosecuting the Agreement or any claim arising out of Executive's employment
with the Company.
SECTION XVII
NOTICES
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made and effective on the
fifth business day after mailing, if delivered by first-class postage prepaid,
registered United States mail, with return receipt requested, or when received,
if delivered 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 in accordance with the notice provisions of this Section
XVII, with a copy to Xxxx Manner, Xxxxxxx, Xxxxxx, Xxxx, Xxxxxxx & Manner, P.C.,
1800 First American Center, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000; or
(b) If to the Executive, at
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or such other address as may have been furnished to the Company by the Executive
in writing in accordance with the notice provisions of the Section XVII.
SECTION XVIII
BINDING AGREEMENT
This Agreement shall be binding on the parties' successors, heirs and
assigns.
SECTION XIX
PAYMENTS AFTER DEFAULT
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 addition, if the Company fails to pay to Executive when due any
compensation or other cash sum provided in this Agreement, the Company shall pay
to Executive, on demand, interest on any portion of the unpaid amount that is
not paid to Executive when due, from the date when due until paid in full, at
the annual rate then provided by Florida law for the payment of interest on
judgments generally (the current annual rate of interest on judgments prescribed
by section 55.03, Florida Statutes, is 10%).
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY
PHARMERICA, INC.
By:
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Title:
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EXECUTIVE
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