Document:

hstm-ex1010_15.htm

EXHIBIT 10.10

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 2019, each director will receive an annual retainer of $5,000, except for the Audit Committee Chair and Nominating and Corporate Governance Chair, who will receive an additional annual retainer of $7,500, and the Compensation Committee Chair, who will receive an additional annual retainer of $2,000. Non-employee directors will also receive a $20,000 flat-fee, except for members of the Audit Committee who will receive $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.

II. Executive Officer Compensation. The following table sets forth the current base salaries and fiscal 2018 performance bonuses provided to our executive officers, including the individuals who the Company expects to be its Named Executive Officers for 2019.

 

							
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Executive Officer
	
  
	
Current Base Salary
	
  
	
Fiscal 2018 Bonus Amount
	
  
	
 

	
Robert A. Frist, Jr.
	
  
	
$335,000
	
  
	
$134,000
	
  
	
 

	
J. Edward Pearson
	
  
	
$330,000
	
  
	
$132,000
	
  
	
 

	
Michael Sousa
	
  
	
$330,000
	
  
	
$77,000
	
  
	
 

	
Gerard M. Hayden, Jr.1
	
  
	
$288,000
	
  
	
$86,000
	
  
	
 

	
Jeffrey D. Cunningham
	
  
	
$284,000
	
  
	
$85,000
	
  
	
 

	
Michael M. Collier
	
  
	
$265,000
	
  
	
$80,000
	
  
	
 

	
Trisha L. Coady
	
 
	
$250,000
	
 
	
$40,000
	
 
	
 

	
M. Scott McQuigg
	
 
	
$250,000
	
 
	
$ -
	
 
	
 

Base salary adjustments for 2019, bonus targets for 2019 cash bonuses, and 2019 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 2019 Proxy Statement.

 

	
	 

	
1 
	
 As previously disclosed on the Current Report on Form 8-K filed by us on October 22, 2018, Mr. Hayden intends to resign as an officer of the Company following the filing of our 2018 Annual Report on Form 10-K.hstm-ex1018_357.htm

 

EXHIBIT 10.18

HealthStream, Inc. 

Board of Directors 

Compensation Committee

2018 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 2018 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 2018 fiscal year in order to reward Management for the Company’s financial performance during fiscal year 2018 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 2018, 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 2018 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 Operating Income: acquisition and divestiture expenses for transactions within the calendar year and operating income (loss) from acquisitions and divestitures 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 2018 fiscal year in an amount established by the Committee by resolution within the first 90 days of the Company’s 2018 fiscal year.

2018 Financial Measure and Plan Principles:

	
 
	
1.
	
The financial measure for 2018 is Operating Income - Operating Income will be the financial measure for 2018.

	
 
	
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 30% of such member’s base salary; provided the CEO and the President & COO shall be eligible to receive an amount equal to 40% 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 16% of such Vice President or Associate Vice President’s base salary.

	
 
	
•
	
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 the Company through December 31, 2018 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, 2018 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 2018 Workforce Development Cash Bonus Incentive Plan, (ii) the 2018 Echo, Inc. Cash Bonus Incentive Plan, or (iii) 2018 PX 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 30% of base salary for each member of the Executive Team other than the Chief Executive Officer and the President & COO, 40% of base salary for the CEO and the President & COO, 16% of base salary for each member of the Leadership Team, and 4% of base salary for each Director.

	
 
	
2.
	
Any Annual Bonus payouts made to the Executive Team, Leadership Team, or Directors pursuant to the Plan shall be payable at such time as bonuses are paid generally to executive officers of the Company.hstm-ex1019_356.htm

 

EXHIBIT 10.19

HealthStream, Inc. 

Board of Directors 

Compensation Committee

2018 Provider Solutions Cash Incentive Bonus Plan 

For Business Segment Management

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 2018 Provider Solutions Cash Incentive Bonus Plan for the Company-Level Leadership Team and Directors (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 Company-level Vice Presidents, Associate Vice Presidents, and Directors who are assigned to the Business Unit (“Management”) 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 2018 fiscal year performance and/or (ii) the Company’s overall 2018 fiscal year performance, each in order to reward Management for the Business Unit’s and/or the Company’s financial performance during fiscal year 2018 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 2018, excluding bonuses.

	
 
	
•
	
Enterprise Actual Operating Income before bonuses – The Company’s Operating Income achieved in fiscal 2018, excluding bonuses.

	
 
	
•
	
Annual Bonus – The annual bonus paid to Management 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 2018 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: for acquisitions and divestitures within or directly impacting the Business Unit, acquisition and divestiture expenses for transactions within the calendar year and operating income (loss) from acquisitions and divestitures consummated during the calendar year (the “Excluded Expenses”).  The Committee has the negative discretion to include the Excluded Expenses in the calculation of Provider Solutions Operating Income. 

	
 
	
•
	
Enterprise Operating Income - The Company’s Operating Income for the 2018 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 Operating Income: acquisition and divestiture expenses for transactions within the calendar year and operating income (loss) from acquisitions and divestitures consummated during the calendar year (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 2018 fiscal year in an amount established by the Committee by resolution within the first 90 days of the Company’s 2018 fiscal year.

 

 

	
 
	
•
	
Enterprise Target Operating Income – Enterprise Operating Income for the 2018 fiscal year in an amount established by the Committee by resolution within the first 90 days of the Company’s 2018 fiscal year.

2018 Financial Measure and Plan Principles:

	
 
	
1.
	
The financial measures for 2018 are Provider Solutions and/or Enterprise Operating Income – Provider Solutions and/or Enterprise Operating Income will be the financial measure for 2018.

	
 
	
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

Two groups are eligible for participation in the Plan:

	
 
	
•
	
Leadership Team (Vice Presidents and Associate Vice Presidents) – The maximum Annual Bonus that Company-Level Vice Presidents and Associate Vice Presidents assigned to the Business Unit shall be eligible to receive under the Plan shall be an amount equal to 16% of such Vice President or Associate Vice President’s base salary, with that 16% being comprised as follows:  12.8% from Provider Solutions Incremental Operating Income and 3.2% from Enterprise Incremental Income.  Therefore, 80% of each Vice President and Associate Vice President’s Annual Bonus is based on achieving and exceeding Provider Solutions Target Operating Income and the other 20% is based on achieving and exceeding Enterprise Target Operating Income.

	
 
	
•
	
Directors - The maximum Annual Bonus that Company-Level 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, with that 4% being comprised as follows:  3.2% from WFD Incremental Operating Income and 0.8% from Enterprise Incremental Income.  Therefore, 80% of each Director’s Annual Bonus is based on achieving and exceeding WFD Target Operating Income and the other 20% is based on achieving and exceeding Enterprise Target Operating Income.  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 the Company through December 31, 2018 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, 2018 through the date of participant’s death or disability shall be awarded.

	
 
	
•
	
Exclusions – Management with a commission based incentive compensation plan shall not be eligible to participate in the Plan.  Additionally, Management who are eligible to participate in any one of the following shall not be eligible to participate:  (i) the 2018 Executive & Corporate Management Cash Bonus Incentive Plan, or (ii) the 2018 Workforce Development Cash Bonus Incentive.

	
 
	
•
	
Company-level Vice Presidents, Associate Vice Presidents, and Directors.  Management includes all individuals who are considered to be Company-level (i.e., HealthStream enterprise-wide) Vice Presidents, Associate Vice Presidents, or Directors, as opposed to just vice presidents, associate vice presidents, and directors at the Business Unit-level.  Given that the Business Unit is comprised of several companies from different acquisitions, the working job titles of Management may differ from the Company’s standard hierarchy and have not been fully standardized.  Therefore, an individual who is considered a Director at the Company-level may have a different working job title at the Business Unit level.  A list of Company-level Vice Presidents, Associate Vice Presidents, and Directors, along with their working job title at the Business Unit level is attached hereto as Exhibit A.  This list is current as of March 15, 2018 and may be updated from time to time to reflect changes in employment (i.e., promotions, resignations, etc.)

 

 

 

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 12.8% for each Company-level Vice President and Associate Vice President and 3.2% for each Company-level Director.

	
 
	
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 3.2% for each Company-Level Vice President and Associate Vice President and 0.8% for each Company-level Director.

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

 

 

Exhibit A

 

Management entitled to participate in the Plan

(current as of March 15, 2018)

 

Company-Level Vice Presidents:

 

Paul Holbel, CTO

 

Company-Level Associate Vice Presidents:

 

Roger Platt, Verity VP

Vicki Searcy, Verity VP

 

Company-Level Directors:

 

		
	
Bruce Durbin
	
Sr. Director, Quality & Cloud Services

	
Jennifer Grijalva
	
Director, Implementations & Upgrades

	
Lisa Rothmuller
	
Sr. Director, Client Consulting

	
Mark Westbrook
	
Sr. Director, Client Success

	
Purti Barve
	
Sr. Development Team Lead

	
Manshi Nawab
	
Data Analyst Lead

	
Brandi Zevenbrgern
	
Sr. Product Manager

	
Suzy Deller
	
AVP, Verity Customer Experience

	
Mark Karger
	
Sr. Director, Verity PMO

	
Sean Harvey
	
Sr. Manager, Data Services

	
Joe Deluca
	
Director, Verity Customer Support

	
Erik Vedvik
	
Sr. Director, Data Services

	
Steve Larsen
	
Sr. Director, Customer Support

	
Terry Griffith
	
AVP, Verity Training & Learning Solutions

	
Bill Locke
	
VP, Software Development

	
David Van Linge
	
AVP, Software Development

	
Sarah Moraes
	
Sr. Director, Verity Marketing

	
Scott Zoldan
	
VP, Software Development

	
Andrew Huber
	
Sr. Director, Professional Services

	
Ryan, Clay
	
Division Controller

	
Nordstrom, Tawnya
	
Director of Human Resources

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