Item 5.02.
Departure of Directors or Certain Officers
; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Senior Vice President and Chief Operating Officer
On August 1, 2019, the Board of Directors (the Board) appointed William Garvis as Senior Vice President and Chief Operating Officer of the Company, effective as of August 1, 2019 (the Effective Date).
Mr. Garvis, age 51, served as Senior Vice President, Client Services of the Company for three (3) years prior to his appointment. Mr. Garvis has also served as Senior Vice President Operations for HealthPort Technologies and Vice President Operations for Discovery Health Record Solutions. Mr. Garvis received a bachelors degree in Marketing from Texas A&M University and an M.B.A. from Southern Methodist University.
There are no family relationships between Mr. Garvis and any director or executive officer of the Company and there are no related party transactions required to be reported under Item 404(a) of Regulation S-K.
In connection with his appointment as Senior Vice President and Chief Operating Officer, Mr. Garvis entered into an employment agreement with the Company, effective August 1, 2019 (the Employment Agreement). The term of the Employment Agreement (the Employment Period) is one (1) year, commencing August 1, 2019, and renews automatically for subsequent one (1)-year periods, unless Mr. Garvis or the Company provides written notice at least sixty (60) calendar days prior to the end of the applicable year to the other of his or its intention to not renew the employment. Mr. Garvis will receive an annual base salary of $255,000 and will be eligible for an annual incentive bonus (at target equal to 45% of Mr. Garvis then current annual base salary), based on individual and Company performance. Mr. Garvis is also eligible to receive the standard employee benefits made available by the Company to its employees generally. Mr. Garvis was also granted a restricted stock award of 50,000 shares. The shares of restricted stock will vest quarterly, in arrears, 25% per quarter through August 1, 2020, subject to the continued employment of Mr. Garvis on each vesting date. The Employment Agreement contains customary confidentiality provisions and non-competition covenants.
If the Employment Agreement is terminated by the Company for reasons other than death, Continued Disability, or Good Cause, or if Mr. Garvis terminates employment for Good Reason, Mr. Garvis will generally be entitled to receive: (1) accrued but unpaid salary through his termination date; (2) reimbursement of expenses incurred prior to his termination date; and (3) an amount equal to six (6) months base salary.
The foregoing description of the Employment Agreement is a summary only, does not purport to be complete, and is qualified in its entirety by reference to the complete text of the Employment Agreement which is attached hereto as Exhibit 10.1 and incorporated by reference as if fully set forth herein.
Approval of Bonus for Thomas Gibson and William Garvis
In addition, on August 1, 2019, the Compensation Committee of the Board and the Board approved a measure for Mr. Garvis and Thomas Gibson, Senior Vice President and Chief Financial Officer, to receive bonuses at the previously approved percentage of their respective salaries under the Companys annual incentive plan. The bonuses are payable in three installments, as such bonuses would otherwise be paid, and Mr. Garvis and Mr. Gibson will not participate in the Companys annual incentive plan for fiscal year 2019. Payment of the bonuses remains subject to their continued employment with the Company on each installment date. The total bonuses for Mr. Garvis and Mr. Gibson granted pursuant to the measure total approximately $100,000 and $110,000, respectively.
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