Document:

EX-10.8

 

Exhibit 10.8

Management Team

Performance Incentive Plan and

Plan Summary

Effective as of January 1, 2008

 

 

1. Introduction

Congratulations on being designated a participant in the Performance Incentive Plan (“PIP,” or the
“Plan”), the incentive-based cash compensation program for the management team of Henry Schein Inc.
(the “Company”). This program was approved by the Compensation Committee of the Board of Directors
of the Company (the “Compensation Committee”) on February 20, 2008, beginning with the
Company’s current fiscal year. This document serves as both the Plan and the summary of the Plan.

Plan participants include the Company’s management team of directors and vice presidents who have
been designated by the Company to participate in the Plan (the “Participant”). The Plan has been
designed to align all Participants in a concerted effort to drive our business toward achieving
common objectives that benefit the Company as a whole, the management team and each Participant.
The Plan is specifically designed to:

	 	•	 	Foster achievement of specific corporate, business unit and individual performance goals
on an annual basis (“Goals”);
	 
	 	•	 	Provide each Participant with an annual cash bonus opportunity based on the achievement
of the Goals (“PIP Award”);
	 
	 	•	 	Recognize and reward Participants for individual and group team achievements;

The Goals will be set forth in writing each year, and you will receive documentation regarding your
annual Goals each year that you are a Participant. Annual Goals may be modified from time to time,
and any modification will also be set forth in writing. For purposes of the Plan, performance and
achievement of Goals will be measured each calendar year or any other period specified by the
Compensation Committee.

The PIP Award, in conjunction with a Participant’s base compensation, is intended to provide
Participants with competitive total annual cash compensation for comparable positions at companies
in our industry and at other organizations of our size.

The Compensation Committee or the Chief Executive Officer of the Company (the “CEO”) (solely with
respect to Participants other than executive officers) has the sole authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the PIP and to construe and
interpret the terms and provisions of the PIP and any PIP Award and make all other determinations
and take any other action necessary or appropriate for the administration of the Plan, including,
without limitation, correcting any defect, supplying any omission or reconciling any inconsistency
in the Plan and any PIP Award in the manner and to the extent it deems necessary to carry the Plan
into effect.

Any decision, interpretation or other action made or taken by or at the direction of the
Compensation Committee or the CEO (solely with respect to Participants other than executive
officers) will be final, binding and conclusive on Henry Schein and all Participants and their
respective heirs, executors, administrators, successors and assigns. The CEO is authorized to act on behalf of the Compensation
Committee under the Plan or to exercise any discretion that the Compensation Committee has under

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the Plan, provided that such act or exercise of discretion by the CEO may not apply to Participants
who are executive officers.

The Compensation Committee may, in its sole discretion, delegate any of its responsibilities under
the PIP (including administrative tasks) to the extent permitted by applicable law. The
Compensation Committee may rely on information, and consider recommendations, provided by the Board
of Directors of the Company or members of Company management.

2. Eligibility

The CEO annually determines eligibility for participation in the Plan, except that the Compensation
Committee makes this determination with respect to executive officers. Participation is intended
to be ongoing. However, changes in assignments may result in a Participant’s being ineligible to
participate in the Plan. Participation in one year does not guaranty participation in another
year. Team Schein Members will be notified at the beginning of each year regarding their
eligibility to participate in the Plan and will be notified during the year if that status changes.

3. PIP Awards

PIP Awards are based on:

	 	•	 	The Company’s annual profitability, specifically measured against earnings per share
(“EPS”), net income or other predetermined profitability Goals;
	 
	 	•	 	The Participant’s business unit or functional area’s level of achievement in financial
and other performance Goals.
	 
	 	•	 	The Participant’s achievement of his or her individual MBO Goals.

4. Individual Performance Goals

A Participant’s individual performance Goals are classified into three categories:

	 	•	 	Company financial performance
	 
	 	•	 	Functional area financial performance
	 
	 	•	 	MBO performance

The Company Financial Performance Goals are based on annual earnings per share (EPS) from
continuing operations. The Functional Financial Performance Goal and the MBO Performance Goal
evaluation and analysis are conducted annually, unless otherwise specified. The PIP Award payouts
corresponding to levels of achievement of Company Financial Performance Goals are determined by the
Compensation Committee in its sole discretion on an annual basis. The PIP Award payouts for
meeting or exceeding Functional Area Financial Goals and each Participant’s individualized MBO
Performance Goals are also determined by the Compensation Committee in its sole discretion on an
annual basis.

Each Participant’s Goals will be determined at the start of each year by their Manager and then
reviewed, as applicable, by the Executive Management Committee (EMC) Member, CEO or the
Compensation Committee. There will be an ongoing review of these Goals. Any changes during the
year must be approved by the Manager and, if appropriate, by the CEO. Each Participant and his or
her Manager are encouraged to have performance evaluations during the year to monitor progress and,
if necessary, to modify Goals (with the approval of the CEO and/or the Compensation Committee, if
appropriate) for the balance of the year.

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The following table illustrates performance Goals for different types of management positions.
This table is intended to provide guidelines for development of a specific performance plan for
each Participant based upon individual positions, roles and other factors. Final weighting of
performance Goals for each Participant will be determined by the Participant’s Manager and, if
appropriate, approved by the CEO and/or the Compensation Committee.

Performance
Goals Based on
Position and Role

	 	 	 	 	 	 	 
	 	 	Range of Performance Goal Categories
	 	 	Functional	 	Company	 	 
	 	 	Financial	 	Financial	 	MBO
	Management Segment	 	Performance	 	Performance	 	Performance
	 
	Corporate

Management Participants

(e.g. Finance, Supply Chain TSM’s, etc)

	 	10% — 40%
	 	15% — 40%
	 	30% — 50%
	Major Business

Unit Participants

(e.g. Dental Group, Medical Group,

Veterinary Group TSM’s, etc.)

	 	55% — 65%
	 	15% — 35%
	 	10% — 25%
	Supporting Corporate Function

Participants (e.g. Legal Department,

Human Resources Department TSM’s, etc.)

	 	10% — 20%
	 	15% — 35%
	 	40% — 60%

5. Company Financial Performance Goals

The Company Financial Performance Goals are determined by the Compensation Committee in its sole
discretion with input from the Executive Management team. Each year, the Compensation Committee
may, as it decides in its sole discretion, make adjustments to the Company Financial Performance
Goals in accordance with Section 8 below.

In determining whether the Company Financial Performance Goals have been achieved, the Compensation
Committee, in its sole discretion, will take into account the quality of earnings and/or
circumstances of achievement.

6. Functional Area Financial Performance Goals

For Participants managing areas that impact a P&L, these Goals are based on the business
unit’s financial performance measured against annual financial budgets, in the following areas:

	 	•	 	Group/Divisional/Subsidiary sales Goals.
	 
	 	•	 	Group/Divisional/Subsidiary gross profit Goals.
	 
	 	•	 	Group/Divisional/Subsidiary pre-tax income after “service and capital charges.”
	 
	 	•	 	Group/Divisional/Subsidiary net income Goals.

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For Participants without sales responsibilities, these Goals are based on expense
performance relative to the budget.

In determining whether Functional Area Financial Goals have been achieved, the Compensation
Committee, in its sole discretion, will take into account the quality of earnings and/or
circumstances of achievement.

7. MBO Performance Goals

Specific, measurable MBO Performance Goals will be approved for each Participant by the CEO, solely
with respect to Participants other than executive officers, or by the Compensation Committee in its
sole discretion, with respect to executive officers. These MBO Performance Goals should drive
toward and support five enterprise-wide initiatives: Profitability; Process Excellence; Customer
Satisfaction, Strategic Planning, and Organizational Development. To drive performance and to
focus management energy, it is recommended that the number of MBO’s be limited to five to nine
critical objectives.

	•	 	Profitability - e.g., reduce expenses as a percent of sales; increase
gross profit percentage and gross profit dollars; increase business
unit sales; reduce inventory.
	 
	•	 	Process Excellence - e.g., implement a new policy; reduce errors to
customers; reduce DSO’s; increase inventory turns.
	 
	•	 	Customer Satisfaction - e.g., increase frequency of salesperson to customer contacts;
implement project to develop computer screens to aid in positive customer interactions;
support internal customer by completing all recruits within a reasonable predetermined time
period; develop customer feedback program, such as surveys and focus groups.
	 
	•	 	Strategic Planning - e.g., develop strategic plan based on individual
responsibilities; benchmark Participant’s unit against similar
companies’ functions.
	 
	•	 	Organizational Development - e.g. personal business development,
succession planning, diversity Goals, staff development, recruitment
Goals.

In determining whether MBO Performance Goals have been achieved or exceeded, the Compensation
Committee, in its sole discretion, will take into account the quality of earnings and/or
circumstances of achievement.

8. Acquisitions, New Business Ventures and Other Adjustments

Each year, the Compensation Committee may adjust, as it decides in its sole discretion, the Company
Financial Performance, Functional Area Financial and MBO Performance Goals for unbudgeted
acquisitions, capital transactions, changes in accounting principles, changes in
applicable law or regulations, repurchases by the Company of any class of its securities during the
fiscal year, or any other unforeseeable event or other facts and circumstances beyond the control
of the Company, by an amount equal to a reasonable estimate of the expected accretion or dilution,
based on information provided to them by the Executive Management team. In the event the
Compensation Committee makes adjustments in accordance with the preceding sentence, the
Compensation Committee in its sole discretion will determine the PIP Award payouts that correspond
to the levels of achievement of the adjusted Goal.

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9. PIP Awards

During the first fiscal quarter of each year, individual performance for the previous year is
evaluated relative to Goals. PIP Awards are determined for each performance category, as
applicable. A Participant’s total PIP Award will equal the sum of the awards earned in each
category for the previous year’s performance.

Notwithstanding anything herein to the contrary, the Compensation Committee or the CEO (solely with
respect to Participants other than executive officers) may, at any time, provide that all or a
portion of a PIP Award is payable: (i) upon the attainment of any Goal (including the Goals), as
determined by the Compensation Committee or the CEO, as applicable; or (ii) regardless of whether
the applicable Goals are attained, subject to the Compensation Committee’s or the CEO’s (solely
with respect to Participants other than executive officers) sole discretion as to the quality of
earnings and the circumstances of their achievement.

Any action by the Compensation Committee (or its delegate) hereunder will be made pursuant to
resolutions documenting such action.

In order to receive any PIP Award, Participants must be actively employed on March 15 of the year
the PIP Award is to be paid out. A prorated PIP Award may be available, at the discretion of the
Compensation Committee or the CEO (solely with respect to Participants other than executive
officers), if a Participant in the Plan dies, becomes permanently disabled, retires at the normal
Social Security retirement age during the Plan year, or in other special circumstances.

PIP awards, less applicable withholdings, will be made by the end of the first fiscal quarter of
each year.

To the extent applicable, payments under the Plan are intended to be short-term deferrals within
the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the
guidance issued thereunder (collectively, “Section 409A”) that are exempt from the applicable
requirements of Section 409A and will be limited, construed and interpreted in accordance with such
intent. Notwithstanding the foregoing, the Company does not guarantee, and nothing in the Plan is
intended to provide a guarantee of, any particular tax treatment with respect to payments or
benefits under the Plan, and the Company will not be responsible for their compliance with or
exemption from Section 409A.

10. Miscellaneous

All expenses of the Plan will be borne by the Company.

This Plan is not intended to, nor does it constitute, a contract or guarantee of continued
employment. Nothing in the Plan or in any notice of a PIP Award will affect the right of the
Company or any of its affiliates to terminate the employment or service of any Participant or to
increase or decrease the compensation payable to the Participant from the rate in effect at the
commencement of a year or to otherwise modify the terms of such Participant’s employment.

Except to the extent required by applicable law, no PIP Award or payment thereof nor any right or
benefit under the Plan will be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance, garnishment, execution or levy of any kind or charge, and any attempt to anticipate,

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alienate, sell, assign, pledge, encumber, charge, garnish, execute upon or levy upon the same will
be void and will not be recognized or given effect by the Company.

No person will have any claim or right to participate in the Plan or to receive any PIP Award for
any particular year.

The Company reserves the right to amend, suspend or terminate the Plan at any time without notice.

The Plan has not been adopted by shareholders and is not designed for Code Section 162(m)
compliance.

No member of the Compensation Committee and no other director or employee of the Company or its
affiliates to whom any duty or power relating to the administration or interpretation of the Plan
has been delegated will be liable for any action, omission, or determination relating to the Plan,
and the Company will indemnify and hold harmless each member of the Compensation Committee and each
other director or employee of the Company or its affiliates to whom any duty or power relating to
the administration or interpretation of the Plan has been delegated against any cost or expense
(including counsel fees, which fees shall be paid as incurred) or liability (including any sum paid
in settlement of a claim with the approval of the Compensation Committee) arising out of or in
connection with any action, omission or determination relating to the Plan, unless, in each case,
such action, omission or determination was taken or made by such member, director or employee in
bad faith and without reasonable belief that it was in the best interests of the Company. The
foregoing provisions of this paragraph are in addition to and shall not be deemed to limit or
modify, any exculpatory rights or rights to indemnification or the advancement of expenses that any
such persons may now or hereafter have, whether under the Company’s Amended and Restated
Certificate of Incorporation, the Company’s Bylaws, the Delaware General Corporation Law (the
“DGCL”) or otherwise.

In the event that any one or more of the provisions contained in the Plan will, for any reason, be
held to be invalid, illegal or unenforceable, in any respect, such invalidity, illegality or
unenforceability will not affect any other provision of the Plan and the Plan will be construed as
if such invalid, illegal or unenforceable provisions had never been contained therein.

The Company will have the right to make any provisions that it deems necessary or appropriate to
satisfy any obligations it may have under law to withhold federal, state or local income or other
taxes incurred by reason of payments pursuant to the Plan.

The Plan and any amendments thereto will be construed, administered, and governed in all respects
in accordance with the laws of the State of New York (regardless of the law that might otherwise
govern under applicable principles of conflict of laws).

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RECEIPT
AND ACKNOWLEDGMENT OF HENRY SCHEIN, INC.
 PERFORMANCE INCENTIVE PLAN AND CONFIDENTIAL

INFORMATION

Your status as a participant under the Performance Incentive Plan (“PIP” or “Plan”), the names of
any other participants under the Plan, the goals that are adopted by Henry Schein Inc. (“HSI”) with
regard to any participant in the Plan, and information regarding payouts and Plan administration
are highly confidential (the “Confidential Information”). The Confidential Information serves as a
guide to the PIP program. Because the general business environment in which HSI operates is always
changing, the Plan and the Confidential Information may be changed at any time at the discretion of
HSI.

By signing below, you acknowledge that you have received a copy of this PIP document and have or
will receive Confidential Information and understand that the Plan and the Confidential Information
are subject to change at the discretion of the Company at any time, acknowledge that the
Confidential Information is highly confidential and understand that the content and the impact of
the Plan on the management of HSI is critical to the success of the Company. Accordingly, you
agree not to disseminate the details and content of the PIP program and the Confidential
Information and not to use them outside of the Company nor to discuss them with anyone other than
your immediate family.

Your signature below indicates that you have read, understand and agree to the above.

Send your signed copy to Compensation — Melville Mail Route M-120

	 	 	 	 	 
	 
	 	 	 	 
	 
	Participant’s Printed Name

	 	Participant’s Signature
	 	Date

8EX-10.13

 

Exhibit 10.13

[Letterhead]

January 11, 2006

Mr. Stanley Komaroff

[address]

Dear Mr. Komaroff:

Please permit this letter to confirm our agreement with respect to certain items
relating to your employment agreement dated as of October 10, 2003, as amended.

1. For 2005, your Base Salary and Incentive Compensation, in accordance with
Section 5 of your Employment Agreement, were set by the Compensation Committee in March
2005 using the annual base salary and incentive compensation payable to the Reference
Five.

In May 2005, Mr. Breslawski was promoted to President of the Company and awarded an
increase in annual base salary and target incentive compensation by the Compensation
Committee in November 2005. Because Mr. Breslawski is a member of the Reference Five,
these increases could impact your 2005 compensation. Accordingly, you and the Company
have agreed as follows.

	 	A.	 	2005 Base Salary will not be adjusted upward as a result of
changes to Mr. Breslawski’s base salary.

	 	B.	 	2005 Incentive Compensation will continue to be calculated
as set forth in the Agreement taking into account the increase to Mr.
Breslawski’ s incentive compensation.

2. Section 4. Term of Contract. The third and fourth sentences of paragraph 4
are amended and restated in their entirety to read as follows:

Unless either you or the Company give notice to one another, not less than 60
days prior to the end of the Employment Expiration Date (defined below), of an
intent not to extend the term, the Employment Expiration Date shall thereafter be
automatically extended for additional one-year periods and your employment
shall continue on terms substantially similar to the terms contained herein
subject to the last sentence of paragraphs 5(a), 5(b) and 5(c) ((the initial
employment term and any extension thereto, the “Employment Term”). Your giving
notice referred to in the immediately proceeding sentence shall be deemed an
election by you to retire under the provisions hereof.”

 

 

3. Section 5. Compensation.

     (a) The first sentence of Section 5(a) is amended and restated in its entirety to read as
follows:

“During the initial Employment Term and the first calendar year thereafter, as
compensation for your employment, you will receive an annual base salary at the average
annual base salary of the Reference Five, in all cases payable in accordance with the
Company’s normal payroll practices for its senior executive officers as in effect from
time to time (the base salary, as in effect from time to time, is hereinafter referred
to as the “Base Salary”).”

     (b) The last sentence of Section 5(a) is amended and restated in its entirety to read as
follows:

“After the initial Employment Term and the first calendar year thereafter, your
salary maybe increased by the CEO, in consultation with the compensation committee of
the Board.”

     (c) In the first and last sentences of Section 5(b), the phrase “and the first calendar
year thereafter” should be inserted after the words “Employment Term”.

     (d) Section 5(c) is amended and restated in its entirety to read as follows:

     “During the Initial Employment Term and for the first calendar year thereafter, commencing
with fiscal year 2004, you will be eligible to receive, in addition to Base Salary, annual
incentive compensation (the “Incentive Compensation) equal to 100% of the average bonus
received by the Reference Five for the same fiscal year; provided however, that the Incentive
Compensation payable to you for fiscal year 2004 will be $50,000 less, and for fiscal years 2005
and 2006, will be $25,000 less, than such average; and provided further, that your Incentive
Compensation for any year, may, if necessary, be reduced but not to an extent that your total
compensation for such fiscal year would be more than $5,000 less than the total compensation of
the fourth-highest-paid Executive Management Committee Member (other than the CEO) for such
fiscal year). “After the Initial Employment Term and the first calendar year thereafter, your
Incentive Compensation shall be determined by the CEO, in consultation with the compensation
committee of the Board”.

4. For fiscal years 2006 and 2007, the term Reference Five shall refer to Gerald Benjamin,
Mark Mlotek and Steven Paladino.

 

 

5. This Amendment shall be effective as of the date hereof.

6. This Amendment may be executed in counterparts, each one of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.

Except as expressly provided in this letter, the Employment Agreement, as amended, remains in full
force and effect.

Sincerely,

	 	 	 	 	 
	Henry Schein, Inc.

 	 	 
	By:  	/s/ Gerald Benjamin
 	 	 
	 	Gerald Benjamin 	 	 
	 	Executive Vice President 	 	 
	 
	AGREED AND ACCEPTED:

 	 	 
	By:  	/s/ Stanley Komaroff
 	 	 
	 	Stanley Komaroff

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