Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On November 6, 2017, Anthem, Inc. (the Company) announced that its Board of Directors (the Board) appointed
Gail Boudreaux as the Companys Chief Executive Officer and President, effective November 20, 2017 (the Transition Date). The Company also announced that its Board appointed Ms. Boudreaux as a member of the Companys
Board, effective as of the Transition Date, in the class of directors with a term expiring at the 2020 annual meeting of the Companys shareholders. A copy of the related press release is furnished with this Current Report on Form
8-K
as Exhibit 99.1.
Ms. Boudreaux, age 57, previously served as the Chief Executive Officer of GKB Global Health,
LLC, a healthcare strategy and business advisory firm that she founded in 2015, as Executive Vice President of United HealthGroup from May 2008 through February 2015, as President of United Healthcare from May 2008 through January 2011 and as the
Chief Executive Officer of United Healthcare from January 2011 through November 2014. Before joining United Healthcare, Ms. Boudreaux served as Executive Vice President of External Operations for Health Care Services Corporation from 2006
through May 2008. Ms. Boudreaux served on the board of directors of Novavax, Inc. from June 2015 through November 5, 2017 and currently serves on the boards of directors of Xcel Energy, Inc. and Zimmer Biomet Holdings, Inc.
Ms. Boudreaux succeeds Joseph Swedish, who will continue to serve as the Executive Chairman pursuant to the transition letter agreement with the Company
dated November 5, 2017 (the Transition Agreement) described below.
Employment Agreement with Ms. Boudreaux
On November 5, 2017, Ms. Boudreaux accepted a written offer letter from the Company establishing her compensation as Chief Executive Officer and
President and executed an employment agreement under the Companys Executive Agreement Plan (collectively, the Offer Letter). Ms. Boudreauxs initial compensation will consist of (i) an annual base salary of
$1,400,000, (ii) beginning in the 2018 fiscal year, a target incentive bonus opportunity equal to 175% of her base salary and (iii) long-term incentive awards with an aggregate target value equal to $10,250,000 for 2018. Ms. Boudreaux will
also receive in connection with the commencement of her employment with the Company a
one-time
grant of performance stock units (the
Sign-On
PSUs) with a
target value of $2,000,000 that vests based on the level of achievement of Company performance from 2017 through 2019 in accordance with the terms of the performance stock units granted to the Companys senior officers in 2017.
Pursuant to the Offer Letter, Ms. Boudreaux will participate in the Companys Executive Agreement Plan on a basis substantially similar to other
senior officers of the Company. The Executive Agreement Plan provides for severance benefits following a termination of employment without cause or resignation for good reason consisting of two years (or, if the termination or resignation is in
connection with a change in control of the Company, three years) of salary and target bonus, as well as continued employee benefits during the severance period. Additionally, the Executive Agreement Plan provides for accelerated vesting of equity
grants upon a termination of employment without cause or for good reason within three years following a change in control. Pursuant to the Offer Letter, the
Sign-On
PSUs will continue to vest in accordance
with their terms (and subject to the achievement of performance vesting conditions) following a termination of Ms. Boudreauxs employment without cause or for good reason.
2
Ms. Boudreaux will be subject to certain restrictive covenants including confidentiality,
non-competition,
non-solicitation
and
non-disparagement
during her employment and for specified periods of time after the termination
of her employment.
There are no arrangements or understandings between Ms. Boudreaux and any other person pursuant to which she was selected as
President and Chief Executive Officer. There are no family relationships between Ms. Boudreaux and any director or executive officer of the Company, and Ms. Boudreaux has no direct or indirect material interest in any transaction required
to be disclosed pursuant to Item 404(a) of Regulation
S-K.
Transition Agreement with Mr. Swedish
Pursuant to his Transition Agreement, Mr. Swedish will continue as the Companys Executive Chairman until the earlier of the Companys 2018
annual meeting of shareholders and May 31, 2018. During that period, he will continue to be paid his current rate of base salary, eligible to earn a bonus for 2017, a prorated bonus for 2018 and eligible to continue in the Companys
employee welfare, retirement savings and perquisite plans. Mr. Swedish will then serve as the Senior Advisor to the Chief Executive Officer and Consultant until May 1, 2020, for which he will receive $4,500,000 per year and be eligible to
participate in the Companys employee welfare, retirement savings and perquisite plans.
The foregoing summaries are qualified in their entirety by
reference to the Offer Letter and the Transition Agreement, copies of which are filed as Exhibits 10.1 and 10.2 to this report, respectively, and are incorporated herein by reference.