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): August 31, 2021
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 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 5, 2021, the Board of Directors (the “Board”) of Premier, Inc. (the “Company”) approved a recommendation of the Nominating and Governance Committee of the Board (the “Nominating and Governance Committee”) to undertake a fair, orderly and thoughtful process to reduce the size of the Board from 15 to 11 directors to better align with current governance best practices. In order to accomplish this transition, the Board established a Special Nominating Committee (the “Special Committee”) charged with evaluating and making recommendations regarding (i) the directors, not to exceed 11 individuals including the Company’s Chief Executive Officer, who will continue to serve on the Board, (ii) the allocation of such continuing directors to each of the three classes of directorship required under the Company’s governing documents, (iii) the composition of the standing Board committees and (iv) the effective date of such changes in Board and committee composition. The decision to form the Special Committee was approved by the Board based on the recommendation of the Nominating and Governance Committee, which received input from the then existing directors, as well as research and advice provided by legal counsel and independent consultants regarding board size, composition and governance policies appropriate to bring the Board in alignment with current best practices. At the time the Special Committee was established, the existing directors agreed to abide by the recommendations of the Special Committee. The Special Committee was comprised of Terry Shaw (as Board Chair), Richard J. Statuto (as Chair of the Nominating and Governance Committee) and Jody R. Davids (an independent director).
Based on the recommendation of the Special Committee, the Board took the following actions on August 31, 2021, effective immediately:
Director Resignations
The Board accepted the resignations tendered by of each of Barclay E. Berdan, Stephen R. D’Arcy, David H. Langstaff, William E. Mayer and Scott Reiner (the “Resigning Directors”) from the Board and their respective Board committees, effective immediately. The agreement by each of the Resigning Directors to resign was not the result of any disagreement with the Board or Company’s management.
In consideration of the Resigning Directors’ agreement to resign based on the recommendation of the Special Committee process, the Board determined to accelerate the vesting of each of their unvested equity awards for the current year (or provide a cash equivalent payment, as applicable). Accordingly, with respect to each Resigning Director, all of the restricted stock units granted on December 7, 2020 will vest as of August 31, 2021.
Decrease in Board Size
The Board approved a decrease in the size of the Board from 15 directors to 11 directors. As a result of the director resignations and the change in the size of the Board, the Board now has one vacancy. The Board directed the Nominating and Governance Committee to recruit an additional female or other diverse director, with appropriate competencies and experiences that support the Company’s strategic plan, to fill the vacancy.
Item 8.01. Other Events.
Determination of Director Independence
The Company’s August 2020 restructuring resulted in the termination of the Voting Trust pursuant to which all Class B Common Stock held by member owners was voted as a single block by the trustee, the elimination of member owners as limited partners under the Limited Partnership Agreement of Premier Healthcare Alliance, L.P. and the exchange of all Class B Common Stock held by member owners into publicly traded Class A Common Stock. In light of those events, and the fact that the Company has not qualified as a “controlled company” under NASDAQ Stock Market LLC (“NASDAQ”) rules since July 2019, as part of its annual director independence review, the Board reevaluated the historical treatment of member-directors as non-independent directors under the NASDAQ requirements.
On August 5, 2021, the Board, under advisement by legal counsel and the Nominating and Governance Committee, undertook an analysis regarding director independence and determined that each of Barclay E. Berdan, John T. Bigalke, Helen M. Boudreau, Stephen R. D’Arcy, Jody R. Davids, Peter S. Fine, David H. Langstaff, William E. Mayer, Marc D. Miller, Marvin R. O’Quinn, Scott Reiner, Terry Shaw, Richard J. Statuto and Ellen C. Wolf are independent directors.
Based on the director resignations, decrease in Board size and independence determinations discussed above, the Board is currently comprised of ten members, including nine directors who are independent under the NASDAQ rules and Michael J. Alkire, the Company’s President and Chief Executive Officer. In addition, four of the ten members (40%) of the Board self-identify as female or racially diverse.
Board Classes and Committee Composition
Under the Company’s certificate of incorporation and bylaws, the Board is required to be divided into three classes designated Class I, Class II and Class III. Each class shall consist, as nearly as possible, of one-third of the total number of directors constituting the entire Board, and in the event the size of the Board is decreased, such decrease shall be apportioned, as nearly as possible, equally among the three classes. Based on the Special Committee process, the Board determined that all continuing directors will remain in their current director class as set forth below.
|
Director |
Class |
Initial Term Expires at the Annual Meeting of Stockholders (Year) |
||
| John T. Bigalke | I | 2023 | ||
| Helen M. Boudreau | I | 2023 | ||
| Marc D. Miller | I | 2023 | ||
| Terry D. Shaw | II | 2021 | ||
| Richard J. Statuto | II | 2021 | ||
| Ellen C. Wolf | II | 2021 | ||
| Michael J. Alkire | III | 2022 | ||
| Jody R. Davids | III | 2022 | ||
| Peter S. Fine | III | 2022 | ||
| Marvin R. O’Quinn | III | 2022 |
The Board also reappointed its standing committees as set forth below:
|
Audit and
Committee |
Compensation
|
Nominating and
|
Finance
|
Member
|
||||||
| Michael J. Alkire | X | |||||||||
| John T. Bigalke* | X | X | ||||||||
| Helen M. Boudreau | X | Chair | ||||||||
| Jody R. Davids | X | X | ||||||||
| Peter S. Fine | X | Chair | ||||||||
| Marc D. Miller | Chair | X | ||||||||
| Marvin R. O’Quinn | X | X | ||||||||
| Terry D. Shaw | X | |||||||||
| Richard J. Statuto | X | Chair | ||||||||
| Ellen C. Wolf* | Chair | X |
| * |
Each of Mr. Bigalke and Ms. Wolf has been designated an “Audit Committee Financial Expert.” |
Merger of Conflict Advisory Committee into the Audit and Compliance Committee
On August 5, 2021, the Board of Directors, based on the recommendation of the Audit and Compliance Committee (“ACC”) and to reduce the complexity of the Board committee structure and enhance efficiency of Board meetings, terminated the Conflict Advisory Committee (“CAC”) and integrated its duties into those of the ACC. The Board originally established the CAC as an advisory committee of the ACC, with the primary responsibilities being the evaluation of potential conflicts of interest between the Company and its officers and directors and making recommendations to the ACC regarding what actions, if any, should be taken with respect to such matters. Prior to its termination, all of the non-management members of the CAC were also members of the ACC.
Consulting Arrangements
On or about September 1, 2021, former directors Stephen D’Arcy, David Langstaff and William Mayer (each a “Consultant”) each entered into a Consulting Agreement with the Company. The Consulting Agreements provide for a one-year term that may be renewed for successive one-year periods by mutual written agreement of the parties. The Consultants will provide consulting and advisory services with respect to strategic issues concerning the Company’s business, as reasonably requested by Company’s Chief Executive Officer from time to time. As compensation under
the Consulting Agreements, each Consultant will receive an award of restricted stock units (RSUs) under the Company’s 2013 Equity Incentive Plan, with a grant date value of $250,000. The RSU award will vest (i) at the end of the one-year term of the Consulting Agreement, subject to the Consultant providing the services required by the Consulting Agreement through the vesting date, or (ii) in the event the Company terminates the Consulting Agreement prior to one year without cause. In addition, Mr. Mayer will receive a cash payment of $75,000, payable in four equal quarterly installments. No other consideration will be paid to the Consultants. The Consulting Agreements were reviewed and approved by the ACC and the Board, and the RSU awards provided for in the Consulting Agreement were approved by the Compensation Committee and the Board. The foregoing is a summary description of the terms and conditions of the Consulting Agreements and the RSU Agreements and is qualified in its entirety by reference to such agreements. The Consulting Agreements with Messrs. D’Arcy, Langstaff and Mayer are filed as Exhibit 10.1, 10.2 and 10.3, respectively, to this Form 8-K, and the form of RSU Agreement for all three Consultants is filed as Exhibit 10.4.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. | |
| 10.1 | Consulting Agreement, effective September 1, 2021, between Stephen R. D’Arcy and Premier, Inc. | |
| 10.2 | Consulting Agreement, effective September 1, 2021, between David H. Langstaff and Premier, Inc. | |
| 10.3 | Consulting Agreement, effective September 1, 2021, between William E. Mayer and Premier, Inc. | |
| 10.4 | Form of Restricted Stock Unit Agreement for Consultants | |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) | |
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/ Michael J. Alkire |
|
| Name: Michael J. Alkire | ||
| Title: President and Chief Executive Officer | ||
Date: September 7, 2021
Exhibit 10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (“Agreement”) effective as of September 1, 2021 (the “Effective Date”), is made by and between Premier, Inc., a Delaware corporation (“Company”), and Stephen D’Arcy (“Consultant”). Company and Consultant are referred to collectively as the “Parties” and each individually as a “Party”.
WHEREAS, Consultant is a former director of Company, and the services of Consultant and his knowledge of the affairs of Company are of great value to Company; and
WHEREAS, Company desires to engage Consultant to perform the services described in this Agreement, and Consultant is willing to provide such services on the terms set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, the Parties, intending to be legally bound, agree as follows:
ARTICLE 1
1.1 Term. Company hereby engages Consultant for a one-year period commencing on the Effective Date (the “Term”), subject to the terms and conditions set forth in this Agreement. The Term may be renewed for successive one-year periods by mutual written agreement of the Parties.
1.2 Consultant’s Duties and Responsibilities. During the Term, Consultant shall provide consulting and advisory services with respect to strategic issues concerning Company’s business (collectively, the “Services”), as reasonably requested by Company’s Chief Executive Officer from time to time. During the Term, Consultant is required, at the request of Company, to put forth reasonable efforts to faithfully perform the Services on a part-time basis and on a schedule mutually agreeable to Company and Consultant.
1.3 Company Policies. Consultant will comply with Company’s Code of Conduct and Insider Trading Policy, attached as Exhibits A and B hereto, as well as any other written Company policies and procedures provided to Consultant (collectively, “Company Policies”), as each may be modified from time to time, and except as otherwise agreed in writing shall recuse himself from participation in any matter in which he or any organization with which he is affiliated has an actual or potential conflict of interest. It shall be Consultant’s express obligation to promptly inform Company of the existence of any potential or actual conflict of interest. Company shall be the final arbiter with respect to whether recusal is required.
1.4 Compensation.
| (a) |
Consulting Fee. Subject to the terms and conditions hereof, Company agrees to grant to Consultant, as compensation in full for the Services provided during the Term, $250,000 in Restricted Stock Units (the “RSUs”) calculated as of the Effective Date. Consultant understands that the RSUs are granted to Consultant under, and subject to the terms of, the Amended and Restated Premier, Inc. 2013 Equity Incentive Plan (the “EIP”), including without limitation that such RSUs will only vest if Consultant provides the Services required under this Agreement throughout the Term. |
| (b) |
Payment of Taxes. Consultant shall be responsible for payment of all taxes arising from Consultant’s engagement under this Agreement. Company will not deduct or withhold from any amounts owing from Company to Consultant with respect to the Services provided by Consultant, any Federal, state, local or foreign withholding taxes, excise tax, or employment taxes (“Taxes”). Consultant shall indemnify Company for any amounts that Company is required to pay as a result of the failure to pay any such Taxes, together with any interest, penalties, and related expenses thereto. |
| (c) |
No Employee Benefits. As an independent contractor, Consultant shall not be eligible for, or entitled to, and shall not participate in, any of Company’s health, disability, life insurance or other employee benefit programs. Because Consultant is an independent contractor and is not an employee of Company, Company will not obtain workers’ compensation insurance for Consultant. |
| (d) |
Expense Reimbursement. During the Term, Company shall reimburse Consultant for all reasonable out-of-pocket business expenses (approved in advance by Company) incurred by Consultant in the course of performing the duties and responsibilities set forth in this Agreement. Such reimbursement shall be consistent with Company’s policies in effect from time to time, and made known to Consultant, with respect to travel and other business expenses (provided, however, that first class air travel shall be permitted), including without limitation Company’s reasonable requirements with respect to reporting and documentation of such expenses. |
ARTICLE 2
2.1 Termination.
| (a) |
This Agreement and the consulting services of Consultant shall terminate upon the occurrence of any one or more of the following events: |
| (i) |
The expiration of this Agreement; |
| (ii) |
The death or disability of Consultant (with “disability” having the same meaning as under the award agreement relating to the RSUs); |
| (iii) |
The termination of this Agreement by Company for Cause (as defined below); or |
| (iv) |
The termination of this Agreement by Consultant for any reason. |
| (b) |
Upon the expiration of this Agreement, all obligations of the Parties shall forthwith terminate, except for the obligations of Consultant pursuant to Sections 1.3, 1.4(b), 2.2 and 2.4 hereof. For purposes of the RSU award granted pursuant to Section 1.4(a) of this Agreement, “Cause” shall mean: (i) material breach by Consultant of any provision of this Agreement which (if capable of being remedied) is not fully remedied within twenty (20) days of the receipt by Consultant of written notice thereof from Company; (ii) commission by Consultant of an act of fraud upon, or willful misconduct of a material nature toward, Company, as reasonably determined by the Board; (iii) the commission by Consultant of any felony (including without limitation a conviction thereof or a plea of nolo contendre thereto); or (iv) the willful commission by Consultant of any act that is reasonably determined by Company to have caused a material adverse effect on the property, operations, business or reputation of Company. |
2.2 Non-Disclosure.
| (a) |
Consultant will have access to confidential and proprietary information of Company (collectively, “Confidential Information”). Confidential Information will be interpreted as broadly as possible to include all information of any sort (whether merely remembered or embodied in a tangible or intangible form) that is (i) related to the current or potential business of Company, and (ii) is not generally or publicly known. Confidential Information includes, without limitation, the information, observations and data obtained by Consultant prior to or during the course of his performance under this Agreement concerning the business and affairs of Company; information concerning acquisition, divestiture and partnering opportunities in the businesses or industries of Company of which Consultant is aware or becomes aware during the Term; as well as development, transition and transformation plans, methodologies and methods of doing business, strategic, marketing and expansion plans, including plans regarding potential sales, financial and business plans, employee lists and telephone numbers, locations of sales representatives, new and existing programs and services, prices and terms, customer service, integration processes, requirements and costs of providing services. |
| (b) |
Consultant acknowledges that Confidential Information gained by Consultant from or on behalf of Company is Company’s proprietary information and, if used by Consultant or disclosed to others, other than on behalf of Company, could cause competitive and irreparable harm to Company and Company’s business. Accordingly, Consultant agrees to hold in a fiduciary capacity for the benefit of Company all Confidential Information of Company and any affiliate of Company obtained prior to or during the Term by Consultant (whether or not developed by Consultant) and will not, whether during the Term or thereafter, communicate or divulge any such Confidential Information to any person or entity, other than to Company or persons or entities designated by Company, or use any such Confidential Information for his own |
| account or the account of anyone other than Company without the prior written consent of Company unless and to the extent that any Confidential Information (i) was in the public domain at the date of disclosure or becomes generally known to and available for use by the public other than as a result of acts or omissions to act of Consultant, (ii) was in the possession of Consultant prior to disclosure of such information to Consultant by Company or was acquired by Consultant from a source other than Company who is not in breach of a covenant of confidentiality with respect to such information, or (iii) is required to be disclosed pursuant to any applicable law or court order (provided that in such latter case, Consultant promptly notifies Company prior to any such disclosure so that Company can seek a protective order barring or limiting such disclosure). Upon request, Consultant shall return or certify that he has destroyed all materials (in any medium) containing any such Confidential Information to Company promptly upon the expiration or termination of this Agreement. |
2.3 Consultant’s Representations. Consultant hereby represents and warrants to Company that (i) the execution, delivery and performance of this Agreement by Consultant does not and shall not conflict with, breach, violate or cause a default under any material contract, agreement, instrument, order, judgment or decree to which Consultant is a party or by which he is bound; and (ii) upon the execution and delivery of this Agreement by both Consultant and Company, this Agreement shall be the valid and binding obligation of Consultant enforceable in accordance with its terms.
2.4 Indemnification. Company shall indemnify Consultant with respect to any liability incurred arising from, and advance expenses reasonably incurred by Consultant in defending, any civil, criminal administrative or investigative action, suit or proceeding arising in connection with Consultant’s performance of Services under this Agreement (other than acts or omissions resulting from willful misconduct or gross negligence of Consultant, including any violation of Company Policies or the terms of this Agreement), in accordance with and to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as amended from time to time.
2.5 Severability. To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected.
2.6 Governing Law. This Agreement is made under and, except as specified in Section 2.4 above, shall be governed by and construed in accordance with the laws of the State of North Carolina without regard for its principles concerning conflicts of law.
2.7 Other Agreements. This Agreement contains the entire agreement of the Parties relating to the subject matter hereof and supersedes all prior agreements and understandings with respect to such subject matter, and the Parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement that are not set forth herein.
2.8 Successors. This Agreement shall extend to and be binding upon the Parties and their respective legal representatives, heirs, distributees, successors and assigns.
2.9 Amendments. No amendment or modification of this Agreement shall be deemed effective unless made in writing and signed by the parties hereto.
2.10 No Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel to enforce any provision of this Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than specifically waived.
2.12 Assignment. This Agreement contemplates the furnishing of unique personal services by Consultant and may not be assigned by Consultant. Company may assign this Agreement to any affiliate but otherwise shall obtain Consultant’s prior written consent to any assignment.
2.14 Notices. Any notice required to be given pursuant to the terms and provisions hereof will be in writing and will be sent by Fedex or other overnight courier or by certified mail, postage prepaid, return receipt requested, to the applicable party at the addresses below. Any party may change the address to which notices are to be sent, by notice given in accordance with the provisions of this section. Notices hereunder will be deemed to have been given, and will be effective, on the day following the date sent by Fedex or other overnight courier or otherwise upon receipt by the other parties:
|
If to Premier: |
Premier, Inc. 13034 Ballantyne Corporate Place Charlotte, North Carolina 28277 Attention: Chief Executive Officer |
|
|
If to Consultant: |
[Name] | |
| [Address] | ||
[Signature Page Follows]
IN WITNESS WHEREOF, each of the parties has caused this Consultant Agreement to be executed as of the Effective Date.
| PREMIER, INC. | ||
| By: |
/s/ Michael J. Alkire |
|
| Name: Michael J. Alkire | ||
| Title: President and Chief Executive Officer | ||
| CONSULTANT: | ||
| By: |
/s/ Stephen D’Arcy |
|
| Stephen D’Arcy | ||
EXHIBIT A
PREMIER, INC. CODE OF CONDUCT
EXHIBIT B
PREMIER, INC. INSIDER TRADING POLICY
Exhibit 10.2
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (“Agreement”) effective as of September 1, 2021 (the “Effective Date”), is made by and between Premier, Inc., a Delaware corporation (“Company”), and David Langstaff (“Consultant”). Company and Consultant are referred to collectively as the “Parties” and each individually as a “Party”.
WHEREAS, Consultant is a former director of Company, and the services of Consultant and his knowledge of the affairs of Company are of great value to Company; and
WHEREAS, Company desires to engage Consultant to perform the services described in this Agreement, and Consultant is willing to provide such services on the terms set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, the Parties, intending to be legally bound, agree as follows:
ARTICLE 1
1.1 Term. Company hereby engages Consultant for a one-year period commencing on the Effective Date (the “Term”), subject to the terms and conditions set forth in this Agreement. The Term may be renewed for successive one-year periods by mutual written agreement of the Parties.
1.2 Consultant’s Duties and Responsibilities. During the Term, Consultant shall provide consulting and advisory services with respect to strategic issues concerning Company’s business (collectively, the “Services”), as reasonably requested by Company’s Chief Executive Officer from time to time. During the Term, Consultant is required, at the request of Company, to put forth reasonable efforts to faithfully perform the Services on a part-time basis and on a schedule mutually agreeable to Company and Consultant.
1.3 Company Policies. Consultant will comply with Company’s Code of Conduct and Insider Trading Policy, attached as Exhibits A and B hereto, as well as any other written Company policies and procedures provided to Consultant (collectively, “Company Policies”), as each may be modified from time to time, and except as otherwise agreed in writing shall recuse himself from participation in any matter in which he or any organization with which he is affiliated has an actual or potential conflict of interest. It shall be Consultant’s express obligation to promptly inform Company of the existence of any potential or actual conflict of interest. Company shall be the final arbiter with respect to whether recusal is required.
1.4 Compensation.
| (a) |
Consulting Fee. Subject to the terms and conditions hereof, Company agrees to grant to Consultant, as compensation in full for the Services provided during the Term, $250,000 in Restricted Stock Units (the “RSUs”) calculated as of the Effective Date. Consultant understands that the RSUs are granted to Consultant under, and subject to the terms of, the Amended and Restated Premier, Inc. 2013 Equity Incentive Plan (the “EIP”), including without limitation that such RSUs will only vest if Consultant provides the Services required under this Agreement throughout the Term. |
| (b) |
Payment of Taxes. Consultant shall be responsible for payment of all taxes arising from Consultant’s engagement under this Agreement. Company will not deduct or withhold from any amounts owing from Company to Consultant with respect to the Services provided by Consultant, any Federal, state, local or foreign withholding taxes, excise tax, or employment taxes (“Taxes”). Consultant shall indemnify Company for any amounts that Company is required to pay as a result of the failure to pay any such Taxes, together with any interest, penalties, and related expenses thereto. |
| (c) |
No Employee Benefits. As an independent contractor, Consultant shall not be eligible for, or entitled to, and shall not participate in, any of Company’s health, disability, life insurance or other employee benefit programs. Because Consultant is an independent contractor and is not an employee of Company, Company will not obtain workers’ compensation insurance for Consultant. |
| (d) |
Expense Reimbursement. During the Term, Company shall reimburse Consultant for all reasonable out-of-pocket business expenses (approved in advance by Company) incurred by Consultant in the course of performing the duties and responsibilities set forth in this Agreement. Such reimbursement shall be consistent with Company’s policies in effect from time to time, and made known to Consultant, with respect to travel and other business expenses (provided, however, that first class air travel shall be permitted), including without limitation Company’s reasonable requirements with respect to reporting and documentation of such expenses. |
ARTICLE 2
2.1 Termination.
| (a) |
This Agreement and the consulting services of Consultant shall terminate upon the occurrence of any one or more of the following events: |
| (i) |
The expiration of this Agreement; |
| (ii) |
The death or disability of Consultant (with “disability” having the same meaning as under the award agreement relating to the RSUs); |
| (iii) |
The termination of this Agreement by Company for Cause (as defined below); or |
| (iv) |
The termination of this Agreement by Consultant for any reason. |
| (b) |
Upon the expiration of this Agreement, all obligations of the Parties shall forthwith terminate, except for the obligations of Consultant pursuant to Sections 1.3, 1.4(b), 2.2 and 2.4 hereof. For purposes of the RSU award granted pursuant to Section 1.4(a) of this Agreement, “Cause” shall mean: (i) material breach by Consultant of any provision of this Agreement which (if capable of being remedied) is not fully remedied within twenty (20) days of the receipt by Consultant of written notice thereof from Company; (ii) commission by Consultant of an act of fraud upon, or willful misconduct of a material nature toward, Company, as reasonably determined by the Board; (iii) the commission by Consultant of any felony (including without limitation a conviction thereof or a plea of nolo contendre thereto); or (iv) the willful commission by Consultant of any act that is reasonably determined by Company to have caused a material adverse effect on the property, operations, business or reputation of Company. |
2.2 Non-Disclosure.
| (a) |
Consultant will have access to confidential and proprietary information of Company (collectively, “Confidential Information”). Confidential Information will be interpreted as broadly as possible to include all information of any sort (whether merely remembered or embodied in a tangible or intangible form) that is (i) related to the current or potential business of Company, and (ii) is not generally or publicly known. Confidential Information includes, without limitation, the information, observations and data obtained by Consultant prior to or during the course of his performance under this Agreement concerning the business and affairs of Company; information concerning acquisition, divestiture and partnering opportunities in the businesses or industries of Company of which Consultant is aware or becomes aware during the Term; as well as development, transition and transformation plans, methodologies and methods of doing business, strategic, marketing and expansion plans, including plans regarding potential sales, financial and business plans, employee lists and telephone numbers, locations of sales representatives, new and existing programs and services, prices and terms, customer service, integration processes, requirements and costs of providing services. |
| (b) |
Consultant acknowledges that Confidential Information gained by Consultant from or on behalf of Company is Company’s proprietary information and, if used by Consultant or disclosed to others, other than on behalf of Company, could cause competitive and irreparable harm to Company and Company’s business. Accordingly, Consultant agrees to hold in a fiduciary capacity for the benefit of Company all Confidential Information of Company and any affiliate of Company obtained prior to or during the Term by Consultant (whether or not developed by Consultant) and will not, whether during the Term or thereafter, communicate or divulge any such Confidential Information to any person or entity, other than to Company or persons or entities designated by Company, or use any such Confidential Information for his own |
| account or the account of anyone other than Company without the prior written consent of Company unless and to the extent that any Confidential Information (i) was in the public domain at the date of disclosure or becomes generally known to and available for use by the public other than as a result of acts or omissions to act of Consultant, (ii) was in the possession of Consultant prior to disclosure of such information to Consultant by Company or was acquired by Consultant from a source other than Company who is not in breach of a covenant of confidentiality with respect to such information, or (iii) is required to be disclosed pursuant to any applicable law or court order (provided that in such latter case, Consultant promptly notifies Company prior to any such disclosure so that Company can seek a protective order barring or limiting such disclosure). Upon request, Consultant shall return or certify that he has destroyed all materials (in any medium) containing any such Confidential Information to Company promptly upon the expiration or termination of this Agreement. |
2.3 Consultant’s Representations. Consultant hereby represents and warrants to Company that (i) the execution, delivery and performance of this Agreement by Consultant does not and shall not conflict with, breach, violate or cause a default under any material contract, agreement, instrument, order, judgment or decree to which Consultant is a party or by which he is bound; and (ii) upon the execution and delivery of this Agreement by both Consultant and Company, this Agreement shall be the valid and binding obligation of Consultant enforceable in accordance with its terms.
2.4 Indemnification. Company shall indemnify Consultant with respect to any liability incurred arising from, and advance expenses reasonably incurred by Consultant in defending, any civil, criminal administrative or investigative action, suit or proceeding arising in connection with Consultant’s performance of Services under this Agreement (other than acts or omissions resulting from willful misconduct or gross negligence of Consultant, including any violation of Company Policies or the terms of this Agreement), in accordance with and to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as amended from time to time.
2.5 Severability. To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected.
2.6 Governing Law. This Agreement is made under and, except as specified in Section 2.4 above, shall be governed by and construed in accordance with the laws of the State of North Carolina without regard for its principles concerning conflicts of law.
2.7 Other Agreements. This Agreement contains the entire agreement of the Parties relating to the subject matter hereof and supersedes all prior agreements and understandings with respect to such subject matter, and the Parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement that are not set forth herein.
2.8 Successors. This Agreement shall extend to and be binding upon the Parties and their respective legal representatives, heirs, distributees, successors and assigns.
2.9 Amendments. No amendment or modification of this Agreement shall be deemed effective unless made in writing and signed by the parties hereto.
2.10 No Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel to enforce any provision of this Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than specifically waived.
2.12 Assignment. This Agreement contemplates the furnishing of unique personal services by Consultant and may not be assigned by Consultant. Company may assign this Agreement to any affiliate but otherwise shall obtain Consultant’s prior written consent to any assignment.
2.14 Notices. Any notice required to be given pursuant to the terms and provisions hereof will be in writing and will be sent by Fedex or other overnight courier or by certified mail, postage prepaid, return receipt requested, to the applicable party at the addresses below. Any party may change the address to which notices are to be sent, by notice given in accordance with the provisions of this section. Notices hereunder will be deemed to have been given, and will be effective, on the day following the date sent by Fedex or other overnight courier or otherwise upon receipt by the other parties:
| If to Premier: | Premier, Inc. | |
| 13034 Ballantyne Corporate Place | ||
| Charlotte, North Carolina 28277 | ||
| Attention: Chief Executive Officer |
| If to Consultant: | [Name] | |
| [Address] |
[Signature Page Follows]
IN WITNESS WHEREOF, each of the parties has caused this Consultant Agreement to be executed as of the Effective Date.
| PREMIER, INC. | ||
| By: |
/s/ Michael J. Alkire |
|
| Name: Michael J. Alkire | ||
| Title: President and Chief Executive Officer | ||
| CONSULTANT: | ||
| By: |
/s/ David Langstaff |
|
| David Langstaff | ||
EXHIBIT A
PREMIER, INC. CODE OF CONDUCT
EXHIBIT B
PREMIER, INC. INSIDER TRADING POLICY
Exhibit 10.3
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (“Agreement”) effective as of September 1, 2021 (the “Effective Date”), is made by and between Premier, Inc., a Delaware corporation (“Company”), and William Mayer (“Consultant”). Company and Consultant are referred to collectively as the “Parties” and each individually as a “Party”.
WHEREAS, Consultant is a former director of Company, and the services of Consultant and his knowledge of the affairs of Company are of great value to Company; and
WHEREAS, Company desires to engage Consultant to perform the services described in this Agreement, and Consultant is willing to provide such services on the terms set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, the Parties, intending to be legally bound, agree as follows:
ARTICLE 1
1.1 Term. Company hereby engages Consultant for a one-year period commencing on the Effective Date (the “Term”), subject to the terms and conditions set forth in this Agreement. The Term may be renewed for successive one-year periods by mutual written agreement of the Parties.
1.2 Consultant’s Duties and Responsibilities. During the Term, Consultant shall provide consulting and advisory services with respect to strategic issues concerning Company’s business (collectively, the “Services”), as reasonably requested by Company’s Chief Executive Officer from time to time. During the Term, Consultant is required, at the request of Company, to put forth reasonable efforts to faithfully perform the Services on a part-time basis and on a schedule mutually agreeable to Company and Consultant.
1.3 Company Policies. Consultant will comply with Company’s Code of Conduct and Insider Trading Policy, attached as Exhibits A and B hereto, as well as any other written Company policies and procedures provided to Consultant (collectively, “Company Policies”), as each may be modified from time to time, and except as otherwise agreed in writing shall recuse himself from participation in any matter in which he or any organization with which he is affiliated has an actual or potential conflict of interest. It shall be Consultant’s express obligation to promptly inform Company of the existence of any potential or actual conflict of interest. Company shall be the final arbiter with respect to whether recusal is required.
1.4 Compensation.
| (a) |
Consulting Fee. Subject to the terms and conditions hereof, Company agrees to grant to Consultant, as compensation in full for the Services provided during the Term, (i) $250,000 in Restricted Stock Units (the “RSUs”) calculated as of the Effective Date and (ii) $75,000 in cash payable in equal quarterly amounts. Consultant understands that the RSUs are granted to Consultant under, and subject to the terms of, the Amended and Restated Premier, Inc. 2013 Equity Incentive Plan (the “EIP”), including without limitation that such RSUs will only vest if Consultant provides the Services required under this Agreement throughout the Term. |
| (b) |
Payment of Taxes. Consultant shall be responsible for payment of all taxes arising from Consultant’s engagement under this Agreement. Company will not deduct or withhold from any amounts owing from Company to Consultant with respect to the Services provided by Consultant, any Federal, state, local or foreign withholding taxes, excise tax, or employment taxes (“Taxes”). Consultant shall indemnify Company for any amounts that Company is required to pay as a result of the failure to pay any such Taxes, together with any interest, penalties, and related expenses thereto. |
| (c) |
No Employee Benefits. As an independent contractor, Consultant shall not be eligible for, or entitled to, and shall not participate in, any of Company’s health, disability, life insurance or other employee benefit programs. Because Consultant is an independent contractor and is not an employee of Company, Company will not obtain workers’ compensation insurance for Consultant. |
| (d) |
Expense Reimbursement. During the Term, Company shall reimburse Consultant for all reasonable out-of-pocket business expenses (approved in advance by Company) incurred by Consultant in the course of performing the duties and responsibilities set forth in this Agreement. Such reimbursement shall be consistent with Company’s policies in effect from time to time, and made known to Consultant, with respect to travel and other business expenses (provided, however, that first class air travel shall be permitted), including without limitation Company’s reasonable requirements with respect to reporting and documentation of such expenses. |
ARTICLE 2
2.1 Termination.
| (a) |
This Agreement and the consulting services of Consultant shall terminate upon the occurrence of any one or more of the following events: |
| (i) |
The expiration of this Agreement; |
| (ii) |
The death or disability of Consultant (with “disability” having the same meaning as under the award agreement relating to the RSUs); |
| (iii) |
The termination of this Agreement by Company for Cause (as defined below); or |
| (iv) |
The termination of this Agreement by Consultant for any reason. |
| (b) |
Upon the expiration of this Agreement, all obligations of the Parties shall forthwith terminate, except for the obligations of Consultant pursuant to Sections 1.3, 1.4(b), 2.2 and 2.4 hereof. For purposes of the RSU award granted pursuant to Section 1.4(a) of this Agreement, “Cause” shall mean: (i) material breach by Consultant of any provision of this Agreement which (if capable of being remedied) is not fully remedied within twenty (20) days of the receipt by Consultant of written notice thereof from Company; (ii) commission by Consultant of an act of fraud upon, or willful misconduct of a material nature toward, Company, as reasonably determined by the Board; (iii) the commission by Consultant of any felony (including without limitation a conviction thereof or a plea of nolo contendre thereto); or (iv) the willful commission by Consultant of any act that is reasonably determined by Company to have caused a material adverse effect on the property, operations, business or reputation of Company. |
2.2 Non-Disclosure.
| (a) |
Consultant will have access to confidential and proprietary information of Company (collectively, “Confidential Information”). Confidential Information will be interpreted as broadly as possible to include all information of any sort (whether merely remembered or embodied in a tangible or intangible form) that is (i) related to the current or potential business of Company, and (ii) is not generally or publicly known. Confidential Information includes, without limitation, the information, observations and data obtained by Consultant prior to or during the course of his performance under this Agreement concerning the business and affairs of Company; information concerning acquisition, divestiture and partnering opportunities in the businesses or industries of Company of which Consultant is aware or becomes aware during the Term; as well as development, transition and transformation plans, methodologies and methods of doing business, strategic, marketing and expansion plans, including plans regarding potential sales, financial and business plans, employee lists and telephone numbers, locations of sales representatives, new and existing programs and services, prices and terms, customer service, integration processes, requirements and costs of providing services. |
| (b) |
Consultant acknowledges that Confidential Information gained by Consultant from or on behalf of Company is Company’s proprietary information and, if used by Consultant or disclosed to others, other than on behalf of Company, could cause competitive and irreparable harm to Company and Company’s business. Accordingly, Consultant agrees to hold in a fiduciary capacity for the benefit of Company all Confidential Information of Company and any affiliate of Company obtained prior to or during the Term by Consultant (whether or not developed by Consultant) and will not, whether during the Term or thereafter, communicate or divulge any such Confidential Information |
| to any person or entity, other than to Company or persons or entities designated by Company, or use any such Confidential Information for his own account or the account of anyone other than Company without the prior written consent of Company unless and to the extent that any Confidential Information (i) was in the public domain at the date of disclosure or becomes generally known to and available for use by the public other than as a result of acts or omissions to act of Consultant, (ii) was in the possession of Consultant prior to disclosure of such information to Consultant by Company or was acquired by Consultant from a source other than Company who is not in breach of a covenant of confidentiality with respect to such information, or (iii) is required to be disclosed pursuant to any applicable law or court order (provided that in such latter case, Consultant promptly notifies Company prior to any such disclosure so that Company can seek a protective order barring or limiting such disclosure). Upon request, Consultant shall return or certify that he has destroyed all materials (in any medium) containing any such Confidential Information to Company promptly upon the expiration or termination of this Agreement. |
2.3 Consultant’s Representations. Consultant hereby represents and warrants to Company that (i) the execution, delivery and performance of this Agreement by Consultant does not and shall not conflict with, breach, violate or cause a default under any material contract, agreement, instrument, order, judgment or decree to which Consultant is a party or by which he is bound; and (ii) upon the execution and delivery of this Agreement by both Consultant and Company, this Agreement shall be the valid and binding obligation of Consultant enforceable in accordance with its terms.
2.4 Indemnification. Company shall indemnify Consultant with respect to any liability incurred arising from, and advance expenses reasonably incurred by Consultant in defending, any civil, criminal administrative or investigative action, suit or proceeding arising in connection with Consultant’s performance of Services under this Agreement (other than acts or omissions resulting from willful misconduct or gross negligence of Consultant, including any violation of Company Policies or the terms of this Agreement), in accordance with and to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as amended from time to time.
2.5 Severability. To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected.
2.6 Governing Law. This Agreement is made under and, except as specified in Section 2.4 above, shall be governed by and construed in accordance with the laws of the State of North Carolina without regard for its principles concerning conflicts of law.
2.7 Other Agreements. This Agreement contains the entire agreement of the Parties relating to the subject matter hereof and supersedes all prior agreements and understandings with respect to such subject matter, and the Parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement that are not set forth herein.
2.8 Successors. This Agreement shall extend to and be binding upon the Parties and their respective legal representatives, heirs, distributees, successors and assigns.
2.9 Amendments. No amendment or modification of this Agreement shall be deemed effective unless made in writing and signed by the parties hereto.
2.10 No Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel to enforce any provision of this Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than specifically waived.
2.12 Assignment. This Agreement contemplates the furnishing of unique personal services by Consultant and may not be assigned by Consultant. Company may assign this Agreement to any affiliate but otherwise shall obtain Consultant’s prior written consent to any assignment.
2.14 Notices. Any notice required to be given pursuant to the terms and provisions hereof will be in writing and will be sent by Fedex or other overnight courier or by certified mail, postage prepaid, return receipt requested, to the applicable party at the addresses below. Any party may change the address to which notices are to be sent, by notice given in accordance with the provisions of this section. Notices hereunder will be deemed to have been given, and will be effective, on the day following the date sent by Fedex or other overnight courier or otherwise upon receipt by the other parties:
|
If to Premier: |
Premier, Inc. | |
| 13034 Ballantyne Corporate Place | ||
| Charlotte, North Carolina 28277 | ||
| Attention: Chief Executive Officer | ||
|
If to Consultant: |
William Mayer | |
| At the last address on record with the Company | ||
| (as updated by Consultant from time to time) | ||
[Signature Page Follows]
IN WITNESS WHEREOF, each of the parties has caused this Consultant Agreement to be executed as of the Effective Date.
| PREMIER, INC. | ||
| By: |
/s/ Michael J. Alkire |
|
| Name: Michael J. Alkire | ||
| Title: President and Chief Executive Officer | ||
| CONSULTANT: | ||
| By: |
/s/ William Mayer |
|
| William Mayer | ||
EXHIBIT A
PREMIER, INC. CODE OF CONDUCT
EXHIBIT B
PREMIER, INC. INSIDER TRADING POLICY
Exhibit 10.4
RESTRICTED STOCK UNIT AGREEMENT
FOR CONSULTANTS
|
Participant: [ ] |
(the “Participant”) | |
|
Grant Date: [ ] |
(the “Grant Date”) | |
|
Number of Award Shares: |
[ ] | |
|
Vesting Date: |
Shall vest in full on the first anniversary of the Grant Date (the “Vesting Date”). | |
1. Grant of Restricted Stock Units. This restricted stock unit award (“Award”) is granted pursuant to the Amended and Restated Premier Inc. 2013 Equity Incentive Plan (the “Plan”), by Premier, Inc. (the “Company”) to the Participant as a Consultant to the Company. The Company hereby grants to the Participant as of the Grant Date (set forth above) the Award consisting of a right to receive the number of shares set forth above (“Award Shares”) of the Company’s Class A common stock, $0.01 par value (“Shares”), upon the Vesting Date, pursuant to the Plan, as it may be amended from time to time, and subject to the terms, conditions, and restrictions set forth herein. Capitalized terms in this restricted stock unit agreement (the “Award Agreement”) shall have the meaning specified in the Plan, unless a different meaning is specified herein.
2. Terms and Conditions. The terms, conditions, and restrictions applicable to this Award are specified in the Plan and this Award Agreement, including Exhibit A – Section 280G Rules, and summarized in the Plan prospectus and any applicable prospectus supplement (together, the “Prospectus”). The terms, conditions and restrictions in the Plan include, but are not limited to, provisions relating to amendment, vesting, cancellation and settlement, all of which are hereby incorporated by reference into this Award Agreement to the extent not otherwise set forth herein.
By accepting the Award, the Participant acknowledges receipt of the Prospectus and that he or she has read and understands the Prospectus. The Prospectus summarizes the material provisions of the Plan. The summary in the Prospectus is not complete and is qualified in its entirety by reference to the provisions of the Plan. You should consult the Plan and the terms of this Award Agreement for more complete information about this Award. The Plan and Award Agreement, in that order, shall govern any inconsistency between the Prospectus on the one hand, and the Plan and the Award Agreement on the other.
The Participant understands that the value that may be realized, if any, from this Award is contingent, and depends on, the future market price of the Shares, among other factors. The Participant further confirms the Participant’s understanding that this Award is granted in connection with the Consulting Agreement executed by the Participant and the Company (the “Consulting Agreement”), is subject to vesting conditions and will be cancelled if the vesting conditions are not satisfied. Thus, the Participant understands that (a) any monetary value assigned to this Award in any communication regarding this Award is contingent, hypothetical, or for illustrative purposes only, and does not express or imply any promise or intent by the Company to deliver, directly or indirectly, any certain or determinable cash value to the Participant; (b) receipt
1
of this Award or any incentive award in the past is neither an indication nor a guarantee that an incentive award of any type or amount will be made in the future, and that absent a written agreement to the contrary, the Company is free to change its practices and policies regarding incentive awards at any time; (c) vesting may be subject to confirmation and final determination by the Committee that the vesting conditions have been satisfied; and (d) Award Shares shall be subject to lock-up restrictions as described in Section 16 of this Award Agreement. The Participant shall have no rights as a stockholder of the Company with respect to any shares covered by this Award unless and until this Award is vested and settled in Shares.
3. Vesting. This Award shall vest in full on the Vesting Date set forth above provided the Participant (i) provides services as a Consultant through the Vesting Date and (ii) has not breached and is not in breach of the Consulting Agreement at all times from the Grant Date through the Vesting Date. Notwithstanding the foregoing:
| (a) |
In the event that a Participant terminates service as a Consultant to the Company due to death or Disability, the Participant shall immediately vest in a portion of the Award equal to the number of Award Shares granted times a fraction, the numerator of which is the number of days of active service elapsed since the Grant Date and the denominator of which is 365; |
| (b) |
In the event that the Company terminates the services of the Consultant pursuant to the Consulting Agreement without Cause (as defined in the Consulting Agreement), the Award shall vest in full; and |
| (b) |
In the event that the Participant is serving as a Consultant to the Company at the time of a Change in Control, the Award shall vest in full. |
The Participant shall be credited with an amount in cash (without interest) equal to the dividends the Participant would have received if the Participant had been the owner of a number of Shares equal to the number of Award Shares; provided, however, that no amount shall be credited with respect to Shares that have been delivered to the Participant as of the applicable record date. Dividend equivalents shall be subject to the same terms and conditions as the Award Shares, and shall vest (or, if applicable, be forfeited) at the same time as the Award Shares. Notwithstanding the foregoing, vesting of the Award (and any dividend equivalents) shall be prohibited to the extent that it would violate applicable law or to the extent the Award is a Performance Share Award. Further notwithstanding the foregoing, nothing in this Award Agreement shall be interpreted to require the Company to grant dividends or dividend equivalents on any Shares or Award Shares.
4. Forfeiture; Break in Service. The unvested portion of this Award, as determined under Section 3 above, shall expire and be permanently forfeited upon termination of service as a Consultant to the Company.
5. Settlement of Award. Subject to Section 7 below, the Company shall deliver or cause to be delivered to or on the behalf of the Participant the number of vested Shares determined under Section 3 above as soon as administratively practicable after they first become vested, but in no event later than sixty (60) days after vesting (for the avoidance of doubt, this deadline is intended to comply with the “short-term deferral” exemption from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)). The dividend equivalents described in Section 3 above shall be paid in cash at the same time as the delivery of the Shares under this Section 5 which correspond to such dividend equivalents. Vested Shares to be delivered due to death shall be paid to the Participant’s Beneficiary designated according to the terms of the Plan.
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6. Compensation Recovery. The Award Shares shall be subject to being recovered under any compensation recovery policy that may be adopted from time to time by the Company or any of its Affiliates. For avoidance of doubt, compensation recovery rights to Award Shares shall extend to the proceeds realized by the Participant due to the sale or other transfer of the Award Shares.
7. Taxes; Limitation on Excess Parachute Payments. The Participant shall bear all expense of, and be solely responsible for, all federal, state, local, or foreign taxes due with respect to any payment received under this Award Agreement. Notwithstanding any other provision in this Award Agreement to the contrary, any payment or benefit received or to be received by the Participant in connection with a Change in Control or the termination of service (whether payable under the terms of this Award Agreement or any other plan, arrangement or agreement with a member of the Premier Group (collectively, the “Payments”) that would constitute a “parachute payment” within the meaning of Section 280G of the Code, shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), but only if, by reason of such reduction, the net after-tax benefit received by the Participant shall exceed the net after-tax benefit that would be received by the Participant if no such reduction was made. Whether and how the limitation under this Section 7 is applicable shall be determined under the Section 280G Rules set forth in Exhibit A, which shall be enforceable as if set forth in this Award Agreement.
8. Consent to Electronic Delivery. In lieu of receiving documents in paper format, the Participant agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other agreements, forms and communications) in connection with this and any other prior or future incentive award or program made or offered by the Company or its predecessors or successors. Electronic delivery of a document to the Participant may be via a Company e-mail system or by reference to a location on a Company intranet site to which the Participant has access.
9. Administration. In administering the Plan, or to comply with applicable legal, regulatory, tax, or accounting requirements, it may be necessary for a member of the Premier Group to transfer certain Participant data to another member of the Premier Group, or to its outside service providers or governmental agencies. By accepting the Award, the Participant consents, to the fullest extent permitted by law, to the use and transfer, electronically or otherwise, of the Participant’s personal data to such entities for such purposes.
10. Entire Agreement/Amendment/Survival/Assignment. The terms, conditions and restrictions set forth in the Plan, this Award Agreement and the Prospectus constitute the entire understanding between the parties hereto regarding this Award and supersede all previous written, oral, or implied understandings between the parties hereto about the subject matter hereof. This
3
Award Agreement may be amended by a subsequent writing (including e-mail or other electronic form) agreed to between the Company and the Participant. Section headings herein are for convenience only and have no effect on the interpretation of this Award Agreement. The provisions of this Award Agreement that are intended to survive a Participant’s termination of service shall survive such date. The Company may assign this Award Agreement and its rights and obligations hereunder to any current or future member of the Premier Group.
11. No Right to Continued Service. The Participant agrees that nothing in this Award Agreement constitutes a contract of service with the Company for a definite period of time. The Company retains the right to decrease the Participant’s compensation and/or benefits, terminate the consulting relationship at any time for any reason or no reason not otherwise prohibited by law, or otherwise change the terms or conditions of the Participant’s service.
12. Transfer Restrictions. The Participant may not sell, assign, transfer, pledge, encumber or otherwise alienate, hypothecate or dispose of this Award or the Participant’s right hereunder to receive Award Shares, except as otherwise provided in the Committee’s sole discretion consistent with the Plan and applicable securities laws.
13. Conflict. This Award Agreement is subject to the terms and provisions of the Plan, including but not limited to the adjustment provisions under Section 12 of the Plan. In the event of a conflict between the Plan and this Award Agreement, the Plan shall control.
14. Definitions. The following terms shall be as defined below:
(a) “Disability” means any of the following: (i) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of at least twelve months, or the Participant’s entitlement to and receipt of disability benefits under a disability insurance program that pays benefits on the basis of the foregoing definition; (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of at least twelve months, receiving disability benefits under a disability insurance program that pays benefits on the basis of the foregoing definition; or (iii) the Participant is determined to be totally disabled by the Social Security Administration or Railroad Retirement Board.
(b) “Premier Group” shall mean the Company, its Subsidiaries and Affiliates.
15. Section 409A. This Award shall be construed consistent with the intention that it be exempt from Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”). However, notwithstanding any other provision of the Plan or this Award Agreement, if at any time the Committee determines that this Award (or any portion thereof) may be subject to Section 409A, the Committee shall have the right in its sole discretion (without any obligation to do so or to indemnify the Participant or any other person for failure to do so) to adopt such amendments to the Plan or this Award Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate either for this Award to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.
4
16. Lock-up Restriction. The Participant agrees that, if the Company proposes to offer for sale any Shares pursuant to a public offering under the Securities Act of 1933 and if requested by the Company and any underwriter engaged by the Company for a reasonable period of time specified by the Company or such underwriter following the effective date of the registration statement filed with respect to such offering, the Participant will not, directly or indirectly, offer, sell, pledge, contract to sell (including any short sale), grant any option to purchase, or otherwise dispose of any securities of the Company held by the Participant or enter into any Hedging Transaction (as defined below) relating to any securities of the Company held by the Participant. For purposes of this Section, a “Hedging Transaction” means any short sale (whether or not against the box) or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any security (other than a broad-based market basket or index) that includes, relates to or derives any significant part of its value from the Shares.
17. Nature of Award. This Award represents the Company’s unfunded and unsecured promise to issue Shares at a future date, subject to the terms of this Award Agreement and the Plan. The Participant has no rights under this Agreement other than the rights of a general unsecured creditor of the Company. The Participant shall have the rights of a shareholder with respect to the Award Shares only to the extent that Shares are issued to the Participant in accordance with the terms and conditions of this Award Agreement and the Plan.
18. Governing Law. This Award Agreement shall be legally binding and shall be executed and construed and its provisions enforced and administered in accordance with the laws of the State of Delaware without regard to the principles of conflicts of law thereunder.
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EXHIBIT A – Section 280G Rules
To Restricted Stock Unit Agreement
When you receive benefits in connection with a Change in Control
The following rules shall apply for purposes of determining whether and how the limitations provided under Section 7 are applicable to the Participant.
1. The “net after-tax benefit” shall mean (i) the Payments (as defined in Section 7) which the Participant receives or is then entitled to receive from the Company or an Affiliate that would constitute “parachute payments” within the meaning of Section 280G of the Code, less (ii) the amount of all federal, state and local income and employment taxes (FICA or SECA) payable by the Participant with respect to the foregoing calculated at the highest marginal income tax rate for each year in which the foregoing shall be paid to the Participant (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of the foregoing), less (iii) the amount of Excise Tax imposed with respect to the payments and benefits described in (i) above.
2. All determinations under Section 7 of this Award Agreement and this Exhibit A will be made by an accounting firm or law firm that is selected for this purpose by the Company’s Chief Executive Officer prior to a Change in Control (the “280G Firm”). All fees and expenses of the 280G Firm shall be borne by the Company. The Company will direct the 280G Firm to submit any determination it makes under Section 7 of this Award Agreement and this Exhibit A and detailed supporting calculations to both the Participant and the Company as soon as reasonably practicable.
3. If the 280G Firm determines that one or more reductions are required under Section 7 of this Award Agreement, the 280G Firm shall also determine which Payments shall be reduced (first from cash payments and then from non-cash benefits) to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay such reduced amount to the Participant. The 280G Firm shall make reductions required under Section 7 of this Award Agreement in a manner that maximizes the net after-tax amount payable to the Participant.
4. As a result of the uncertainty in the application of Section 280G at the time that the 280G Firm makes its determinations under this Section, it is possible that amounts will have been paid or distributed to the Participant that should not have been paid or distributed (collectively, the “Overpayments”), or that additional amounts should be paid or distributed to the Participant (collectively, the “Underpayments”). If the 280G Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant, which assertion the 280G Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Participant must repay to the Company, without interest; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Participant to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Participant is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the 280G Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the 280G Firm will notify the Participant and the Company of that determination and the amount of that Underpayment will be paid to the Participant promptly by the Company.
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5. The Participant will provide the 280G Firm access to, and copies of, any books, records, and documents in the Participant’s possession as reasonably requested by the 280G Firm, and otherwise cooperate with the 280G Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Section 7 of this Award Agreement and this Exhibit A.
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