Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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On May 20, 2018, Thomas D. Miller, President, Chief Executive Officer, and member of the Board of Directors (the Board) of
Quorum Health Corporation (the Company) resigned from all positions with the Company, effective immediately, and withdrew as a director nominee for election at the Companys Annual Meeting of Stockholders to be held on June 8,
2018 (the 2018 Annual Meeting). The Board accepted Mr. Millers resignation and withdrawal as a director nominee on May 20, 2018 (the Transition Date). Mr. Millers decision to resign was not related
to a disagreement with the Company over any of its operations, policies, or practices. In addition, effective as of the Transition Date, the size of the Board was decreased to six members.
At this time, the Board is not nominating a replacement director for election at the 2018 Annual Meeting. Other than Mr. Miller, the
nominees named in the Companys definitive proxy materials will stand for election at the 2018 Annual Meeting. Notwithstanding Mr. Millers resignation, the form of proxy card included in the Companys definitive proxy materials
remains valid. However, any votes submitted with instruction to vote for all of the Boards nominees will be voted only for the remaining six nominees, as named in the Companys definitive proxy materials, and any votes submitted with
instruction to vote for Mr. Miller will be disregarded.
In connection with his resignation, on the Transition Date, the Company
entered into a Separation and Release Agreement (the Separation Agreement) and a Consultancy Agreement (the Consultancy Agreement) with Mr. Miller. The Separation Agreement, effective on the Transition Date, ended
Mr. Millers employment with the Company and provided, among other things, that, in exchange for Mr. Millers release of all claims arising out of or relating to Mr. Millers employment with the Company and his
resignation therefrom, Mr. Miller would receive: (i) $1.35 million, less applicable deductions and withholdings, divided and payable in equal payments in accordance with the Companys normal pay cycle over an eighteen (18) month
period; (ii) eighteen (18) months of continued contribution by the Company of the employer portion of Mr. Millers health insurance benefits, and eligibility to participate in the Companys health insurance plan at employee rates
until age 65 or until eligible for full coverage by another employer; (iii) up to $25,000 in outplacement services; and (iv) a cash amount equal to Mr. Millers accrued and unused vacation. Mr. Miller remains entitled to all
accrued and vested rights under the Companys Amended and Restated Supplemental Executive Retirement Plan and the QHCCS, LLC Nonqualified Deferred Compensation Plan, as well as his rights under applicable award agreements with respect to
outstanding Company restricted stock awards.
Upon Mr. Millers resignation and pursuant to the Consultancy Agreement, he agreed
to advise the Companys management team on issues related to certain matters as requested by the Companys Chief Executive Officer and/or his designee. The term of the Consultancy Agreement is May 21, 2018 to May 20, 2020, unless
otherwise mutually agreed by the parties. During the term of the Consultancy Agreement, Mr. Miller will be entitled to receive consulting fees of $1,000 per month plus $250 per hour of work and will be subject to restrictions on competing with
the Company or its subsidiaries.
The Board appointed Robert H. Fish, age 67, as Interim President and Chief Executive Officer of the
Company.
Mr. Fish has extensive experience in the healthcare industry, including leading operational and business transformations as
Chairman, President or CEO of several healthcare companies. Most recently he served as Interim Chief Executive Officer of Millennium Health, LLC from January 2018 to March 2018. He served as CEO of Skilled Healthcare from November 2013 through
completion of its combination with
FC-GEN
in February 2015, when it changed its name to Genesis Healthcare, Inc., a national provider of post-acute healthcare services. Mr. Fish has served as Chairman of
the Board of Directors of Genesis Healthcare since April 2017 and has been a member of the Genesis Board since November 2013. From 2012 until he joined Skilled Healthcare in 2013, Mr. Fish served as Managing Partner at Sonoma-Seacrest, LLC, a
California healthcare firm specializing in strategic planning, performance improvement and merger and acquisition issues. Earlier in his career, Mr. Fish was Regional President and CEO at St. Joseph Health System and President and CEO at Valley
Care Health System. He also served as Director, Chairman and CEO at Genesis Health Ventures, a long-term care and institutional pharmacy company. Mr. Fish currently serves as a member of the Board of Directors of the St. Helena Hospital
Foundation, a philanthropic organization. In connection with his role with St. Helena Hospital, Mr. Fish also serves on the Adventist Health regional finance committee. Mr. Fish is a Director at LifeCare Health Services, a private
long-term acute hospital company and American Renal Associates, a public dialysis services company. Mr. Fishs other previous Board positions include Chairman of REACH Medical Holdings, a regional air medical transport company; Coram,
Inc., a home infusion provider; and Director at NeighborCare, Inc., a large institutional pharmacy. Mr. Fish received a B.A. in Sociology from Whittier College, and a Masters of Public Health degree in Hospital Administration from the
University of California, Berkeley.
In connection with the appointment of Mr. Fish as Interim President and Chief Executive Officer
as of the Transition Date, the Board authorized an annual base salary of $900,000 for Mr. Fish. The Compensation Committee and the Board continue to review the compensation arrangements for Mr. Fish and may amend the compensation
arrangements at a future date.
There are no family relationships between Mr. Fish and any director or other executive
officer of the Company, neither are there any transactions between Mr. Fish nor any member of his immediate family and the Company, or any of its subsidiaries, that would be reportable as a related party transaction under the rules of the
Securities and Exchange Commission.