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Exhibit 10.27
 
PHARMERICA CORPORATION

SUMMARY OF

2015 LONG-TERM INCENTIVE PROGRAM

2015 Long-Term Incentive Program

On March 19, 2015, the Board of Directors of the Corporation, upon
recommendation of the Compensation Committee, adopted the 2015 Long-Term
Incentive Program (the “LTIP”) under the Omnibus Plan to provide restricted
stock units and performance share unit awards to the Corporation’s executives
and certain other officers and employees based on pre-established performance
objectives and goals. The LTIP advances the Corporation’s 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, 2015 and ends on
December 31, 2017.

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 Committee’s 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
Corporation’s principal executive officer, principal financial officer, and
other fiscal 2014 Named Executive Officers as follows:

Executive
 
Title
 
Bonus Target
         
Gregory S. Weishar
 
Chief Executive Officer
 
250% of base salary
         
David Froesel
 
Executive Vice President, Chief Financial Officer and Treasurer
 
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, Chief Compliance Officer and Secretary
 
138% of base salary
         
Berard Tomassetti
 
Senior Vice President, Chief Accounting Officer
 
60% of base salary

 

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The Compensation Committee established the 2015 LTIP awards for the fiscal 2014
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 19, 2015, the Board of Directors, upon recommendation of the
Compensation Committee, awarded restricted stock units under the LTIP for the
Corporation’s principal executive officer, principal financial officer, and
other fiscal 2014 Named Executive Officers as follows:
 
 
 
Executive
 
 
Title
 
Restricted Stock
Units
(50% of Bonus
Target)
 
Gregory S. Weishar
Chief Executive Officer
   
38,600
             
David Froesel
Executive Vice President, Chief Financial Officer and Treasurer
   
15,709
             
Robert McKay
Senior Vice President of Purchasing and Trade Relations
   
6,225
             
Thomas Caneris
Senior Vice President, General Counsel, Compliance Officer and Secretary
   
8,126
             
Berard Tomassetti
Senior Vice President, Chief Accounting Officer
   
2,363
 

Performance Criteria. The LTIP performance criteria for the performance share
units are tied to company performance. With respect to all Named Executive
Officers other than Berard Tomassetti, company performance will be measured for
purposes of the performance share units by comparing the Corporation’s Adjusted
EBITDA at the end of the performance cycle to a target end-of-performance cycle
Adjusted EBITDA set by the Compensation Committee and by comparing the
Corporation’s adjusted diluted earnings per share (“Adjusted Diluted EPS”) at
the end of the performance cycle to a target end-of-performance cycle Adjusted
Diluted EPS set by the Compensation Committee. With respect to Berard
Tomassetti, company performance will be measured for purposes of the performance
share units by comparing the Corporation’s Adjusted EBITDA at the end of the
performance cycle to a target end-of-performance cycle Adjusted EBITDA set by
the Compensation Committee. With respect to all Named Executive Officers other
than Berard Tomassetti, 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.  With respect to Berard Tomassetti,
the Adjusted EBITDA target accounts for 100% of his performance target.

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:
 

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Performance Level
 
Payout Level
     
< 85.0% of Performance Target
 
0.0% of Award Target
     
85.0% of Performance Target
 
50.0% of Award Target
     
91.0% of Performance Target
 
70.0% of Award Target
     
100.0% of Performance Target
 
100.0% of Award Target
     
109.0% of Performance Target
 
130.0% of Award Target
     
115.0% of Performance Target
 
150.0% of Award Target
     
> 115.0% 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:
 

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Performance Level
 
Payout Level
     
< 85.0% of Performance Target
 
0.0% of Award Target
     
85.0% of Performance Target
 
50.0% of Award Target
     
91.0% of Performance Target
 
70.0% of Award Target
     
100.0% of Performance Target
 
100.0% of Award Target
     
109.0% of Performance Target
 
130.0% of Award Target
     
115.0% of Performance Target
 
150.0% of Award Target
     
> 115.0% of Performance Target
 
150.0% of Award Target

Award Agreements. Awards of restricted stock units and performance share units
are made under the LTIP pursuant 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 vest in three equal annual installments beginning on the first
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 pursuant to the 2015
LTIP and shall be deemed to have been granted as of March 19, 2015.

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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.
 
 

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