Document:

EXHIBIT 10.12

 

Sedley Place, 4th Floor

361 Oxford Street

London

W1C 2JL

XXXX

Dear X

The Alliance Boots 2012 Long Term Incentive Plan (the “Plan”)

I am pleased to provide you with details of an award (the “Award”) granted to you today (the “Date of Grant”) under the Plan. The Plan has been designed to reward participants for the continued performance of the Alliance Boots Group, for the delivery of synergies and to align participants with Walgreens through the award of Walgreen shares as part of the Plan.

Grant of Award

The Award comprises three separate parts:

	·	the Group Target Part which is a cash award and has a maximum value of £X;

	·	the Synergy Target Part, which is a cash award and has a maximum value of £X; and

	·	the Share Part which is an award of X Walgreen shares.

Based on the current Walgreen share price of $50 per share, the Award has an aggregate value at the Date of Grant of £X.

The effective start date of the Plan is 1 August 2012 (The “Effective Date of the Plan”). Each Part of the Award is described more fully below.

Group Target Part

The Group Target Part of your Award is subject to a performance condition based on the budget trading profit performance of the Group excluding trading profit from the joint synergy programme with Walgreens (the “TP Target”). The performance measurement periods are the respective years ending in March 2013, March 2014, March 2015 and the period from April 2015 to July 2015 (each being a “Performance Period”).

At the end of each Performance Period the Remuneration Committee will determine whether the TP Target has been achieved for the Executive Directors of Alliance Boots GmbH, and the same performance measure will apply to the other participants. The table below sets out the portion of the Group Target Part of the Award for each Performance Period:

 

	
Performance Periods

	
% of Group Target Part vesting

if TP Target achieved

	
1 April 2012 to 31 March 2013

	
22.3%

	
1 April 2013 to 31 March 2014

	
33.3%

	
1 April 2014 to 31 March 2015

	
33.3%

	
1 April 2015 to 31 July 2015

	
11.1%

	                                	
100.0%

 

If the TP Target is not met for any Performance Period then the amount of the Group Target Part of your Award for that Performance Period is nil.

If the merger with Walgreens is completed, two thirds of the total amount vested will be paid immediately, with the remaining third paid one year later if you are still employed by the merged group. If the merger takes place during a Performance Period then the portion vesting will be pro rated. If the merger does not take place by the end of the Performance Periods, then the amount vested will be immediately paid in full.

Any payment due to you in respect of the Group Target Part of your Award will be made to you, net of applicable income taxes and social security contributions.

Synergy Target Part

The Synergy Target Part of your Award is subject to a performance condition based on a synergy target (the “Synergy Target”). The performance measurement periods are the respective years ending in August 2013, August 2014, August 2015 (each being a “Performance Period”).

At the end of each Performance Period it will be determined whether the Synergy Target has been achieved. The table below sets out the portion of the Synergy Target Part of the Award for each Performance Period:

	
Performance Periods

	
% of Synergy Target Part vesting if Synergy Target achieved

	
1 August 2012 to 31 August 2013

	
33.3%

	
1 September 2013 to 31 August 2014

	
33.3%

	
1 September 2014 to 31 August 2015

	
33.3%

	                           	
100.0%

If the Synergy Target is not met for any Performance Period then the amount of the Synergy Target Part of your Award for that Performance Period is nil.

If the merger with Walgreens is completed, two thirds of the total amount vested will be paid immediately, with the remaining third paid one year later if you are still employed by the merged group. If the merger takes place during a Performance Period then the portion vesting will be pro rated. If the merger does not take place by the end of the Performance Periods, then the amounted vested will be immediately paid in full.

Any payment due to you in respect of the Synergy Target Part of your Award will be made to you, net of applicable income taxes and social security contributions.

Share Part

There is no performance condition associated with the Share Part of your Award. It will vest if the merger with Walgreens is completed and you remain in employment with the Alliance Boots Group (and are not working your notice or are on garden leave from your employer) on the date of completion of the merger with Walgreens.

The transfer of any shares to you under the Share Part of your Award will be made under arrangements that ensure that any applicable income tax and social security contributions that arise in connection with the transfer will be withheld.

Cessation of Employment

If you cease to be employed for any reason other than those mentioned below (or you are working a notice period or are on garden leave from your employer) before the award vests, the Share Part, the Group Target Part and the Synergy Target Part of your Award will lapse.

 

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If you cease to be employed by the Group due to death, disability, retirement, redundancy, or the company or business in which your work ceasing to be part of the Group, the Group Target Part and the Synergy Target Part may vest subject to the extent determined by the Board as defined in the rules of the Plan.

Plan Rules

Your Award is made subject to the terms of the Plan and in the event of any discrepancy between the content of this letter and the terms of the Plan, the terms of the Plan will prevail.

A copy of the rules of the Plan is available from Frank Standish. Please e-mail a request to frank.standish@allianceboots.com if you wish to receive a copy.

This Award is personal to you and it must be kept confidential. Failure to keep details of this Award confidential will result in its forfeiture.

Taxation

A general summary of the tax position for this award in your jurisdiction is enclosed.

The summary is intended only as a general guide to the taxation position in your jurisdiction and does not constitute tax or legal advice. It has been prepared on the basis of current legislation and revenue practice as at the date of this letter, which may change in the future. If you are in any doubt as to your personal tax position or as to how the legislation works in relation to your own particular circumstances, you should contact your personal tax adviser.

If you have any questions about the Plan or the award granted to you under it, please contact Frank Standish on XXXXX or email XXXXXX.

Yours sincerely,

	
Stefano Pessina

	
Dominic Murphy

For and on behalf of Alliance Boots

3EXHIBIT 10.13

 

Senior Management Annual Incentive Plan

2014/2015

Bonus Scheme Rules

(Group & Division)

 

	1.	ELIGIBILITY

Country

Eligibility for a business/country senior management incentive plan should include the Managing Director/Country Manager plus their immediate management team as approved by the Alliance Healthcare Chief Executive in conjunction with the Divisional HR Director.

Division

Eligibility for a division senior management incentive plan should include the division head’s immediate management team as approved by the Alliance Healthcare Chief Executive in conjunction with the Divisional HR Director.

Group

Eligibility for participating in the plans for Group employees is restricted to Senior Group Employees plus other employees selected by the relevant Group Executive Director in conjunction with the Group HR Director on a discretionary basis.

	2.	BONUS PLAN DESIGN

Bonuses will be calculated using the following formula and weight factors:

	
Total Bonus =

	
Business performance bonus

	
60% Weight

	 	
+ Individual performance bonus

	
40% Weight

	3.	PERFORMANCE MEASURES

The performance measures used reflect the specific priorities for this performance year and are also a selection of particular and relevant organisational unit measures.

The primary measures of business performance will be based on key criteria for each business, as defined in the annual budget.

For Business Performance objectives a separate and unit specific table is provided for each relevant organisational unit.

Individual Performance Rating from 5 to 1. An individual performance rating of 1 will result in no bonus. The ratings are as follows: 1 = Did not meet expectations on the most important objectives, 2 = Met expectations on most objectives, 3 = Met the objectives, 4 = Met the objectives and exceeded expectations on some objectives, 5 = Significantly exceeded expectations on the objectives.

The definitions will be used consistently across the business and are as per the group reporting system Cognos.

 

Individual performance will be based on the Alliance Boots Senior Management appraisal process and rating.

	4.	SETTING TARGETED PAYMENTS

The aim of an annual incentive plan is to deliver a competitive bonus payment, compared to similar roles within the local market, for the achievement of a challenging performance target. It will be assumed that all approved targets include an appropriate degree of stretch. For details please see respective unit specific bonus table.

	5.	MINIMUM THRESHOLD

Bonus payments in respect of each performance measure, either business or individual, should commence to accrue once an acceptable level of performance has been achieved. For example:

		-	No bonus will be paid to individuals if the business performance for those businesses shown on the bonus schedule fail to reach the minimum threshold for bonus payments.

		-	No bonus will be paid to individuals with a performance rating of 1.

		-	Where an individual’s performance rating is 2, the Managing Director/Country Manager will have the discretion to recommend that the relevant business bonus should also be reduced by up to 50%.

		-	Where an individual’s performance rating is 2, the Divisional Executive Director will have the discretion to recommend that the relevant divisional bonus should also be reduced by up to 50%.

		-	Where an individual’s performance rating is 2, the Group Executive Director will have the discretion to recommend that the relevant group bonus should also be reduced by up to 50%.

	6.	BONUSES AND COMPANY PENSION SCHEMES

Annual bonuses will not be pensionable.

	7.	REVIEW AND APPROVAL PROCESS

Plans for each organisational unit will be approved by the relevant Executive Director in agreement with the Group Finance Director and the HR Director.

	8.	ADMINISTRATION AND CONDITIONS FOR PAYMENT

		·	The Plan will run for an accounting year (01.04.14-31.3.15). The Plan is discretionary and the Company reserves the right to withdraw or vary the Plan at the end of any review period. Participation in the Plan in any one year will be at the sole discretion of the relevant Executive Director.

 

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		·	Any payment under the Plan will be paid with the June payroll, after the results for the year have been confirmed.

		·	At the discretion of the Executive Director new employees commencing during the year will be eligible to join the Plan on a pro-rata basis for whole months worked, provided they have commenced employment prior to 1 January 2015.

		·	Individuals transferring to positions which are eligible for the Plan, or moving to positions covered by a different country or division or group scheme, will be eligible for a reward for the relevant position(s) on a pro-rata basis for whole months worked, provided they have worked for at least three months in the role. The subsequent reward will be based on the appropriate salary for each role carried out. If they have worked for less than three months in the new role, the full year’s award will be based on their previous role and salary.

		·	Personal Bonuses will be prorated for any periods of paid or unpaid leave of absence, such as Parental Leave, Maternity Leave, Time off for family emergencies, sickness etc.

		·	Participants leaving the Group’s employment, for any reason, before payment falls due, or employees under notice at that time, will forfeit any right to a bonus payment from the Plan. However, bonuses for members retiring or leaving the Group early due to ill-health retirement will be paid at the discretion of the Division Executive Director.

		·	The relevant Executive Director reserves the right to exercise discretion in interpreting the rules of the Plan.

 

 

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