Document:

Exhibit 10.13

 

PREMIER, INC.

ANNUAL INCENTIVE COMPENSATION PLAN

 

AMENDMENT 2011-1

 

WHEREAS, Premier, Inc., a Delaware company (the “Company”), adopted the Premier, Inc. Annual Incentive Compensation Plan, effective July 1, 1996, for the benefit of selected employees of the Company and its affiliates, subsidiaries, and managed entities which the Company permits to participate in the Plan;

 

WHEREAS, the Company has amended and restated the Plan, most recently effective September 1, 2003;

 

WHEREAS, the Compensation Committee (the “Committee”) of the Board of Directors of the Company has reserved the right to amend the Plan;

 

WHEREAS, the Committee has determined that it is in the best interest of the Company to amend the Plan to implement a clawback or recoupment of certain Awards and payments under the Plan to specified participants to replicate some of the relevant requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

NOW, THEREFORE, the Plan is amended, effective January 1, 2011, to provide as follows:

 

1.  New Article 8A is added to provide as follows:

 

ARTICLE 8A.  REDUCTION AND REPAYMENT OF AWARDS IN CERTAIN CIRCUMSTANCES

 

8A.1       Clawback Policy.  The Company may, in its discretion, cancel all or any portion of the Awards of specified Participants, whether vested or unvested, whether before or following payment of such Award(s), under the following circumstances:

 

(a)  With respect to a Covered Executive, an Award or payment of an Award is made for a Fiscal Period, and the Audit Committee: (i) determines that the financial statements on which the Award is based or paid are materially inaccurate and (ii) subsequently restates or otherwise adjusts the financial statements in a manner that reduces the size of the Award or payment.

 

(b)  With respect to a Covered Executive, an Award or payment of an Award is made for a Fiscal Period, and the Audit Committee: (i) determines that one or more of the Operating Metrics calculations on which the Award is based or paid are materially 

 

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inaccurate and (ii) subsequently restates or otherwise adjusts the Operating Metrics calculations in a manner that reduces the size of the Award or payment.

 

(c)  With respect to a Senior Executive, an Award or payment of an Award is made for a Fiscal Period, and the Audit Committee: (i) determines that the financial statements on which the Award is based or paid are materially inaccurate, (ii) subsequently restates or otherwise adjusts the financial statements in a manner that reduces the size of the Award or payment, and (iii) determines that such inaccuracy is attributable, in whole or in part, to the Senior Executive’s fraud, intentional misconduct, or gross negligence, including the failure to report another person’s fraud, intentional misconduct, or gross negligence.

 

(d)  With respect to a Senior Executive, an Award or payment of an Award is made for a Fiscal Period, and the Audit Committee determines: (i) that one or more of the Operating Metrics calculations on which the Award is based or paid are materially inaccurate, (ii) subsequently restates or otherwise adjusts one or more of the Operating Metrics calculations in a manner that reduces the size of the Award or payment, and (iii) determines that such inaccuracy is attributable, in whole or in part, to the Senior Executive’s fraud, intentional misconduct, or gross negligence, including the failure to report another person’s fraud, intentional misconduct, or gross negligence.

 

8A.2       Fiscal Periods.

 

(a)  The Fiscal Period described in Section 8A.1(a) and (b) shall mean the 36-month period immediately preceding the date on which the Company restates or otherwise adjusts the financial statements or performance measure(s) in a manner that reduces the size of the Award or payment, including amounts awarded and/or paid prior to the effective date of this Article 8A.

 

(b)  The Fiscal Period described in Section 8A.1(c) and (d) shall mean the entire period preceding the date on which the Company restates or otherwise adjusts the financial statements or performance measure(s) in a manner that reduces the size of the award or payment during which the individual is engaged in the role of a Senior Executive, including periods prior to the effective date of this Article 8A.

 

8A.3       Amount of Clawback.

 

(a)  If one or more of the events described in Section 8A.1 occurs, the Committee, in its discretion, shall reduce the Award by an amount equal to the Award calculated using the erroneous financial statements or performance measures, less the Award calculated using the restated or adjusted financial statements or performance standards.

 

(b)  Where the financial results were considered in calculating the Award, but the Award is not awarded or paid on a formulaic basis, the Committee shall determine, in its discretion, the amount, if any, by which the Award should be reduced.

 

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Section 8A.4         Recoupment of Paid Awards.

 

(a)  Subject to applicable law, the Company will seek to recoup amounts calculated under Section 8A.3 and previously paid to the Covered Executive or Senior Executive by:

 

(i)  Requiring the Covered Executive or Senior Executive to pay such amount to the Company,

 

(ii)  Set-off,

 

(iii)  Reducing future compensation or deferred compensation, and/or

 

(iv)  Such other means or combination as the Committee determines to be appropriate.

 

(b)  The Committee will determine whether to charge interest with respect to such recoupment and, if interest will be charged, how it will be calculated.

 

(c)  Any recoupment under this Policy may be in addition to any other remedies that may be available to the Company under applicable law, including disciplinary actions up to and including termination of employment.  This does not limit the Company’s ability to seek recoupment, in appropriate circumstances (including circumstances beyond the scope of this Plan) and as permitted by law, of any amounts from any individual, whether or not the individual is a Covered Executive or a Senior Executive.

 

Section 8A.5         Definitions.

 

(a)  “Audit Committee” means the Audit Committee of the Board of Directors of the Company.

 

(b)  “Covered Executive” means an individual who serves or served as a member of the Company’s Executive Team or as a participant in the Long-Term  Incentive Plan during all or a portion of the applicable Fiscal Period.

 

(c) “Operating Metrics” means the Goals and Performance Standards and Performance Standard Achievement used to calculate Awards.

 

(d)  “Senior Executive” means an individual who serves or served as the Company’s Chief Executive Officer or Chief Financial Officer during all or a portion of the applicable Fiscal Period.

 

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IN WITNESS WHEREOF, the Compensation Committee of the Company’s Board of Directors has authorized its member to execute this Amendment 2011-1 to the Plan this 31 day of January, 2011.

 

 

	
 
    	
/s/   Robin Bernstein
    
	
 
    	
For   the Compensation Committee
    

 

4Exhibit 10.14

 

PREMIER, INC.

ANNUAL INCENTIVE COMPENSATION PLAN

 

AMENDMENT 2013-1

 

WHEREAS, Premier Health Services, Inc., (f/k/a Premier, Inc.) a Delaware company (the “Company”), adopted the Premier, Inc. Annual Incentive Compensation Plan, effective July 1, 1996, for the benefit of selected employees of the Company and its affiliates, subsidiaries, and managed entities which the Company permits to participate in the Plan;

 

WHEREAS, the Company has amended and restate the Plan, most recently effective September 1, 2003;

 

WHEREAS, the Compensation Committee of the Company (the “Committee”) may amend the Plan;

 

WHEREAS, the Committee wishes to amend the Plan to conform the definition of “Change in Control” used in the Plan with the definition found in the Premier, Inc. 2013 Equity Incentive Plan;

 

WHEREAS, the Committee wishes to amend the Plan, contingent upon Premier, Inc.’s (“Premier”) successful completion of the contemplated initial public offering, to reflect the adoption a new compensation recoupment policy; and

 

WHEREAS, the Committee has determined that it is in the best interest of the Premier, the Company and their affiliates to amend the Plan to make certain technical updates to clarify the Company’s intention that the Plan be construed and operated in a manner such that it is exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”), but to also provide a Code Section 409A “savings clause” in the event any amounts payable under the Plan are determined to be nonqualified deferred compensation within the meaning of Code Section 409A.

 

NOW, THEREFORE, the Plan is amended, effective August 16, 2013, to provide as follows:

 

1.  Section 2.1(c) of the Plan is hereby deleted in its entirety and replaced as follows:

 

“(c)                            “Change in Control” shall have the meaning set forth in Section 13.3 (or subsequent applicable sections, if and as later amended) of the Premier, Inc. 2013 Equity Incentive Plan, as it may be established, modified, changed or replaced from time to time.”

 

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2.  A new Section 8A.6 is added to the Plan as follows:

 

“Section 8A.6                    Replacement Compensation Recoupment Policy.

 

Notwithstanding the foregoing provisions in this Section 8A and contingent upon the successful completion of the contemplated reorganization pursuant to which Premier Healthcare Solutions, Inc. (f/k/a Premier, Inc.) and Premier Purchasing Partners, L.P. would become direct or indirect subsidiaries of Premier, Inc. (“New Premier”) and New Premier will engage in an initial public offering of Class A Common Stock (the reorganization and initial public offer for which is collectively referred to herein as the “Reorganization”), the following provisions shall replace Sections 8A.1 through 8A.5.

 

Effective as of the Reorganization, a Participant’s eligibility to participate in, receive Awards under, and rights to payment pursuant to this Plan is conditioned upon the Participant’s being subject any compensation recovery policy that may be adopted from time to time by New Premier or any subsidiary of New Premier (a “Recoupment Policy”) and all amounts payable pursuant to this Plan shall be subject to the Recoupment Policy.”

 

3.  A new Section 11.12 is hereby added to the Plan as follows:

 

“11.12  Code Section 409A.

 

(a)                                 The Plan is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the rules, regulations and other guidance promulgated thereunder (“Code Section 409A”) and shall be construed and interpreted in such a manner consistent with said intent.

 

(b)                                 Notwithstanding the foregoing, in the event any portion of the Plan is determined to involve the deferral of compensation or the payment of “nonqualified deferred compensation” (as such term is described in Code Section 409A), such portion of the Plan shall be interpreted to comply with Code Section 409A, and each provision that conflicts with such requirements shall be neither valid nor enforceable.  The Committee may amend any such portion of the Plan determined to be subject to the requirements of Code Section 409A to the extent required to comply with Code Section 409A, as the Committee may determine to be necessary or appropriate.

 

(c)                                  The following provisions shall apply upon a “separation from service” (as defined by Code Section 409A) on or after the date that any stock of the Company (or its parent) becomes publicly traded on an established securities market or otherwise.  If the Participant is deemed on the date of such a separation from service to be a “specified employee” (within the meaning of that term under Code Section 409A(a)(2)(B) and determined using any identification methodology and procedure selected by the Company (or its parent) from time to time, or if none, the default methodology and procedure specified under Code Section 409A), then any amounts that are considered “nonqualified

 

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deferred compensation” (within the meaning of that term under Code Section 409A) payable as a result of the Participant’s separation from service shall not be paid prior to the date which is the earlier of (i) the expiration of the six (6) month period measured from the date of such separation from service of the Participant, and (ii) the date of the Participant’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to the Participant in a lump sum, and any remaining payments due under the Plan shall be paid or provided in accordance with the normal payment dates specified for them herein.  In determining whether a Participant is subject to the delay hereinabove described, the transitional rules of Treasury Regulation § 1.409A-1(i)(6) shall be applied.”

 

IN WITNESS WHEREOF, the Compensation Committee of the Company has authorized the execution of this Amendment 2013-1 to the Plan this 16th day of August, 2013.

 

 

	
 
    	
/s/   Robin Bernstein
    
	
 
    	
For   the Compensation Committee
    

 

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