Document:

Corporate Integrity Agreement dated as of March 29, 2005

 Exhibit 10.8 
 CORPORATE INTEGRITY AGREEMENT 
 BETWEEN THE 
 OFFICE OF INSPECTOR GENERAL 
 OF THE 
 DEPARTMENT
OF HEALTH AND HUMAN SERVICES 
 AND

 PHARMERICA, INC., AND PHARMERICA
DRUG SYSTEMS, INC. 
 I. PREAMBLE 
 PharMerica, Inc., PharMerica Drug Systems, Inc., and their subsidiaries that furnish pharmaceutical items and products and related services reimbursable
under Medicare, Medicaid or other Federal health care programs to long-term care, assisted living and other like facilities (PharMerica, Inc., PharMerica Drug Systems, Inc. and such subsidiaries being hereafter collectively referred to as
“PharMerica”) hereby enter into this Corporate Integrity Agreement (“CIA”) with the Office of Inspector General (“OIG”) of the United States Department of Health and Human Services (“HHS”) to promote
compliance with the statutes, related regulations, and written directives of Medicare, Medicaid, and all other Federal health care programs (as defined in 42 U.S.C. § 1320a-7b(f)) (“Federal health care program requirements”).
Contemporaneously with this CIA, PharMerica, Inc. and PharMerica Drug Systems, Inc. are entering into a Settlement Agreement with the OIG, and this CIA is incorporated by reference into the Settlement Agreement. 
 Prior to the Effective Date of this CIA, PharMerica established a voluntary compliance program, which includes a corporate compliance officer
(“Compliance Officer”), a corporate compliance committee (“Compliance Committee”), a Code of Ethics & Business Conduct (the “Code of Conduct”), written policies and procedures, educational and training
initiatives, review and disciplinary procedures, a confidential disclosure program (“Disclosure Program”), an ineligible persons screening program (“Screening Program”), and internal audit and review procedures designed, as
represented by PharMerica, to promote compliance with applicable laws, including Federal health care program requirements, and the promotion of ethical business practices. PharMerica shall continue the operation of the compliance program for the
duration of the term of the CIA. 
 II. TERM AND SCOPE OF THE CIA

 A. The period of the compliance obligations assumed by PharMerica under this CIA shall be five years from the effective date of this
CIA, unless otherwise 

  

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specified. The effective date shall be the date on which the final signatory of this CIA executes this CIA (“Effective Date”). Each one-year
period, beginning with the one-year period following the Effective Date, shall be referred to as a “Reporting Period.” 
 B.
Sections VIII, IX, X, XI, and XII shall expire no later than 120 days after OIG’s receipt of: (1) PharMerica’s final Annual Report; or (2) any additional materials submitted by PharMerica pursuant to OIG’s request, whichever
is later. 
 C. The scope of this CIA shall be governed by the following definitions: 
 1. “Covered Persons” means: 
  

	 	a.	all employees of PharMerica, including but not limited to, the PharMerica CEO and all members of PharMerica management inclusive of senior vice presidents, vice presidents,
directors, and managers; 

  

	 	b.	all contractors, subcontractors and agents engaged by PharMerica to provide pharmaceutical items or services to patients or to perform billing or coding functions;

  

	 	c.	all contractors, subcontractors and agents engaged by PharMerica to perform functions related to the marketing of items or services reimbursable by Federal health care programs;

  

	 	d.	all contractors, subcontractors and agents engaged by PharMerica to perform functions related to the preparation of claims or other requests for reimbursement for pharmaceutical
items or services to patients on behalf of PharMerica; and 

  

	 	e.	all contractors, subcontractors and agents engaged by PharMerica to provide functions related to the sale or acquisition of entities that engage in Federal health care program
business, including but not limited to solicitation of sellers, valuation, due diligence, negotiation, drafting and review of documents related to such transactions, excluding lawyers, accountants and financial advisors except those accountants and
financial advisors who are acting as agents of PharMerica in connection with a Covered Transaction (defined below). 

  

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 Notwithstanding the above, the term “Covered Persons” does not include part-time or per diem
employees, contractors, subcontractors, and agents who are not reasonably expected to work more than 160 hours per year, except that any such individuals shall become “Covered Persons” at the point when they work more than 160 hours during
the calendar year. “Covered Persons” who are entities shall have those obligations with respect to their employees and subcontractors that are set forth in section III.C.7 of the CIA. 
 2. “Arrangements” means every arrangement or transaction that involves directly or indirectly the offer, payment, solicitation, or receipt of
anything of value; and is between PharMerica and any actual or potential source of health care business or referrals to PharMerica or any actual or potential recipient of health care business or referrals from PharMerica. For purpose of this
definition, the term “source” shall mean any physician, contractor, vendor, or agent, and the term “health care business or referrals” shall include referring, recommending, arranging for, ordering, leasing, or purchasing of any
good, facility, item, or service for which payment may be made in whole or in part by a Federal health care program. 
 3. “Covered
Transaction” means any transaction pursuant to which PharMerica acquires or sells any interest in a business unit or entity that furnishes pharmaceutical items or products and related services that are reimbursable by Medicare, Medicaid or
other Federal health care programs. 
 4. “Relevant Covered Persons” means a Covered Person who is involved with the development,
approval, management, or review of any of PharMerica’s Arrangements. 
 III. CORPORATE INTEGRITY
OBLIGATIONS 
 A. Compliance Officer and Committee. 
 1. Compliance Officer. Prior to the Effective Date of this CIA, PharMerica appointed a Compliance Officer who is responsible for developing and
implementing policies, procedures, and practices designed to ensure compliance with the requirements set forth in this CIA and with Federal health care program requirements. The Compliance Officer is and 

  

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shall remain a member of management of PharMerica, is and shall remain required to make periodic (at least quarterly) reports regarding compliance matters
directly to the PharMerica Compliance Committee, and is and shall remain authorized to report on such matters directly to the PharMerica Compliance Committee and the Chief Executive Officer of PharMerica and shall have direct or indirect access to
the Board or Directors of PharMerica, Inc.’s parent. The Compliance Officer is not and shall not be the General Counsel or Chief Financial Officer. The Compliance Officer is and shall remain responsible for monitoring the day-to-day compliance
activities engaged in by PharMerica as well as for any reporting obligations created under this CIA. The Compliance Officer function outlined in this Section II.A.l shall continue during the Term of this CIA. 
 PharMerica shall report to OIG, in writing, any changes in the identity or position description of the Compliance Officer, or any actions or changes that
would affect the Compliance Officer’s ability to perform the duties necessary to meet the obligations in this CIA, within 15 days after such a change. 
 2. Compliance Committee. Prior to the Effective Date of this CIA PharMerica appointed a Compliance Committee. The Compliance Committee includes and shall continue to include the Compliance Officer and members
of senior management responsible for finance, clinical, human resources, legal, sales and operations. The Compliance Committee supports the Compliance Officer in fulfilling his/her responsibilities (e.g., assists in the analysis of the
organization’s risk areas and oversees monitoring of internal and external audits and investigations). The Compliance Committee function outlined in this Section II.A.2 shall continue during the Term of this CIA. 
 PharMerica shall report to OIG, in writing, any changes in the composition of the Compliance Committee, or any actions or changes that would affect the
Compliance Committee’s ability to perform the duties necessary to meet the obligations in this CIA, within 15 days after such a change. 
 B. Written Standards. 
 1. Code of Conduct. Prior to the Effective Date of this CIA, PharMerica adopted and
distributed the Code of Conduct to all Covered Persons who are employees and the personnel file of each Covered Person who is an employee contains a written certification that he or she has 

  

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received, read, understood, and shall abide by the Code of Conduct. PharMerica shall make the promotion of, and adherence to, the Code of Conduct an element
in evaluating the performance of all employees. The Code of Conduct reflects: 
 a. a commitment to full compliance with all federal, state
and local laws and regulations (which includes Federal health care program requirements); 
 b. the requirement that all of PharMerica’s
officers, directors, and employees shall be expected to comply with all federal, state and local laws and regulations (which includes Federal health care program requirements); 
 c. the requirement that all of PharMerica’s officers and employees shall be expected to report to the Compliance Officer, or other appropriate
individual designated by PharMerica, suspected violations of the Code of Conduct or any Federal, state and local laws and regulations (which includes Federal health care program requirements); 
 d. the possible consequences to both PharMerica and individuals of failure to comply with Federal health care program requirements and the failure to
report such noncompliance; and 
 e. the right of all individuals to use the Disclosure Program described in Section III.F, and
PharMerica’s commitment to non- retaliation . 
 Covered Persons who are not employees and new Covered Persons shall receive the Code of
Conduct and shall complete the form of certification currently used for Covered Persons who are employees within the later of 120 days after the Effective Date or 30 days after becoming a Covered Person. 
 PharMerica shall periodically review the Code of Conduct to determine if revisions are appropriate and shall make any necessary revisions based on such
review. Any revised Code of Conduct shall be distributed within 60 days after any revisions are finalized. Each Covered Person shall certify, in writing, that he or she has received, read, understood, and shall abide by the revised Code of Conduct
within 30 days after the distribution of the revised Code of Conduct. 
  

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 2. Policies and Procedures. Within 120 days after the Effective Date, PharMerica shall implement
written Policies and Procedures regarding the operation of PharMerica’s compliance program and its compliance with Federal health care program requirements. At a minimum, the Policies and Procedures shall address: 
 a. the subjects relating to the Code of Conduct identified in Section III.B.l; 
 b. the expectation that all Covered Persons shall comply with the Code of Conduct, the Policies and Procedures required under this Section, and this CIA;
and 
 c. 42 U.S.C. § 1320a-7b(b) (“Anti-Kickback Statute”) and related regulations and guidance; business or financial
arrangements or contracts that may violate the Anti-Kickback Statute; and the applicability of the Anti-Kickback statute to Covered Transactions as that term is defined in Section II.C.3. 
 Within 120 days after the Effective Date, the relevant portions of the Policies and Procedures shall be distributed to all individuals whose job functions
relate to those Policies and Procedures. Appropriate and knowledgeable staff shall be available to explain the Policies and Procedures. 
 At
least once per fiscal year of PharMerica (and more frequently, if appropriate), PharMerica shall assess and update as necessary the Policies and Procedures. Within 30 days after the effective date of any revisions, the relevant portions of any such
revised Policies and Procedures shall be distributed to all individuals whose job functions relate to those Policies and Procedures. 
 C.
Training and Education. 
 1. General Training. Within 120 days after the Effective Date, PharMerica shall provide at least one
hour of General Training to each Covered Person. This training, at a minimum, shall explain the CIA requirements and PharMerica’s Compliance Program (including the Code of Conduct) as supplemented by this CIA. 
  

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 New Covered Persons shall receive the General Training described above within 30 days after becoming
employed or engaged, or within 120 days after the Effective Date, whichever is later. After receiving the initial General Training described above, each Covered Person who is an employee shall receive at least one hour of General Training per fiscal
year of PharMerica beginning on October 1, 2005. 
 2. Anti-Kickback Training. Within 120 days after the Effective Date, each
Relevant Covered Person shall receive no less than two hours of training addressing: 
 a. Arrangements that potentially implicate the
Anti-Kickback Statute and related regulations and guidance; 
 b. the policies, procedures and other requirements relating to Arrangements
and the Anti-Kickback Statute, including the “Covered Transactions Procedures” (as defined in, and required by, Section III.D.l); 
 c. the personal obligation of each Relevant Covered Person to know the applicable legal requirements and PharMerica’s the policies and procedures; 
 d. the legal sanctions under the Anti-Kickback Statute; and 
 e. examples of violations of the Anti-Kickback
Statute. 
 New Relevant Covered Persons shall receive this training within 30 days after becoming employed or engaged, or within 120 days
after the Effective Date, whichever is later. A PharMerica employee who has completed the Anti-Kickback Training shall review the work of a new Relevant Covered Person on a Covered Transaction until such time as the new Relevant Covered Person
completes his or her Anti-Kickback Training. 
 After receiving the initial Anti-Kickback Training described in this Section, each Relevant
Covered Person shall receive at least one hour of Anti-Kickback Training per fiscal year of PharMerica beginning on October 1, 2005. 
  

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 3. Certification. Each individual who is required to attend training pursuant to this Section
III.C shall certify, in writing, or in electronic form, if applicable, that he or she has received the required training. The certification shall specify the type of training received and the date received. The Compliance Officer (or designee) shall
retain the certifications, along with all course materials. These shall be made available to OIG, upon request. 
 4. Qualifications of
Trainer. Persons providing the training required by this Section III.C shall be knowledgeable about the subject area. 
 5. Update of
Training. PharMerica shall at least once per fiscal year of PharMerica review the training programs developed to satisfy the requirements of this Section III.C, and, where appropriate, update the training to reflect changes in Federal health
care program requirements, any issues discovered during internal audits, the Covered Transactions Procedures, and any other relevant information. 
 6. Training Methods. PharMerica may provide the training required under this CIA through videotape, DVD, appropriate computer-based training approaches or other comparable methods not involving in-person training. If PharMerica
chooses to provide training pursuant to any such method, it shall make available at reasonable times appropriately qualified and knowledgeable staff or trainers to answer questions or provide additional information to the individuals receiving such
training. 
 7. Entities. Where a Covered Person or Relevant Covered Person is an entity, the General Training obligations under this
CIA shall be met so long as the training is provided to a member of management of the entity. PharMerica shall require the entity to take reasonable steps to apprise its employees and other personnel regarding the content of the training. In
addition PharMerica shall require such entities to do the following: 
  

	 	a.	agree to abide by the Code of Conduct or adopt its own Code of Conduct addressing substantially all of the requirements of Section III.B.1; 

  

	 	b.	distribute the following materials to its employees and subcontractors working on PharMerica matters: (1) PharMerica or its own Code of Conduct; (2) copies of relevant
PharMerica policies and procedures relating to the work of the entity; and (3) information about PharMerica’s Disclosure Program (including the hotline number); 

  

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	 	c.	provide, either directly or through PharMerica, Anti-Kickback Training (as described in Section III.C.2) to its employees and subcontractors to the extent they are involved with the
development, approval, management, or review of any of PharMerica’s Arrangements; 

  

	 	d.	certify to PharMerica that all employees and subcontractors working on PharMerica matters have: (1) been screened to exclude Ineligible Persons in accordance with the
requirements of Section III.G of the CIA; (2) received a copy of PharMerica’s Code of Conduct or its own Code of Conduct, copies of relevant PharMerica policies and procedures, and information about PharMerica’s Disclosure Program
(including the hotline number); and (3) to the extent applicable, received Anti-Kickback training. 

 D. Compliance
with the Anti-Kickback Statute. 
 1. Covered Transactions Procedures. Within 120 days after the Effective Date, PharMerica shall
create procedures reasonably designed to ensure that Covered Transactions entered into from and after 120 days after the Effective Date do not violate the Anti-Kickback Statute, taking into account the related regulations and guidance (“Covered
Transactions Procedures”), These Covered Transactions Procedures shall apply to Covered Transactions entered into 120 days from and after the Effective Date and shall include the following: 
 a. creating and maintaining a database of all Covered Transactions containing, at minimum (i) the name(s) of the acquiring and selling party(ies),
(ii) the type of transaction (e.g., stock or asset acquisition), (iii) the purchase price, (iv) the name of the individual that provided the “Management Representation” as required by III.D.1.c, (v) the name of
counsel who conducted the legal review required by Section III.D.l.d and the date the “Completion Memo” required by such Section was prepared by such counsel, (vi) the date of the closing of the Covered Transaction, and (vii) the
file number for the Covered Transaction, as required by Section III.D.l.e (“Covered Transactions Database”); 
  

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 b. requiring that the agreement governing the Covered Transaction and all related arrangements between
the parties thereto be set forth in writing and signed by, as applicable, PharMerica and the other parties thereto; 
 c. requiring that a
written representation be obtained from the most senior member of PharMerica management involved in the Covered Transaction that the entirety of the arrangement between the parties to the Covered Transaction is reflected in written agreements and
documents that were supplied to counsel conducting the review required by Section III.D. 1 .d (“Management Representation”); 
 d.
establishing and implementing a written review and approval process that includes but is not limited to a legal review by counsel with expertise in the Anti-Kickback Statute and the creation of appropriate documentation of all such reviews and
approvals, the purpose of which is to ensure that no Covered Transaction is consummated until such counsel has prepared a written memorandum (“Completion Memo”) attesting to (i) the general completion of such review and approval
process, (ii) the receipt of the Management Representation, and (iii) the completion of counsel’s own review of the Covered Transaction under Federal health care program requirements; 
 e. assuring that PharMerica maintains a complete file (and assigns a number to such file permitting ready retrieval) for each Covered Transaction, which
file shall contain, at minimum (i) all of the written agreements and documents required by Section III.D.l.b, (ii) the Management Representation, and (iii) the Completion Memo; 
 f. requiring that the Compliance Officer review the Covered Transactions Database, Covered Transaction review and approval process required by Section
III.D.1.d, and other Covered Transactions Procedures on at least a quarterly basis and provide a report on the results of such review to the Compliance Committee; and 
 g. implementing an effective response when violations of the Anti-Kickback Statute are discovered; such effective response may 

  

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include disclosure of the violation to the OIG, unwinding the Arrangement, and repaying any associated Overpayments pursuant to Section III.I (Reporting)
when appropriate. 
 2. Records Retention and Access. PharMerica shall retain and make available to OIG, upon request, the Covered
Transactions Database and all supporting documentation of the Covered Transactions subject to Section and, to the extent available, all non-privileged communications related to such Covered Transactions. 
 E. Review Procedures. 
 1. General
Description. 
 a. Engagement of Independent Review Organization. Within 90 days after the Effective Date, PharMerica shall engage
an individual or entity (or entities), such as an accounting, auditing, law or consulting firm (hereinafter “Independent Review Organization” or “IRO”), to perform a review to assist PharMerica in assessing its compliance with
the obligations pursuant to this CIA set forth in Section I1I.D (“Covered Transactions Review”). The IRO engaged by PharMerica to perform the Covered Transactions Review shall have familiarity with the Anti-Kickback Statute and Federal
health care program requirements. 
 Each IRO shall assess, along with PharMerica, whether it can perform the IRO review in a professionally
independent and/or objective fashion, as appropriate to the nature of the engagement, taking into account any other business relationships or other engagements that may exist. The engagement of the IRO for the Covered Transactions Review shall not
be deemed to create an attorney-client relationship between PharMerica and the IRO. 
 b. Frequency of Covered Transactions Review.
The Covered Transactions Review shall be performed annually and shall cover each of the Reporting Periods. The IRO(s) shall perform all components of each annual Covered Transactions Review. 
 c. Retention of Records. The IRO and PharMerica shall retain and make available to OIG, upon request, all work papers, supporting documentation,
correspondence, and draft reports (those exchanged between the IRO and PharMerica) related to the Covered Transactions Reviews. 
  

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 d. Responsibilities and Liabilities. Nothing in this Section III.E affects PharMerica’s
responsibilities for or liabilities under any criminal, civil, or administrative laws or regulations applicable to any Federal health care program including, but not limited to, the Anti-Kickback Statute. 
 2. Covered Transactions Review. The IRO shall perform a review to assess whether PharMerica is complying with the Covered Transactions Procedure
required by Section III.D.I for each Covered Transaction consummated from and after 120 days after the Effective Date. The IRO’s assessment shall include (a) verifying that the Covered Transaction is listed in the Covered Transaction
Database and that the required information for the Covered Transaction is reflected in the Covered Transaction Database; (b) verifying the receipt of the Management Representation prior to the consummation of the Covered Transaction;
(c) verifying that the Covered Transaction was subject to the contract review and approval process (including a legal review), that such review and approval process was appropriately documented and that a Completion Memo was prepared prior to
the consummation of the Covered Transaction; (d) verifying that PharMerica maintains a complete file (and assigns a number to such file permitting ready retrieval) for the Covered Transaction; and (e) verifying that the Compliance Officer
is reviewing the Covered Transactions Database, contract review and approval process and satisfaction of the other requirements of the Covered Transactions Procedure, on a quarterly or more frequent basis, and reporting the results of such review to
the Compliance Committee. 
 3. Covered Transactions Review Report. The IRO shall prepare a report based upon the Covered Transactions
Review performed (“Covered Transactions Review Report”). The Covered Transactions Review Report shall include the IRO’s findings with respect to (a) whether PharMerica has generally implemented the Covered Transactions Procedures
described in Section III.D.1; and (b) specific findings as to whether PharMerica has complied with the Covered Transactions Procedures for each Covered Transaction reviewed by the IRO in accordance with Section III.E.2. 
 4. Validation Review. In the event OIG has reason to believe that: (a) PharMerica’s Covered Transactions Procedure fails to conform to
the 

  

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requirements of this CIA; or (b) the IRO’s findings or Covered Transactions Review Report are inaccurate, OIG may, at its sole discretion, conduct
its own review to determine whether the Covered Transactions Review complied with the requirements of the CIA and/or the findings or Covered Transactions Review Report are inaccurate (“Validation Review”). PharMerica shall pay for the
reasonable cost of any Validation Review performed by OIG or any of its designated agents. Any Validation Review must be initiated no later than one year after PharMerica’s final submission (as described in Section II of this CIA) is received
by OIG. 
 Prior to initiating a Validation Review, OIG shall notify PharMerica of its intent to do so and provide a written explanation of
why OIG believes such a review is necessary. To resolve any concerns raised by OIG, PharMerica may request a meeting with OIG to: (a) discuss the results of any Covered Transactions Review or Covered Transactions Review Report; (b) present
any additional information to clarify the results of the Covered Transactions Review or to correct the inaccuracy of the Covered Transactions Review Report; and/or (c) propose alternatives to the proposed Validation Review. PharMerica agrees to
provide any additional information as may be requested by OIG under this Section in an expedited manner. OIG will attempt in good faith to resolve any Covered Transactions Review issues with PharMerica prior to conducting a Validation Review.
However, the final determination as to whether or not to proceed with a Validation Review shall be made at the sole discretion of OIG. 
 5.
Independence/Objectivity Certification. The IRO shall include in its report(s) to PharMerica a certification or sworn affidavit that it has evaluated its professional independence and/or objectivity, as appropriate to the nature of the
engagement, with regard to the Covered Transactions Review and that it has concluded that it is, in fact, independent and/or objective. 
 F.
Disclosure Program. 
 Prior to the Effective Date of this CIA, PharMerica established a Disclosure Program that includes a toll-free
compliance telephone line to enable individuals to disclose, to the Compliance Officer or some other person who is not in the disclosing individual’s chain of command, any identified issues or questions associated with PharMerica’s
policies, conduct, practices, or procedures with respect to a Federal health care program believed by the individual to be a potential violation of criminal, civil, or 

  

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administrative law. PharMerica shall continue to appropriately publicize the existence of the disclosure mechanism (e.g., via periodic e-mails to
employees or by posting the information in prominent common areas). PharMerica shall continue the Disclosure Program during the Term of the CIA as set forth in this Section III.F. 
 The Disclosure Program emphasizes a non-retribution, non-retaliation policy, and includes a reporting mechanism for anonymous communications for which
appropriate confidentiality is maintained. Upon receipt of a disclosure, the Compliance Officer (or designee) gathers all relevant information from the disclosing individual. The Compliance Officer (or designee) makes a preliminary, good faith
inquiry into the allegations set forth in every disclosure to ensure that he or she has obtained all of the information necessary to determine whether a further review should be conducted. For any disclosure that is sufficiently specific so that it
reasonably permits a determination of the appropriateness of the alleged improper practice and provides an opportunity for taking corrective action, PharMerica conducts an internal review of the allegations set forth in the disclosure and ensures
that proper follow-up is conducted. 
 The Compliance Officer (or designee) maintains a confidential disclosure log, which includes a record
and summary of each disclosure received (whether anonymous or not), the status of the respective internal reviews, and any corrective action taken in response to the internal reviews. The disclosure log shall be made available to OIG upon written
request but only as to those log entries that relate to allegations received concerning Federal health care programs or any alleged patient harm or abuse resulting from PharMerica’s practices. At such time as PharMerica makes the confidential
disclosure log available for review by the OIG as specified above, it will also report to the OIG the following information (but only as it relates to those log entries other than those for Federal health care program allegations or patient harm
allegations): the total number of disclosures received and included in the confidential disclosure log for such period, the general categories into which the disclosures fell (including, at a minimum, the following categories: human resources, loss
prevention, controlled substance issues), the number of disclosures in each category, and a general description of how PharMerica followed up on the disclosures in each category. When PharMerica provides access to the confidential disclosure log to
the OIG as specified in this Section, it shall provide the log to the OIG upon request and as soon as practicable, but not later than 10 business days from the date of the OIG request. 
  

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 G. Ineligible Persons. 
 1. Definitions. For purposes of this CIA: 
 a. an “Ineligible Person” shall include an individual or entity who: 
 i. is currently excluded, debarred, suspended, or
otherwise ineligible to participate in the Federal health care programs or in Federal procurement or non-procurement programs; or 
 ii. has
been convicted of a criminal offense that falls within the ambit of 42 U.S.C. § 1320a-7(a), but has not yet been excluded, debarred, suspended, or otherwise declared ineligible. 
 b. “Exclusion Lists” include: 
 i.
the HHS/OIG List of Excluded Individuals/Entities (available through the Internet at http//oig.hhs.gov); and 
 ii. the General
Services Administration’s List of Parties Excluded from Federal Programs (available through the Internet at http://epls.arnet.gov). 
 c. “Screened Persons” include officers, directors, employees, contractors, and agents of PharMerica (excluding employees, subcontractors or agents of any such contractors or agents). 
 2. Screening Requirements. PharMerica shall ensure that all Screened Persons are not Ineligible Persons, by implementing the following screening
requirements. 
 a. PharMerica shall screen all Screened Persons against the Exclusion Lists prior to engaging their services and, as part of
the hiring or contracting process, shall require such persons to disclose whether they are an Ineligible Person. 
  

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 b. PharMerica shall screen all Screened Persons against the Exclusion Lists within 90 days after the
Effective Date and on an annual basis thereafter. 
 c. PharMerica shall implement a policy requiring all Screened Persons to disclose
immediately any debarment, exclusion, suspension, or other event that makes that person an Ineligible Person. 
 Nothing in this Section
affects the responsibility of (or liability for) PharMerica to refrain from billing Federal health care programs for items or services furnished, ordered, or prescribed by an Ineligible Person (including employees, subcontractors, and agents of any
contractors or agents of PharMerica). 
 3. Removal Requirement. If PharMerica has actual notice that a Screened Person has become an
Ineligible Person, PharMerica shall remove such person from responsibility for, or involvement with, PharMerica’s business operations related to the Federal health care programs and shall remove such person from any position for which the
person’s compensation or the items or services furnished, ordered, or prescribed by the person are paid in whole or part, directly or indirectly, by Federal health care programs or otherwise with Federal funds at least until such time as the
person is reinstated into participation in the Federal health care programs. 
 4. Pending Charges and Proposed Exclusions. If
PharMerica has actual notice that a Screened Person is charged with a criminal offense that falls within the ambit of 42 U.S.C. §§ 1320a-7(a), 1320a-7(b)(l)-(3), or is proposed for exclusion during his or her employment or contract term,
PharMerica shall take all appropriate actions to ensure that the responsibilities of that person have not and shall not adversely affect the quality of care rendered to any beneficiary, patient, or resident, or the accuracy of any claims submitted
to any Federal health care program. 
 H. Notification of Government Investigation or Legal Proceedings. 
 Within 30 days after discovery, PharMerica shall notify OIG, in writing, of any ongoing investigation or legal proceeding known to PharMerica conducted or
brought by a governmental entity or its agents, involving an allegation that PharMerica has committed a crime or has engaged in fraudulent activities. This notification shall include a description of the 

  

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allegation, the identity of the investigating or prosecuting agency, and the status of such investigation or legal proceeding. PharMerica shall also provide
written notice to OIG within 30 days after the resolution of the matter, and shall provide OIG with a description of the findings and/or results of the investigation or proceedings, if any. 
 I. Reporting. 
 1.
Overpayments. 
 a. Definition of Overpayments. For purposes of this CIA, an “Overpayment” shall mean the amount of
money PharMerica has received in excess of the amount due and payable under any Federal health care program requirements. 
 b. Reporting
of Overpayments. If, at any time, PharMerica identifies or learns of any Overpayment, PharMerica shall notify the payor (e.g., Medicaid fiscal agent) within 30 days after identification of the Overpayment and take remedial steps within 60
days after identification (or such additional time as may be agreed to by the payor) to correct the problem, including preventing the underlying problem and the Overpayment from recurring. Also, within 30 days after identification of the
Overpayment, PharMerica shall repay the Overpayment to the appropriate payor to the extent such Overpayment has been quantified. If not yet quantified, within 30 days after identification, PharMerica shall notify the payor of its efforts to quantify
the Overpayment amount along with a schedule of when such work is expected to be completed. Notification and repayment to the payor shall be done in accordance with the payor’s policies, and for Medicare contractors, shall include the
information contained on the Overpayment Refund Form provided as Appendix A to this CIA. Notwithstanding the above, notification and repayment of any Overpayment amount that routinely is reconciled or adjusted pursuant to policies and procedures
established by the payor should be handled in accordance with such policies and procedures. 
 2. Reportable Events. 
 a. Definition of Reportable Event. For purposes of this CIA, a “Reportable Event” means anything that involves: 
 i. a substantial Overpayment; or 
  

 17 

 ii. a matter that a reasonable person would consider a probable violation of criminal, civil, or
administrative laws applicable to any Federal health care program for which penalties or exclusion may be authorized. 
 A Reportable Event
may be the result of an isolated event or a series of occurrences. 
 b. Reporting of Reportable Events. If PharMerica determines
(after a reasonable opportunity to conduct an appropriate review or investigation of the allegations) through any means that there is a Reportable Event, PharMerica shall notify OIG, in writing, within 30 days after making the determination that the
Reportable Event exists. The report to OIG shall include all of the information on the Overpayment Refund Form as well as the following information: 
 i. if the Reportable Event results in an Overpayment, the report to OIG shall be made at the same time as the notification to the payor required in Section III.I.I and shall include: 
 (A) the payer’s name, address, and contact person to whom the Overpayment was sent; and 
 (B) the date of the check and identification number (or electronic transaction number) by which the Overpayment was repaid/refunded; 
 ii. a complete description of the Reportable Event, including the relevant facts, persons involved, and legal and Federal health care program authorities
implicated; 
 iii. a description of PharMerica’s actions taken to correct the Reportable Event; and 
 iv. any further steps PharMerica plans to take to address the Reportable Event and prevent it from recurring. 
  

 18 

 IV. NEW BUSINESS UNITS OR
LOCATIONS 
 In the event that, after the Effective Date, PharMerica changes locations or sells, closes,
purchases, or establishes a new business unit or location related to the furnishing of items or services that may be reimbursed by Federal health care programs, PharMerica shall notify OIG of this fact as soon as possible, but no later than within
30 days after the date of change of location, sale, closure, purchase, or establishment. This notification shall include the address of the new business unit or location, phone number, fax number, Medicare Provider number, provider identification
number and/or supplier number, and the corresponding contractor’s name and address that has issued each Medicare number. Each new business unit or location shall be subject to all the requirements of this CIA. 
 V. IMPLEMENTATION AND ANNUAL REPORTS 
 A. Implementation Report. Within 150 days after the Effective Date, PharMerica shall submit a written report to OIG summarizing the status of its
implementation of the requirements of this CIA (“Implementation Report”). The Implementation Report shall, at a minimum, include: 
 1. the name, address, phone number, and position description of the Compliance Officer required by Section III. A, and a summary of other noncompliance job responsibilities the Compliance Officer may have; 
 2. the names and positions of the members of the Compliance Committee required by Section III.A; 
 3. a copy of PharMerica’s Code of Conduct as provided in Section III.B.1; 
 4. a copy of all Policies and Procedures required by Section III.B.2; 
 5. the number of individuals required to complete the Code of Conduct certification required by Section III.B.1, the percentage of individuals who have completed such certification, and an explanation of any
exceptions (the documentation supporting this information shall be available to OIG, upon request); 
 6. the following information regarding
each type of training required by Section III.C: 
 a. a description of such training, including a summary of the topics covered, the length
of sessions and a schedule of training sessions; and 
  

 19 

 b. the number of individuals required to be trained, percentage of individuals actually trained, and an
explanation of any exceptions. 
 A copy of all training materials and the documentation supporting this information shall be available to
OIG, upon request. 
 7. a description of the Covered Transactions Database required by Section III.D.1.a; 
 8. a description of the tracking and monitoring procedures and other Covered Transactions Procedures required by Section III.D.1; 
 9. a description of the Disclosure Program required by Section III.F; 
 10. the following information regarding the IRO(s): (a) identity, address, and phone number; (b) a copy of the engagement letter; (c) a summary and description of any and all current and prior
engagements and agreements between PharMerica and the IRO; and (d) the proposed start and completion dates of the Covered Transactions Review; 
 11. a certification from the IRO regarding its professional independence and/or objectivity with respect to PharMerica; 
 12. a
description of the process by which PharMerica fulfills the requirements of Section III.G regarding Ineligible Persons; 
 13. the name,
title, and responsibilities of any person who is determined to be an Ineligible Person under Section III.G; the actions taken in response to the screening and removal obligations set forth in Section III.G; and the actions taken to identify,
quantify, and repay any overpayments to Federal health care programs relating to items or services furnished, ordered or prescribed by an Ineligible Person; 
 14. a list of all of PharMerica’s locations (including locations and mailing addresses); the corresponding name under which each location is doing business; the corresponding phone numbers and fax numbers; each
location’s Medicare Provider number(s), provider identification number(s), and/or supplier number(s); and the name and address of each Medicare contractor to which PharMerica currently submits claims; 
  

 20 

 15. a listing of the PharMerica, Inc. and PharMerica Drug Systems, Inc. subsidiaries that furnish
pharmaceutical items and products and related services reimburseable under Medicare, Medicaid, or other Federal health care programs to long-term care, assisted living and other like facilities; and 
 16. the certifications required by Section V.C. 
 B. Annual Reports. PharMerica shall submit to OIG annually a report with respect to the status of, and findings regarding, PharMerica’s compliance activities for each of the Reporting Periods (“Annual Report”).

 Each Annual Report shall include, at a minimum: 
 1. any change in the identity, position description, or other noncompliance job responsibilities of the Compliance Officer and any change in the membership of the Compliance Committee described in Section III.A;

 2. a summary of any significant changes or amendments to the Policies and Procedures required by Section III.B and the reasons for such
changes (e.g., change in contractor policy); 
 3. the number of individuals required to complete the Code of Conduct certification
required by Section III.B.1, the percentage of individuals who have completed such certification, and an explanation of any exceptions (the documentation supporting this information shall be available to OIG, upon request); 
 4. the following information regarding each type of training required by Section III.C: 
 a. a description of such training, including a summary of the topics covered, the length of sessions and a schedule of training sessions; 
 b. the number of individuals required to be trained, percentage of individuals actually trained, and an explanation of any exceptions. 
  

 21 

 A copy of all training materials and the documentation supporting this information shall be available to
OIG, upon request. 
 5. a description of any changes to the Covered Transactions Database required by Section III.D.l.a; 
 6. a description of any changes to the tracking and monitoring procedures and other Covered Transactions procedures required by Section III.D.l;

 7. a complete copy of all reports prepared pursuant to Section III.E, along with a copy of the IRO’s engagement letter (if
applicable); 
 8. PharMerica’s response and corrective action plan(s) related to any issues raised by the reports prepared pursuant to
Section III.E; 
 9. a summary and description of any and all current and prior engagements and agreements between PharMerica and the IRO, if
different from what was submitted as part of the Implementation Report; 
 10. a certification from the IRO regarding its professional
independence and/or objectivity with respect to PharMerica; 
 11. a summary of Reportable Events (as defined in Section III.I) identified
during the Reporting Period and the status of any corrective and preventative action relating to all such Reportable Events; 
 12. a report
of the aggregate Overpayments that have been returned to the Federal health care programs. Overpayment amounts shall be broken down into the following categories: inpatient Medicare, outpatient Medicare, Medicaid (report each state separately, if
applicable), and other Federal health care programs. Overpayment amounts that are routinely reconciled or adjusted pursuant to policies and procedures established by the payor do not need to be included in this aggregate Overpayment report;

 13. a summary of the disclosures in the disclosure log required by Section III.F that: (a) relate to Federal health care programs;
(b) allege abuse or neglect of patients; or (c) involve allegations of conduct that may involve illegal remuneration or inappropriate referrals in violation of the Anti-Kickback Statute; 
  

 22 

 14. any changes to the process by which PharMerica fulfills the requirements of Section III.G regarding
Ineligible Persons; 
 15. the name, title, and responsibilities of any person who is determined to be an Ineligible Person under Section
III.G; the actions taken by PharMerica in response to the screening and removal obligations set forth in Section III.G; and the actions taken to identify, quantify, and repay any overpayments to Federal health care programs relating to items or
services furnished, ordered or prescribed by an Ineligible Person; 
 16. a summary describing any ongoing investigation or legal proceeding
required to have been reported pursuant to Section III.H. The summary shall include a description of the allegation, the identity of the investigating or prosecuting agency, and the status of such investigation or legal proceeding; 
 17. a description of all changes to the most recently provided list of PharMerica’s locations (including addresses) as required by Section V.A.15;
the corresponding name under which each location is doing business; the corresponding phone numbers and fax numbers; each location’s Medicare provider number(s), provider identification number(s); and the name and address of each Medicare
contractor to which PharMerica currently submits claims; and 
 18. the certifications required by Section V.C. 
 The first Annual Report shall be received by OIG no later than 60 days after the end of the first Reporting Period. Subsequent Annual Reports shall be
received by OIG no later than the anniversary date of the due date of the first Annual Report. 
 C. Certifications. The Implementation
Report and Annual Reports shall include a certification by the Compliance Officer that: 
 1. to the best of his or her knowledge, except as
otherwise described in the applicable report, PharMerica is in compliance with all of the requirements of this CIA; and 
 2. he or she has
reviewed the Report and has made reasonable inquiry regarding its content and believes that the information in the Report is accurate and truthful. 
  

 23 

 D. Designation of Information. PharMerica shall clearly identify any portions of its submissions
that it believes are trade secrets, or information that is commercial or financial and privileged or confidential, and therefore potentially exempt from disclosure under the Freedom of Information Act (FOIA), 5 U.S.C. § 552. PharMerica shall
refrain from identifying any information as exempt from disclosure if that information does not meet the criteria for exemption from disclosure under FOIA. 
 VI. NOTIFICATIONS AND SUBMISSION OF REPORTS 
 Unless otherwise stated in writing after the Effective Date, all notifications and reports required under this CIA shall be submitted to the following entities: 
 OIG: 
 Administrative and Civil
Remedies Branch 
 Office of Counsel to the Inspector General 
 Office of Inspector General 
 U.S. Department of Health and Human Services 
 Cohen Building, Room 5527 
 330 Independence
Avenue, S.W. 
 Washington, DC 20201 
 Telephone: (202) 619-2078 
 Facsimile: (202) 205-0604 
 PharMerica: 
 Paul D. Ross, Rph

 Executive Director, Compliance and Regulatory Affairs/ 
 PharMerica Corporate Compliance Officer 
 3625 Queen Palm Drive 
 Tampa, FL 33619 
 Telephone :
(813) 318-6152 
 Facsimile: (813) 318-6733 
 Email: Pross@Pharmerica.com 
 Unless otherwise specified, all notifications and reports required by
this CIA may be made by certified mail, overnight mail, hand delivery, or other means, provided that there is proof that such notification was received. For purposes of this requirement, internal facsimile confirmation sheets do not constitute proof
of receipt. 
  

 24 

 VII. OIG INSPECTION, AUDIT, AND REVIEW
RIGHTS 
 In addition to any other rights OIG may have by statute, regulation, or contract, OIG or its
duly authorized representative(s) may examine or request copies of PharMerica’s books, records, and other documents and supporting materials and/or conduct on-site reviews of any of PharMerica’s locations for the purpose of verifying and
evaluating: (a) PharMerica’s compliance with the terms of this CIA; and (b) PharMerica’s compliance with the requirements of the Federal health care programs in which it participates. The documentation described above shall be
made available by PharMerica to OIG or its duly authorized representative(s) at all reasonable times for inspection, audit, or reproduction. Furthermore, for purposes of this provision, OIG or its duly authorized representative(s) may interview any
of PharMerica’s employees, contractors, or agents who consent to be interviewed at the individual’s place of business during normal business hours or at such other place and time as may be mutually agreed upon between the individual and
OIG. PharMerica shall assist OIG or its duly authorized representative(s) in contacting and arranging interviews with such individuals upon OIG’s request. PharMerica’s employees may elect to be interviewed with or without a representative
of PharMerica present. 
 VIII. DOCUMENT AND RECORD RETENTION

 PharMerica shall maintain for inspection all documents and records relating to compliance with this CIA for six years from the
Effective Date (or longer if otherwise required by law). 
 IX. DISCLOSURES 
 Consistent with HHS’s FOIA procedures, set forth in 45 C.F.R. Part 5, OIG shall make a reasonable effort to notify PharMerica prior to any release by
OIG of information submitted by PharMerica pursuant to its obligations under this CIA and identified upon submission by PharMerica as trade secrets, or information that is commercial or financial and privileged or confidential, under the FOIA rules.
With respect to such releases, PharMerica shall have the rights set forth at 45 C.F.R. § 5.65(d). 
 X. BREACH AND
DEFAULT PROVISIONS 
 PharMerica is expected to fully and timely comply with all of its
CIA obligations. 
  

 25 

 A. Stipulated Penalties for Failure to Comply with Certain Obligations. As a contractual remedy,
PharMerica and OIG hereby agree that failure to comply with certain obligations as set forth in this CIA may lead to the imposition of the following monetary penalties (hereinafter referred to as “Stipulated Penalties”) in accordance with
the following provisions. 
 1. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became
due) for each day PharMerica fails to establish and implement any of the following obligations as described in Section III: 
 a. a
Compliance Officer; 
 b. a Compliance Committee; 
 c. the Code of Conduct; 
 d. written Policies and Procedures; 
 e. the training of Covered Persons; 
 f. the
Covered Transactions Procedures described in Section III.D.l.; 
 g. a Disclosure Program; 
 h. Ineligible Persons screening and removal requirements; and 
 i. notification of Government investigations or legal proceedings. 
 2. A Stipulated Penalty of $2,500 (which
shall begin to accrue on the day after the date the obligation became due) for each day PharMerica fails to engage an IRO, as required in Section III.E. 
 3. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each day PharMerica fails to submit the Implementation Report or the Annual Reports to OIG in
accordance with the requirements of Section V by the deadlines for submission. 
  

 26 

 4. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation
became due) for each day PharMerica fails to submit the annual Covered Transactions Review Report (and any other required Review Report) in accordance with the requirements of Section III.E. 
 5. A Stipulated Penalty of $ 1,500 for each day PharMerica fails to grant access to the information or documentation as required in Section VII. (This
Stipulated Penalty shall begin to accrue on the date PharMerica fails to grant access.) 
 6. A Stipulated Penalty of $5,000 for each false
certification submitted by or on behalf of PharMerica as part of its Implementation Report, Annual Report, additional documentation to a report (as requested by the OIG), or otherwise required by this CIA. 
 7. A Stipulated Penalty of $ 1,000 for each day PharMerica fails to comply fully and adequately with any obligation of this CIA. OIG shall provide notice
to PharMerica, stating the specific grounds for its determination that PharMerica has failed to comply fully and adequately with the CIA obligation(s) at issue and steps PharMerica shall take to comply with the CIA. (This Stipulated Penalty shall
begin to accrue 20 days after PharMerica receives this notice from OIG of the failure to comply provided PharMerica does not cure such failure within such 20-day period.) A Stipulated Penalty as described in this Subsection shall not be demanded for
any violation for which OIG has sought a Stipulated Penalty under Subsections 1-6 of this Section. 
 B. Timely Written Requests for
Extensions. PharMerica may, in advance of the due date, submit a timely written request for an extension of time to perform any act or file any notification or report required by this CIA. Notwithstanding any other provision in this Section, if
OIG grants the timely written request with respect to an act, notification, or report, Stipulated Penalties for failure to perform the act or file the notification or report shall not begin to accrue until one day after PharMerica fails to meet the
revised deadline set by OIG. Notwithstanding any other provision in this Section, if OIG denies such a timely written request, Stipulated Penalties for failure to perform the act or file the notification or report shall not begin to accrue until
three business days after PharMerica receives OIG’s written denial of such request or the original due date, whichever is later. A “timely written request” is defined as a request in writing received by OIG at least five business days
prior to the date by which any act is due to be performed or any notification or report is due to be filed. 
  

 27 

 C. Payment of Stipulated Penalties. 
 1. Demand Letter. Upon a finding that PharMerica has failed to comply with any of the obligations described in Section X.A and after determining
that Stipulated Penalties are appropriate, OIG shall notify PharMerica of: (a) PharMerica’s failure to comply; and (b) OIG’s exercise of its contractual right to demand payment of the Stipulated Penalties (this notification is
referred to as the “Demand Letter”). 
 2. Response to Demand Letter. Within 20 days after the receipt of the Demand Letter,
PharMerica shall either: (a) cure the breach to OIG’s satisfaction and pay the applicable Stipulated Penalties; or (b) request a hearing before an HHS administrative law judge (ALJ) to dispute OIG’s determination of
noncompliance, pursuant to the agreed upon provisions set forth below in Section IX.E. In the event PharMerica elects to request an ALJ hearing, the Stipulated Penalties shall continue to accrue until PharMerica cures, to OIG’s satisfaction,
the alleged breach in dispute. Failure to respond to the Demand Letter in one of these two manners within the allowed time period shall be considered a material breach of this CIA. 
 3. Form of Payment. Payment of the Stipulated Penalties shall be made by certified or cashier’s check, payable to: “Secretary of the
Department of Health and Human Services,” and submitted to OIG at the address set forth in Section V. 
 4. Independence from Material
Breach Determination. Except as set forth in Section X.D.1.b, these provisions for payment of Stipulated Penalties shall not affect or otherwise set a standard for OIG’s decision that PharMerica has materially breached this CIA, which
decision shall be made at OIG’s discretion and shall be governed by the provisions in Section X.D, below. 
 D. Exclusion for
Material Breach of this CIA. 
 1. Definition of Material Breach. A material breach of this CIA means: 
 a. a failure by PharMerica to report a Reportable Event, take corrective action, and make the appropriate refunds, as required in Section III.I;

  

 28 

 b. a repeated or flagrant violation of the obligations under this CIA, including, but not limited to,
the obligations addressed in Section X.A; or 
 c. a failure to respond to a Demand Letter concerning the payment of Stipulated Penalties in
accordance with Section X.C. 
 2. Notice of Material Breach and Intent to Exclude. The parties agree that a material breach of this
CIA by PharMerica constitutes an independent basis for PharMerica’s exclusion from participation in the Federal health care programs. Upon a determination by OIG that PharMerica has materially breached this CIA and that exclusion is the
appropriate remedy, OIG shall notify PharMerica of: (a) PharMerica’s material breach; and (b) OIG’s intent to exercise its contractual right to impose exclusion (this notification is hereinafter referred to as the “Notice of
Material Breach and Intent to Exclude”). 
 3. Opportunity to Cure. PharMerica shall have 30 days from the date of receipt of the
Notice of Material Breach and Intent to Exclude to demonstrate to OIG’s satisfaction that: 
 a. PharMerica is in compliance with the
obligations of the CIA cited by OIG as being the basis for the material breach; 
 b. the alleged material breach has been cured; or

 c. the alleged material breach cannot be cured within the 30-day period, but that: (i) PharMerica has begun to take action to cure
the material breach; (ii) PharMerica is pursuing such action with due diligence; and (iii) PharMerica has provided to OIG a reasonable timetable for curing the material breach. 
 4. Exclusion Letter. If, at the conclusion of the 30-day period, PharMerica fails to satisfy the requirements of Section X.D.3, OIG may exclude
PharMerica from participation in the Federal health care programs. OIG shall notify PharMerica in writing of its determination to exclude PharMerica(this letter shall be referred to hereinafter as the “Exclusion Letter”). Subject to the
Dispute Resolution provisions in Section X.E, 

  

 29 

 
below, the exclusion shall go into effect 30 days after the date of PharMerica’s receipt of the Exclusion Letter. The exclusion shall have national
effect and shall also apply to all other Federal procurement and nonprocurement programs. Reinstatement to program participation is not automatic. After the end of the period of exclusion, PharMerica may apply for reinstatement by submitting a
written request for reinstatement in accordance with the provisions at 42 C.F.R. §§ 1001.3001-3004. 
 E. Dispute Resolution

 1. Review Rights. Upon OIG’s delivery to PharMerica of its Demand Letter or of its Exclusion Letter, and as an agreed-upon
contractual remedy for the resolution of disputes arising under this CIA, PharMerica shall be afforded certain review rights comparable to the ones that are provided in 42 U.S.C. § 1320a-7(f) and 42 C.F.R. Part 1005 as if they applied to the
Stipulated Penalties or exclusion sought pursuant to this CIA. Specifically, OIG’s determination to demand payment of Stipulated Penalties or to seek exclusion shall be subject to review by an HHS ALJ and, in the event of an appeal, the HHS
Departmental Appeals Board (DAB), in a manner consistent with the provisions in 42 C.F.R. § 1005.2-1005.21. Notwithstanding the language in 42 C.F.R. § 1005.2(c), the request for a hearing involving Stipulated Penalties shall be made
within 10 days after receipt of the Demand Letter and the request for a hearing involving exclusion shall be made within 25 days after receipt of the Exclusion Letter. 
 2. Stipulated Penalties Review. Notwithstanding any provision of Title 42 of the United States Code or Title 42 of the Code of Federal Regulations, the only issues in a proceeding for Stipulated Penalties under
this CIA shall be: (a) whether PharMerica was in full and timely compliance with the obligations of this CIA for which OIG demands payment; and (b) the period of noncompliance. PharMerica shall have the burden of proving its full and
timely compliance and the steps taken to cure the noncompliance, if any. OIG shall not have the right to appeal to the DAB an adverse ALJ decision related to Stipulated Penalties. If the ALJ agrees with OIG with regard to a finding of a breach of
this CIA and orders PharMerica to pay Stipulated Penalties, such Stipulated Penalties shall become due and payable 20 days after the ALJ issues such a decision unless PharMerica requests review of the ALJ decision by the DAB. If the ALJ decision is
properly appealed to the DAB and the DAB upholds the determination of OIG, the Stipulated Penalties shall become due and payable 20 days after the DAB issues its decision. 
  

 30 

 3. Exclusion Review. Notwithstanding any provision of Title 42 of the United States Code or Title
42 of the Code of Federal Regulations, the only issues in a proceeding for exclusion based on a material breach of this CIA shall be: 
 a.
whether PharMerica was in material breach of this CIA; 
 b. whether such breach was continuing on the date of the Exclusion Letter; and

 c. whether the alleged material breach could not have been cured within the 30- day period, but that: (i) PharMerica had begun to
take action to cure the material breach within that period; (ii) PharMerica has pursued and is pursuing such action with due diligence; and (iii) PharMerica provided to OIG within that period a reasonable timetable for curing the material
breach and PharMerica has followed the timetable. 
 For purposes of the exclusion herein, exclusion shall take effect only after an ALJ
decision favorable to OIG, or, if the ALJ rules for PharMerica, only after a DAB decision in favor of OIG. PharMerica’s election of its contractual right to appeal to the DAB shall not abrogate OIG’s authority to exclude PharMerica upon
the issuance of an ALJ’s decision in favor of OIG. If the ALJ sustains the determination of OIG and determines that exclusion is authorized, such exclusion shall take effect 20 days after the ALJ issues such a decision, notwithstanding that
PharMerica may request review of the ALJ decision by the DAB. If the DAB finds in favor of OIG after an ALJ decision adverse to OIG, the exclusion shall take effect 20 days after the DAB decision. PharMerica shall waive its right to any notice of
such an exclusion if a decision upholding the exclusion is rendered by the ALJ or DAB. If the DAB finds in favor of PharMerica, PharMerica shall be reinstated effective on the date of the original exclusion. 
 4. Finality of Decision. The review by an ALJ or DAB provided for above shall not be considered to be an appeal right arising under any statutes or
regulations. Consequently, the parties to this CIA agree that the DAB’s decision (or the ALJ’s decision if not appealed) shall be considered final for all purposes under this CIA. 
  

 31 

 XI. EFFECTIVE AND BINDING AGREEMENT

 Consistent with the provisions in the Settlement Agreement pursuant to which this CIA is entered, and into which this CIA is
incorporated, PharMerica and OIG agree as follows: 
 A. This CIA shall be binding on the successors, assigns, and transferees of PharMerica,
Inc. and PharMerica Drug Systems, Inc.; 
 B. This CIA shall become final and binding on the date the final signature is obtained on the CIA;

 C. Any modifications to this CIA shall be made with the prior written consent of the parties to this CIA; 
 D. OIG may agree to a suspension of PharMerica’s obligations under the CIA in the event of PharMerica’s cessation of participation in Federal
health care programs. If PharMerica withdraws from participation in Federal health care programs and is relieved of its CIA obligations by OIG, PharMerica shall notify OIG at least 30 days in advance of PharMerica’s intent to reapply as a
participating provider or supplier with any Federal health care program. Upon receipt of such notification, OIG shall evaluate whether the CIA should be reactivated or modified. 
 E. The undersigned signatories of PharMerica, Inc. and PharMerica Drug Systems, Inc. represent and warrant that they are authorized to execute this CIA.
The undersigned OIG signatory represents that he is signing this CIA in his official capacity and that he is authorized to execute this CIA. 
  

 32 

 ON BEHALF OF PHARMERICA,
INC. AND PHARMERICA DRUG SYSTEMS, INC. 
  

					
	 

	 		 	3-29-05
	WILLIAM SHIELDS	 		 	DATE
	President and C.E.O.	 		 	
	PharMerica, Inc. and PharMerica Drug Systems, Inc.	 		 	
			
	 

	 		 	3/29/05
	RICHARD GREENHALL, Esq.	 		 	DATE
	Counsel	 		 	
	PharMerica, Inc. and PharMerica Drug Systems, Inc.	 		 	

  

 33 

 ON BEHALF OF THE OFFICE
OF INSPECTOR GENERAL 
 OF THE DEPARTMENT
OF HEALTH AND HUMAN SERVICES 
  

					
	 

	 		 	3/22/05
	 LEWIS MORRIS
	 		 	DATE
	 Chief Counsel to the Inspector General
 Office of Inspector General
 U.S. Department of Health and Human Services
	 		 	

 Appendix A 
 OVERPAYMENT REFUND 
  

					
	 TO BE COMPLETED BY MEDICARE CONTRACTOR
  

	Date:                                     
                            

							
				
	Contractor Deposit Control #	 	  
	    	Date of Deposit:	 	  

							
				
	Contractor Contact Name:	 	  
	 	Phone #	 	  

			
		
	Contractor Address:	 	  

		
	Contractor Fax:	 	  

  

	
	TO BE COMPLETED BY PROVIDER/PHYSICIAN/SUPPLIER
	
	Please complete and forward to Medicare Contractor. This form, or a similar document containing the following information, should accompany every voluntary refund so that receipt of check is
properly recorded and applied.

			
		
	 PROVIDER/PHYSICIAN/SUPPLIER NAME
	 	  

			
		
	 ADDRESS
	 	  

							
				
	 PROVIDER/PHYSICIAN/SUPPLIER #
	 	  
	 	CHECK NUMBER #	 	  

							
				
	 CONTACT PERSON:
	 	  
	 	PHONE #	 	  

				
	 AMOUNT OF CHECK $
	 	  
	 	CHECK DATE	 	  

 REFUND INFORMATION 
 For each Claim, provide the following: 
 Patient Name                                   
                                        
                                        
  HIC #                                    
                             
 Medicare Claim Number
                                        
                                        
                 Claim Amount Refunded
$                                 
 Reason Code for Claim Adjustment:             (Select reason code from list below. Use one reason per
claim) 
 (Please list all claim numbers involved. Attach separate sheet, if necessary) 
  

	Note:	If Specific Patient/HIC/Claim #/Claim Amount data not available for all claims due to Statistical Sampling, please indicate methodology and formula used to determine amount and
reason for overpayment:
                                        
                         

 For Institutional Facilities Only: 
 Cost Report Year(s)
                                        

 (If multiple cost report years are involved, provide a breakdown by amount and corresponding cost report year.) 
 For OIG Reporting Requirements: 
 Do you have a Corporate
Integrity Agreement with OIG?                        Yes
                        No 
 Reason Codes: 
  

					
	 Billing/Clerical Error
	  	 MSP/Other Payer Involvement
	  	 Miscellaneous

	 01 – Corrected Date of Service
	  	08 – MSP Group Health Plan Insurance	  	13 – Insufficient Documentation
	 02 – Duplicate
	  	09 – MSP No Fault Insurance	  	14 – Patient Enrolled in an HMO
	 03 – Corrected CPT Code
	  	10 – MSP Liability Insurance	  	15 – Services Not Rendered
	 04 – Not Our Patient(s)
	  	11 – MSP, Workers Comp. (Including	  	16 – Medical Necessity
	 05 – Modifier Added/Removed
	  	 Black Lung
	  	17 – Other (Please Specify)
	 06 – Billed in Error
	  	12 – Veterans Administration	  	
	 07 – Corrected CPT CodeSafari Holding Corporation Omnibus Incentive Plan

 Exhibit 10.9 
 PHARMERICA CORPORATION 
 2007 OMNIBUS INCENTIVE PLAN 
 SECTION 1. Purpose. The purpose of the PharMerica Corporation 2007 Omnibus Incentive Plan is to enhance the incentive of those employees,
directors and other individuals who are expected to contribute significantly to the success of the Company and its Affiliates to perform at the highest level, and, in general, to further the best interests of the Company and its stockholders.

 SECTION 2. Definition. 
 As used in the Plan, the following terms shall have the meanings set forth below: 
 (a) “Act” shall mean the
Securities Exchange Act of 1934, as amended. 
 (b) “Affiliate” shall mean (i) any entity that, directly or indirectly,
controls, is controlled by or under common control with the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Committee. 
 (c) “Award” shall mean any Option, Stock Appreciation Right, award of Restricted Stock, Restricted Stock Unit, Deferred Stock,
Performance Award or Other Stock-Based Award granted under the Plan, which may be denominated or settled in Shares, cash or in such other forms as provided for herein. 
 (d) “Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing any Award granted under the Plan, which may, but need not, be executed or acknowledged by a
Participant. 
 (e) “Beneficiary” shall mean a person or persons entitled to receive payments or other benefits or exercise
rights that are available under the Plan in the event of the Participant’s death. If no such person is named by a Participant who is an individual, such individual’s Beneficiary shall be the individual’s estate. 
 (f) “Board” shall mean the board of directors of the Company. 
 (g) “Change in Control” shall mean the occurrence of: 
 (i) any “person” (as defined in Section 13(d) of the Act other than the Company, its Affiliates or an employee benefit plan or trust maintained by the Company or its affiliates, becoming the
“beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of 40% or more of the combined voting power of the Company’s then outstanding Voting Stock (excluding any “person” who becomes such a
beneficial owner in connection with a transaction described in clause (A) of paragraph (iii) below); 

 (ii) at any time during a period of twelve consecutive months, individuals who at the beginning of such
period constituted the Board (and any new member of the Board whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the members of the Board then still in office
who either were members of the Board at the beginning of the period or whose election or nomination was so approved) cease for any reason to constitute at least a majority of members then constituting the Board; or 
 (iii) the consummation of (A) a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other
corporation, other than a merger or consolidation which would result in the Voting Stock of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or being converted into
Voting Stock of the surviving entity or any parent thereof) at least 50% of the combined voting power of the Voting Stock, or the total fair market value of all the securities, of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) any sale, lease, exchange or other transfer (in one transaction or a series of transactions) of assets of the Company having a total gross fair market value equal to more than
40% of the total gross Fair Market Value of all assets of the Company immediately prior to such transaction or transactions. 
 Notwithstanding the foregoing, (i) in no event shall a Change in Control be deemed to have occurred with respect to a Participant if the Participant is part of a “group”, within the meaning of Section 13(d)(3) of the
Act, which consummates the Change in Control transaction and (ii) an Award Agreement may provide for a definition of the term “Change in Control” with respect to an Award that is different from the definition provided above.

 (h) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. 
 (i) “Committee” shall mean the Compensation Committee of the Board or such other committee as may be designated by the Board that
satisfies the requirements of applicable law. If the Board does not designate the Committee, references herein to the “Committee” shall refer to the Board. 
 (j) “Company” shall mean PharMerica Corporation, a Delaware corporation. 
 (k)
“Covered Employee” means an individual who is a “covered employee” within the meaning of Section 162(m)(3) of the Code, or any successor provision. 
  

 2 

 (l) “Deferred Stock” shall mean a right to receive Shares or other Awards or a
combination thereof at the end of a specified deferral period, granted under Section 9. 
 (m) “Fair Market Value”
shall mean with respect to Shares, the closing price of a Share on the date in question (or, if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) on the principal stock exchange on which the
Shares trade or are quoted, or if Shares are not so listed or quoted, fair market value as determined by the Committee, and with respect to any property other than Shares, the fair market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee. 
 (n) “Incentive Stock Option” shall mean an option
representing the right to purchase Shares from the Company, granted under and in accordance with the terms of Section 6, that (i) meets the requirements of Section 422 of the Code, or any successor provision thereto and (ii) is
designated by the Committee in the applicable Award Agreement as an Incentive Stock Option. 
 (o) “Non-Qualified Stock
Option” shall mean an option representing the right to purchase Shares from the Company, granted under and in accordance with the terms of Section 6, that is not an Incentive Stock Option. 
 (p) “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option. 
 (q) “Other Stock-Based Award” means an Award granted pursuant to Section 11 of the Plan. 
 (r) “Participant” shall mean the recipient of an Award granted under the Plan. 
 (s) “Performance Award” means an Award granted pursuant to Section 10 of the Plan, including, but not limited to, one intended to
be “qualified performance-based compensation” under Section 162(m) of the Code. 
 (t) “Performance Period”
means the period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are measured and must be met. 

(u) “Plan” shall mean the PharMerica Corporation 2007 Omnibus Incentive Plan, as the same may be amended from time to time.

 (v) “Restricted Stock” shall mean any Share granted under Section 8. 
 (w) “Restricted Stock Unit” shall mean a contractual right granted under Section 8 that is denominated in Shares. Each Unit
represents a right to 

  

 3 

 
receive the value of one Share (or a percentage of such value) upon the terms and conditions set forth in the Plan and the applicable Award Agreement. Awards
of Restricted Stock Units may include, without limitation, the right to receive dividend equivalents. 
 (x) “SAR” or
“Stock Appreciation Right” shall mean any right granted to a Participant pursuant to Section 7 to receive, upon exercise by the Participant, the excess of (i) the Fair Market Value of one Share on the date of exercise over
(ii) the grant price of the right specified by the Committee in its sole discretion, which, except in the case of Substitute Awards or in connection with an adjustment provided in Section 5(d), shall not be less than the Fair Market Value
of one Share on such date of grant of the right. 
 (y) “Service” shall mean the active performance of services for the
Company or an Affiliate by a person who is an employee or director of the Company or an Affiliate. 
 (z) “Shares” shall
mean shares of the common stock of the Company. 
 (aa) “Subsidiary” shall mean a subsidiary of the Company within the
meaning of Section 424(f) of the Code. 
 (bb) “Substitute Awards” shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by the Company or with which the Company combines; provided that the terms and conditions of each such Substitute Award (including, without limitation, the exercise price
and number of Shares subject to such Substitute Award) shall be determined in accordance with U.S. Department of Treasury Regulation §1.409A-1(b)(5)(v)(D). 
 (cc) “Voting Stock” shall mean securities entitled to vote generally on the election of the Board. 
 SECTION 3. Eligibility.  
 (a) Any employee, member of the Board, consultant or other advisor of, or any other
individual who provides services to, the Company or any Affiliate, shall be eligible to be selected to receive an Award under the Plan, except that Incentive Stock Options may be granted only to employees of the Company or a Subsidiary. 

(b) Holders of options and other types of awards granted by a company acquired by the Company or with which the Company combines are eligible for
grant of Substitute Awards hereunder. 
  

 4 

 SECTION 4. Administration.  
 (a) The Plan shall be administered by the Committee. The Committee shall consist of not less than three directors. Each Committee member shall be
(i) independent, within the meaning of and to the extent required by applicable rulings and interpretations of the Securities and Exchange Commission and the applicable stock exchange on which the Shares trade or are quoted and (ii) an
outside director pursuant to Section 162(m) of the Code, and any regulations issued thereunder, in each case at such time as the Company becomes subject to the respective regulatory regime. The Board may designate one or more directors as
alternate members of the Committee who may replace any absent or disqualified member at any meeting of the Committee. The Committee may delegate to one or more of the Committee’s members or to officers of the Company the authority to exercise
all duties and responsibilities of the Committee under the Plan, including those listed in Section 4(b) below or such of those duties and responsibilities as may be specified by the Committee, except that such delegation shall not be applicable
to any Award for a person then covered by Section 16 of the Act. The Committee may issue rules and regulations for administration of the Plan. It shall meet at such times and places as it may determine. 
 (b) Subject to the terms of the Plan and applicable law, the Committee (or its delegate) shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards (including Substitute Awards) to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights, or
other matters are to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award; (v) adopt form of Award Agreements; (vi) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, or other Awards, or canceled, forfeited or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended; (vii) correct any defect,
supply any omission or reconcile any inconsistency in or among the Plan, an Award or an Award Agreement; (viii) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, and other amounts
payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (ix) interpret and administer the Plan and any instrument or agreement relating to, or Award
made under, the Plan; (x) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (xi) make any other determination and take any
other action that the Committee deems necessary or desirable for the administration of the Plan. 
 (c) All decisions of the Committee shall
be final, conclusive and binding upon all parties, including the Company, the stockholders and the Participants. 
  

 5 

 SECTION 5. Shares Available for Awards.  
 (a) Subject to adjustment as provided in Section 5(d) below, the maximum number of Shares available for delivery under the Plan is 3,800,000 Shares.
Notwithstanding the foregoing and subject to adjustment as provided in Section 5(d), the maximum number of Shares that may be subject to grant of Incentive Stock Options is 3,800,000, the maximum number of Shares that are available for Awards
under Sections 8, 9 and 11 is 1,900,000 and no Participant may receive Options and SARs under the Plan in any fiscal year that relate to more than 650,000 Shares. 
 (b) If, after the effective date of the Plan, any Shares covered by an Award other than a Substitute Award, or to which such an Award relates, are forfeited, or if such an Award otherwise terminates without the
delivery of Shares or of other consideration, then the Shares covered by such Award, or to which such Award relates, to the extent of any such forfeiture or termination, shall again be, or shall become, available for issuance under the Plan.

 (c) Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or Shares acquired by
the Company. 
 (d) In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash,
Shares or other securities), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or
other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities)
which thereafter may be made the subject of Awards, including the aggregate and individual limits specified in Section 5(a) and Section 10(c), (ii) the number and type of Shares (or other securities) subject to outstanding Awards, and
(iii) the grant, purchase, or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided, however, that the number of Shares subject to any Award
denominated in Shares shall always be a whole number. 
 (e) Shares underlying Substitute Awards shall not reduce the number of Shares
remaining available for issuance under the Plan. 
 SECTION 6. Options.  
 (a) The Committee is hereby authorized to grant Options to Participants with the terms and conditions set forth in this Section 6 and with such
additional terms and conditions as set forth in an Award Agreement, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine: 
  

 6 

 (b) The purchase price per Share under an Option shall be determined by the Committee; provided,
however, that, except in the case of Substitute Awards, such purchase price shall not be less than the Fair Market Value of a Share on the date of grant of such Option. 
 (c) The term of each Option shall be fixed by the Committee but shall not exceed 10 years from the date of grant thereof. 
 (d) The Committee shall determine the time or times at which an Option may be exercised in whole or in part. 
 (e) The Committee shall determine the method or methods by which, and the form or forms, including, without limitation, cash, Shares, other Awards, or
any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, in which, payment of the exercise price with respect thereto may be made or deemed to have been made. 
 (f) The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code, or
any successor provision thereto, and any regulations promulgated thereunder. 
 (g) Each Option shall be evidenced by an Award Agreement
which contains the terms and conditions of the Option as determined by the Committee. 
 SECTION 7. Stock Appreciation Rights.

 (a) The Committee is hereby authorized to grant Stock Appreciation Rights (“SARs”) to Participants with terms and
conditions as the Committee shall determine not inconsistent with the provisions of the Plan. Each SAR shall be evidenced by an Award Agreement which includes the terms and conditions determined by the Committee. 
 (b) SARs may be granted hereunder to Participants either alone (“freestanding”) or in addition to other Awards granted under the Plan
(“tandem”) and may, but need not, relate to a specific Option granted under Section 6. 
 (c) Any tandem SAR related to
an Option may be granted at the same time such Option is granted or at any time thereafter before exercise or expiration of such Option. In the case of any tandem SAR related to any Option, the SAR or applicable portion thereof shall not be
exercisable until the related Option or applicable portion thereof is exercisable and shall terminate and no longer be exercisable upon the termination or exercise of the related Option, except that a SAR granted with respect to less than the full
number of Shares covered by a related Option shall not be reduced until the exercise or termination of the related Option exceeds the number of Shares not covered by the SAR. Any Option related to any tandem SAR shall no longer be exercisable to the
extent the related SAR has been exercised. 
  

 7 

 (d) A freestanding SAR shall not have a term of greater than 10 years or, unless it is a Substitute
Award, an exercise price less than the Fair Market Value of the Share on the date of grant. 
 SECTION 8. Restricted Stock and
Restricted Stock Units. 
 (a) The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to
Participants. Each Award of Restricted Stock and Restricted Stock Units shall be evidenced by an Award Agreement which shall set forth the conditions, if any, which will need to be satisfied before the grant will be effective and the conditions, if
any, under which the Participant’s interest in the related Shares or the value of the Restricted Stock Units will be forfeited or become vested, including performance goals, if any, that must be achieved as a condition to vesting of the
Restricted Stock Award or the Restricted Stock Unit. The Committee, in its discretion, may award dividend equivalents with respect to Awards of Restricted Stock and Restricted Stock Units. 
 (b) Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without
limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as
the Committee may deem appropriate. 
 (c) Any share of Restricted Stock granted under the Plan may be evidenced in such manner as the
Committee may deem appropriate including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of shares of Restricted Stock granted under the Plan,
such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. 
 (d) The Committee may in its discretion, when it finds that a waiver would be in the best interests of the Company, waive in whole or in part any or all
restrictions with respect to Shares of Restricted Stock or Restricted Stock Units. 
 (e) If the Committee intends that an Award under this
Section 8 shall constitute or give rise to “qualified performance based compensation” under Section 162(m) of the Code, such Award may be structured in accordance with the requirements of Section 10(c), including without
limitation, the performance criteria and the Award limitation set forth therein, and any such Award shall be considered a Performance Award for purposes of the Plan. 
  

 8 

 SECTION 9. Deferred Stock. The Committee is authorized to grant Deferred Stock to
Participants, subject to terms and conditions set forth in this Section 9 and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine. Each grant of Deferred
Stock shall be evidenced by an Award Agreement which contains the terms and conditions determined by the Committee. 
 (a) Issuance of Shares
will occur upon expiration of the deferral period specified for an Award of Deferred Stock by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, Deferred Stock shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals
and/or future service requirements), separately or in combination, in installments or otherwise, and under such other circumstances as the Committee may determine at the date of grant or thereafter. Deferred Stock may be satisfied by delivery of
Shares, other Awards, or a combination thereof, as determined by the Committee at the date of grant or thereafter. 
 (b) The Committee, in
its discretion, may award dividend equivalents with respect to Awards of Deferred Stock. 
 SECTION 10. Performance Awards.

 (a) The Committee is hereby authorized to grant Performance Awards to Participants with terms and conditions as the Committee shall
determine not inconsistent with the provisions of the Plan. Each grant of Performance Awards shall be evidenced by an Award Agreement which contains the terms and conditions determined by the Committee. The Committee, in its discretion, may award
dividend equivalents with respect to Performance Awards. 
 (b) Performance Awards may be denominated as a cash amount, number of Shares, or
a combination thereof and are Awards which may be earned upon achievement or satisfaction of performance conditions specified by the Committee. In addition, the Committee may specify that any other Award shall constitute a Performance Award by
conditioning the right of a Participant to exercise the Award or have it settled, and the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the Committee. The Committee may use such business
criteria and other measures of performance as it may deem appropriate in establishing any performance conditions. Subject to the terms of the Plan, the performance goals to be achieved during any Performance Period, the length of any Performance
Period, the amount of any Performance Award granted and the amount of any payment or transfer to be made pursuant to any Performance Award shall be determined by the Committee and set forth in the Award Agreement. 
  

 9 

 (c) Every Performance Award shall, if the Committee intends that such Award should constitute
“qualified performance-based compensation” for purposes of Section 162(m) of the Code, include a pre-established formula, such that payment, retention or vesting of the Award is subject to the achievement during a performance period
or periods, as determined by the Committee, of a level or levels of, or increases in, in each case as determined by the Committee, one or more performance measures with respect to the Company, any Subsidiary and/or any business unit of the Company
or any Subsidiary, including without limitation the following: return on equity or average equity, diluted earnings per share, total earnings, earnings growth, return on capital or average capital, return on assets or net assets, earnings before
interest and taxes, EBITDA, EBITDA minus capital expenditures, sales or sales growth, customer or customer growth, traffic, revenue or revenue growth, income or net income, net income before share-based payments, gross margin return on investment,
increase in the fair market value of common stock, share price (including, but not limited to, growth measures and total stockholder return), operating profit, gross profit, net earnings, cash flow (including, but not limited to, operating cash flow
and free cash flow), cash flow return on investment (which equals net cash flow divided by total capital), capital expenditures, operating expenses, selling, general and administrative expenses, operating income or net operating income, return on
investment, inventory turns, return on sales, financial return ratios, total return to stockholders, market share, earnings measures/ratios, economic value added (EVA), balance sheet measurements such as receivable turnover, internal rate of return,
increase in net present value, or expense targets, customer satisfaction surveys and productivity; each as determined in accordance with generally accepted accounting principles, where applicable, as consistently applied by the Company. Performance
criteria may be measured on an absolute (e.g., plan or budget) or relative basis. Relative performance may be measured against a group of peer companies, a financial market index, or other acceptable objective and quantifiable indices. Except
in the case of an award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, if the Committee determines that a change in the business, operations, corporate structure or capital structure of the
Company, or the manner in which the Company conducts its business, or other events or circumstances render the performance objectives unsuitable, the Committee may modify the performance objectives or the related minimum acceptable level of
achievement, in whole or in part, as the Committee deems appropriate and equitable. Performance measures may vary from Performance Award to Performance Award, respectively, and from Participant to Participant, and may be established on a stand-alone
basis, in tandem or in the alternative. For any Award subject to any the pre-established formula described herein, the maximum number of shares subject to any such Award denominated in Shares granted in any fiscal year to a Participant shall be
500,000 Shares, subject to adjustment as provided in Section 5(d), and the maximum amount earned in respect of a Performance Award denominated in cash or value other than Shares on an annualized fiscal year basis with respect to any Participant
shall be $5,000,000. The Committee shall have the power to impose 

  

 10 

 
such other restrictions on Awards subject to this Section 10(c) as it may deem necessary or appropriate to ensure that such Awards satisfy all
requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto. Notwithstanding any provision of the Plan to the contrary, the Committee shall not be
authorized to increase the amount payable under any Award to which this Section 10(c) applies upon attainment of such pre-established formula. 
 (d) Settlement of Performance Awards shall be in cash, Shares, other Awards or other property, or a combination thereof, in the discretion of the Committee as set forth in the applicable Award Agreement. Performance Awards will be
distributed only after the end of the relevant Performance Period. The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion
to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to paragraph (c) above. Any settlement which changes the form of payment from that originally specified shall be implemented in a manner such
that the Performance Award and other related Awards do not, solely for that reason, fail to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code. The Committee shall specify the circumstances in which
such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant. 
 SECTION 11. Other
Stock-Based Awards. . The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise
based on, or related to, Shares or factors that may influence the value of Shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, purchase rights for Shares, Awards
with value and payment contingent upon performance of the Company or business units thereof or any other factors designated by the Committee. The Committee shall determine the terms and conditions of such Awards and such terms and conditions shall
be contained in an Award Agreement which evidences such Award. Shares delivered pursuant to an Award in the nature of a purchase right granted under this Section 11 shall be purchased for such consideration, paid for at such times, by such methods,
and in such forms, including, without limitation, cash, Shares, other Awards, notes, or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other Award under the Plan, may also be granted pursuant to
this Section 11. The Committee, in its discretion, may award dividend equivalents with respect to Awards granted pursuant to this Section 11. 
 SECTION 12. Effect of Termination of Service on Awards. The Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, the circumstances in which Awards shall be exercised,
vested, paid or forfeited in the event a Participant ceases to provide Service to the Company or any Affiliate prior to the end of a performance period 

  

 11 

 
or exercise or settlement of such Award; provided that, to the extent such Award is subject to Section 409A of the Code, the Committee’s
determination provided for in this Section 12 shall comply with Section 409A of the Code and the regulations promulgated thereunder. 
 SECTION 13. General Provisions Applicable to Awards.  
 (a) Awards shall be granted for no cash consideration or for
such minimal cash consideration as may be required by applicable law. 
 (b) Awards may, in the discretion of the Committee, be granted
either alone or in addition to or in tandem with any other Award or any award granted under any other plan of the Company. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under any
other plan of the Company, may be granted either at the same time as or at a different time from the grant of such other Awards or awards. 
 (c) Subject to the terms of the Plan, payments or transfers to be made by the Company upon the grant, exercise or payment of an Award may be made in the form of cash, Shares, other securities or other Awards, or any combination thereof, as
determined by the Committee in its discretion at the time of grant, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such
rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of dividend equivalents in respect of installment or deferred
payments. 
 (d) Except as may be permitted by the Committee or as specifically provided in an Award Agreement, (i) no Award and no
right under any Award shall be encumbered, assignable, alienable, saleable or transferable by a Participant otherwise than by will or pursuant to Section 13(e) and (ii) each Award, and each right under any Award, shall be exercisable
during the Participant’s lifetime only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative. The provisions of this paragraph shall not apply to any Award which has been fully
exercised, earned or paid, as the case may be, and shall not preclude forfeiture of an Award in accordance with the terms thereof. 
 (e) A
Participant may designate a Beneficiary or change a previous beneficiary designation at such times prescribed by the Committee by using forms and following procedures approved or accepted by the Committee for that purpose. If no Beneficiary
designated by the Participant is eligible to receive payments or other benefits or exercise rights that are available under the Plan at the Participant’s death, the Beneficiary shall be the Participant’s estate. 
  

 12 

 (f) All certificates for Shares and/or Shares or other securities delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which such Shares or other securities are then listed, and any applicable Federal or state securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to
such restrictions. 
 (g) The applicable Award Agreement shall provide whether, upon a Change in Control, outstanding Options shall become
fully exercisable and/or vested and outstanding Awards (other than Options) shall become fully vested and/or payable. To the extent not provided in the applicable Award Agreement, the Committee shall determine the treatment of outstanding Awards in
connection with any transaction or transactions resulting in a Change in Control after giving due consideration to the federal income tax consequences, if any, under Section 409A of the Code arising from such treatment. 
 (h) The Committee may impose restrictions on any Award with respect to non-competition, confidentiality and other restrictive covenants, as it deems
necessary in its sole discretion. 
 SECTION 14. Amendments and Termination.  
 (a) Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan, the Board may amend,
alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without (i) stockholder approval if
such approval is required by the listed company rules of the stock exchange, if any, on which the Shares are principally traded or quoted or required to comply with Rule 16b-3 of the Act and Section 162(m) or 422 of the Code, or (ii) the
consent of the affected Participant, if such action would adversely affect the rights of such Participant under any outstanding Award, except to the extent any such amendment, alteration, suspension, discontinuance or termination is made to cause
the Plan to comply with applicable law, stock exchange rules and regulations or accounting or tax rules and regulations. Notwithstanding anything to the contrary herein, the Committee may amend the Plan in such manner as may be necessary to enable
the Plan to achieve its stated purposes in any jurisdiction in a tax-efficient manner and in compliance with local rules and regulations. 
 (b) The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue or terminate, any Award theretofore granted, prospectively or retroactively, without the consent of any relevant
Participant or holder or beneficiary of an Award, provided, however, that no such action shall adversely affect the rights of any affected Participant or holder or beneficiary under any Award theretofore granted under the Plan, except 

  

 13 

 
to the extent any such action is made to cause the Plan to comply with applicable law, stock exchange rules and regulations or accounting or tax rules and
regulations; and provided further that, except as provided in Section 5(d), no such action shall directly or indirectly, through cancellation and regrant or any other method, reduce, or have the effect of reducing, the exercise price of
any Award established at the time of grant thereof and provided further, that the Committee’s authority under this Section 14(b) is limited in the case of Awards subject to Section 10(c), as set forth in Section 10(c).

 (c) Except as noted in Section 10(c), the Committee shall be authorized to make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of events (including, without limitation, the events described in Section 5(d)) affecting the Company, or the financial statements of the Company, or of changes in applicable laws, regulations or
accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. 
 (d) Any provision of the Plan or any Award Agreement to the contrary notwithstanding, the Committee may cause any Award granted hereunder to be canceled
in consideration of a cash payment or alternative Award made to the holder of such canceled Award equal in value to the Fair Market Value of such canceled Award, except that (i) the Committee shall give due consideration to the federal income
tax consequences arising under Section 409A of the Code prior to taking any such action and (ii) this Section 14(d) shall not be interpreted to permit any transaction that is prohibited by the second proviso of Section 14(b)
relating to the direct or indirect repricing of Awards. 
 (e) The Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect. 
 SECTION 15. Miscellaneous.  
 (a) No employee, Participant or other person shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity of treatment of employees, Participants, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. Any
Award granted under the Plan shall be a one-time Award which does not constitute a promise of future grants. The Company, in its sole discretion, maintains the right to make available future grants hereunder. 
 (b) A Participant granted an Award shall have no rights as a stockholder of the Company with respect to such Award unless and until such time as
certificates of book-entry shares for the Shares underlying the Award are registered in such Participant’s name in the Company’s stock records. The right of any Participant to receive payment with respect to an Award by virtue of
participation in the Plan shall be no greater than the right of any of the Company’s unsecured general creditors. 
  

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 (c) The Company shall be authorized to withhold from any Award granted or any payment due or transfer
made under any Award or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other securities or other Awards) of any federal, state and local withholding taxes due in respect of an Award, its
exercise, or any payment or transfer under such Award or under the Plan and to take such other action (including, without limitation, providing for elective payment of such amounts in cash or Shares by the Participant) as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes. 
 (d) Nothing contained in the Plan shall prevent the
Company from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases. 
 (e) The Plan and all determinations made and actions taken thereunder shall be governed by the internal substantive laws of the State of Delaware and
construed accordingly, to the extent not superseded by applicable federal law. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or to continue to provide services to, the Company or any
Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss a Participant, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement or in any other
agreement binding the parties. The receipt of any Award under the Plan is not intended to confer any rights on the receiving Participant except as set forth in such Award. 
 (f) If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any
person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full
force and effect. 
 (g) Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any
unsecured general creditor of the Company. 
  

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 (h) No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash or other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated. 
 SECTION 16. Effective Date of the Plan. The Plan shall be effective as of [__], 2007. 
 SECTION 17. Term of the Plan. No Award shall be granted under the Plan after the tenth year anniversary of its adoption by the Board.
However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and the authority of the Committee to amend, alter, adjust, suspend, discontinue, or terminate
any such Award, or to waive any conditions or rights under any such Award, and the authority of the Board to amend the Plan, shall extend beyond such date. 
 SECTION 18. Section 409A of the Code. With respect to Awards subject to Section 409A of the Code, the Plan is intended to comply with the requirements of Section 409A, and the provisions hereof shall
be interpreted in a manner that satisfies the requirements of Section 409A and the related regulations, and the Plan shall be operated accordingly. If any provision of the Plan or any term or condition of any Award would otherwise frustrate or
conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. 
  

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