DEF 14A 1 mdrx-def14a_20191231.htm DEF 14A mdrx-def14a_20191231.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

Allscripts Healthcare Solutions, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Allscripts Healthcare Solutions, Inc.
222 Merchandise Mart Plaza, Suite 2024
Chicago, Illinois 60654

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 2020

To the stockholders of Allscripts Healthcare Solutions, Inc.:

Notice is hereby given that the 2020 Annual Meeting of Stockholders (the “Annual Meeting”) of Allscripts Healthcare Solutions, Inc., a Delaware corporation (the “Company”), will be held on Thursday, May 21, 2020, at 9:00 a.m. Central time at the Company’s principal executive offices, located at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654,1 for the following purposes:

1. To elect the seven directors named in the accompanying proxy statement, each to serve until the Company’s 2021 Annual Meeting of Stockholders and until their successors are duly elected, subject to earlier resignation or removal;

2. To approve the amendment and restatement of the Allscripts Amended and Restated 2019 Stock Incentive Plan;

3. To approve the amendment and restatement of the Allscripts Employee Stock Purchase Plan;

4. To ratify the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020;

5.  To approve, on an advisory basis, the Company’s named executive officer compensation; and

6. To transact such other business as may properly come before the Annual Meeting or any adjournment(s) or postponement(s) thereof.

The Board of Directors of the Company unanimously recommends a vote FOR each director nominee and FOR each of Proposals 2, 3, 4 and 5.

These items are described more fully in the accompanying proxy statement. Only stockholders of record as of the close of business on March 27, 2020 are entitled to receive notice of, to attend, and to vote at the Annual Meeting.

Sincerely,

 

Brian P. Farley

Executive Vice President, Chief Administrative Officer,

General Counsel and Corporate Secretary

Chicago, Illinois
April 6, 2020

 

 

 

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Note that as part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that we may need to change the date, time or place of the meeting. If we take this step, we will announce the decision to do so in advance, and details of the change(s) will be posted on our website and filed with the Securities and Exchange Commission as proxy material.

 


IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS

The Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 are available at: www.proxyvote.com.

YOUR VOTE IS IMPORTANT. PLEASE EXERCISE YOUR STOCKHOLDER RIGHT TO VOTE AS SOON AS POSSIBLE, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING.

 

 


 

PROXY STATEMENT
FOR

20
20 ANNUAL MEETING OF STOCKHOLDERS OF

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

GENERAL INFORMATION

Why am I receiving these materials?

Allscripts Healthcare Solutions, Inc., a Delaware corporation (the “Company”), has made these materials available to you on the Internet or, upon your request, has delivered printed versions of these materials to you by mail, in connection with the Company’s solicitation of proxies for use at the Company’s 2020 Annual Meeting of Stockholders (the “Annual Meeting”), to be held on Thursday, May 21, 2020 at 9:00 a.m., Central time, and at any postponement(s) or adjournment(s) thereof. The Annual Meeting will be held at the Company’s principal executive offices, located at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654.

These materials were first sent or made available to the Company’s stockholders on or about April 6, 2020. You are invited to attend the Annual Meeting and are requested to vote on the proposals described in this proxy statement (this “Proxy Statement”).

What is included in these proxy materials?

These proxy materials include:

 

The Notice of 2020 Annual Meeting of Stockholders;

 

This Proxy Statement; and

 

The Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2020 (the “Annual Report”).

If you requested printed versions by mail, these proxy materials also include the proxy card or voting instruction form for the Annual Meeting.

What items will be voted on at the Annual Meeting?

The Company is aware of five items on which stockholders may vote at the Annual Meeting:

 

The election to the Company’s Board of Directors (the “Board”) of the seven nominees named in this Proxy Statement (Proposal One);

 

The approval of the Allscripts Amended and Restated 2019 Stock Incentive Plan (the “2019 Stock Incentive Plan”) (Proposal Two);

 

The approval of an amendment and restatement of the Allscripts Employee Stock Purchase Plan (the “Allscripts Employee Stock Purchase Plan”) (Proposal Three);

 

The ratification of the appointment of Grant Thornton LLP (“Grant Thornton”) as the Company’s independent registered public accounting firm for the year ending December 31, 2020 (Proposal Four); and

 

A non-binding advisory resolution to approve the Company’s named executive officer compensation (Proposal Five).

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Will any other business be conducted at the meeting?

The Company knows of no matters to be submitted to the Company’s stockholders at the Annual Meeting, other than the proposals referred to in this Proxy Statement. If any other matters come before the Company’s stockholders at the Annual Meeting, it is the intention of the persons named on the proxy to vote the shares represented thereby on such matters in accordance with their best judgment.

What are the Board’s voting recommendations?

The Board recommends that you vote your shares:

 

“FOR” election of each of the seven nominees named in this Proxy Statement to the Board (Proposal One);

 

“FOR” approval of the 2019 Stock Incentive Plan (Proposal Two);

 

“FOR” approval of the Allscripts Employee Stock Purchase Plan (Proposal Three);

 

“FOR” ratification of the appointment of Grant Thornton as the Company’s independent registered public accounting firm for the year ending December 31, 2020 (Proposal Four); and

 

“FOR” approval of the advisory resolution to approve the Company’s named executive officer compensation (Proposal Five).

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

Pursuant to rules adopted by the SEC, the Company uses the Internet as the primary means of furnishing proxy materials to its stockholders. Accordingly, the Company is sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to its stockholders. All stockholders will have the ability to access the proxy materials on the website indicated in the Notice or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or how to request a printed set may be found in the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. The Company encourages its stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of its annual meetings and reduce the cost to the Company associated with the physical printing and mailing of materials.

I share an address with another stockholder, and we received only one paper copy of the proxy materials. How can I obtain an additional copy of the proxy materials?

The Company has adopted an SEC-approved procedure called “householding.” Under this procedure, the Company may deliver a single copy of the Notice and, if applicable, this Proxy Statement and the Annual Report to multiple stockholders who share the same address, unless the Company has received contrary instructions from one or more of the stockholders. This procedure reduces the environmental impact of the Company’s annual meetings and reduces the Company’s printing and mailing costs. Stockholders who participate in householding will continue to receive separate proxy cards. Upon request, the Company will deliver promptly a separate copy of the Notice and, if applicable, this Proxy Statement and the Annual Report to any stockholder at a shared address to which the Company delivered a single copy of any of these documents.

To receive free of charge a separate copy of the Notice and, if applicable, this Proxy Statement and the Annual Report, or separate copies of any future notice, proxy statement, or annual report, stockholders may write or call the Company at: Allscripts Healthcare Solutions, Inc., 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654, Attention: Investor Relations, or (800) 334-8534.

 

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If you are receiving more than one copy of the proxy materials at a single address and would like to participate in householding, please contact the Company using the mailing address or telephone number above. Stockholders who hold shares in “street name” (as described below) may contact their brokerage firm, bank, broker-dealer, or other similar organization to request information about householding.

How can I get electronic access to the proxy materials?

The Notice will provide you with instructions regarding how to use the Internet to view the Company’s proxy materials for the Annual Meeting and instruct the Company to send future proxy materials to you by e-mail. If you choose to receive future proxy materials by e-mail, you will receive an e-mail message next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

Who may vote at the Annual Meeting?

Each share of the Company’s common stock has one vote on each matter. Only stockholders of record as of the close of business on March 27, 2020 (the “Record Date”) are entitled to receive notice of, to attend, and to vote on the Annual Meeting. As of the Record Date, there were 161,897,197 shares of the Company’s common stock issued and outstanding. In addition to stockholders of record of the Company’s common stock, beneficial owners of shares held in street name as of the Record Date can vote using the methods described below.

Each share of the Company’s common stock has one vote on each item of business at the Annual Meeting.

What is the difference between a stockholder of record and a beneficial owner of shares held in street name?

Stockholder of Record. If your shares are registered directly in your name with the Company’s transfer agent, Broadridge Investor Communication Solutions, Inc. (“Broadridge”), you are considered the stockholder of record with respect to those shares, and the Notice was sent directly to you by the Company.

Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the “beneficial owner” of shares held in “street name,” and a Notice was forwarded to you by that organization. As a beneficial owner, you have the right to instruct your broker, bank, trustee, or other nominee how to vote your shares.

If I am a stockholder of record of the Company’s shares, how do I vote?

If you are a stockholder of record, there are four ways to vote:

 

In Person. You may vote in person at the Annual Meeting by requesting a ballot when you arrive. You must bring valid picture identification, such as a driver’s license or passport, and may be requested to provide proof of stock ownership as of the Record Date.

 

Via the Internet. You may vote by proxy via the Internet by following the instructions provided in the Notice.

 

By Telephone. If you request printed copies of the proxy materials by mail, you will receive a proxy card and you may vote by proxy by calling the toll-free number found on the proxy card.

 

By Mail. If you request printed copies of the proxy materials by mail, you will receive a proxy card and you may vote by proxy by filling out the proxy card and returning it in the envelope provided.

 

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If I am a beneficial owner of the Company’s shares held in street name, how do I vote?

If you are a beneficial owner of shares held in street name, there are four ways to vote:

 

In Person. If you are a beneficial owner of shares held in street name and wish to vote in person at the Annual Meeting, you must obtain a “legal proxy” from the organization that holds your shares. A legal proxy is a written document that will authorize you to vote your shares held in street name at the Annual Meeting. Please contact the organization that holds your shares for instructions regarding obtaining a legal proxy. You must bring a copy of the legal proxy to the Annual Meeting and ask for a ballot from an usher when you arrive. You must also bring valid picture identification, such as a driver’s license or a passport. In order for your vote to be counted, you must hand both the copy of the legal proxy and your completed ballot to an usher who will then provide them to the inspector of election.

 

Via the Internet. You may vote by proxy via the Internet by visiting www.proxyvote.com and entering the control number found in your Notice. The availability of Internet voting may depend on the voting process of the organization that holds your shares.

 

By Telephone. If you request printed copies of the proxy materials by mail, you will receive a voting instruction form and you may vote by proxy by calling the toll-free number found on the voting instruction form. The availability of telephone voting may depend on the voting process of the organization that holds your shares.

 

By Mail. If you request printed copies of the proxy materials by mail, you will receive a voting instruction form and you may vote by proxy by filling out the form and returning it in the envelope provided.

What is the quorum required for the Annual Meeting?

The presence, in person or by proxy, of the holders of not less than one-third of the total number of shares of the Company’s common stock issued and outstanding as of the Record Date and entitled to vote at the Annual Meeting will constitute a quorum. You will be considered part of the quorum if you return a signed and dated proxy card, if you vote over the Internet or by telephone, or if you attend and vote at the Annual Meeting. If a quorum is not present, the Company may propose to adjourn the Annual Meeting to solicit additional proxies.

How are proxies voted?

All shares represented by valid proxies received prior to the taking of the vote at the Annual Meeting will be voted and, where a stockholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the stockholder’s instructions.

What happens if I do not give specific voting instructions?

Stockholders of Record. If you are a stockholder of record and you (i) indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board; or (ii) sign and return a proxy card or vote by Internet or telephone without giving specific voting instructions, then the persons named as proxy holders, Paul M. Black and Richard J. Poulton, will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.

Beneficial Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.”

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Which proposals are considered “routine” or “non-routine”?

The ratification of the appointment of Grant Thornton as the Company’s independent registered public accounting firm for the year ending December 31, 2020 (Proposal Four) is considered a routine matter under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore no broker non-votes are expected in connection with Proposal Four.

Each of the other proposals, the election of directors (Proposal One), the approval of the 2019 Stock Incentive Plan (Proposal Two), the approval of the Allscripts Employee Stock Purchase Plan (Proposal Three) and the advisory resolution to approve the Company’s named executive officer compensation (Proposal Five) are considered non-routine matters under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore broker non-votes may exist in connection with each of Proposals One, Two, Three and Five.

What is the voting requirement to approve each of the proposals?

With respect to the election of directors (Proposal One), in accordance with the policy of majority voting in uncontested director elections set forth in the Company’s by-laws, if the number of shares voted “FOR” any nominee exceeds the number of shares voted “AGAINST” such nominee, he or she will be elected as a director to serve until the Company’s 2021 Annual Meeting of Stockholders and until his or her successor has been duly elected, or until his or her earlier resignation or removal. If any nominee is an incumbent director and fails to receive a majority of the votes cast with respect to his or her nomination, he or she must tender a resignation as director, and such resignation will be considered by the Nominating and Governance Committee of the Board (the “Nominating Committee”) in accordance with the requirements of the Company’s Corporate Governance Guidelines.

Approval of each of Proposals Two, Three, Four and Five requires the affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote on such matter.

How are broker non-votes and abstentions treated?

Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present. With respect to the election of directors (Proposal One), a stockholder abstention or broker non-vote with respect to any nominee will have no effect on that nominee’s election. With respect to Proposals Two, Three, Four and Five, a stockholder abstention will have the effect of a vote “AGAINST” the approval of each proposal, but a broker non-vote will have no effect on the approval of the proposal.

In order to minimize the number of broker non-votes, the Company encourages you to vote or to provide voting instructions with respect to each proposal to the organization that holds your shares by carefully following the instructions provided in the Notice or voting instruction form.

Can I change my vote after I have voted?

You may revoke your proxy and change your vote at any time before the vote is taken at the Annual Meeting. Prior to the applicable cutoff time, you may change your vote using the Internet or telephone methods described above, in which case only your latest Internet or telephone proxy submitted prior to the Annual Meeting will be counted. You may also revoke your proxy and change your vote by signing and returning a new proxy card or voting instruction form dated as of a later date, or by attending the Annual Meeting and voting in person. However, your attendance at the Annual Meeting will not automatically revoke your proxy unless you properly vote at the Annual Meeting or specifically request that your prior proxy be revoked by delivering a written notice of revocation to the Company’s Corporate Secretary at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654 prior to the Annual Meeting.

Who will serve as the inspector of election?

A representative of Broadridge will serve as the inspector of election.

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Where can I find the voting results of the Annual Meeting?

Preliminary voting results will be announced at the Annual Meeting. Final voting results will be tallied by the inspector of election after the taking of the vote at the Annual Meeting. The Company will publish the final voting results in a Current Report on Form 8-K, which the Company is required to file with the SEC within four business days following the Annual Meeting.

Where are the Company’s principal executive offices located, and what is the Company’s main telephone number?

The Company’s principal executive offices are located at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654. The Company’s main telephone number is (800) 334-8534.

Who is paying the costs of the proxy solicitation?

The Company is providing these proxy materials in connection with the solicitation by the Company’s Board of Directors of proxies to be voted at the Annual Meeting. The Company is paying the costs of the solicitation of proxies. The Company must pay brokerage firms, banks, broker-dealers, or other similar organizations representing beneficial owners of shares held in street name certain fees associated with (i) forwarding the Notice to beneficial owners; (ii) forwarding printed proxy materials by mail to beneficial owners who specifically request them; and (iii) obtaining beneficial owners’ voting instructions. The Company has not, but may in the future decide to, retain a proxy solicitor to assist in the solicitation of proxies. Generally, the fee for such services is approximately $15,000 plus expenses. If the Company does elect to retain a proxy solicitor, the Company will pay the proxy solicitor reasonable and customary fees. In addition to solicitations by mail, the proxy solicitor, if any, and certain of the Company’s directors, officers, and employees, without additional compensation, may solicit proxies on the Company’s behalf in person, by telephone, or by electronic communication.

How can I attend the Annual Meeting?

Only stockholders of record as of the Record Date or their proxies are entitled to attend the Annual Meeting. Each stockholder must present valid picture identification such as a driver’s license or passport and, if asked, provide proof of stock ownership as of the Record Date. The use of mobile phones, recording or photographic equipment, tablets, or computers is not permitted at the Annual Meeting.

Note that as part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that we may need to change the date, time or place of the meeting. If we take this step, we will announce the decision to do so in advance, and details of the change(s) will be posted on our website and filed with the SEC as proxy material. The proxies may also be voted at any adjournments or postponements of the meeting.

What is the deadline to propose actions for consideration or to nominate individuals to serve as directors at the 2021 Annual Meeting of Stockholders?

Requirements for Stockholder Proposals to be Considered for Inclusion in the Company’s Proxy Materials. Proposals that a stockholder intends to present at the Company’s 2021 Annual Meeting of Stockholders and wishes to be considered for inclusion in the Company’s proxy statement and form of proxy related to the Company’s 2021 Annual Meeting of Stockholders must be received by no later than December 7, 2020. All proposals must comply with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which lists the requirements for the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals must be delivered to the Company’s Corporate Secretary by mail at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654.

 

 

 

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Requirements for Other Stockholder Proposals to be Brought Before the 2021 Annual Meeting of Stockholders and Director Nominations. Notice of any director nomination or any proposal that a stockholder intends to present at the Company’s 2021 Annual Meeting of Stockholders, but does not intend to have included in the Company’s proxy statement and form of proxy related to the Company’s 2021 Annual Meeting of Stockholders, as well as any director nominations, must be delivered to the Company’s Corporate Secretary by mail at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654, not earlier than the close of business on December 22, 2020, and not later than the close of business on January 21, 2021. The notice must be submitted by a stockholder of record and must set forth the information required by the Company’s by-laws with respect to each director nomination or other proposal that the stockholder intends to present at the Company’s 2021 Annual Meeting of Stockholders. If you are a beneficial owner of shares held in street name, you can contact the organization that holds your shares for information about how to register your shares directly in your name as a stockholder of record.

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DIRECTORS

Listed below are the seven nominees for election as a director. Each nominee currently serves on the Board.  As previously announced, Yancey L. Spruill, who has been a member of the Board since 2016, is not standing for re-election at the Annual Meeting.  The Company thanks Mr. Spruill for his dedicated service and valuable contribution to the Board.

At the Annual Meeting, proxies cannot be voted for a greater number of individuals than the seven nominees named in this Proxy Statement. Each of the nominees listed below has consented to serving as a nominee, being named in this Proxy Statement and serving on the Board if elected. Each director elected at the Annual Meeting will serve a one-year term.

The Board comprises a diverse group of leaders in their respective fields. Many of the Company’s directors have senior leadership experience at major domestic and multinational companies. In these positions, they have also gained significant and diverse management experience, including strategic and financial planning, public company reporting, compliance, risk management (including with respect to cybersecurity risk) and leadership development. Many directors also have experience serving as executive officers of, or on boards of directors and board committees of, other public companies, and have an understanding of corporate governance practices and trends. The Board believes that the collective experiences, viewpoints and perspectives of the Company’s nominees for directors result in a Board with the commitment and energy to advance the interests of the Company’s stockholders.

 

Name

 

Position with the Company

 

Age as of the Annual

Meeting

 

 

Director Since

Mara G. Aspinall

 

Director

 

 

57

 

 

2017

Paul M. Black

 

Director, Chief Executive Officer

 

 

62

 

 

2012

P. Gregory Garrison

 

Director

 

 

66

 

 

2015

Jonathan J. Judge

 

Director

 

 

66

 

 

2016

Michael A. Klayko

 

Chairman of the Board

 

 

65

 

 

2013

Dave B. Stevens

 

Director

 

 

58

 

 

2016

David D. Stevens

 

Director

 

 

67

 

 

2012

 

The Board and the Nominating Committee believe the skills, qualities, attributes, and experience of the nominees provide the Company with business acumen and a diverse range of perspectives to engage each other and the Company’s management to address effectively the Company’s evolving needs and represent the best interests of the Company’s stockholders. The biographies below describe the skills, qualities, attributes, and experience of the nominees that led the Board and the Nominating Committee to determine that it is appropriate to nominate these directors.

 

Mara G. Aspinall currently serves as President and Chief Executive Officer of HealthCatalysts Group, a private healthcare consulting firm, and Managing Director of BlueStone Venture Partners, a life science-focused venture capital firm focused in the U.S. Southwest. Ms. Aspinall currently serves as a director of Orasure Technologies, Castle Biosciences and Abcam plc, along with other privately-held healthcare technology and medical insurance companies. Ms. Aspinall formerly served as a director of Safeguard Scientifics. From September 2011 until June 2014, Ms. Aspinall was the President and Chief Executive Officer of the Ventana Medical Systems and the Global Head of Roche Tissue Diagnostics, a global leader in the development and commercialization of tissue-based cancer diagnostics. Prior to 2011, Ms. Aspinall served as President of Genzyme Pharmaceuticals and Genzyme Genetics, a leading esoteric drug manufacturer and genetic test provider worldwide, respectively. Among other qualifications, Ms. Aspinall brings extensive international experience and operational expertise in the healthcare technology industry and is frequently recognized as an industry leader and pioneer with a focus on personalized medicine. Ms. Aspinall is certified in Board Oversight of Cybersecurity through the National Association of Corporate Directors and Carnegie Mellon University.

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Paul M. Black is the Chief Executive Officer and a director of Allscripts. As Chief Executive Officer, Mr. Black guides the Company’s vision to fulfill its global commitment to build “Open”, connected communities of health. Mr. Black also served as President of Allscripts from December 2012 until October 2015. Prior to joining Allscripts in 2012, Mr. Black spent more than thirteen years with Cerner Corporation in various executive positions, retiring as Cerner’s Chief Operating Officer in 2007. Mr. Black’s career started with International Business Machines Corporation, where he spent twelve years in a variety of leadership positions in sales, product marketing and professional services. Mr. Black has served on multiple publicly-traded, private company and nonprofit boards of directors for companies in healthcare information technology, patient monitoring, healthcare services, health care delivery, healthcare device and consumer internet marketing. In Kansas City, Mr. Black has spent seventeen years as chairman and as an executive officer of Truman Medical Centers, an academic safety net health system. He currently is on the boards of The Advancement Board University of Kansas Health System and the Harry S. Truman Presidential Library. He formerly serviced on the board of Haemonetics Corp. Among other qualifications, Mr. Black brings extensive experience in the healthcare information technology industry, along with experience in the management of worldwide operations, sales, and support.

P. Gregory Garrison was a senior leader of PricewaterhouseCoopers (“PwC”) for over twenty years, most recently serving as its Vice Chairman and Chief Operating Officer. Earlier in his career, Mr. Garrison also led PwC’s U.S. Assurance & Audit Services practice, the Global Risk Management Solutions practice, and served as the Managing Partner of PwC’s Los Angeles and St. Louis practices. Mr. Garrison has experience in strategic planning, operations, finance, information technology, mergers and acquisitions, human capital and sales and marketing. Over the course of his career, Mr. Garrison has also spent considerable time meeting and working with various regulators, as well as advising numerous boards and audit committees. Among other qualifications, Mr. Garrison brings experience as a successful business and operations leader, professional advisor and recognized financial expert.

Jonathan J. Judge currently serves as a director of FEXCO Holdings Ltd., a global provider of finance and business solutions that is headquartered in Ireland. Mr. Judge served as a director of D&H Corporation, a Toronto-based financial technology company, until its sale in June 2017. From April 2004 to January 2016, Mr. Judge served as a director of PMC-Sierra, Inc., where he was the Chairman of the Board from August 2011 to January 2016 and was Chairman of the compensation committee. From August 2010 until his retirement in January 2013, Mr. Judge served as the Chief Executive Officer of First Data Corporation, a global leader in electronic commerce and payment processing. From October 2004 until August 2010, Mr. Judge served as the President and Chief Executive Officer of Paychex Inc., a provider of payroll and human services. Mr. Judge also served as President and Chief Executive Officer of Crystal Decisions, Inc. from October 2002 until the merger of Crystal Decisions with Business Objects S.A. in December 2003. From 1976 until October 2002, Mr. Judge held senior management positions at International Business Machines Corporation, departing as General Manager of its personal computing division. Among other qualifications, Mr. Judge brings more than 45 years of experience in the technology industry and extensive management, leadership and global operations expertise.

Michael A. Klayko has been the Chairman of the Board since March 2014. Mr. Klayko currently serves as the Chief Executive Officer of MKA Capital, an investment company focused on technology investments. Previously, Mr. Klayko was Chief Executive Officer of AOptix Technologies, Inc., a privately-held provider of wireless communications and mobile network solutions, from July 2014 until January 2016. From 2005 until 2013, Mr. Klayko served as Chief Executive Officer of Brocade Communications Systems, Inc., a comprehensive network solutions provider. Mr. Klayko previously held executive positions at Rhapsody Networks, Inc. (including as its Chief Executive Officer), McDATA Corp., EMC Corporation, Hewlett-Packard Company, and International Business Machines Corporation. Currently, Mr. Klayko serves as a director of Cyrus One Inc., a publicly-traded real estate investment trust focused on data centers. Within the past five years, Mr. Klayko served as a director of PMC-Sierra, Inc., a public-traded semi-conductor company. Mr.Klayko serves on the board of Virgin Pulse and TIBCO, both of which are privately held companies. Among other qualifications, Mr. Klayko brings over 35 years of leadership experience in the technology industry as well as extensive experience in the management of worldwide operations, sales, and support.

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Dave B. Stevens is the founder and managing director of Keelan Capital LLC and currently serves as an advisor to a variety of venture capital and private equity firms and private enterprises in the technology industry. From April 2012 to May 2015, Mr. Stevens served as a director of Imation Corp., a provider of global scalable storage and data security solutions. From September 2008 to June 2013, Mr. Stevens was the Chief Technology Officer of Brocade Communications Systems, Inc., a provider of networking solutions for data centers, enterprises and service providers, having re-joined the company through its acquisition of Rhapsody Networks, where Mr. Stevens was the founding Chief Executive Officer and Vice President of Business Development. Mr. Stevens is co-founder of Palo Alto Networks, Inc., a leader in the development of cyber security and next-generation firewall products, and served as its Chief Executive Officer from October 2005 to June 2008. From January 2003 to June 2004, Mr. Stevens was the Chief Technology Officer of Transport systems for Brocade Communications Systems, Inc. Mr. Stevens previously served in senior management positions at Atmosphere Networks, Nortel, Bay Networks and SynOptics Communications. Among other qualifications, Mr. Stevens brings extensive technology experience in the security, computer, and data storage industries.

David D. Stevens currently serves as a private advisor and investor in private equity in the healthcare services industry. From 1983 until 2006, Mr. Stevens served in various executive roles at Accredo Health Group, Inc. (formerly Accredo Health, Inc.) and its predecessor companies, serving as its Chief Executive Officer from 1995 until 2006, its Chairman of the Board from 1995 until 2005, and its President and Chief Operating Officer from 1993 until 1996. Accredo Health Group, Inc. was acquired by Medco Health Solutions, Inc. in 2005. Mr. Stevens currently serves as a director of Wright Medical Group, Inc., a publicly-traded orthopedic company that designs, manufactures, and distributes extremity and biologic solutions; and several privately-held healthcare companies. In the past five years, Mr. Stevens also has served as a director of Viasystems Group, Inc., a leading manufacturer of complex multi-layer printed circuit boards and electro-mechanical solutions that was publicly-traded prior to its acquisition by TTM Technologies, Inc. in 2015. Among other qualifications, Mr. Stevens brings extensive financial and operating expertise, leadership experience, experience with serving on boards of directors, and significant experience in the healthcare industry.

10

 


 

CORPORATE GOVERNANCE

Role of the Board

The Board oversees the Company’s Chief Executive Officer and other senior management in the competent and ethical operation of the Company in support of the long-term interests of the Company’s stockholders. The Company’s Corporate Governance Guidelines are available at the “Corporate Governance” section at investor.allscripts.com.

Board Leadership Structure

The Board believes that its current leadership structure best serves the objectives of the Board’s oversight of management, the Board’s ability to carry out its roles and responsibilities on behalf of the Company’s stockholders, and the Company’s overall corporate governance. The Board currently believes that the separation of the Chairman and the Chief Executive Officer roles allows the Company’s Chief Executive Officer to focus his time and energy on operating and managing the Company. The Board periodically reviews this leadership structure to determine whether it continues to best serve the Company and its stockholders.

Board Meetings

The Board met a total of fifteen times during 2019. The Board has determined that all the following incumbent directors who are standing for re-election at the Annual Meeting are independent under applicable rules of the Nasdaq Stock Market LLC (“Nasdaq”) and the SEC: Ms. Aspinall and Messrs. Garrison, Judge, Klayko, Dave B. Stevens and David D. Stevens. Mr. Spruill, who is not standing for re-election at the Annual Meeting, is also independent under the applicable rules of the Nasdaq and the SEC. Mr. Black, who serves as the Company’s Chief Executive Officer, is not independent under such rules.

Executive Sessions of Independent Directors

The independent directors of the Company meet regularly in executive session, i.e., with no management directors or management present. These executive sessions may include such topics as the independent directors determine. During these executive sessions, the independent directors have access to members of management and other guests as the independent directors determine.

Annual Board and Committee Evaluations

In accordance with the Company’s Corporate Governance Guidelines, the Nominating Committee is responsible for facilitating an annual evaluation of the Board. The Nominating Committee also oversees the annual performance evaluation of the committees of the Board.

Committees of the Board

The Board has a standing Audit Committee (the “Audit Committee”) and Compensation Committee (the “Compensation Committee”), in addition to the Nominating Committee. The Board has determined that each of the committee members is independent under applicable Nasdaq and SEC rules for committee memberships. The members of the committees are shown in the tables below.

Name

 

Audit Committee

 

 

Compensation

Committee

 

 

Nominating and

Governance

Committee

 

 

Transaction

Advisory

 

Mara G. Aspinall

 

Member

 

 

-

 

 

-

 

 

 

-

 

Paul M. Black

 

 

-

 

 

-

 

 

-

 

 

 

-

 

P. Gregory Garrison

 

Chairman

 

 

 

-

 

 

-

 

 

Member

 

Jonathan J. Judge

 

 

-

 

 

Chairman

 

 

Member

 

 

Member

 

Michael A. Klayko

 

 

-

 

 

Member

 

 

Member

 

 

Chairman

 

Yancey L. Spruill

 

Member

 

 

 

-

 

 

 

-

 

 

 

-

 

Dave B. Stevens

 

Member

 

 

Member

 

 

 

-

 

 

 

-

 

David D. Stevens

 

Member

 

 

 

-

 

 

Chairman

 

 

Member

 

11

 


 

 

The Audit Committee is primarily responsible for assisting the Board in fulfilling its oversight and monitoring responsibility of reviewing the financial information that will be provided to the Company’s stockholders and others; appointing and overseeing the services performed by the Company’s independent registered public accounting firm, as well as pre-approving all services and fees related thereto; overseeing and periodically evaluating the performance and responsibilities of the Company’s internal audit department, including approving the Company’s annual internal audit plan and reviewing the results of internal audits, including management’s responses thereto; reviewing with the Company’s management, internal audit department, and independent registered public accounting firm the Company’s critical accounting policies and its system of internal controls over financial reporting; and overseeing the risk assessments related to the Company conducted by the Company’s management (including assessments relating to cybersecurity risk). The Audit Committee is also responsible for reviewing all related party transactions and has the authority to approve all such transactions. The Audit Committee met a total of ten times during 2019.

The Compensation Committee is primarily responsible for reviewing the compensation arrangements for the Company’s executive officers, administering the Company’s equity compensation plans, and reviewing the Board’s compensation. For a further description of the Compensation Committee’s processes and procedures, including the roles of the Company’s management and independent compensation consultants in the Compensation Committee’s decision-making process, see the “Compensation Discussion and Analysis” section below. The Compensation Committee met a total of four times during 2019.

The Nominating Committee assists the Board in identifying qualified individuals to become directors, makes recommendations to the Board concerning the size, structure, and composition of the Board and its committees, monitors the process to assess the Board’s effectiveness, and is primarily responsible for the oversight of corporate governance at the Company, including implementation of the Company’s Corporate Governance Guidelines. In March 2020, the Nominating Committee recommended to the full Board each of the nominees named in this Proxy Statement for election to the Board. The Nominating Committee met a total of two times during 2019.

Each of the Audit Committee, the Compensation Committee, and the Nominating Committee operates under written charters adopted by the Board. These charters are available at the “Corporate Governance” section at investor.allscripts.com.

During 2019, each member of the Board attended or participated in 75% or more of the aggregate of (i) the total number of meetings of the Board (held during the period for which such person has been a director) and (ii) the total number of meetings held by each committee of the Board on which such person served (during the period that such person served).

There are no family relationships among the Company’s executive officers and directors.

Consideration of Director Nominees

Stockholder Nominees

The Nominating Committee considers properly submitted stockholder nominations for candidates for membership on the Board in accordance with the Company’s by-laws. Stockholders who wish to nominate directors should follow the instructions under “Requirements for Other Stockholder Proposals to be Brought Before the 2021 Annual Meeting of Stockholders and Director Nominations” in this Proxy Statement.


12

 


 

Director Qualifications

The Nominating Committee and the Board consider on an annual basis the appropriate characteristics, skills and experiences for the Board as a whole and its individual members. In evaluating the suitability of individual Board members, the Board takes into account many factors, including their business and professional accomplishments, integrity, demonstrated ability to make independent analytical inquiries, ability to understand the Company’s business and willingness to devote the necessary time to Board duties. In addition, the Nominating Committee endeavors to identify and evaluate candidates based on their specific healthcare and related industry experience and any other areas that may be expected to contribute to an effective Board. With respect to diversity, the Nominating Committee may consider such factors as differences in viewpoint, professional experience, education, skills, and other individual qualifications that contribute to Board heterogeneity, including characteristics such as gender, race, and national origin.

Identifying and Evaluating Nominees for Directors

The Nominating Committee utilizes a variety of methods for identifying and evaluating nominees for directors. Candidates may come to the attention of the Nominating Committee through management, current Company directors, Company stockholders, or other persons. These candidates are evaluated and discussed by members of the Nominating Committee from time to time. Candidates may be considered at any point during the year.

The Nominating Committee considers stockholder recommendations for candidates to the Board in the same manner as candidates identified by the Nominating Committee. Any such recommendation should be delivered to the Company’s Corporate Secretary by mail at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654. Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by the Nominating Committee. If any materials are provided by a Company stockholder in connection with the recommendation of a director candidate, such materials are forwarded to the Nominating Committee. The Nominating Committee also may review materials provided by professional search firms or other parties in connection with a nominee.

Mandatory Retirement Age

The Board has implemented a policy providing that no director who has reached the age of 72 should stand for re-election to the Board, unless the Nominating Committee and the Board, in their discretion, believe an extension would best serve the interests of the Company.

Board Oversight of Risk Management

The Board believes that evaluating how the Company’s senior management team manages the various risks confronting the Company is one of its most important areas of oversight. In carrying out this critical responsibility, the Board has designated the Audit Committee with primary responsibility for overseeing enterprise risk management.

In accordance with this responsibility, the Audit Committee monitors the Company’s major financial, operational, privacy, security (including cybersecurity), business continuity, legal and regulatory, and reputational exposures, and reviews the steps management has taken to monitor and control these exposures. The Audit Committee’s oversight includes, among other things, the review of regular reports from the Company’s Senior Vice President, Chief Compliance Counsel; the Company’s Vice President, Corporate Audit; the Company’s Vice President, Chief Security Officer; and other members of the Company’s management as to the identification and status of risks to the Company, including financial risks and litigation claims and risks. As with other matters, the Audit Committee regularly discusses these topics with the Board. Most recently, the Audit Committee has been focused on, among other things, cybersecurity risk and the policies and procedures developed by the Company to facilitate the compliance by Practice Fusion, Inc., a subsidiary of the Company, with its obligations under the deferred prosecution and other agreements it signed with the U.S. Attorney for the District of Vermont on January 27, 2020. In addition, the Board has requested

13

 


 

and has been receiving regular updates from management regarding the Company’s response to the coronavirus, or COVID-19, and its impacts on the Company and its clients, employees and other stakeholders.

Additionally, when determined by the Board or by the Company’s management to be advisable, the Board or selected committees of the Board may undertake a formal enterprise risk assessment, at which risks facing the Company and associated responses are evaluated in detail. The Board also receives regular financial and business updates from the Company’s senior management, which updates involve detailed reports on financial and business risks facing the Company when applicable.

While the Audit Committee has primary responsibility for overseeing enterprise risk management, each of the other Board committees also considers risk within its area of responsibility. For example, the Nominating Committee reviews legal and regulatory compliance risks as they relate to corporate governance structure and processes, and the Compensation Committee reviews risks related to compensation matters. The Chairman of each of these committees periodically apprises the Board of significant risks and the Company’s management’s response to these risks, as appropriate.

In establishing and reviewing the Company’s executive compensation program, the Compensation Committee considers whether the program encourages unnecessary or excessive risk-taking and has concluded that it does not. The Company’s executive officers’ base salaries are fixed in amount and thus do not encourage risk-taking, and the majority of compensation provided to the Company’s executive officers is in the form of long-term equity awards that help align executive pay with the long-term interests of the Company’s stockholders. The Compensation Committee believes that these awards do not encourage unnecessary or excessive risk-taking because the ultimate value of the awards is tied to the Company’s financial or stock price performance, and because awards are subject to regular vesting schedules to help ensure that a significant component of executive compensation is tied to long-term stockholder value creation.

The Compensation Committee has also reviewed the Company’s compensation programs for employees generally, and has concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee believes that the Company’s annual cash and long-term equity awards provide an effective and appropriate mix of incentives to help ensure the Company’s performance is focused on long-term stockholder value creation and do not encourage short-term risk-taking at the expense of long-term results.

While the Board and its committees oversee risk management strategy, the Company’s management is responsible for implementing and supervising day-to-day risk management processes and reporting to the Board and its committees on such matters.

Audit Committee Financial Experts

The Board has determined that each of Ms. Aspinall, Mr. Garrison, Mr. Spruill and Mr. David D. Stevens qualifies as an “audit committee financial expert” as defined under applicable SEC rules. The Board has also determined that each member of the Audit Committee meets the additional criteria for independence of audit committee members set forth in Rule 10A-3(b)(1) under the Exchange Act.

Code of Conduct

The Company has adopted a Code of Conduct that applies to all of its employees, including the Company’s principal executive officer, principal financial officer, and senior accounting officers, as well as to the Board. The Code of Conduct is available at the “Corporate Governance” section at investor.allscripts.com. The Company intends to comply with any disclosure obligation regarding any changes in, or waivers from, the Code of Conduct by posting such information on the same website or by filing a Form 8-K with the SEC.


14

 


 

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors, and greater than 10% stockholders also are required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file.

Based solely upon a review of the copies of such forms furnished to the Company, and on written representations from the reporting persons, the Company believes that all Section 16(a) filing requirements applicable to the Company’s directors and officers were timely met during 2019.

Certain Relationships and Related Transactions

The Company, or one or more of its subsidiaries, may occasionally enter into transactions with certain “related persons.” Related persons include the Company’s executive officers, directors, beneficial owners of more than 5% of the Company’s common stock, immediate family members of any of these persons, and entities in which one or more of these persons has a direct or indirect material interest. The Company refers to transactions with these related persons as “related party transactions.”

In accordance with the Company’s written policy, the Audit Committee (or, in certain circumstances, disinterested members of the Board) is responsible for the review and approval of each related party transaction exceeding $120,000 in which a related person has a direct or indirect material interest. The Audit Committee considers all relevant factors when determining whether to approve a related party transaction, including, without limitation:

 

The size of the transaction and the amount of consideration payable to a related person;

 

The nature of the interest of the applicable related person;

 

Whether the transaction may involve a conflict of interest;

 

Whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties; and

 

Whether the proposed transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties.

Since January 1, 2019, neither the Board nor the Audit Committee has been made aware of or asked to review and approve any “related party transactions.”

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee is or has been an executive officer of the Company. None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, an executive officer of which served as a director of the Company or member of the Compensation Committee during 2019.

Attendance of Directors at Annual Meeting of Stockholders

The Company expects all of its directors and director nominees to attend its annual meetings of stockholders, barring emergencies or unusual circumstances.  Where a director is unable to attend an annual meeting in person but is able to do so by electronic conferencing, the Company will arrange for the director’s participation by means where the director can hear and be heard by those present at the meeting. All of the Company’s then-current directors attended the Company’s 2019 Annual Meeting of Stockholders.

15

 


 

Communications with the Board

Any correspondence intended for the Board, or for any individual member or members of the Board, should be directed to the Company’s Corporate Secretary at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654, with a request to forward the communication to the intended recipient(s). In general, any stockholder communication delivered to the Corporate Secretary for forwarding to the Board or specified Board member(s) will be forwarded in accordance with the stockholder’s instructions. However, the Company reserves the right not to forward to Board members any abusive, threatening, or otherwise inappropriate materials.

Information regarding the submission of comments or complaints relating to the Company’s accounting, internal accounting controls, or auditing matters can be found in the Company’s Code of Conduct, which is available at the “Corporate Governance” section at investor.allscripts.com.

Compensation of Directors

The Compensation Committee is responsible for reviewing and approving the compensation program for the Company’s non-employee directors. The Compensation Committee utilizes a combination of cash and equity as a way to attract and retain qualified directors.

Cash Compensation

For 2019, the annual retainer paid to the Company’s non-employee directors was $60,000, payable in equal quarterly installments. Non-employee directors also received a retainer of $2,000 for attendance at Board meetings in excess of ten per year, and $1,500 for attendance at each committee meeting. The Chairman of the Board may waive the additional $2,000 fee for the entire Board, and may waive the $1,500 fee for any applicable committee meeting for the attendees thereof. The Chairman of each committee may also waive the $1,500 fee for any committee meeting he chairs. Each non-employee director of the Company is also reimbursed for expenses incurred when attending Board and committee meetings and other Board-related activities.

The Chairman of the Board receives an additional annual retainer in the amount of $100,000, payable in equal quarterly installments. Each Chairman of the Audit Committee, Compensation Committee, and Nominating Committee receives an additional annual retainer of $25,000, $25,000, and $15,000, respectively, for his service as Chairman of the respective committees, payable in equal quarterly installments. Each member of the Audit Committee, Compensation Committee, and Nominating Committee also receives an additional annual retainer of $2,500 per committee served. In addition, each member of the Transaction Advisory Committee receives an additional annual retainer of $5,000 for serving on that committee. All of the foregoing payments are pro-rated for the dates of applicable service.

Prior to the beginning of each calendar year, non-employee directors may elect to receive all or a portion of their quarterly cash retainer payment in the form of deferred stock units (“DSUs”). DSUs represent the right to receive shares of the Company’s common stock at the time the director’s Board service ends. The number of DSUs granted is determined by dividing the portion of the cash compensation with respect to which the election is made by the closing price of the Company’s common stock on the date the cash compensation is due to be paid. DSUs issued in lieu of cash compensation are fully-vested.

Equity Compensation

Under the Company’s 2019 Stock Incentive Plan, the Company’s non-employee directors are eligible to receive equity awards in the form of stock options, restricted stock, or restricted stock units (“RSUs”) at the discretion of the Board or the Compensation Committee. For 2019, the value of each annual equity award was $200,000, delivered in the form of RSUs, which fully vest on the first anniversary of the grant date or, if earlier, upon a change of control of the Company. If a non-employee director retires from the Board prior to the first anniversary of the grant date, a pro-rata portion of the RSUs will vest based on the time elapsed from the grant date to the date of retirement. Annual director equity awards are granted immediately following the Company’s annual meeting of stockholders to coincide with the commencement of director terms.

16

 


 

Director Compensation – 2019

The following table shows information regarding the compensation earned during 2019 by the Company’s non-employee directors who served on the Board during the year. The compensation paid to Mr. Black is shown in the table entitled “Summary Compensation Table – 2019, 2018 and 2017” and the related explanatory tables in the “Executive Compensation” section below. Mr. Black does not receive any compensation for his service as a member of the Board.

Name

 

Fees Earned or

Paid in Cash (1)

($)

 

 

Stock Awards (2)

($)

 

 

Total

($)

 

Mara G. Aspinall

 

 

87,500

 

 

 

200,000

 

 

 

287,500

 

P. Gregory Garrison

 

 

117,500

 

 

 

200,000

 

 

 

317,500

 

Jonathan J. Judge

 

 

114,000

 

 

 

200,000

 

 

 

314,000

 

Michael A. Klayko

 

 

189,000

 

 

 

200,000

 

 

 

389,000

 

Yancey L. Spruill

 

 

85,500

 

 

 

200,000

 

 

 

285,500

 

Dave B. Stevens

 

 

92,525

 

 

 

200,000

 

 

 

292,525

 

David D. Stevens

 

 

111,500

 

 

 

200,000

 

 

 

311,500

 

 

 

(1)

This column reports the amount of cash compensation earned by each director during 2019 for his or her Board and committee service. As described above, non-employee directors may elect to convert all or a portion of their cash compensation into fully-vested DSUs. None of the non-employee directors elected to do so in 2019.

(2)

In accordance with SEC rules, the amounts shown reflect the aggregate grant date fair value of RSU awards granted to non-employee directors during 2019, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (“FASB ASC Topic 718”). The grant date fair value of RSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. The aggregate number of equity awards outstanding, including DSUs issued in lieu of cash compensation, as of December 31, 2019 for each of the Company’s non-employee directors are as follows:

 

Name

 

Number of Shares

Subject to

Outstanding

RSUs/DSUs as of

12/31/19

 

Mara G. Aspinall

 

 

36,393

 

P. Gregory Garrison

 

 

51,522

 

Jonathan J. Judge

 

 

51,522

 

Michael A. Klayko

 

 

51,522

 

Yancey L. Spruill

 

 

51,522

 

Dave B. Stevens

 

 

51,522

 

David D. Stevens

 

 

51,522

 

 

 

17

 


 

SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables show certain information as of March 27, 2020 (the “Table Date”), unless otherwise indicated, with respect to the beneficial ownership of the Company’s common stock by: (i) each person the Company believes beneficially holds more than 5% of the outstanding shares of the Company’s common stock based solely on the Company’s review of SEC filings; (ii) each director and nominee; (iii) each named executive officer listed in the table entitled “Summary Compensation Table – 2019, 2018 and 2017” under the section entitled “Compensation Discussion and Analysis” below; and (iv) all directors and executive officers as a group.

Unless otherwise indicated, all persons named as beneficial owners of the Company’s common stock have sole voting power and sole investment power with respect to the shares indicated as beneficially owned.

 

>5% Stockholders

 

Shares of

Common Stock

Beneficially

Owned

 

 

Percent of

Common

Stock

Outstanding

 

Wellington Management Group LLP (1)

 

 

22,499,616

 

 

 

13.90

%

Blackrock, Inc. (2)

 

 

21,200,086

 

 

 

13.09

%

The Vanguard Group (3)

 

 

16,366,537

 

 

 

10.11

%

Shapiro Capital Management, LLC (4)

 

 

11,679,857

 

 

 

7.21

%

Dimensional Fund Advisors LP (5)

 

 

10,359,633

 

 

 

6.40

%

 

 

 

 

 

 

 

 

 

 

Named Executive Officers, Directors and Director

Nominees

 

Shares of

Common

Stock Beneficially

Owned

 

 

Options,

Exercisable, Stock

Awards Vesting,

and DSUs

Convertible

Within

60 Days (6)

 

 

Total

 

 

Percent of

Common

Stock Outstanding

 

Paul M. Black (8)

 

 

1,267,728

 

 

 

-

 

 

 

1,267,728

 

 

*

 

Richard J. Poulton

 

 

215,503

 

 

 

-

 

 

 

215,503

 

 

*

 

Brian P. Farley

 

 

200,736

 

 

 

-

 

 

 

200,736

 

 

*

 

Lisa Khorey

 

 

120,503

 

 

 

-

 

 

 

120,503

 

 

*

 

Mara G. Aspinall

 

 

33,677

 

 

 

-

 

 

 

33,677

 

 

*

 

P. Gregory Garrison

 

 

62,928

 

 

 

-

 

 

 

62,928

 

 

*

 

Jonathan J. Judge

 

 

57,465

 

 

 

-

 

 

 

57,465

 

 

*

 

Michael A. Klayko (8)

 

 

117,315

 

 

 

-

 

 

 

117,315

 

 

*

 

Yancey L. Spruill

 

 

59,843

 

 

 

-

 

 

 

59,843

 

 

*

 

Dave B. Stevens

 

 

47,843

 

 

 

-

 

 

 

47,843

 

 

*

 

David D. Stevens

 

 

120,844

 

 

 

-

 

 

 

120,844

 

 

*

 

All directors, director nominees and

   current executive officers as a group

   (11 persons)

 

 

2,304,385

 

 

 

-

 

 

 

2,304,385

 

 

 

1.42

%

 

*

Represents less than 1% of the issued and outstanding shares of the Company’s common stock as of the Table Date.

18

 


 

(1)

This information is derived from a Schedule 13G/A filed by Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP (collectively, the “Wellington Reporting Persons”) on January 27, 2020. According to the Schedule 13G/A, each Wellington Reporting Person, with the exception of Wellington Management Company LLP, had sole power to vote or direct the vote of zero shares, sole power to dispose of or direct the disposition of zero shares, shared power to vote or direct the vote of 21,188,718 shares, and shared power to dispose of or direct the disposition of 22,499,616 shares. Wellington Management Company LLP had sole power to vote or direct the vote of zero shares, sole power to dispose of or direct the disposition of zero shares, shared power to vote or direct the vote of 21,090,834 shares, and shared power to dispose of or direct the disposition of 22,254,920 shares. According to the Schedule 13G/A, each Wellington Reporting Person lists its address as c/o Wellington Management Company LLP, 280 Congress Street, Boston, MA 02210.

(2)

This information is derived from a Schedule 13G/A filed by BlackRock, Inc. on February 4, 2020. According to the Schedule 13G/A, BlackRock, Inc. had sole power to vote or direct the vote of 20,522,453 shares, sole power to dispose of or direct the disposition of 21,200,086 shares, shared power to vote or direct the vote of zero shares, and shared power to dispose of or direct the disposition of zero shares. According to the Schedule 13G/A, BlackRock, Inc. lists its address as 55 East 52nd Street, New York, NY 10055.

(3)

This information is derived from a Schedule 13G/A filed by The Vanguard Group (“Vanguard Group”) on February 10, 2020. According to the Schedule 13G/A, Vanguard Group had sole power to vote or direct the vote of 175,997 shares, sole power to dispose of or direct the disposition of 16,204,120 shares, shared power to vote or direct the vote of 26,536 shares, and shared power to dispose of or direct the disposition of 162,417 shares. According to the Schedule 13G/A, Vanguard Group lists its address as 100 Vanguard Blvd., Malvern, PA 19355.  

(4)

This information is derived from a Schedule 13G filed by Samuel R. Shapiro and Shapiro Capital Management LLC (collectively, the “Shapiro Reporting Persons”) on February 14, 2020. According to the Schedule 13G, the Shapiro Reporting Persons had sole power to vote or direct the vote of 10,104,136 shares, sole power to dispose of or direct the disposition of 11,679,857 shares, shared power to vote or direct the vote of 1,575,721 shares, and shared power to dispose of or direct the disposition of zero shares. According to the Schedule 13G, each Shapiro Reporting Person lists its address as 3060 Peachtree Road N.W., Suite 1555, Atlanta, GA 30305.

(5)

This information is derived from a Schedule 13G/A filed by Dimensional Fund Advisors LP (“DFA”) on February 12, 2020. According to the Schedule 13G/A, DFA had sole power to vote or direct the vote of 9,920,047 shares, sole power to dispose of or direct the disposition of 10,359,633 shares, shared power to vote or direct the vote of zero shares, and shared power to dispose of or direct the disposition of zero shares. According to the Schedule 13G/A, DFA lists its address as Building One, 6300 Bee Cave Road, Austin, TX 78746.

(6)

Represents shares of the Company’s common stock underlying stock awards held that were vesting, options held that were exercisable and DSUs held that were convertible at the Table Date or within 60 days thereafter. Does not include RSUs that vest more than 60 days after the Table Date. RSUs are awards granted by the Company and payable, subject to vesting requirements, in shares of the Company’s common stock.

(7)

Voting and dispositive power over 59,794 shares of common stock presented for Mr. Black are shared with Mr. Black’s wife.

(8)

The shares of common stock presented for Mr. Klayko are held in a family trust in which he shares voting and dispositive power.

19

 


 

EQUITY COMPENSATION PLAN INFORMATION

The following table shows information, as of December 31, 2019, concerning shares of the Company’s common stock authorized for issuance under the Company’s equity compensation plans.

 

Name

 

Number of

Securities to be

issued upon

Exercise of

Outstanding

Options, Warrants

and Rights

(#)(a)

 

 

Weighted-Average

Exercise Price of

Outstanding

Options, Warrants

and Rights

($)(b)

 

 

Number of

Securities Remaining

Available for Future

Issuance Under

Equity

Compensation Plans

(Excluding

Securities Reflected

in Column(a))

(#)(c)

 

 

Equity compensation plans approved by

   stockholders

 

 

10,148,284

 

 

 

13.67

 

(1)

 

7,672,997

 

(2)

Equity compensation plans not approved

   by stockholders

 

-

 

 

-

 

 

-

 

 

Total

 

 

10,148,284

 

 

 

13.67

 

 

 

7,672,997

 

 

(1)

The weighted-average exercise price excludes a total of 8,914,571 RSUs and awards granted under equity compensation plans approved by stockholders with no exercise price but with a weighted-average grant date fair market value of approximately $11.53 as of December 31, 2019.

(2)

Includes 518,785 shares available for issuance under the Amended and Restated Allscripts Healthcare Solutions, Inc. Employee Stock Purchase Plan. Also, includes 7,154,212 shares available for issuance pursuant to the 2019 Stock Incentive Plan.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

 


 

EXECUTIVE OFFICERS

 

Name

 

Age

 

Position

Paul Black

 

61

 

Chief Executive Officer

Brian Farley

 

50

 

Executive Vice President, General Counsel & Chief Administrative Officer

Lisa Khorey

 

53

 

Executive Vice President, Chief Client Delivery Officer

Richard Poulton

 

54

 

President and Chief Financial Officer

 

 

 

 

 

Paul Black is the Chief Executive Officer and a director of Allscripts. Prior to joining Allscripts as its President in 2012, Mr. Black spent more than thirteen years with Cerner Corporation in various executive positions, retiring as Cerner’s Chief Operating Officer in 2007. Mr. Black’s career started with International Business Machines Corporation, where he spent twelve years in a variety of leadership positions in sales, product marketing and professional services. In Kansas City, Mr. Black has spent sixteen years as chairman and as an executive officer of Truman Medical Centers, an academic safety net health system. He currently is on the boards of The Advancement Board University of Kansas Health System and the Harry S. Truman Presidential Library.

Brian Farley has served as our Executive Vice President, General Counsel & Chief Administrative Officer since August 2017 and prior to that served as our Senior Vice President, General Counsel and Corporate Secretary since May 2013. From 2005 to 2013, Mr. Farley served in various positions at Motorola Mobility LLC, a provider of mobile communication devices and video and data delivery solutions. His most recent role at Motorola Mobility LLC was Corporate Vice President and General Counsel of Motorola’s Home business.

Lisa Khorey has served as our Executive Vice President, Chief Client Delivery Officer since November 2016. Prior to joining Allscripts, Ms. Khorey was the executive director of Ernst & Young’s National Provider Practice, specializing in analytics. Previously, Ms. Khorey held a variety of technical and executive leadership roles at University of Pittsburgh Medical Center.

Richard Poulton has served as our President since October 2015 and as our President and Chief Financial Officer since March 3, 2020. Mr. Poulton had also previously served as our Chief Financial Officer from October 2012 to March 2016. From October 2012 to September 2015, Mr. Poulton served as our Executive Vice President. From 2006 to 2012, Mr. Poulton served in various positions at AAR Corp., a provider of products and services to commercial aviation and the government and defense industries. His most recent role at AAR Corp. was Chief Financial Officer and Treasurer. Mr. Poulton also spent more than ten years at UAL Corporation in a variety of financial and business development roles, including Senior Vice President of Business Development as well as President and Chief Financial Officer of its client-focused Loyalty Services subsidiary.

 

21

 


 

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis explains the Company’s executive compensation philosophy and program, the decisions the Compensation Committee made with respect to the Company’s executive compensation program for 2019, and the factors that the Compensation Committee considered in making those decisions. The Compensation Committee has the principal responsibility for establishing, implementing and monitoring the Company’s executive compensation program in accordance with the Company’s executive compensation philosophy and what the Compensation Committee believes to be best practices with respect to executive compensation. This Compensation Discussion and Analysis focuses on the compensation of the Company’s named executive officers (our “NEOs”) for 2019, who were:

 

Paul M. Black, Chief Executive Officer (“CEO”);

 

Richard J. Poulton, President;

 

Dennis M. Olis, Chief Financial Officer;

 

Brian P. Farley, Executive Vice President, General Counsel & Chief Administrative Officer; and

 

Lisa Khorey, Executive Vice President, Chief Client Delivery Officer.

On March 2, 2020, the Company announced that Mr. Olis would no longer serve as Chief Financial Officer, effective March 3, 2020, with Mr. Poulton assuming the role of Chief Financial Officer as of such date.

Executive Summary

In 2019, the Company continued to make progress on its strategic, financial and operational imperatives that drive higher client satisfaction, improve the Company’s competitive positioning by expanding the depth and breadth of the Company’s products, and, as a result, position the Company for sustainable long-term growth both domestically and globally. As described in more detail in the Company’s Form 10-K, these initiatives resulted in both certain operational and financial successes in 2019; however, the Company’s stock price performance in 2019 was disappointing.

Importantly, the Company’s executive compensation program is designed to ensure rigorous pay-for-performance accountability and strongly align realizable compensation outcomes with key financial metrics and valuation, including stock price performance. As a result of the Company’s relatively disappointing stock price and financial performance, the Company’s NEOs realized materially lower compensation in 2019 than their target total compensation. This lower than target compensation is highlighted in two primary areas: (1) the number of performance stock units (“PSUs”) that vested in 2019, and (2) amount of the NEO’s 2019 annual cash incentive bonus payments.

Specifically, and as described in greater detail below, for each of the NEOs who received a PSU grant in 2016, which had a cliff vest in 2019, none (0%) of such PSUs actually vested in 2019 given the Company’s relative total shareholder return (“TSR”) measured against a peer group of companies over the grant’s three-year vesting period. In addition, PSUs granted to the Company’s NEOs in 2017, 2018 and 2019 (which are scheduled to vest in 2020, 2021 and 2022, respectively) are also based on relative TSR performance and are currently tracking at an expected payout of 0% as of the end of 2019. Finally, the Compensation Committee exercised its discretion to reduce the annual incentive cash bonuses paid to the Company’s NEOs for 2019. We believe that these outcomes are evidence of a direct alignment between pay and performance as well as rigorous incentive compensation program design.

 

 

22

 


 

The chart below compares the average for the three previous years of the target total compensation opportunity provided to Mr. Black, including base salary, annual bonus and equity awards, to the value for each element of compensation that was realized or realizable by Mr. Black as of the end of 2019. For the three-year period from 2017 to 2019, roughly 54% of Mr. Black’s target compensation has either been realized or is realizable. For the chart below, Mr. Black’s annual bonus amount in the column on the right reflects the average of the actual annual bonuses that he earned during the three-year period, as disclosed in the Summary Compensation Table – 2019, 2018 and 2017. Mr. Black’s 2017, 2018 and 2019 realized or realizable equity includes PSUs and restricted stock units (“RSUs”) either earned and vested or eligible to vest in the future under awards granted in 2017, 2018 and 2019.  All equity awards are valued using $9.82 per share, the closing price of the Company’s common stock on December 31, 2019.

 

CEO Three-Year Average Target Versus Realized or Realizable Compensation  

 

The Compensation Committee considered financial and operational results, as well as the Company’s stock price performance, when making compensation decisions for 2019. In designing and overseeing the various elements of the 2019 executive compensation program, the Compensation Committee focused on aligning executive compensation with financial metrics that the Compensation Committee believes are indicative of the Company’s ability to build and sustain growth.

23

 


 

The charts below illustrate the 2019 target total direct compensation opportunities (i.e., base salary and target short- and long-term incentive opportunities) for the CEO, as well as the average of such opportunities for the Company’s other NEOs. As shown below, 86% of the CEO’s 2019 target total direct compensation, and 85% of the average of the other NEOs’ target total direct compensation is at-risk compensation that is dependent on either the Company’s financial performance or stock price. Total direct compensation includes annual cash incentive bonus opportunities and PSUs, each of which are dependent on the Company’s financial or stock price performance, and service-based RSUs, the value of which is dependent on the Company’s stock price.

 

 

 

(1)

Values illustrated reflect the percentage of each compensation element at target.

(2)

“At-Risk Compensation” is compensation where the value is either based upon the Company’s financial performance or stock price.

(3)

“Performance-Based Compensation” is compensation that is dependent on achievement against pre-established quantitative performance goals.

The at-risk elements of the Company’s 2019 executive compensation program are annual incentive cash bonuses and long-term incentive equity awards. With respect to annual incentive cash bonuses, the Compensation Committee approved the Company’s annual incentive cash bonus plan (the “2019 Bonus Plan”) with potential payouts that are fully contingent on the Company’s non-GAAP EPS performance. A threshold level of non-GAAP EPS performance must be attained before payment of any bonuses under the 2019 Bonus Plan.

24

 


 

With respect to equity awards, in 2019 the Compensation Committee approved annual equity grants to the NEOs in the form of:

 

50% service-based RSUs, which vest, subject to continuous service, 1/3 per year over three years; and

 

50% PSUs, the number of which may be earned based on the Company’s TSR relative to a pre-established peer group, measured over a single three-year performance period.

As in recent years, the Compensation Committee chose to structure a significant portion of each NEO’s compensation as at-risk compensation, with the compensation actually realized by each NEO significantly impacted by the financial or stock price performance of the Company.  

Executive Compensation Philosophy

The Compensation Committee engages in an ongoing review of the Company’s executive compensation program to evaluate whether the program supports the Company’s compensation objectives and is aligned with the long-term interests of the Company’s stockholders, taking into account input from stockholders and the results of the annual say-on-pay vote. In connection with this ongoing review, the Compensation Committee has continued to monitor the Company’s executive compensation program to ensure that the Company maintains best practices with respect to executive compensation.

The Company’s primary objective for its executive compensation program is to attract, retain, and motivate outstanding leaders who will drive the Company’s long-term success. The Compensation Committee seeks to establish and implement a compensation program for the Company’s NEOs that emphasizes pay-for-performance, and is designed to meet the following objectives:

 

Reward outstanding performance for an individual’s performance against corporate goals;

 

Provide long-term incentive compensation through equity awards, a significant portion of which are performance-based;

 

Provide executive compensation levels and structures that are both competitive in the executive market and internally equitable; and

 

Align the Company’s executive compensation with the Company’s financial performance in order to incentivize the creation of sustainable value for the Company’s stockholders.

25

 


 

The Company maintains the following balance of compensation practices that it believes enhances its pay-for-performance philosophy and aligns the Company’s executives’ interests with the long-term interests of the Company’s stockholders:

 

The Company HAS This Practice

 

          Pay aligned with the Company’s financial performance and stockholder returns

 

          Significant at-risk compensation for NEOs

 

          A significant portion of NEO annual equity awards are performance contingent and tied to rigorous, long-term relative stock price goals

 

          Double-trigger change of control severance benefits

 

          Stock ownership requirements for officers (CEO 6x base salary and other NEOs 2x base salary) and non-employee directors (5x cash retainer)

 

          Limited perquisites

 

          Anti-hedging and anti-pledging policies

 

          Clawback policy

The Company Does NOT Have This Practice

 

X          Repricing of options without stockholder approval

 

X          Tax gross-ups for NEOs

 

X          Excise tax gross-ups for change of control benefits

 

X          Single-trigger or otherwise excessive change of control severance benefits

 

X          Dividend payments on unearned equity awards

 

X          Excessive perquisites

 

X          Supplemental executive retirement benefits

 

X          Guaranteed annual bonuses or equity rights

 

Consideration of Stockholder Say-on-Pay Vote

The Compensation Committee considers the outcome of the Company’s annual say-on-pay vote when making decisions regarding the Company’s executive compensation program. At the Company’s 2019 Annual Meeting of Stockholders, approximately 99% of the votes cast on the Company’s 2019 say-on-pay vote were cast in favor of approving the compensation of its NEOs. This 99% approval from stockholders at the Company’s 2019 annual meeting of stockholders follows similar say-on-pay results from 2017 and 2018, which was 94% for each of those years. The Compensation Committee viewed the outcome of the say-on-pay vote as indicative that a significant majority of the Company’s stockholders view the Company’s approach to executive compensation favorably. Accordingly, the Compensation Committee did not make any changes to the Company’s executive compensation program in response to the 2019 say-on-pay vote. The Company’s management continues to engage in dialogue with many of the Company’s largest stockholders, and the Compensation Committee will continue to consider stockholder feedback and the results of the Company’s say-on-pay votes when making future executive compensation decisions.

Compensation Procedures

Compensation Committee

During 2019, Jonathan J. Judge (Chairman), Michael A. Klayko, and Dave B. Stevens served on the Compensation Committee. Mr. Judge joined in May 2016 and became Chairman in May 2018, Mr. Klayko joined in May 2013, and Mr. Stevens joined in May 2017.


26

 


 

Role of Management

The primary objective of the Company’s executive compensation program is to align the program with the Company’s financial performance and the long-term interests of the Company’s stockholders. The Compensation Committee believes that this alignment is best achieved through consultations with members of the Company’s senior management, because management is familiar with the Company’s day-to-day operations and responsible for creating and executing the Company’s business plan. As such, the Company’s management provides the Compensation Committee with valuable insights into the Company’s day-to-day operations and future expectations, which the Company believes are supported by the rewards and incentives in the compensation program. In 2019, the Compensation Committee consulted with Messrs. Black and Farley in formulating compensation plans. Members of that group attended Compensation Committee meetings during which NEO and employee compensation decisions were made, but each was not present during the Compensation Committee’s discussions regarding his own compensation. The Compensation Committee also regularly meets in executive session without any members of management present.

Role of Compensation Consultant

The Compensation Committee retained Compensia to serve as its independent compensation consultant with respect to decisions regarding 2019 compensation. Compensia reported directly to the Compensation Committee and participated in Compensation Committee meetings. Compensia did not perform any other services for the Company in 2019. After considering Compensia’s relationship with the Company, the services provided by Compensia, and information provided to the Committee by Compensia, the Compensation Committee determined that Compensia met the independence requirements to serve as its independent compensation consultant and that Compensia’s work did not raise any conflict of interest.

Specifically, Compensia:

 

Advised on the design of the Company’s executive compensation program in order to assist the Compensation Committee in evaluating the linkage between pay and performance;

 

Provided and reviewed market compensation and performance data to assist the Compensation Committee in setting 2019 executive compensation relative to competitive market data;

 

Advised the Compensation Committee regarding the elements of the Company’s 2019 executive compensation program, equity grants, and equity compensation-related dilution levels relative to the Company’s peers; and

 

Advised the Compensation Committee regarding the Company’s compensation risk assessment, which assessment concluded that the compensation programs of the Company in 2019 did not create incentives that were reasonably likely to materially harm the Company.

 

 

 

 

 

 

 

 

 

27

 


 

Market Analysis

The Compensation Committee considers relevant market pay practices and relative performance when setting executive compensation and incentive goals. Market practices, or benchmarks, are based on peer group disclosure. When making compensation decisions, the Compensation Committee considers the market data in conjunction with other factors, such as an officer’s individual tenure and performance, unique qualifications and role within the Company. Working with Compensia, the Compensation Committee established a peer group in 2018 to be used in designing the Company’s 2019 executive compensation program. The peer group used to evaluate the Company’s 2019 compensation decisions included companies with the following characteristics:

 

Software and business services companies generally in the technology sector, with a focus on direct healthcare technology competitors to the extent available;

 

Revenues ranging generally between 0.5x and 2.5x of the Company’s trailing four quarter revenues, with median revenues of approximately $1.3 billion (the Company’s trailing four quarter revenues, when the peer group was determined, was approximately $2 billion); and

 

A market capitalization range generally between 0.25x and 4.0x of the Company’s market capitalization, with median market capitalization of $4.8 billion (for reference, the Company’s market capitalization, as of October 2018 when the peer group was determined, was approximately $2.0 billion). Although Cerner Corporation has a market capitalization outside of this range, it was included because Cerner is viewed as a healthcare technology competitor that competes directly with the Company for customers and executive talent.

The peer group used to evaluate 2019 compensation decisions consisted of the 22 U.S.-based publicly traded healthcare technology companies and general software companies listed below (the “2019 peer group”). For 2019, the Compensation Committee chose to remove DST Systems, Inc. and The Advisory Board Co., which were acquired. To replace those companies, the Compensation Committee chose to add AMN Healthcare Services, Inc., Huron Consulting Group Inc. and Navigant Consulting, Inc. AMN Healthcare Services, Inc. is a healthcare solutions and staffing services provider.  Huron Consulting and Navigant Consulting are both professional services firms that provide a range of advisory, technology and analytic solutions to clients. The Compensation Committee considers each of those companies to be financially comparable to the Company.

 

Healthcare Technology

Companies

 

Software Companies

AMN Healthcare Services, Inc.

 

Cadence Design Systems, Inc.

athenahealth, Inc.

 

CDK Global, Inc.

Cerner Corporation

 

Fair Isaac

Haemonetics Corporation

 

Huron Consulting Group Inc.

Hill-Rom Holdings Inc.

 

MAXIMUS, Inc.

HMS Holdings Corp.

 

Navigant Consulting, Inc.

Inovalon Holdings, Inc.

 

Nuance Communications

Medidata Solutions, Inc.

 

Parametric Technology Corporation

Omnicell, Inc.

 

Synopsys, Inc.

Premier Inc.

 

Teradata

Veeva Systems, Inc.

 

Verint Systems

 

 

 

 

28

 


 

Elements of Compensation

The Compensation Committee believes that the Company’s compensation programs for its NEOs are competitive and appropriately designed to attract and retain key employees, reward performance, and promote long-term stockholder value. This section describes the elements of the Company’s compensation program for NEOs, together with a discussion of various compensation decisions.

The principal components of the Company’s 2019 executive compensation program were base salary, annual incentive cash bonuses, and long-term incentive equity awards. The Company also provides a 401(k) retirement savings plan with certain matching contributions, group health and welfare plans, and group term life insurance. In addition, the Company provides the NEOs with severance benefits upon a termination of employment under certain circumstances, including following a change of control of the Company, as more fully described elsewhere in this Proxy Statement. The Company does not maintain defined benefit pension plans for its NEOs because the Compensation Committee believes that the existing compensation arrangements enable the Company’s NEOs to adequately plan for their retirement and that wealth creation should primarily be a function of performance for the Company’s stockholders.

 

Base Salary

Base salaries are paid to the NEOs to compensate them for the performance of their respective job duties and responsibilities. The Compensation Committee reviews base salaries of the NEOs on an annual basis. In setting annual base salaries, the Compensation Committee takes into consideration the Company’s overall financial and operating performance in the prior year, the Company-wide target for base salary increases for all employees, market and competitive salary information, changes in the scope of an NEO’s job responsibilities, and other relevant factors. When considering market and competitive salary information, the Compensation Committee has historically reviewed peer compensation data, although there is no target compensation level. The Compensation Committee also reviews each NEO’s role and performance, as well as the performance of the business units and departments for which he or she is responsible, to the extent applicable. For Mr. Black, the Compensation Committee evaluates his performance and recommends any salary adjustment for approval by the Board. For each of the other NEOs, the Compensation Committee receives a performance evaluation from the CEO and a recommendation for any salary adjustment. For 2019, the Compensation Committee determined that the Company’s overall financial and operating performance did not warrant an increase in any NEO’s base salary.  Accordingly, each NEO continued to receive the same base salary as he or she received in 2018.

The following table sets forth the base salary rate in effect as of December 31, 2019 for each NEO:

 

Name

 

Salary Rate as

of December 31,

2019

($)

 

 

% Increase From 2018 Base Salary

 

Paul M. Black

 

 

1,030,000

 

 

 

0

%

Richard J. Poulton

 

 

630,000

 

 

 

0

%

Dennis M. Olis

 

 

460,000

 

 

 

0

%

Brian P. Farley

 

 

456,000

 

 

 

0

%

Lisa Khorey

 

 

502,250

 

 

 

0

%

 

 


29

 


 

Annual Incentive Cash Bonuses

Consistent with its approach since 2016, the Compensation Committee chose non-GAAP EPS as the financial performance measure for the 2019 Bonus Plan. The non-GAAP EPS targets established by the Committee tied the 2019 Bonus Plan to a rigorous goal based on a key measure stockholders consider when evaluating the performance of the Company. Non-GAAP EPS is defined as non-GAAP net income divided by weighted shares outstanding, diluted in the applicable period. Non-GAAP net income consists of GAAP net income/(loss) as reported, and adds back deferred revenue and other adjustments, acquisition-related amortization, stock-based compensation expense, nonrecurring expenses and transaction-related costs, non-cash charges, and non-cash asset impairment charges, and equity in earnings of unconsolidated investments, in each case net of any related tax effects. Non-GAAP net income also includes a tax rate alignment adjustment.  

Each NEO’s bonus target, as a percentage of base salary, did not change for 2019. Mr. Black’s target cash bonus was 150% of his base salary, Mr. Poulton’s target cash bonus was 100% of his base salary, and Mr. Olis, Mr. Farley and Ms. Khorey each had a target cash bonus of 75% of their respective base salaries.  

The chart below shows the non-GAAP EPS performance range that the Compensation Committee approved for 2019:

 

 

Non-GAAP

Adjusted EPS($)(1)

 

 

% Payout

 

Maximum

 

 

0.79

 

 

200%

 

 

 

 

0.78

 

 

188.9%

 

 

 

 

0.77

 

 

177.8%

 

 

 

 

0.76

 

 

166.7%

 

 

 

 

0.75

 

 

155.6%

 

 

 

 

0.74

 

 

144.4%

 

 

 

 

0.73

 

 

133.3%

 

 

 

 

0.72

 

 

122.2%

 

 

 

 

0.71

 

 

111.1%

 

Target

 

 

0.70

 

 

100%

 

 

 

 

0.69

 

 

93.8%

 

 

 

 

0.68

 

 

87.5%

 

 

 

 

0.67

 

 

81.3%

 

 

 

 

0.66

 

 

75%

 

 

 

 

0.65

 

 

68.8%

 

 

 

 

0.64

 

 

62.5%

 

 

 

 

0.63

 

 

56.3%

 

Threshold

 

 

0.62

 

 

50%

 

 

 

(1)

The non-GAAP EPS performance levels approved by the Compensation Committee took into account the divestiture of OneContent, which occurred in February 2018.

Bonus payments for the NEOs under the 2019 Bonus Plan were based on the Company’s non-GAAP EPS performance for the year. Pursuant to the approved non-GAAP EPS performance range, the Company’s reported fiscal 2019 non-GAAP EPS of $0.67 would have resulted in a bonus payment equal to 81% of their target bonus for each NEO. Given the Company’s overall performance for the year, however, the Compensation Committee approved management’s recommendation that the bonus payments for the NEOs be reduced to just 15% of their 2019 target bonuses; an amount significantly below the amounts otherwise earned under the 2019 Bonus Plan. After reducing the proposed bonus payment for each NEO based on the Company’s performance, the Compensation Committee also considered the performance of each individual NEO.  As a result, the Compensation Committee determined that Ms. Khorey’s formulaic payout would be reduced to a bonus payment equal to 47.5% of her target amount given the performance of the business unit that she leads. The Compensation Committee did not make further adjustments based on individual performance and each remaining NEO received a bonus equal to 15% of his target bonus for 2019.  

30

 


 

 

Name

 

2019 Bonus

Plan

Target

Amount

($)(1)

 

 

2019 Actual

Incentive

Bonus

($)

 

Paul M. Black

 

 

1,545,000

 

 

 

231,750

 

Richard J. Poulton

 

 

630,000

 

 

 

94,500

 

Dennis M. Olis

 

 

345,000

 

 

 

51,750

 

Brian P. Farley

 

 

342,000

 

 

 

51,300

 

Lisa Khorey

 

 

376,688

 

 

 

178,927

 

 

(1)

The target amount reported for each NEO reflects the NEO’s actual earnings in 2019.      

Equity Awards

Under the 2019 Stock Incentive Plan, the Compensation Committee may grant incentive and non-qualified stock options, PSUs, RSUs, and other forms of equity compensation. The Compensation Committee believes that the issuance of equity-based long-term incentive awards to the Company’s NEOs is consistent with its stated objective of establishing an executive compensation program that aligns executives’ interests with the long-term interests of the Company’s stockholders.

In considering annual equity awards, the Compensation Committee conducts an annual review of the Company’s overall equity program, including items such as the Company’s total projected equity budget for the year, the Company’s aggregate equity usage relative to peers, and the available share pool; and it factors that review into its annual award decisions. The Compensation Committee also considers market data for the Company’s peer group, individual factors such as the performance, responsibilities and qualifications of each NEO, each NEO’s past equity awards, and the unvested retention value attributable to past awards when considering the amount and structure of equity awarded to each NEO annually.

For 2019, each of the NEOs was provided 50% of his or her annual equity award in the form of PSUs that may be earned based on the Company’s TSR relative to a peer group of broadly comparable companies in terms of industry and revenue range measured over a single three-year performance period. Using three-year relative TSR as the performance measure is consistent with the PSUs granted to the Company’s NEOs since 2015. The Company’s relative TSR is determined by comparing the change in the Company’s stock price over the three-year performance period beginning on the grant date, taking into account any dividends paid (which are assumed to be reinvested in the stock). The change in value over the performance period is then used to calculate a TSR gain/loss percentage for the performance period. That gain/loss percentage is then compared to the TSR gain/loss percentages of the peer group companies to calculate the Company’s relative TSR percentile. The Compensation Committee believes that using relative TSR as a performance measure provides an objective measure of the Company’s performance relative to other investment alternatives similar to the Company both within the Company’s industry and in the broader market.  

The 2019 TSR PSU awards require performance to be at the 60th percentile relative to the peer group for target vesting, and performance to be at the 31st percentile relative to the peer group for any vesting to occur.  The maximum payout of 200% of target requires TSR performance to be at the 90th percentile or greater relative to the peer group.  In addition, if the Company’s TSR is negative at the end of the three-year performance period, the 2019 TSR PSU awards will be capped at the target payout level even if the Company significantly outperforms the peer group.  


31

 


 

The peer group for measuring relative TSR performance under the 2019 TSR PSU awards consists of the following companies:

 

 

ACI Worldwide

 

Genpact

 

Navigant Consulting

AMN Healthcare Services

 

Hill-Rom Holdings

 

NextGen Healthcare

Cardtronics

 

HMS Holdings

 

Nuance Communications

CDK Global

 

Huron Consulting Group

 

Omnicell

Cerner

 

Inovalon Holdings

 

PRA Health Sciences

Computer Programs & Sys.

 

j2 Global

 

Premier

CoreLogic

 

LiveRamp Holdings

 

Teradata

Endurance International

 

Mantech International

 

TTEC Holdings

Euronet Worldwide

 

MAXIMUS

 

Verint Systems

Fair Isaac

 

Medidata Solutions

 

Virtusa

 

The Compensation Committee selected the 2019 relative TSR peer group based on its review of comparability to the Company on key selection criteria including industry, revenue, market capitalization and stage/time from initial public offering.  The Compensation Committee chose the group of companies listed above because the Compensation Committee determined that those companies are most aligned with the Company when considering the key selection criteria.

The remaining 50% of the annual equity award made to each NEO for 2019 was in the form of service-based RSUs that vest 1/3 each year for three years.  This structure is also consistent with 50% of the annual equity award made to each NEO since 2015.

When determining the amount of the annual equity award to each NEO for 2019, the Compensation Committee chose to award equity in the same amounts awarded to the NEOs in 2018.  The individual grant decisions reflect a review of quantitative market data and relevant qualitative factors including individual performance, time in role, scope and breadth of duties, and internal pay equity.

The following table illustrates the annual equity awards made to the NEOs in 2019:

 

Name

 

Service-Based

RSUs (1)

($)

 

 

Relative TSR

PSUs (1)

($)

 

 

Total 2019

Grant Value (1)

($)

 

Paul M. Black

 

 

2,500,000

 

 

 

2,500,000

 

 

 

5,000,000

 

Richard J. Poulton

 

 

2,000,000

 

 

 

2,000,000

 

 

 

4,000,000

 

Dennis M. Olis

 

 

800,000

 

 

 

800,000

 

 

 

1,600,000

 

Brian P. Farley

 

 

1,000,000

 

 

 

1,000,000

 

 

 

2,000,000

 

Lisa Khorey

 

 

1,000,000

 

 

 

1,000,000

 

 

 

2,000,000

 

 

(1)

Represents the target equity award opportunity approved by the Compensation Committee as the annual equity award for each NEO included in the table. The target award values are not the same as the grant date fair values computed for financial reporting purposes and reported in the “2019 Grants of Plan-Based Awards” table included in the section entitled “Executive Compensation” below because the target value of the PSUs reported for financial reporting purposes is determined based on the application of a Monte Carlo simulation method, while the amounts reported above represented the target compensation opportunity approved by the Compensation Committee. These amounts do not include the service-based RSUs granted in recognition of the successful divestiture of the Company’s investment in Netsmart LLC, described below.


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In addition to the annual equity awards, the Compensation Committee also made an equity award to each NEO in recognition of the successful divestiture of the Company’s investment in Netsmart LLC. The sale was completed in December of 2018 in exchange for $566.6 million in cash. It resulted in a pre-tax gain of $500 million. The equity award made to each NEO was in the form of service-based RSUs that cliff vest after two years, subject to the NEO’s continued service.  Mr. Black received an award of $1,000,000, Mr. Poulton received an award of $1,200,000 and Mr. Olis, Mr. Farley and Ms. Khorey received awards of $350,000.

Pre-2019 Equity Award Vesting Results

The Company granted certain performance-based equity awards prior to 2019 that vest, based in part, on the Company’s 2019 performance. In 2016, the Company granted PSUs to the NEOs that vest based on the Company’s relative TSR over a single three-year performance period through February 24, 2019. The awards required the Company’s TSR relative to the peer group to be at the 35th percentile for any vesting to occur, and TSR relative to the peer group to be at the 65th percentile for target vesting. The Company’s TSR for the three-year performance period ended February 24, 2019 was -13.79%, which placed the Company at the 15th percentile relative to the peer group. That performance was below the threshold required for any vesting to occur and therefore no portion of the awards vested at the end of the performance period.  

In 2015, the Company also granted PSUs to Mr. Black that vest based on the Company’s cumulative TSR growth over a four-year performance period, with the ability to accelerate vesting based on the Company’s cumulative TSR growth over a three-year performance period. Performance at the end of the three-year performance period was below the minimum threshold for any vesting. For any vesting to occur at the end of the four-year performance period, the Company must achieve 22% cumulative TSR growth. As of March 6, 2019, the Company achieved TSR growth of -7.17% for the four-year performance period. That performance was below the minimum vesting threshold and therefore resulted in vesting of 0% of the shares eligible to vest under the award for the four-year performance period.

Benefits and Perquisites

Each of the NEOs participates in the health and welfare benefit plans and fringe benefit programs generally available to all other Company employees. Beyond this, the Company generally does not provide the NEOs with significant perquisites and personal benefits in excess of $10,000. Under certain circumstances, however, the Compensation Committee recognizes that special arrangements may be necessary or desirable. The total perquisites provided to each NEO are described in the “2019 All Other Compensation” table included below.

Severance Arrangements in Employment Agreements

The Company has entered into severance arrangements as a component of the employment agreements with certain members of its senior management team, including the NEOs. These severance arrangements provide for payments and other benefits if the officer’s employment terminates for a qualifying event or circumstance, such as being terminated without “Cause” or leaving employment for “Constructive Discharge,” as these terms are defined in the employment agreements. A termination following a “Change of Control” (as defined in the employment agreements) generally results in the NEOs receiving additional compensation under the employment agreements.

The Company has eliminated single trigger change of control benefits and tax gross-up payments on change of control benefits. Any change of control benefit is “double trigger,” requiring termination of employment under all circumstances, including a situation where the officer is not offered a “Comparable Job” (as defined in each employment agreement) in connection with a “Change of Control,” and the officer terminates employment within 10 days after the “Change of Control.” Additional information regarding the above-referenced employment agreements, including a quantification of benefits that would have been received by each of the NEOs had termination or change of control occurred on December 31, 2019, is found under the heading “—2019 Potential Payments upon Termination or Change of Control” section below.

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The Compensation Committee believes that these severance and change of control arrangements are an important part of overall compensation for the NEOs, because these arrangements help to secure the continued employment and dedication of the NEOs, notwithstanding any concern that they might have at such time regarding their own continued employment, prior to or following a change of control. The Compensation Committee also believes that these arrangements are important as a recruitment and retention device, as many of the companies with which the Company competes for executive talent have similar arrangements in place for their senior employees.

Stock Ownership Requirements

The Board has approved stock ownership requirements for the Company’s non-employee directors and for certain executives of the Company, including each of the NEOs. The CEO is required to maintain an ownership level with a fair market value equal to six times (6x) his base salary, while the other NEOs are required to maintain an ownership level with a fair market value equal to two times (2x) his or her respective base salary. The initial measurement date is five years from the date on which the NEO became subject to the guidelines. Common stock owned outright, service-based awards outstanding, and deferred stock units are included when determining the ownership level. Stock options and performance-based awards are excluded. If the stock ownership requirement is not met after five years, the NEO will be required to retain shares equal in value to no less than half of the after-tax value of shares vesting from any equity award until the stock ownership requirement is satisfied. The stock ownership requirement for the Company’s non-employee directors is five times (5x) the annual cash retainer then paid to each such director, with no specific period for achievement.

 


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EXECUTIVE COMPENSATION

Summary Compensation Table – 2019, 2018 and 2017

The following table shows information regarding the compensation of each of the Company’s NEOs for 2019, 2018 and 2017.

 

Name and Principal Position

 

Year

 

Salary

$

 

Bonus

$

 

Stock

Awards (1)

$

 

Option

Awards

$

 

Non-Equity

Plan

Incentive Plan

Compensation (2)

$

 

All Other

Compensation (3)

$

 

Total

$

Paul M. Black

 

2019

 

1,030,000

 

-

 

6,237,879

 

-

 

231,750

 

8,984

 

7,508,613

   Chief Executive Officer

 

2018

 

1,030,000

 

-

 

5,326,877

 

-

 

1,436,850

 

7,524

 

7,801,251

 

 

2017

 

1,030,000

 

-

 

5,308,053

 

-

 

1,380,376

 

6,155

 

7,724,584

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Richard J. Poulton

 

2019

 

630,000

 

-

 

5,390,325

 

-

 

94,000

 

19,457

 

6,133,782

President

 

2018

 

630,000

 

-

 

4,261,519

 

-

 

582,413

 

21,317

 

5,495,249

 

 

2017

 

615,000

 

-

 

3,844,094

 

-

 

550,125

 

21,102

 

5,030,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dennis M. Olis

 

2019

 

460,000

 

-

 

2,445,167

 

-

 

51,750

 

19,680

 

2,976,597

Chief Financial Officer

 

2018

 

460,000

 

-

 

1,704,620

 

-

 

317,038

 

18,917

 

2,500,575

 

 

2017

 

438,136

 

-

 

1,037,963

 

-

 

293,939

 

14,949

 

1,784,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brian P. Farley

 

2019

 

456,000

 

-

 

2,445,167

 

-

 

51,300

 

14,837

 

2,967,304

EVP, General Counsel &

 

2018

 

456,000

 

-

 

2,130,774

 

-

 

316,088

 

13,832

 

2,916,694

Chief Administrative Officer

 

2017

 

444,682

 

-

 

1,698,579

 

-

 

298,331

 

18,048

 

2,459,640

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lisa Khorey

 

2019

 

502,250

 

-

 

2,445,167

 

-

 

178,927

 

9,317

 

3,135,661

EVP, Chief Client Delivery

 

2018

 

502,250

 

-

 

2,130,774

 

-

 

348,184

 

2,570

 

2,983,778

   Officer

 

2017

 

490,000

 

-

 

1,061,631

 

-

 

291,938

 

2,236

 

1,845,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The amounts in this column represent equity awards granted under the 2011 and 2019 Stock Incentive Plan. The amounts reported are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, with awards subject to performance or market-based vesting conditions calculated based on the probable achievement of such vesting conditions at the time of grant.  In the first quarter of 2019, all NEOs were provided 50% of their equity award opportunity in PSUs that vest based on the Company’s relative TSR compared to a peer group of companies over a single three-year performance period. The grant date fair value for these PSUs was $11.74 per share. The grant date fair values of the PSUs that vest based on the Company’s relative TSR were calculated based on the application of a Monte Carlo simulation model. The weighted averages of the assumptions used during the first quarter of 2019 were: risk-free interest rate of 2.48%; no dividend yield; and expected volatility using the historical volatility over the most recent three-year period for the peer group and implied volatility at 38.20%. In calculating the fair market value, three years was used to be commensurate with the three-year performance period of the awards. The interest rate is equal to the yield, as of the measurement date, of the zero-coupon U.S. Treasury bill that is commensurate with the overall performance period. The grant date fair value of the PSUs does not correspond to the actual value that may be recognized by an NEO with respect to the award, which may be higher or lower based on a number of factors, including the Company’s performance, the performance of the companies in the peer group, stock price fluctuations and applicable vesting. Under FASB ASC Topic 718, the vesting conditions related to the 2019 PSUs are considered market conditions and not performance conditions. Accordingly, there is no grant date fair value below or in excess of the amount reflected in the table above for the PSUs that could be calculated and disclosed based on achievement of market conditions. The amount also includes the grant date fair value of service-based RSU awards. The service-based awards granted to all NEOs in the first quarter of 2019 was $10.72 per share.  The service-based awards were calculated based on the market value of the

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Company’s stock on the date of grant. See Note 11 to the Consolidated Financial Statements included in the Annual Report for a discussion of the relevant assumptions used in calculating these amounts pursuant to FASB ASC Topic 718.

(2)

Amounts included in this column for 2019 represent cash incentive bonuses payable under the 2019 Bonus Plan based on the Company’s achievement of non-GAAP EPS goals.

(3)

Amounts included in this column for 2019 are set forth by category in the “2019 All Other Compensation” table below.

 

 

2019 All Other Compensation

 

Name

 

Parking

Expense

Payments

($)

 

 

401(k)

Matching

Contributions

($)

 

 

Life

Insurance

Premiums

($)

 

 

Executive

Physicals

($)

 

 

Total

($)

 

Paul M. Black

 

 

-

 

 

 

-

 

 

 

7,524

 

 

 

1,460

 

 

 

8,984

 

Richard J. Poulton

 

 

1,260

 

 

 

11,200

 

 

 

2,622

 

 

 

4,375

 

 

 

19,457

 

Dennis M. Olis

 

 

-

 

 

 

11,200

 

 

 

4,485

 

 

 

3,995

 

 

 

19,680

 

Brian P. Farley

 

 

1,260

 

 

 

11,200

 

 

 

2,377

 

 

 

-

 

 

 

14,837

 

Lisa Khorey

 

 

-

 

 

 

6,697

 

 

 

2,620

 

 

 

-

 

 

 

9,317

 

 

2019 Grants of Plan-Based Awards

The following table provides information regarding non-equity incentive awards and equity-based awards granted by the Company in 2019.

 

 

 

 

 

 

 

Estimated Possible Payouts Under

Non-Equity Incentive Plan

Awards (1)

 

 

Estimated Future Payouts Under

Equity Incentive Plan

Awards

 

 

Stock

Awards:

Number of

Shares of

 

 

Grant Date

Fair Value

of Stock

 

Name

 

Grant

Date

 

Approval

Date

 

Threshold

$

 

 

Target

$

 

 

Maximum

$

 

 

Threshold

#

 

 

 

 

Target

#

 

 

Maximum

#

 

 

Stock or

Units

(#)

 

 

and Option

Award (2)

($)

 

Paul M.

   Black

 

 

 

 

 

 

772,500

 

 

 

1,545,000

 

 

 

3,090,000

 

 

 

-

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2/28/2019

(3)

2/28/2019

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,696

 

 

 

 

 

233,209

 

 

 

466,418

 

 

 

-

 

 

 

2,737,874

 

 

 

2/28/2019

(4)

2/28/2019

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

-

 

 

 

-

 

 

 

233,209

 

 

 

2,500,000

 

 

 

2/28/2019

(5)

2/28/2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

93,284

 

 

 

1,000,004