Rivas A&R Employment Agreement
In connection with the appointment of Mr. Rivas as Chief Executive Officer, the Company and Mr. Rivas entered into an amended and restated offer letter agreement, dated as of November 7, 2022 (the “Rivas A&R Employment Agreement”), which, as of January 1, 2023, will supersede the employment agreement between the Company and Mr. Rivas, dated June 21, 2022. Pursuant to the Rivas A&R Employment Agreement, Mr. Rivas will receive an annualized base salary of $900,000 and will be eligible to receive an annual discretionary performance bonus for each year he is employed by the Company with a target of 120% of his annualized base salary. Mr. Rivas will also be eligible to participate in the Company’s long-term incentive program and to receive discretionary awards thereunder, with a target value of 680% of his annualized base salary. In addition, Mr. Rivas will be eligible for an initial grant of PBRSUs based on a value of $6,120,000, the terms which will be determined at a later date by the Human Capital Committee of the Board. Under the terms of the Rivas A&R Employment Agreement, if Mr. Rivas’ employment is terminated by the Company without “cause” or he resigns for “good reason” (each as defined in the Rivas A&R Employment Agreement), he will be entitled to receive the following severance benefits: (i) an amount equal to two times the sum of his base salary and annual performance target, payable over a period of 24 months following the termination; provided, however, that in the event of his resignation for “good reason” or termination by the Company without “cause” within 24 months following a change of control (as defined in the Rivas A&R Employment Agreement), such payment shall be made by the Company in a lump sum within 60 days following such termination, (ii) a prorated annual bonus for the calendar year in which his termination occurs, with the amount of such bonus based on the greater of (A) target performance and (B) actual performance results under the Company’s annual bonus plan and (iii) continued coverage under the Company’s group health plan of Mr. Rivas and his eligible dependents at the same cost as if he were an employee of the Company for up to 18 months following the termination. Mr. Rivas’ receipt of the severance benefits described in the previous sentence is subject to his execution (and non-revocation) of a release of claims in favor of the Company and his continued compliance with his restrictive covenant obligations, which include a non-solicitation covenant that applies for the duration of Mr. Rivas’ employment and for a period of 18 months thereafter, a non-competition covenant that applies for the duration of Mr. Rivas’ employment and for a period of 12 months thereafter and customary confidentiality, nondisclosure, assignment of intellectual property and mutual non-disparagement covenants.
There are no arrangements or understandings between Mr. Rivas and any other person pursuant to which Mr. Rivas was appointed as Chief Executive Officer of the Company. Mr. Rivas does not have any family relationship with any director, executive officer or person nominated or chosen by the Company to become a director or executive officer of the Company. The Company is not aware of any related person transactions (within the meaning of Item 404(a) of Regulation S-K promulgated by the Securities and Exchange Commission (the “SEC”)) between Mr. Rivas and the Company.
President Succession
On November 8, 2022, the Company also announced that John Sparby, currently the Executive Vice President, Operations & Delivery and Chief Operating Officer, will succeed Mr. Rivas in the role of President of the Company effective as of January 1, 2023.
Mr. Sparby, age 47, has served as the Company’s Executive Vice President, Operations & Delivery and Chief Operating Officer since January 2021. He most recently served as Executive Vice President, Customer Operations as the operational leader of the Company’s revenue cycle customer engagements. Mr. Sparby joined the Company in January 2004 as Customer Executive and has since served the Company as Shared Services Operating Executive from January 2008 to December 2010, General Manager, East Region from January 2011 to December 2013, Senior Vice President, Customer Operations from January 2014 to December 2016 and Executive Vice President, Customer Operations from January 2017 to December 2020. Prior to joining the Company, Mr. Sparby spent six years at Stockamp & Associates leading large-scale, end to end revenue cycle re-engineering projects primarily for academic health systems, achieving significant income statement and balance sheet improvements.
Sparby Employment Agreement
In connection with the appointment of Mr. Sparby as President, the Company and Mr. Sparby entered into an offer letter agreement, dated as of November 7, 2022 (the “Sparby Employment Agreement”). Pursuant to the Sparby Employment Agreement, Mr. Sparby will receive an annualized base salary of $750,000 and will be eligible to receive an annual discretionary performance bonus for each year he is employed by the Company with a target of 100% of his annualized base salary. Mr. Sparby will also continue to be eligible to participate in the Company’s long-term incentive program and to receive discretionary awards thereunder, with a target value of 200% of his annualized base salary. Under the terms of the Sparby Employment Agreement, if Mr. Sparby’s employment is terminated by the Company without “cause” or he resigns for “good reason” (each as defined in the
