Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Directors or Certain Officers
On January 11, 2019, Douglas R. Conant, 67, a member of the Board of Directors
of AmerisourceBergen Corporation (the "Company") since 2013, informed the
Company that he will not stand for re-election as a director at the upcoming
Annual Meeting of Stockholders to be held on February 28, 2019 (the "2019 Annual
Meeting"). Mr. Conant's decision not to stand for re-election was not a result
of any disagreement with the Company. Mr. Conant has indicated his intention to
continue to serve as a director of the Company until the 2019 Annual Meeting.
Following Mr. Conant's notification to the Company, the Board of Directors acted
to approve a reduction in its size from ten to nine members, effective as of the
date of the 2019 Annual Meeting. The Board of Directors also nominated each of
the other current directors for election, and each has decided to stand for
election at the 2019 Annual Meeting.
Compensatory Arrangements of Certain Officers
On January 11, 2019, the Company entered into amended and restated employment
agreements with its current named executive officers: Steven H. Collis,
Chairman, President and Chief Executive Officer; John G. Chou, Executive Vice
President and Chief Legal & Business Officer; James F. Cleary, Jr., Executive
Vice President and Chief Financial Officer; and Robert P. Mauch, Executive Vice
President and Group President, Pharmaceutical Distribution & Strategic Global
Sourcing. Upon recommendation by the Company's independent compensation
consultant and approval of the Compensation and Succession Planning Committee of
the Board of Directors of the Company, the employment agreements were amended
and restated to align the severance and change in control benefits with general
market practice, supported by benchmarking among the Company's peer group.
Mr. Collis' employment agreement was amended to provide that in the event Mr.
Collis' employment is terminated by the Company without cause or by Mr. Collis
for good reason, in either case, upon or within 24 months following a change in
control of the Company, provided that Mr. Collis delivers an effective release
in favor of the Company and its affiliates, Mr. Collis will receive the
• Continued base salary for a period of three years following termination of
• Three times the average annual bonus paid to Mr. Collis for the preceding
three years, paid in three substantially equal installments over the
three-year period following termination of employment.
Messrs. Cleary's and Mauch's employment agreements were amended to provide that,
in addition to the severance they would receive on a termination of employment
by the Company without cause or by the executive for good reason, and subject to
the delivery of an effective release in favor of the Company and its affiliates,
if such termination occurs upon or within 24 months following a change in
control of the Company, the executive will receive two times the average annual
bonuses received for the preceding three years, which will be paid in regular
payroll installments over the two-year period following termination of
employment. This amendment is consistent with amendments made to the employment
agreements for other executive officers (other than Messrs. Collis and Chou,
whose employment agreements already included this benefit).
Additionally, the terms of the employment agreements for all executive officers,
including the current named executive officers, were amended as follows:
• To conform to the Company's current bonus program, the executive will be
entitled to a pro-rata bonus for the year of termination, as well as any
bonus for the prior fiscal year that has not yet been paid prior to the
termination of employment, in the event the executive's employment is
terminated by the Company without cause or by the executive for good
reason. The pro-rata bonus for Messrs. Collis and Chou will continue to be
based on target performance and the pro-rata bonus for all other
executives, including Messrs. Cleary and Mauch, will be based on actual
• If amounts otherwise payable to the executive officer in connection with a
change in control would constitute excess parachute payments within the
meaning of Section 280G of the Internal Revenue Code, the Company will
reduce such payments to an amount that would avoid any excise taxes under
section 4999 of the Internal Revenue Code, but only if such reduction
would provide the executive with a greater net after-tax benefit than
would no reduction. Prior to the amendments, the Company was required to
reduce any excess parachute payments, if necessary to ensure that they do
not constitute excess parachute payments under Section 280G.
• The definition of cause, as defined in the employment agreements, was
updated to include the executive's material failure to comply with the
Company's code of conduct or employment policies.
• To provide that the employment agreements and the compensation payable
thereunder will be subject to the Incentive Compensation Restriction and
Financial Recoupment Program of the Company's Corporate Integrity
Agreement, to the extent applicable, and any applicable clawback or
recoupment policies, share trading policies, and other policies that may
be implemented by the Board of Directors of the Company or otherwise
required by law from time to time.
• To make certain other non-material updates.
The terms of the employment agreements for Messrs. Collis, Chou and Mauch before
the amended and restated employment agreements became effective were disclosed
in the Company's Definitive Proxy Statement for the 2018 Annual Meeting of
Stockholders, filed on January 19, 2018, and the terms of the employment
agreement for Mr. Cleary before the amended and restated agreements became
effective were disclosed in the Company's Current Report on Form 8-K filed on
November 13, 2018.
Item 9.01. Financial Statements and Exhibits.
10.1 Amended and Restated Employment Agreement, dated as of January 11, 2019,
between the Company and Steven H. Collis.
10.2 Amended and Restated Employment Agreement, dated as of January 11, 2019,
between the Company and John G. Chou.
10.3 Form of Employment Agreement applicable to executive officers.
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