Document:

hstm-ex105_11.htm

EXHIBIT 10.5

HealthStream, Inc. (the Company)

Summary of Director and Executive Officer Compensation

I. Director Compensation. Directors who are employees of the Company do not receive additional compensation for serving as directors of the Company. For fiscal year 2020, each director received an annual retainer of $5,000, except for the Audit Committee Chair and Nominating and Corporate Governance Chair, who received an additional annual retainer of $7,500, and the Compensation Committee Chair, who received an additional annual retainer of $2,000. Non-employee directors also received a $20,000 flat-fee, except for members of the Audit Committee who received $22,500, for board and committee meeting attendance and participation in lieu of per meeting fees.

In addition to the cash compensation set forth above, each non-employee director is eligible to receive a nondiscretionary annual grant of restricted share units. The restricted share units are granted annually and vest ratably over a three-year period.

Director compensation for 2021 has not yet been determined by the Compensation Committee.

II. Executive Officer Compensation. The following table sets forth the current base salaries and fiscal 2020 performance bonuses to be provided to our executive officers upon review and approval by the Compensation Committee, including the individuals who the Company expects to be its Named Executive Officers for 2021.

 

						
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
Executive Officer
	
  
	
Current Base Salary
	
  
	
Fiscal 2020 Bonus Amount1
	
  

	
Robert A. Frist, Jr.
	
  
	
$345,050
	
  
	
$92,473
	
  

	
J. Edward Pearson
	
  
	
$339,900
	
  
	
$91,093
	
 

	
Michael Sousa
	
  
	
$339,900
	
  
	
$18,355
	
  

	
Scott A. Roberts
	
  
	
$250,000
	
  
	
$50,000
	
  

	
Jeffrey D. Cunningham
	
  
	
$292,520
	
  
	
$58,504
	
  

	
Michael M. Collier
	
  
	
$272,950
	
  
	
$54,590
	
  

	
Trisha L. Coady
	
 
	
$253,450
	
 
	
$50,690
	
 

	
M. Scott McQuigg
	
 
	
$250,000
	
 
	
$50,000
	
 

	
Kevin O’Hara
	
 
	
$285,000
	
 
	
$-2
	
 

	
Scott Fenstermacher
	
 
	
$200,000
	
 
	
$-3
	
 

1 Fiscal 2020 bonus amounts remain subject to review and approval by the Compensation Committee.

2 Kevin O’Hara’s date of hire with the Company was January 1, 2021.

3 Scott Fenstermacher was promoted to Senior Vice President in January 2021.

Base salary adjustments for 2021, bonus targets for 2021 cash bonuses, and 2021 equity grants for executive officers have not yet been determined by the Compensation Committee.

III. Additional Information. The foregoing information is summary in nature. Additional information regarding Director and Named Executive Officer compensation will be contained in the Company’s 2021 Proxy Statement.hstm-ex1016_96.htm

EXHIBIT 10.16

HealthStream, Inc. 

Board of Directors 

Compensation Committee

Amended and Restated 2020 Executive and Corporate Management Cash Incentive Bonus Plan 

 

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 2020 Executive and Corporate Management Cash Incentive Bonus Plan (the “Plan”).  The Plan is the cash-based, short-term incentive portion of HealthStream's incentive compensation structure for certain executive officers, as well as the vice presidents, associate vice presidents, and directors who are assigned to a corporate function, as opposed to a business unit specific function (such individuals referred to collectively as “Management”).  The purpose of the Plan is to specify appropriate opportunities to earn a cash bonus with respect to the Company’s 2020 fiscal year in order to reward Management for the Company’s financial performance during fiscal year 2020 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 2020, excluding bonuses. 

 

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

 

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

 

	
 
	
•
	
Operating Income – The Company’s operating income for the 2020 fiscal year calculated in accordance with generally accepted accounting principles under ASC 606 and consistent with the Company’s past practice and presented in the Company’s audited financial statements, provided the following are excluded from the calculation of Operating Income: (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 2020 budget; and (ii) operating income (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 Operating Income. 

 

 

 

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EXHIBIT 10.16

	
 
	
•
	
Target Operating Income – Operating Income for the 2020 fiscal year in an amount established by the Committee by resolution within the first 90 days of the Company’s 2020 fiscal year.

 

 

2020 Financial Measure and Plan Principles:

 

	
 
	
1.
	
The financial measure for  is Operating Income - Operating Income will be the financial measure for 2020.

 

	
 
	
2.
	
The Annual Bonus is funded by Incremental Operating Income - The Annual Bonus will be earned from the amount of Incremental Operating Income. 

 

The Plan

 

Eligibility

 

Three groups are eligible for participation in the Plan:

 

	
 
	
•
	
Executive Team – The maximum Annual Bonus that Executive Team members, other than the Chief Executive Officer of HealthStream and the President & Chief Operating Officer of HealthStream, shall be eligible to receive under the Plan shall be an amount equal to 20% of such member’s base salary; provided the CEO and the President & COO shall be eligible to receive an amount equal to 26.8% of their base salary.  Unless otherwise excluded below, the Executive Team eligible for participation includes the Chief Executive Officer, President & Chief Operating Officer, and Senior Vice Presidents of the Company.

 

	
 
	
•
	
      Leadership Team (Vice Presidents and Associate Vice Presidents) – The   

      maximum Annual Bonus that Vice Presidents and Associate Vice Presidents of     

      the Business Unit shall be eligible to receive under the Plan shall be an amount 

      equal to 10.7% of such Vice President or Associate Vice President’s base salary.

 

	
 
	
•
	
Senior Directors - The maximum Annual Bonus that Senior Directors of the Business Unit shall be eligible to receive under the Plan shall be an amount equal to 5.4% of such Senior Director’s base salary.  For purposes of clarity, Directors do not include members of the Board of Directors, but are management-level employees of the Company.

 

	
 
	
•
	
Directors - The maximum Annual Bonus that Directors of the Business Unit shall be eligible to receive under the Plan shall be an amount equal to 4% of such Director’s base salary.  For purposes of clarity, Directors do not include members of the Board of Directors, but are management-level employees of the Company.

 

	
 
	
•
	
      Employment Requirements – Participants in the Plan who were employed with   

 

 

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EXHIBIT 10.16

	
 
		

the Company through December 31, 2020 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, 2020 through the date of participant’s death or disability shall be awarded.

 

	
 
	
•
	
Exclusions - Members of the Executive Team with a commission based incentive compensation plan shall not be eligible to participate in the Plan.  Additionally, members of the Executive Team who are eligible to participate in any one of the following shall not be eligible to participate in the Plan:  (i) the 2020 Workforce Development Cash Bonus Incentive Plan, or (ii) the 2020 Provider Solutions Cash Bonus Incentive Plan.

 

Payout 

 

Payouts under the Plan shall be determined as follows:

 

	
 
	
1.
	
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 20% of base salary for each member of the Executive Team other than the Chief Executive Officer and the President & COO, 26.8% of base salary for the CEO and the President & COO, 10.7% of base salary for each member of the Leadership Team, 5.4% of base salary for each Senior Director, and 4% of base salary for each Director.

 

	
 
	
2.
	
Any Annual Bonus payouts made to the Executive Team, Leadership Team, Senior Directors, or Directors pursuant to the Plan shall be payable at such time as bonuses are paid generally to executive officers of the Company.

 

 

 

 

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EXHIBIT 10.17

HealthStream, Inc. 

Board of Directors 

Compensation Committee

Amended and Restated 2020 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 2020 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 2020 fiscal year performance and/or (ii) the Company’s overall 2020 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 2019 and to further align his interest with those of the shareholders of the Company.

 

Definitions:

 

 

	
 
	
•
	
Provider Solutions Actual Operating Income before bonuses – The Business Unit’s Operating Income achieved in fiscal 2020, excluding bonuses.

 

	
 
	
•
	
Enterprise Actual Operating Income before bonuses – The Company’s Operating Income achieved in fiscal 2020, excluding bonuses.

 

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

 

	
 
	
•
	
Provider Solutions Incremental Operating Income – Provider Solutions Actual Operating Income before bonuses less Provider Solutions Target Operating Income.

 

	
 
	
•
	
Enterprise Incremental Operating Income – Enterprise Actual Operating Income before bonuses less Enterprise Target Operating Income.

 

	
 
	
•
	
Provider Solutions Operating Income – The Business Unit’s Operating Income for the 2020 fiscal year calculated in accordance with generally accepted accounting principles under ASC 606  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 Provider Solutions Operating Income: 

 

 

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EXHIBIT 10.17

	
 
		
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 2020 budget and (ii) operating income (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 Operating Income. 

 

	
 
	
•
	
Enterprise Operating Income - The Company’s Operating Income for the 2019 fiscal year calculated in accordance with generally accepted accounting principles under ASC 606 and consistent with the Company’s past practice and presented in the Company’s audited financial statements, provided the following  are excluded from the calculation of Operating Income: (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 2020 budget; and (ii) operating income (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 Operating Income.

 

	
 
	
•
	
Provider Solutions Target Operating Income – Provider Solutions Operating Income for the 2020 fiscal year in an amount established by the Committee by resolution within the first 90 days of the Company’s 2020 fiscal year.

 

	
 
	
•
	
Enterprise Target Operating Income – Enterprise Operating Income for the 2020 fiscal year in an amount established by the Committee by resolution within the first 90 days of the Company’s 2020 fiscal year.

 

 

2020 Financial Measure and Plan Principles:

 

	
 
	
1.
	
The financial measures for 2020 are Provider Solutions and/or Enterprise Operating Income – Provider Solutions and/or Enterprise Operating Income will be the financial measure for 2020.

 

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

 

 

The Plan

 

Eligibility

 

 

 

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EXHIBIT 10.17

One individual is eligible for participation in the Plan:

 

	
 
	
•
	
President – The maximum Annual Bonus the President shall be eligible to receive under the Plan shall be an amount equal to 26.8 percent of the President’s base salary, with that 26.8% being comprised as follows:  21.4% from Provider Solutions Incremental Operating Income and 5.4% from Enterprise Incremental Income.  Therefore, approximately 80% of the President’s Annual Bonus is based on achieving and exceeding Provider Solutions Target Operating Income and the other approximately 20% is based on achieving and exceeding Enterprise Target Operating Income.

 

	
 
	
•
	
Employment Requirements – Participants in the Plan who were employed with   

the Company through December 31, 2020 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, 2020 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 Operating Income will be determined by subtracting the Provider Solutions Target Operating Income from Actual Operating Income before bonuses.  The Provider Solutions Incremental Operating Income will then be multiplied by 21.4% for the President.

 

	
 
	
2.
	
Enterprise Incremental Operating Income will be determined by subtracting the Enterprise Target Operating Income from Enterprise Actual Operating Income before bonuses.  The Enterprise Incremental Operating Income will then be multiplied by 5.4% 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.

 

 

 

 

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