EX-10.1






Exhibit 10.1




HealthStream, Inc.

Board of Directors

Compensation Committee

Cash Incentive Bonus Plan — 2015




Overview:



Pursuant to the HealthStream, Inc. 2010 Stock Incentive Plan, the Compensation Committee (the
“Committee”) of the Board of Directors of HealthStream, Inc. (the “Company”) hereby establishes
this 2015 Cash Incentive Bonus Plan (the “Plan”). The Plan is the cash-based, short-term incentive
portion of HealthStream’s incentive compensation structure. The purpose of the Plan is to specify
appropriate opportunities to earn a cash bonus with respect to the Company’s 2015 fiscal year in
order to reward officers of the Company (“Management”) for the Company’s financial performance
during fiscal year 2015 and to further align their interests with those of the shareholders of the
Company.



Definitions:




	 	•	 	Actual Operating Income before bonuses – The Company’s Operating Income
achieved in fiscal 2015, excluding bonuses.






	 	•	 	[REDACTED]






	 	•	 	Incremental Operating Income - Actual Operating Income before bonuses less
Target Operating Income.






	 	•	 	Operating Income - Operating income for the 2015 fiscal year calculated in
accordance with generally accepted accounting principles and consistent with the
Company’s past practice and presented in the Company’s audited financial statements,
provided the following expenses are excluded from the calculation of Operating Income:
acquisition expenses for transactions within the calendar year and operating income
(loss) from acquisitions consummated during the calendar year (the “Excluded
Expenses”). The Committee has the negative discretion to include the Excluded Expenses
in the calculation of Operating Income.






	 	•	 	Target Operating Income – Operating Income for the 2015 fiscal year in an
amount established by the Committee by resolution within the first 90 days of the
Company’s 2015 fiscal year.





2015 Financial Measure and Plan Principles:




	 	1.	 	The financial measure for 2015 is Operating Income - Operating Income will be the
financial measure for 2015.






	 	2.	 	The bonus pool is funded by Incremental Operating Income - Bonuses will be earned from
the amount of Incremental Operating Income.






	 	3.	 	Incremental Operating Income is shared by shareholders of the Company and Management -
Only a portion of the Incremental Operating Income will be used to fund the bonus pool.
Shareholders will realize 100% of Incremental Operating Income once bonus pools have been
funded to the maximum levels established by the Plan.





The Plan



Eligibility



Three groups are eligible for participation in the Plan:




	 	•	 	Executive Team – Chief Executive Officer, Executive Vice Presidents and Senior
Vice Presidents may earn up to 30% of base salary.






	 	•	 	[REDACTED]






	 	•	 	[REDACTED]






	 	•	 	Exclusions - Members of the Executive Team or [REDACTED] with a commission
based incentive compensation plan shall not be eligible to participate in the Plan.





Incentive Payout



Payouts under the Plan shall be determined as follows:




	 	1.	 	The Company’s Incremental Operating Income will be determined by subtracting the Target
Operating Income from Actual Operating Income before bonuses. The Incremental Operating
Income will then be multiplied by a percentage for [REDACTED], the Executive Team and
[REDACTED], respectively.






	 	2.	 	[REDACTED]






	 	3.	 	[REDACTED]






	 	4.	 	The Executive Team Bonus Pool will be limited to 30% of Executive Team total base
salaries.






	 	5.	 	While the maximum percentage of base salary that each group of participants is
eligible to earn under the Plan shall remain set during the Plan year, bonus pool amounts
may change due to impact of hiring, terminating, or promoting eligible participants during
the Plan year. Management shall have discretion as to whether and to what extent newly
hired and newly promoted employees who would otherwise qualify to participate in the Plan
are allowed to participate in the Plan during the Plan year of such individuals hiring or
promotion.