UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): June 14, 2019

 

 

Premier, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware   001-36092   35-2477140

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

13034 Ballantyne Corporate Place

Charlotte, NC 28277

(Address of Principal Executive Offices) (Zip Code)

(704) 357-0022

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol

 

Name of each exchange

on which registered

Class A Common Stock, $0.01 Par Value   PINC   NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2). Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 8.01.

Other Events.

On June 14, 2019, the Board of Directors (the “Board”) of Premier, Inc. (the “Company”), upon the recommendation of the Compensation Committee of the Board, approved amendments to the Company’s Directors’ Compensation Policy (the “Amended Policy”). The Amended Policy, effective July 1, 2019, amends the previous Directors’ Compensation Policy adopted by the Board on August 11, 2016 (the “Previous Policy”). The Amended Policy is designed to provide an incentive to attract and retain the services of qualified persons to serve as directors of the Company. The Compensation Committee’s recommendation was based upon market analysis of director compensation levels and practices generally and within the Company’s peer group conducted by and discussed with the Compensation Committee’s independent compensation consultant.

Under the Previous Policy, non-employee directors were paid the following compensation:

 

  •  

an annual cash retainer of $80,000;

 

  •  

an annual equity award of restricted stock units valued at $125,000, with the exception of any director whose employer prohibits the receipt by such individual of equity from the Company;

 

  •  

in lieu of the annual equity award in the preceding bullet, any director whose employer prohibits the receipt of equity from the Company shall receive an annual cash award of $100,000;

 

  •  

per meeting cash fees in connection with committee and ad hoc meeting attendance, and retainers for service as chair of the Board or chair of a Board committee;

 

  •  

reimbursement for reasonable out-of-pocket business expenses incurred in connection with attending meetings of the Board and its committees or in connection with other Company business; and

 

  •  

a gift in the amount of $1,000 to the director’s selected not-for-profit organization during the holiday season in lieu of receipt of a holiday gift.

The Amended Policy leaves unchanged the annual cash retainer, expense reimbursement and not-for-profit gift, but revises the following elements of non-employee director compensation:

 

  •  

the annual equity award of restricted stock units will increase to $155,000, with the exception of any director whose employer prohibits the receipt by such individual of equity from the Company;

 

  •  

the annual cash award granted in lieu of the annual equity award for any director whose employer prohibits the receipt of equity from the Company will increase to $125,000; and

 

  •  

in lieu of per-meeting fees, the Board chair, committee chairs and committee members will receive additional retainers for their service.

The grant date of the annual equity award, and the annual cash award for directors who are prohibited from receiving equity, will be moved from January to the earlier of the first business day following the annual stockholders meeting or December 15. Consistent with the Previous Policy, the annual equity award, and any annual cash award granted in lieu of the annual equity award, will vest in full one year after the grant date and immediately upon a change in control.

Consistent with the Previous Policy, directors who are also our employees do not receive cash or equity compensation for service on the Board in addition to compensation payable for their service as employees of the Company.

All other provisions of the Previous Policy remain unchanged in the Amended Policy.

The foregoing description of the Amended Policy is qualified in its entirety by reference to the terms of the Amended Policy, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

10.1      Premier, Inc. Directors’ Compensation Policy, as amended effective July 1, 2019

SIGNATURE

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.

 

Premier, Inc.

By:

  /s/ Susan D. DeVore
 

Name: Susan D. DeVore

Title:   Chief Executive Officer

Date: June 14, 2019

Exhibit 10.1

 

LOGO

 

 

Directors’ Compensation Policy

Overview

The Board of Directors of Premier, Inc. (“Premier”) has approved the following Director Compensation Policy (“Policy”) to provide an incentive to attract and retain the services of qualified persons to serve as directors.

Objectives

This Policy is designed to achieve the following key objectives:

 

  ●  

Align the interests of the non-employee directors (as defined below) and stockholders

 

  ●  

Support overall organizational objectives and encourage the creation of stockholder value

 

  ●  

Attract and retain high quality talent

 

  ●  

Reflect the broad spectrum of talent and diverse sources of market data

 

  ●  

Target median competitive pay levels, as evaluated no less frequently than every three years

 

  ●  

Be simple to understand and administer

Eligibility

This Policy shall apply to each director of the Board of Directors of Premier, Inc. (the “Board”) who is not an employee of, or compensated consultant to, Premier or any of its Affiliates (a “non-employee director”). Employees of Premier, Inc., Premier Healthcare Solutions, Inc., Premier Supply Chain Improvement, Inc. or their respective affiliates are not eligible to receive compensation under this Policy. The table below sets forth compensation levels for all Directors.

 

 

Compensation Element

 

     Compensation Amount      
Annual Retainer  

Cash Retainer

 

     $80,000      
 

Equity Retainer (or Cash Award, if applicable) 1

 

     $155,000 / $125,000 1      

Additional

Retainer Fees

 

Board Chair

 

     $60,000      
  Committees      Chair    Member      
 

 

      Audit and Compliance Committee

     $30,000    $15,000      
 

      Compensation Committee

 

     $30,000    $15,000      
 

      Nominating and Governance Committee

 

     $15,000    $7,500      
 

      Member Agreement Review Committee

 

     $15,000    $7,500      
 

      Finance Committee

 

     $15,000    $7,500      
 

      Conflict Advisory Committee

 

     $15,000    $7,500      
 

      Short-term Ad Hoc Committee

 

     $10,000    $5,000      
Other  

      Charitable Contribution

 

     $1,000      

 

  1)   Annual Equity Award is payable in restricted stock units (RSUs). Directors that certify in writing that they are prohibited by their organizations from receiving equity-based compensation from Premier will receive an annual cash award of $125,000 in lieu of equity compensation.

 

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LOGO

Equity Grants

Each Director shall be granted under Premier’s 2013 Equity Incentive Plan or any successor plan (the “Equity Plan”) restricted stock units (“RSUs”) for shares of Premier’s Class A common stock each year (the “Annual Grant”) on the earlier of the first business day following the annual stockholder meeting, or December 15. A Director joining the Board after the most recent Annual Grant, shall be entitled to a pro-rated grant based upon the number of days of service expected prior to the next Annual Grant (assuming the next Annual Grant date will be the business day following the expected date of the next annual stockholder meeting) divided by 365. The number of shares subject to the RSUs shall be determined based on the closing price of a share as of the grant date. The RSUs shall vest one year from the date of grant, subject to the Director’s continued service on the Board. The grants shall vest in full immediately upon a Change in Control (as defined in the Equity Plan). Equity grants under this Policy are subject to the Premier, Inc. Stock Ownership Guidelines.

Annual Cash Awards (in lieu of Equity Grants)

Directors who are prohibited by their respective organizations from receiving equity-based compensation from Premier shall be granted an annual cash award of $125,000 in lieu of equity compensation each year (the “Annual Award”) on the earlier of the first business day following the annual stockholder meeting, or December 15. A Director must certify, in writing, that his or her employer prohibits the receipt of equity-based compensation from Premier to be eligible for an Annual Award. A Director joining the Board after the most recent Annual Award, shall be entitled to a pro-rated award based upon the number of days of service expected prior to the next Annual Award (assuming the next Annual Award date will be the business day following the expected date of the next annual stockholder meeting) divided by 365. The Annual Award shall vest one year from the date of grant, subject to continued service on the Board. The Annual Award shall vest in full immediately upon a Change in Control (as defined in the Equity Plan). Directors that are prohibited from receiving equity-based compensation shall not be subject to the Premier, Inc. Stock Ownership Guidelines.

Payment Term for Cash Fees and Retainer

Cash payments to non-employee directors for Board and board committee service shall be paid quarterly in arrears as of the last day of each fiscal quarter. Non-employee directors shall receive cash compensation after first being elected or appointed to the Board on a pro-rated basis during the first fiscal quarter in which initially appointed or elected based on the number of days during which service is provided. If a non-employee director dies, resigns, or is removed during any quarter, he or she shall be entitled to a cash payment on a pro-rated basis through his or her last day of service.

Expense Reimbursement

Upon presentation of documentation of such expenses reasonably satisfactory to Premier, each non-employee director shall be reimbursed for his or her reasonable out-of-pocket business expenses incurred in connection with attending meetings of the Board and its committees or in connection with other business related to the Board. Each non-employee director shall also be reimbursed for his or her reasonable out-of-pocket business expenses authorized by the Board or one of its committees that are incurred in connection with attendance at meetings with Premier’s management. Each non-employee director shall abide by Premier’s travel and other policies applicable to company personnel.

Additional Services

On occasion, short-term ad hoc committees shall be formed to address a particular oversight need. In the event that an ad-hoc committee is formed, the committee chair shall be paid an annual retainer of $10,000 and committee members shall be paid a member retainer of $5,000.

The Board has the authority to provide additional compensation to directors for ad hoc requests that require a substantial amount of time and/or work.

Additional Compensation

On an annual basis, each non-employee director shall have the ability to direct an amount of $1,000 to his or her selected not-for-profit organization during the holiday season in lieu of receipt of a holiday gift from Premier, Inc.

Policy Review / Amendments

The Compensation Committee or the Board shall review this Policy from time to time to assess whether any amendments in the type and amount of compensation provided herein should be adjusted in order to fulfill the objectives of this Policy. This Policy may only be amended by the Board.

Approved by the Premier, Inc. Board of Directors on September 6, 2013

Reviewed and approved by the Premier, Inc. Compensation Committee on August 10, 2016

Approved by the Premier, Inc. Board of Directors on August 11, 2016

Approved by the Premier, Inc. Board of Directors on June 14, 2019

 

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