Document:

hstm-ex1019_11.htm

EXHIBIT 10.19

HealthStream, Inc. 

Board of Directors 

Compensation Committee

2021 Provider Solutions Cash Incentive Bonus Plan 

For the Business Segment President

Overview:

 

Pursuant to the HealthStream, Inc. 2016 Omnibus Incentive Plan, the Compensation Committee (the “Committee”) of the Board of Directors of HealthStream, Inc. (the “Company”) hereby establishes this Amended 2021 Provider Solutions Cash Incentive Bonus Plan for the Business Segment President (the “Plan”).  The Plan is a cash-based, short-term incentive portion of the Company’s Provider Solutions segment (the “Business Unit”) incentive compensation structure for the president (“President”) of the Business Unit.  The purpose of the Plan is to specify appropriate opportunities to earn a cash bonus with respect to the (i) Business Unit’s 2021 fiscal year performance and/or (ii) the Company’s overall 2021 fiscal year performance, each in order to reward the President for the Business Unit’s and/or the Company’s financial performance during fiscal year 2021 and to further align his interest with those of the shareholders of the Company.

 

Definitions:

 

 

	
 
	
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Provider Solutions Actual Adjusted EBITDA before bonuses – The Business Unit’s Adjusted EBITDA achieved in fiscal 2021, excluding bonuses.

 

	
 
	
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Enterprise Actual Adjusted EBITDA before bonuses – The Company’s Adjusted EBITDA achieved in fiscal 2021, excluding bonuses.

 

	
 
	
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Annual Bonus – The annual bonus paid to President after the Committee determines the applicable financial measure has been achieved.

 

	
 
	
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Provider Solutions Incremental Adjusted EBITDA – Provider Solutions Actual Adjusted EBITDA before bonuses less Provider Solutions Target Adjusted EBITDA.

 

	
 
	
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Enterprise Incremental Adjusted EBITDA – Enterprise Actual Adjusted EBITDA before bonuses less Enterprise Target Adjusted EBITDA.

 

	
 
	
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Provider Solutions Adjusted EBITDA – The Business Unit’s Adjusted EBITDA for the 2021 fiscal year shall be determined by the Business Unit’s performance as a component of the Enterprise Adjusted EBITDA, provided the following expenses are excluded from the calculation of Provider Solutions Adjusted EBITDA: for acquisitions and divestitures within or directly impacting the Business Unit, (i) acquisition and divestiture expenses incurred within the calendar year to the extent such expenses are in excess of the amount originally allocated to such purpose in the 

 

 

	
 
		
Company’s 2021 budget and (ii) EBITDA (profit/loss) from acquisitions and divestitures consummated during the calendar year (the “Provider Solutions Excluded Expenses”).  The Committee has the negative discretion to include the Provider Solutions Excluded Expenses in the calculation of Provider Solutions Adjusted EBITDA. 

 

	
 
	
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Enterprise Adjusted EBITDA - The Company’s Adjusted EBITDA for the 2021 fiscal year calculated as set forth in the “Reconciliation of Non-GAAP Financial Measures” in the Company’s annual filing under Form 10-K and as updated under subsequent quarterly filings under Form 10-Q or the Company’s quarterly earnings releases filed under Forms 8-K, provided the following  are excluded from the calculation of Adjusted EBITDA: (i) acquisition and divestiture expenses incurred within the calendar year to the extent such expenses are in excess of the amount originally allocated to such purpose in the Company’s 2021 budget; and (ii) EBITDA (profit/loss) from acquisitions and divestitures consummated during the calendar year(collectively, the “Excluded Expenses”).  The Committee has the negative discretion to include the Excluded Expenses in the calculation of Enterprise Adjusted EBITDA.

 

	
 
	
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Provider Solutions Target Adjusted EBITDA – Provider Solutions Adjusted EBITDA for the 2021 fiscal year in an amount established by the Committee by resolution within the first 90 days of the Company’s 2021 fiscal year.

 

	
 
	
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Enterprise Target Adjusted EBITDA – Enterprise Adjusted EBITDA for the 2021 fiscal year in an amount established by the Committee by resolution within the first 90 days of the Company’s 2021 fiscal year.

 

 

2021 Financial Measure and Plan Principles:

 

	
 
	
1.
	
The financial measures for 2021 are Provider Solutions and/or Enterprise Adjusted EBITDA – Provider Solutions and/or Enterprise Adjusted EBITA will be the financial measure for 2021.

 

	
 
	
2.
	
The Annual Bonus is funded by Provider Solutions and/or Enterprise Incremental Adjusted EBITDA – The Annual Bonus will be earned from an amount of Provider Solutions and/or Enterprise Incremental Adjusted EBITDA. 

 

 

The Plan

 

Eligibility

 

One individual is eligible for participation in the Plan:

 

 

 

 

	
 
	
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President – The maximum Annual Bonus the President shall be eligible to receive under the Plan shall be an amount equal to 40 percent of the President’s base salary, with that 40% being comprised as follows:  32% from Provider Solutions Incremental Adjusted EBITDA and 8% from Enterprise Incremental Adjusted EBITDA.  Therefore, 80% of the President’s Annual Bonus is based on achieving and exceeding Provider Solutions Target Adjusted EBITDA and the other 20% is based on achieving and exceeding Enterprise Target Adjusted EBITDA.

 

	
 
	
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Employment Requirements – Participants in the Plan who were employed with   

the Company through December 31, 2021 shall be eligible to receive bonus payments, if any, under the Plan regardless of whether such employees are employed on the date such payments are actually made.  Notwithstanding the foregoing, in the case of death or disability, the participant’s pro rata share from January 1, 2021 through the date of participant’s death or disability shall be awarded.

 

 

Payout 

 

Payouts under the Plan shall be determined as follows:

 

	
 
	
1.
	
Provider Solutions Incremental Adjusted EBITDA will be determined by subtracting the Provider Solutions Target Adjusted EBITDA from Actual Adjusted EBITDA before bonuses.  The Provider Solutions Incremental Adjusted EBITDA will then be multiplied by 32% for the President.

 

	
 
	
2.
	
Enterprise Incremental Adjusted EBITDA will be determined by subtracting the Enterprise Target Adjusted EBITDA from Enterprise Actual Adjusted EBITDA before bonuses.  The Enterprise Incremental Adjusted EBITDA will then be multiplied by 8% for the President.

 

	
 
	
3.
	
Any such Annual Bonus made to the President pursuant to the Plan shall be payable at such time as bonuses are paid generally to executive officers of the Company.hstm-ex1020_140.htm

 

Exhibit 10.20

HEALTHSTREAM, INC.

DIRECTORS STOCK ELECTION PLAN

 

December 14, 2020

 

Section 1.  Purpose.  The purpose of this Directors Stock Election Plan (the “Plan”) is to enable HealthStream, Inc. (the “Company”) to provide a mechanism for non-employee directors of the Company (“Directors”) to elect to cause the cash compensation (the “Director Cash Compensation”) otherwise payable by the Company to any such Directors in their capacity as a non-employee director to be paid in the form of shares of the Company’s common stock, no par value (“Common Stock”), in lieu of Director Cash Compensation, all in accordance with the terms set forth in this Plan and the 2016 Omnibus Incentive Plan of the Company (the “Incentive Plan”).

 

Section 2.  Election Mechanics.

 

(a)Director Election Form.  At any time prior to the beginning of a calendar year (or other period made available by the Company), a Director may elect, by executing, completing and delivering to the Company an election form to be provided by the Company (the “Election Form”), that all, but not less than all, of the Director Cash Compensation that would otherwise be payable to such Director during such calendar year or other period (the “Applicable Year”) (any Director Cash Compensation that any Director elects to receive in the form of Unrestricted Shares (as defined below) as specified in the Election Form, the “Applicable Director Cash Compensation”) be paid in the form of unrestricted shares of Common Stock issued by the Company (the “Unrestricted Shares”) in lieu of such Applicable Director Cash Compensation.  

 

(b)Common Stock.  Any Director electing to receive an award of Unrestricted Shares pursuant to the Election Form will be entitled to receive, on the dates on which such Director would otherwise be entitled to receive Applicable Director Cash Compensation during such Applicable Year, which dates (unless otherwise determined by the Plan Committee) will be the tenth day of the final month in each calendar quarter during such Applicable Year (or, if such day is not a business day, the next succeeding business day) (the “Payment Dates”), an award of Unrestricted Shares in an amount (rounded to the nearest whole share) equal to the quotient of (i) the Applicable Director Cash Compensation otherwise payable on any such Payment Date, divided by (ii) the closing price of the Common Stock as reported on the Nasdaq Global Select Market on the Payment Date, or if the applicable Payment Date falls on a day when markets are closed, then on the most recently ended trading date in proximity thereto.  For purposes of clarification, in no event will any Director be entitled to receive any award of Unrestricted Shares except to the extent that the Applicable Director Cash Compensation would otherwise be (or have been) payable to such Director in or with respect to the Applicable Year.  In addition, notwithstanding the foregoing or anything contained herein to the contrary, in the event that, between the date of the Election Form and the Payment Date, any adjustments occur with respect to the Common Stock within the scope of Section 4.2 of the Incentive Plan, or any Change in Control (as defined in the Incentive Plan) is consummated, the Plan Committee may, in its discretion, determine any changes in the consideration to be paid to any Director hereunder (including changes in the form(s) and timing of payment of such consideration payable hereunder consistent with any restrictions set forth in 

 

 

 

Section 4.2 of the Incentive Plan), provided that the total value of the consideration payable to any Director after such adjustment shall be equivalent to the pre-adjustment value. 

 

  Section 3.  Administration

 

(a)Plan Committee.  This Plan will be administered by the Compensation Committee, or such other committee as may be appointed by the Board (any such committee, the “Plan Committee”), and may include Directors who have elected to participate in the Plan.  No member of the Plan Committee will be liable for any act done or determination made in good faith.

 

(b)Committee Determination Final.  The construction and interpretation of any provision of the Plan by the Plan Committee, and a determination by the Plan Committee of the amount of any deferral account, will be final and conclusive.

 

(c)Amendments.  The Company reserves the right to terminate, modify or amend this Plan, as may be determined by the Plan Committee; provided, however, that no such termination, modification or amendment that would materially and adversely affect the rights of any Director who has previously made an election hereunder shall not to that extent be effective without the consent of such Director. 

 

(d)Non-Alienation.  Prior to the issuance of the unrestricted Shares to which an election hereunder relates, no Director (or estate of a Director) will have power to transfer, assign, anticipate, mortgage or otherwise encumber any rights or any amounts payable to him or her hereunder; nor will any such rights or payments be subject to seizure for the payment of any debts, judgments, alimony, or separate maintenance, or be transferable by operation of law in the event of bankruptcy, insolvency, or otherwise.

 

(e)Taxes.  Any Director to whom Unrestricted Shares are issued hereunder will become subject to federal, state and local income taxes and other amounts as may be required by law with respect to the receipt of the Unrestricted Shares.  By acknowledging and accepting any such award, any such Director will acknowledge that the Company will be required to report the compensation to the IRS, that such Director will be responsible for his or her tax liability, and that the Company will prepare or cause to be prepared an IRS Form 1099 (or other applicable form) reporting such compensation to the Director.

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