2012 Incentive Program



 Exhibit 10.1 
 COMPUTER PROGRAMS AND SYSTEMS, INC. 
 2012 EXECUTIVE OFFICER INCENTIVE
PROGRAM 
 1. Purpose and Administration of the 2012 Incentive Program. The 2012 Executive Officer Incentive Program
(the “2012 Incentive Program”) has been established by Computer Programs and Systems, Inc. (the “Corporation”) to encourage outstanding performance from its executive officers. Subject to applicable law, all designations,
determinations, interpretations, and other decisions under or with respect to the 2012 Incentive Program or any bonus award hereunder shall be within the sole discretion of the Compensation Committee (the “Compensation Committee”) of the
Board of Directors (the “Board”) of the Corporation, may be made at any time and shall be final, conclusive and binding upon all persons. Designations, determinations, interpretations, and other decisions made by the Compensation Committee
with respect to the 2012 Incentive Program or any bonus award hereunder, including but not limited to the application of the Recoupment Policy described herein, need not be uniform and may be made selectively among Eligible Executives, whether or
not such Eligible Executives are similarly situated. 
 2. Participation. All executives officers of the Corporation,
except executives who receive commission-based compensation, are eligible to receive a bonus award pursuant to the 2012 Incentive Program (each, an “Eligible Executive”). Each Eligible Executive selected by the Board to receive a bonus
award under the 2012 Incentive Program is referred to herein as a Participant. 
 3. Calculation and Payment of Awards.
Bonus awards shall be calculated based on the financial results of the Corporation for the 2012 fiscal year. The bonus awards to be paid pursuant to the 2012 Incentive Program (each, an “Award”) shall be on such terms as the Board may
prescribe, at the Compensation Committee’s recommendation, based on the performance criteria set forth on Schedule A hereto. The target(s) for the performance criteria shall be determined by the Board, in its discretion, at the
recommendation of the Compensation Committee, as set forth on Schedule A hereto. As soon as practicable following the 2012 fiscal year, the Compensation Committee shall determine and certify whether and to what extent the performance goal has
been met, as well as the amount of the Award that each Participant has earned under the 2012 Incentive Program. A Participant is required to remain employed with the Corporation through the end of the 2012 fiscal year in order to have a legally
binding right to the Award. 
 Awards pursuant to the 2012 Incentive Program will be paid solely in cash. All amounts due to
Participants under the 2012 Incentive Program shall be paid as soon as administratively feasible after the end of the 2012 fiscal year, and, in any event, no later than March 15, 2013. Except as the Compensation Committee may otherwise
determine in its sole and absolute discretion, termination of a Participant’s employment prior to the end of the 2012 fiscal year will result in the forfeiture of the Award by the Participant, and no payments shall be made with respect thereto.
This 2012 Incentive Program is not a qualified plan for federal income tax purposes, and any payments are subject to applicable tax withholding requirements. 
 4. Adjustments for Unusual or Nonrecurring Events. The Compensation Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, bonus awards
under the 2012 Incentive Program in recognition of unusual or nonrecurring events affecting any Participant, the Corporation, or the financial statements of the Corporation; in the event of changes in applicable laws, regulations or accounting
principles; or in the event the Compensation 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 2012 Incentive Program.
The Compensation Committee is also authorized to adjust performance targets or bonus awards downward to avoid unwarranted windfalls. Notwithstanding the foregoing, the Compensation Committee shall not have the discretion to increase any Award
payable to a Participant in excess of that provided by the application of the terms and conditions set forth in Schedule A hereto. 
 5. Recoupment Policy. The Corporation may recover from any Participant any incentive compensation awarded or paid pursuant to this 2012 Incentive Program based on (i) achievement of financial
results that were subsequently the subject of a restatement due to material noncompliance with any financial reporting requirement under either GAAP or the federal securities laws, other than as a result of changes to accounting rules


  








 
and regulations, or (ii) a subsequent finding that the financial information or performance metrics used by the Compensation Committee to determine the amount of the incentive compensation
were materially inaccurate, in each case regardless of individual fault. In addition, the Corporation may recover any incentive compensation awarded or paid pursuant to this 2012 Incentive Program based on a Participant’s conduct which is not
in good faith and which materially disrupts, damages, impairs or interferes with the business of the Corporation. This Recoupment Policy applies to any incentive compensation earned or paid to an Eligible Executive pursuant to this 2012 Incentive
Program. Subsequent changes in status, including retirement or termination of employment, do not affect the Corporation’s rights to recover compensation under this policy. The Compensation Committee will administer this policy and exercise its
discretion and business judgment in the fair application of this policy based on the facts and circumstances as it deems relevant in its sole discretion. More specifically, the Compensation Committee shall determine in its discretion any appropriate
amounts to recoup, the officers from whom such amounts shall be recouped (which need not be all officers who received the bonus compensation at issue) and the timing and form of recoupment; provided, that only compensation paid or settled within
three years prior to the Compensation Committee taking action under this Recoupment Policy shall be subject to recoupment; provided further, that any recoupment pursuant to clause (i) or (ii) of the first sentence of this paragraph shall
not exceed the portion of any applicable bonus paid hereunder that is in excess of the amount of performance-based or incentive compensation that would have been paid or granted based on the actual, restated financial statements or actual level of
the applicable financial or performance metrics as determined by the Compensation Committee in its sole discretion. 
 For
avoidance of doubt, the Corporation may set off the amounts of any such required recoupment against any amounts otherwise owed by the Corporation to a Participant as determined by the Compensation Committee in its sole discretion, solely to the
extent any such offset complies with the requirements of Section 409A of the Internal Revenue Code, as amended (the “Code”), and the guidance issued thereunder. 
 If any restatement of the Corporation’s financial results indicates that the Corporation should have made higher performance-based payments than those actually made under the 2012 Incentive Program
for the period affected by the restatement, then the Compensation Committee shall have discretion, but not the obligation to cause the Corporation to make appropriate incremental payments to affected Participants then-currently employed by the
Corporation. The Compensation Committee will determine, in its sole discretion, the amount, form and timing of any such incremental payments, which shall be no more than the difference between the amount of performance-based compensation that was
paid or awarded and the amount that would have been paid or granted based on the actual, restated financial statements. 
 6.
No Right to Employment. The grant of an Award under the 2012 Incentive Program shall not be construed as giving a Participant the right to be retained in the employ of the Corporation. 

7. No Trust or Fund Created. Neither the 2012 Incentive Program nor any Award shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Corporation and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Corporation pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Corporation. 
 8. No Rights to Awards. No person shall
have any claim to be granted any Award and there is no obligation for uniformity of treatment among Participants. The terms and conditions of Awards, if any, need not be the same with respect to each Participant. The Corporation reserves the right
to terminate the 2012 Incentive Program at any time in the Corporation’s sole discretion. 
 9. Section 409A of the
Internal Revenue Code. This 2012 Incentive Program is intended to be exempt from Section 409A of the Code. 
 10.
Interpretation and Governing Law. This 2012 Incentive Program shall be governed by and interpreted and construed in accordance with the internal laws of the State of Alabama, without reference to principles of conflicts or choices of laws. In
the event the terms of this 2012 Incentive Program are inconsistent with the terms of any written agreement between a Participant and the Corporation, the terms of such written agreement shall govern the Participant’s participation in the 2012
Incentive Program. 

  








 Schedule A 
 to 2012 Incentive Program 
 Performance Metric; Determination of
Percentage of Target Bonus Amount Earned 
 The performance metric selected by the Board is the
Corporation’s EBITDA.1 The percentage of the target
award (“Target Bonus Amount”) that is earned by a Participant is based on the Corporation’s EBITDA in 2012 (“2012 EBITDA”) compared to the Corporation’s EBITDA in 2011 (“2011 EBITDA”), as follows: 

 

	 	•	 	 Threshold: 75% of the Participant’s Target Bonus Amount is earned if 2012 EBITDA is 95% of 2011 EBITDA. No bonus is earned if 2012 EBITDA
is less than 95% of 2011 EBITDA. 


  

	 	•	 	 Target: 100% of the Participant’s Target Bonus Amount is earned if 2012 EBITDA is 105% of 2011 EBITDA. 



 

	 	•	 	 Maximum: 150% of the Participant’s Target Bonus Amount is earned if 2012 EBITDA equals or exceeds 130% of 2011 EBITDA.



  

	 	•	 	 Interpolation: The Corporation will interpolate between the threshold, target, and maximum goals in the manner set forth in the following table:



  

			
	 2012 EBITDA
	  	 Percentage of Target Bonus Amount

Earned by Participant

		
	 Less than 95% of 2011 EBITDA
	  	No bonus earned
	 95% of 2011 EBITDA
	  	75% of Target Bonus Amount
	 100% of 2011 EBITDA
	  	90% of Target Bonus Amount
	 105% of 2011 EBITDA
	  	100% of Target Bonus Amount
	 110% of 2011 EBITDA
	  	110% of Target Bonus Amount
	 115% of 2011 EBITDA
	  	120% of Target Bonus Amount
	 120% of 2011 EBITDA
	  	130% of Target Bonus Amount
	 125% of 2011 EBITDA
	  	140% of Target Bonus Amount
	 130% or more of 2011 EBITDA
	  	150% of Target Bonus Amount

 The Corporation will linearly interpolate between the amounts set forth above. For example, (i) if
2012 EBITDA is 97.5% of 2011 EBITDA, each Participant will earn 82.5% of his Target Bonus Amount, (ii) if 2012 EBITDA is 107.5% of 2011 EBITDA, each Participant will earn 105% of his Target Bonus Amount, and (iii) if 2012 EBITDA is 122.5%
of 2011 EBITDA, each Participant will earn 135% of his Target Bonus Amount. 
  

 

	1 	 “EBITDA” means earnings before interest, income taxes, depreciation and amortization, as determined in good faith by the Board or the
Compensation Committee, in consultation with the Chief Executive Officer of the Corporation.