EXHIBIT 10.2

Picture 1 [pgnd20150930ex10253dfa1001.jpg]

 

August 21, 2015

 

Mr. Matthew Hallgren

One North Franklin, Suite 3400

Chicago, IL 60606

 

Dear Matt:

 

This letter (the “Letter Agreement”) will confirm our agreement regarding your
employment with Press Ganey Holdings, Inc. (the “Company”).

 

As you may be aware, in connection with the commencement of your employment, you
were provided with an offer letter, dated March 28, 2014, as supplemented by a
written confirmation of a salary increase dated July 20, 2014 and a written
confirmation of promotion dated October 28, 2014 (collectively, the “Offer
Letter”). Notwithstanding anything to the contrary in the Offer Letter, (x)
effective August 31, 2015, your title will be Senior Vice President, Finance and
you will be reporting to the Chief Financial Officer and (y) your base salary
will be $200,000 annually (the “Base Salary”). With respect to each full
calendar year while employed by the Company, you will be eligible to earn an
annual target bonus award of up to thirty percent (30%) of your Base Salary (the
“Target Bonus”), based upon and subject to the achievement of performance goals,
which bonus, if any, is payable in accordance with and subject to the terms and
conditions of the Company’s bonus plan.

 

In addition to the foregoing, in the event that your employment is terminated by
the Company without Cause (as defined below) (other than due to death or
disability) on or prior to August 31, 2016, subject to(x) your continued
compliance with the restrictive covenants by which you are bound, (y) your
returning on the date of your employment termination any and all property of the
Company or its affiliates in your possession or control and (z) your execution
and delivery of a general release of claims against the Company and its
affiliates in a form acceptable to the Company (“Release”), on or prior to the
sixtieth (60th ) day following the date of your termination of employment and
your non-revocation of such Release within the time period provided therein
(clauses (x), (y) and (z), collectively, the “Conditions”), the Company shall
pay you an aggregate gross amount equal to $100,000 in the manner set forth
below, which amount is equal to six (6) months of your current annual base
salary (the “Severance Payment”), less any applicable withholding or other
taxes.

 

The first installment of the Severance Payment, which amount is payable in
twelve (12) equal installments in accordance with the Company’s usual payroll
practices, will be paid to you on the first regular payroll date that occurs
immediately following the date of termination; provided, however, that the
Company shall have the right to cease making such payments and you shall be
obligated to repay to the Company any such amounts already paid if (i) you fail
to execute and deliver the Release within the time period provided therein or,
after timely delivery, you revoke the Release within the time period specified
in such Release, or (ii) you breach your obligations under any agreement
containing restrictive covenants by which you are bound.

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

For purposes of this Letter Agreement, the term “Cause” shall mean (i) the
commission by you of an act of fraud or embezzlement, (ii) your indictment or
conviction for or plea of guilty or nolo contendere to (x) a felony or (y) a
crime involving moral turpitude, (iii) negligence or willful or intentional
misconduct by you in the performance of your duties, including any willful or
intentional misrepresentation or willful or intentional concealment by you on
any report  submitted to the Company (or any of its affiliates) which the Chief
Executive Officer of the Company (the “CEO”) in his reasonable discretion
determines is materially detrimental to the best interests of the Company and
its affiliates, (iv) the violation by you of a company policy regarding
substance abuse, sexual harassment or discrimination or any other material
policy of the Company or any of its affiliates regarding employment that the CEO
in his reasonable discretion determines is materially detrimental to the best
interests of the Company and its affiliates, (v) your willful or intentional
refusal or repeated failure, following notice from the Company, to render
services to the Company or any of its affiliates in accordance with your
employment (other than as a result of incapacity due to physical or mental
illness), (vi) your willful or intentional refusal or repeated failure,
following notice from the Company, to comply with reasonable directives of the
Board of Directors of the Company, the Board of Directors of any affiliate of
the Company, the CEO or the General Counsel of the Company consistent with your
duties, (vii) any act or omission that constitutes a material breach by you of
any of the provisions of any agreement between you, on the one hand, and the
Company or an affiliate of the Company, on the other hand, or (viii) any other
willful or intentional misconduct by you which is materially injurious to the
financial condition or business reputation of, or is otherwise, materially
injurious to the Company or any of its affiliates.

 

In addition to the Severance Payment, subject to the Conditions, should you
timely elect to continue coverage under the Company’s group health plans
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”), the Company agrees to pay the COBRA premiums for your
medical, dental and vision coverage for a period of six (6) months from the
termination date (such payment, the “COBRA Payment” and such period, the “COBRA
Reimbursement Period”), in order for you to maintain health insurance coverage
that is substantially equivalent to your coverage immediately prior to the
termination date. Should you obtain employment with  an  employer  who provides
health insurance benefits during the COBRA Reimbursement Period, the Company’s
obligation to provide you the COBRA Payment shall forever cease upon the
expiration of the waiting period (if any) for entitlement to insurance coverage
through your new employer. You agree to notify the Company in writing in the
event that you obtain employment before the end of the COBRA Reimbursement
Period. In any event, and notwithstanding any provision to the contrary herein,
the Company shall have no obligation to make any payments for COBRA premiums
paid for health insurance coverage beyond the expiration of the COBRA
Reimbursement Period. Notwithstanding the foregoing, if the Company determines
that it cannot provide the COBRA Payment without potentially violating
applicable law or incurring an excise tax, the Company shall in lieu thereof
provide you a taxable monthly payment in an amount equal to the monthly COBRA
premium that you would be required to pay to continue your and your covered
dependents’ group medical, dental and visions coverage in effect on the date of
termination (which amount shall be based on the premium for the first month of
COBRA coverage), which payment shall commence in the month following the month
in which the date of termination occurs and shall end on the earliest of (X) the
last day of the COBRA Reimbursement Period, (Y) the date that you and/or your
covered dependents become no longer eligible for COBRA and (Z) the date you
becomes eligible to receive health insurance coverage from a subsequent
employer.

 

Upon termination of your employment for any reason, you (or your estate) will be
entitled to receive (i) any unpaid Base Salary earned through the date of
termination, (ii) any expenses owed to you pursuant to the Company’s business
expense reimbursement policy and (iii) any amounts accrued and arising from your
participation in or benefits accrued under any employee benefit plan, program or
arrangement, subject to and payable in accordance with the terms and conditions
of such employee benefit plans, programs or arrangements. Except as otherwise
required by law, the payments described in this Letter Agreement will be the
only payments and benefits you will receive upon or following a termination of
your employment, and you  agree you are not entitled to any additional payments,
rights or benefits not otherwise described in this Letter Agreement. You hereby
acknowledge and agree that you are not eligible to be a participant in any
severance plan of the Company. Any payments received under this Letter Agreement
will not be taken into account for purposes of determining benefits under any
employee benefit plan of the Company, except to the extent required by law, or
as otherwise expressly provided by the terms of such plan.

2

--------------------------------------------------------------------------------

 

 

 

Notwithstanding any other provision of this Letter Agreement, any payments
hereunder will be subject to the withholding of such amounts, if any, relating
to tax and other payroll deductions as the Company reasonably determines it
should withhold pursuant to any applicable law or regulation.

 

This Letter Agreement is intended to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A”) and will be interpreted
accordingly. References under this Letter Agreement to your termination of
employment shall be deemed to refer to the date upon which you experienced a
“separation from service” within the meaning of Section 409A (a “Separation from
Service”). Notwithstanding anything herein to the contrary, if any payment of
money or benefits due to you hereunder could cause the application of an
accelerated or additional tax under Section 409A, such payments or benefits
shall be deferred if deferral will make such payment or benefits compliant under
Section 409A, or otherwise such payment or benefits shall be restructured, to
the extent possible, in a manner determined by the Company that does not cause
such an accelerated or additional tax. To the extent any reimbursements or
in-kind benefits due to you under this Letter Agreement constitute “non-
qualified deferred compensation” under Section 409A, any such reimbursements or
in-kind benefits shall be paid to you in a manner consistent with Treasury
Regulation Section 1.409A-3(i)(1)(iv). For purposes of Section 409A, each
payment made under this Letter Agreement will be designated as a “separate
payment” within the meaning of Section 409A. Notwithstanding anything in herein
to the contrary, if you are deemed by the Company at the time of your Separation
from Service to be a  “specified employee” for purposes of Section 409A, to the
extent delayed commencement of any portion of the benefits to which you are
entitled under this Letter Agreement is required in order to avoid a prohibited
distribution under Section 409A, such portion of your benefits shall not be
provided to you prior to the earlier of (i) the expiration of the six-month
period measured from the date of your Separation from Service or (ii) the date
of your death. Upon the first business day following the expiration of the
foregoing period, all payments deferred pursuant to the preceding sentence shall
be paid in a lump sum to you (or your estate or beneficiaries), and any
remaining payments due to you under this Letter Agreement will be paid as
otherwise provided herein. The Company shall consult with you in good faith
regarding the implementation of the provisions of this paragraph; provided that
neither the Company nor any of its employees or representatives shall have any
liability to you with respect to thereto.

 

This Letter Agreement constitutes the entire agreement between you and the
Company and supersedes all other prior agreements between the parties related to
the subject matter contained herein.

 

The validity, interpretation, construction and performance of this Letter
Agreement shall be governed by the laws of the State of Delaware without regard
to its principles of conflicts of law that would result in the application of
the laws of a jurisdiction other than the State of Delaware.

 

This Letter Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original but all of which together will constitute one
and the same instrument.

 

[The remainder of this page intentionally left blank.]

 

 

3

--------------------------------------------------------------------------------

 

 

If the foregoing terms and conditions are acceptable and agreed to by you,
please sign on the line provided below to signify such acceptance and return the
executed copy to the undersigned.

 

 

 

  PRESS GANEY ASSOCIATES, INC.

 

 

 

 

 

 

 

  By:

/s/ DEVIN J. ANDERSON

 

  Name:

Devin J. Anderson

 

  Title:

General Counsel and Corporate Secretary

 

 

 

 

 

 

 

 

 

  Accepted and agreed:

 

 

 

 

 

  /s/ MATTHEW W. HALLGREN

 

 

  Matthew Hallgren

 

 

 

 

 

 

 

 

 

4

--------------------------------------------------------------------------------