EXHIBIT 10-V

 

Summary of Certain Director and Executive Compensation

 

Named Executive Officer Compensation

 

2004 Bonuses

 

On March 16, 2005, the Compensation Committee of the Board of Directors of
Priority Healthcare Corporation (the “Company”) approved payment of cash bonus
awards for 2004 in the following amounts to the Company’s Chief Executive
Officer and four other most highly compensated executive officers (the “Named
Executive Officers”):

 

Name and Principal Position

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   Bonus

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Steven D. Cosler, President and Chief Executive Officer

   $ 282,792

Kim K. Rondeau, Executive Vice President—Specialty Pharmacy Sales and Marketing

   $ 81,616

Tracy Nolan, Executive Vice President and Chief Operating Officer

   $ 88,594

Rebecca M. Shanahan, Executive Vice President—Administration, Secretary and
General Counsel

   $ 87,900

Guy F. Bryant, Executive Vice President— Distribution Services

   $ 72,708

 

2005 Salaries and Benefits

 

The following are the current base salary levels of the Company’s Named
Executive Officers:

 

Name

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   Salary

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Steven D. Cosler, President and Chief Executive Officer

   $ 525,000

Kim K. Rondeau, Executive Vice President—Specialty Pharmacy Sales and Marketing

   $ 325,000

 

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Tracy Nolan, Executive Vice President and Chief Operating Officer

   $ 300,000

Rebecca M. Shanahan, Executive Vice President—Administration, Secretary and
General Counsel

   $ 255,000

Guy F. Bryant, Executive Vice President—Distribution Services

   $ 257,000

 

Each of the Named Executive Officers has an employment agreement with the
Company. A copy of each such employment agreement has been filed as an exhibit
to the Company’s reports under the Securities Exchange Act of 1934, as amended,
and is incorporated herein by reference.

 

The Named Executive Officers are also eligible to receive awards under the
Company’s 1997 Stock Option and Incentive Plan.

 

Each of the Named Executive Officers is also eligible to participate in the
Company’s qualified profit sharing plan and non-qualified deferred compensation
plan. The Company also contributes amounts to premiums under group life
insurance that covers the Named Executive Officers.

 

2005 Bonus Criteria

 

Each of the Named Executive Officers of the Company is also eligible to receive
an annual bonus pursuant to the Company’s 2003 Cash Bonus Performance Plan for
Executives (the “Plan”). The Compensation Committee has established targeted
levels of net sales and net earnings amounts for the Company for the 2005 fiscal
year, the achievement of which will trigger bonus payments to the Named
Executive Officers under the Plan. In addition, the Compensation Committee has
established individual bonus criteria for each of the Named Executive Officers
that include criteria relating to the areas for which he or she is responsible,
such as revenue and profitability, selling, general and administrative expenses,
EBITDA, new programs, customer satisfaction, reduction of employee attrition,
innovation, corporate development and systems and processes. The Named Executive
Officers may receive bonus amounts pursuant to the criteria under the Plan and
the additional individual criteria, up to the following percentage ranges of
their salaries: Mr. Cosler, 50% to 150%; and Ms. Rondeau, Mr. Nolan, Ms.
Shanahan and Mr. Bryant, 30% to 90%. Payment of bonuses, if any, is normally
made in March after the end of the performance period during which bonuses were
earned. Bonuses normally will be paid in cash in a single lump sum, subject to
payroll taxes and tax withholdings.

 

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Director Compensation

 

The Company pays each member of the Board of Directors who is an “independent
director,” as such term is defined by the listing rules of the Nasdaq Stock
Market, as in effect from time to time, the following: (i) an annual retainer of
$15,000 payable as follows: (A) one-half, or $7,500, paid in twelve equal
monthly installments of $625 each, and (B) one-half, or $7,500, paid in the form
of shares of Class B Common Stock granted under the Company’s Outside Directors
Stock Plan (the “Directors Plan”) valued at 100% of the fair market value of
such shares on the date of grant, with the date of grant being the date of the
annual meeting of shareholders of the Company held each year; and (ii) $1,000
for attending (in person or by telephone) any Board meeting, and $500 for
attending (in person or by telephone) any meeting of a committee of the Board of
Directors. All directors are reimbursed for all reasonable out-of-pocket
expenses incurred in connection with attendance at meetings. The Company also
pays approximately $96,000 per year to Mr. William E. Bindley for services that
he provides in his capacity as Chairman of the Board. Mr. Bindley does not
participate in any benefit plans of the Company, other than the Company’s health
insurance plan. The Company also pays approximately $100,000 per year to Mr.
Robert L. Myers for services he provides in his capacity as Vice Chairman of the
Board. Mr. Myers also participates in the Company’s group life insurance and
health insurance plans.

 

In addition, pursuant to the Directors Plan, each Eligible Director (as defined
therein) is automatically granted an option to purchase 4,000 shares of Class B
Common Stock on June 1 of each year, subject to future increases or decreases by
the Compensation Committee in its discretion. The option exercise price per
share is equal to the fair market value of one share of Class B Common Stock on
the date of grant. Each option becomes exercisable six months following the date
of grant and expires ten years following the date of grant.

 

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