UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Between June 20, 2023 and June 23, 2023, Computer Programs and Systems, Inc. (the “Company”) entered into an Executive Severance Agreement (the “Severance Agreement”) with each of Matt J. Chambless (Chief Financial Officer, Secretary and Treasurer), David A. Dye (Chief Operating Officer), Dawn M. Severance (Chief Sales Officer), and Amaris McComas (Chief People Officer), as well as other members of the Company’s senior management team (each, an “Executive”). The purposes of the Severance Agreements are to standardize the compensation arrangements among the Company’s senior management team and to aid in the Company’s attraction and retention of executive-level talent, as well as to enhance protections for the Company in connection with executive transitions. Under the Severance Agreement, in the event the Executive is terminated by the Company without “Cause” (as defined in the Severance Agreement), other than within twelve (12) months following a “Change in Control” (as defined in the Severance Agreement) of the Company, the Executive will be eligible to receive, in addition to any accrued but unpaid amounts or benefits, (i) twelve (12) months (eighteen (18) months, in the case of Mr. Dye) of equal installment payments which are in the aggregate equal to one (1) times (one and one half (1.5) times, in the case of Mr. Dye) the sum of the Executive’s base salary and target bonus for the year in which the termination event occurs; (ii) up to twelve (12) months (eighteen (18) months, in the case of Mr. Dye) of reimbursements for medical and/or dental continuation coverage; (iii) continued vesting of the Executive’s outstanding unvested shares of restricted stock during the period in which the Executive is subject to non-competition and non-solicitation covenants; and (iv) a pro rata portion of the Executive’s outstanding cash incentive awards and performance share awards to be calculated in the manner set forth in the applicable award agreements based on the degree of attainment of the applicable performance goals at the end of the applicable performance period, with the amount of the awards, if any, to be pro-rated based on the number of days that the Executive was employed by the Company during the performance period.
The Severance Agreement further provides that, in the event the Executive is terminated by the Company without Cause within twelve (12) months following a Change in Control of the Company, the Executive will be eligible to receive, in addition to any accrued but unpaid amounts or benefits, (i) a lump sum payment equal to one and one half (1.5) times (two (2) times, in the case of Mr. Dye) the sum of the Executive’s base salary and target bonus for the year in which the termination event occurs; and (ii) up to twelve (12) months (eighteen (18) months, in the case of Mr. Dye) of reimbursements for medical and/or dental continuation coverage.
The Executive’s receipt of severance payments and benefits is subject to the Executive’s execution and non-revocation of a release of claims in the Company’s favor and compliance with confidentiality, non-disparagement and other covenants, all as more specifically provided for in the Severance Agreement. Additionally, the Executive’s receipt of severance payments and benefits is subject to the Executive’s compliance with non-competition and non-solicitation covenants for twelve (12) months (eighteen (18) months, in the case of Mr. Dye) following the termination event.
The foregoing summary of the Severance Agreement does not purport to be complete and is qualified in its entirety by reference to the Severance Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
The following exhibits are filed herewith:
| Exhibit Number |
Description | |
| 10.1 | Form of Executive Severance Agreement entered into between Computer Programs and Systems, Inc. and each executive officer | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COMPUTER PROGRAMS AND SYSTEMS, INC. | ||||||
| Date: June 26, 2023 | By: | /s/ Matt J. Chambless | ||||
| Matt J. Chambless | ||||||
| Chief Financial Officer, Secretary and Treasurer | ||||||
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