| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Robert H. Fish Employment Agreement
On August 24, 2018, Quorum Health Corporation (the “Company”) entered into an employment agreement with Robert H. Fish (the “Employment Agreement”) memorializing the terms of Mr. Fish’s employment as the President and Chief Executive Officer of the Company, which has been approved by the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board”).
Pursuant to the terms of the Employment Agreement, Mr. Fish will receive an annual base salary of $900,000 and is eligible to participate in the annual incentive bonus plan with a target bonus of 125% of Mr. Fish’s annual base salary based on the Company’s attainment of performance goals established by the Compensation Committees (which annual incentive bonus will be prorated to the extent it relates to a partial fiscal year). Mr. Fish is also entitled to aone-time grant of 500,000 shares of restricted stock. The equity grant to Mr. Fish is made pursuant to the Quorum Health Corporation 2016 Stock Award Plan, and 50% of the award is time-based and 50% is performance-based. The time-based restricted stock grant vests inone-third increments on each of the first three anniversaries of May 21, 2018, provided that Mr. Fish continues to be employed on such dates, subject to certain exceptions for qualifying terminations of employment as described in the Form of Restricted Stock Award Agreement attached as an exhibit to the Employment Agreement. The performance-based restricted stock award has both performance and time vesting components. The performance-based awards are established in three equal tranches, with each tranche subject to performance milestones. Generally with respect to each tranche, once the performance milestone has been attained, the restrictions will lapse in equalone-third (1/3) increments on each of the first three anniversaries of May 21, 2018, provided that Mr. Fish continues to be employed on such dates, subject to certain exceptions for qualifying terminations of employment as described in the Form of Performance Based Restricted Stock Award Agreement attached as an exhibit to the Employment Agreement. Mr. Fish will be entitled to the same benefits and perquisites provided to the Company’s senior executives, including participation in all executive compensation plans, as disclosed in the Company’s definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on April 27, 2018.
The Employment Agreement provides that in the event Mr. Fish’s employment is terminated by the Company other than for “cause”, death or “disability,” or if Mr. Fish terminates for “good reason” (each as defined in the Employment Agreement), Mr. Fish would be entitled to receive: (i) the aggregate lump sum of (a) Mr. Fish’s annual base salary through the date of termination to the extent not already paid, (b) any business expenses that are reimbursable but that had not already been reimbursed by the Company as of the date of termination, and (c) any accrued vacation pay, (ii) any vested benefits, vested equity benefits or reimbursements to which Mr. Fish was entitled, which will be paid in accordance of the terms of such plans and arrangements; (iii) a monthly amount equal to $168,750 until the18-month anniversary of the date of termination; (iv) in the event that Mr. Fish’s termination occurs during the24-month period following a Change of Control (as defined in the Quorum Health Corporation 2016 Stock Award Plan) and the Change of Control constitutes a change in ownership or effective control, or a change in ownership of a substantial portion of the assets, of the Company under Section 409A of the Internal Revenue Code of 1986 (a “409A CIC”), the Company will pay Mr. Fish a lump sum payment in the amount equal to $6,075,000, and (v) if Mr. Fish’s termination occurs during the24-month period following a Change of Control but the Change of Control does not constitute a 409A CIC, the Company will pay Mr. Fish a monthly amount equal to $168,750 until the36-month anniversary of the date of termination; provided, that payments of such amounts under (iii), (iv) and (v) above are subject to Mr. Fish’s execution andnon-revocation of a separation agreement and general release of claims in favor of the Company.
Pursuant to the Employment Agreement, Mr. Fish is bound by a confidentiality covenant both during and after his employment. Mr. Fish is also subject to an18-month post-terminationnon-competition covenant and an18-month post-terminationnon-solicitation covenant.
The foregoing is only a summary of the Employment Agreement with Mr. Fish and does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
