Exhibit 10.34


 


PHARMERICA CORPORATION







SUMMARY OF







2016 LONG-TERM INCENTIVE PROGRAM







2016 Long-Term Incentive Program







On March 17, 2016, the Board of Directors of the Corporation, upon recommendation of the Compensation Committee, adopted the 2016 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, 2016 and ends on December 31, 2018.







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 2015 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


	 	 	 	 	 
	
Suresh Vishnubhatia

	
 

	
Executive Vice President of Long Term Care Operations

	
 

	
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 and Secretary

	
 

	
138% of base salary





 


The Compensation Committee established the 2016 LTIP awards for the 2015 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 17, 2016, 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 2015 Named Executive Officers as follows:







 


	
 


 


Executive

	 	
 


 


Title

	
 

	
Restricted Stock


Units


(50% of Bonus


Target)

	
 


	
Gregory S. Weishar

	 	
Chief Executive Officer

	
 

	
 

	
57,841

	
 


	
 

	 	
 

	
 

	
 

	
 

	
 


	
David Froesel

	 	
Executive Vice President, Chief Financial Officer and Treasurer

	
 

	
 

	
22,324

	
 


	
 

	 	
 

	
 

	
 

	
 

	
 


	
Suresh Vishnubhatia

	 	
Executive Vice President of Long Term Care Operations

	
 

	
 

	
16,086

	
 


	
 

	 	
 

	
 

	
 

	
 

	
 


	
Robert McKay

	 	
Senior Vice President of Purchasing and Trade Relations

	
 

	
 

	
8,846

	
 


	
 

	 	
 

	
 

	
 

	
 

	
 


	
Thomas Caneris

	 	
Senior Vice President, General Counsel and Secretary

	
 

	
 

	
11,548

	
 










Performance Criteria. The LTIP performance criteria for the performance share units are tied to company performance. With respect to all Named Executive Officers, company performance will be measured for purposes of the performance share units by comparing the Corporation's annual earnings before interest, taxes, depreciation and amortization, and other amounts as reported in the Corporation's disclosures in its Form 10-K as of and for the year ended December 31, 2016 ("Adjusted EBITDA"), 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 all Named Executive Officers, 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.







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:
















	
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:


 


	
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 2016 LTIP and shall be deemed to have been granted as of March 17, 2016.







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.