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EX-3.1 - EX-3.1 - Envision Healthcare Corp | d538133dex31.htm |
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): February 26, 2018 (February 20, 2018)
ENVISION HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 001-37955 | 62-1493316 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
1A Burton Hills Boulevard Nashville, Tennessee |
37215 | |||
(Address of principal executive offices) | (Zip Code) |
(615) 665-1283
(Each registrants 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 (see General Instruction A.2. below):
☐ | 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)) |
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 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. |
Long Term Incentive Program
On February 20, 2018, the Compensation Committee (the Committee) of the Board of Directors (the Board) of Envision Healthcare Corporation (the Company) approved a long-term incentive program for 2018 (the Long-Term Incentive Plan) that will provide annual equity awards to the Companys named executive officers under the Envision Healthcare Corporation, Inc. 2013 Omnibus Incentive Plan and the Envision Healthcare Corporation 2014 Equity and Incentive Plan.
A significant portion of each annual award under the Long-Term Incentive Plan, as it relates to the Companys named executive officers, will consist of performance share units, on the terms described below, in order to further align the interests of the Companys management with its stockholders. Of the annual awards granted to the Companys named executive officers, 60% of the aggregate grant date value consists of performance share units and 40% of the aggregate grant date value consists of restricted share units. For 2018 awards, the total aggregate grant date value of an executives awards under the program, assuming achievement of targeted performance, equals a percentage of each executives annual base salary, with the applicable percentage determined by such executives responsibilities.
The following table provides additional information regarding the target award levels and allocation of these awards for the Companys named executive officers:
Executive Officer |
Target Award ($) | Award Mix | ||||||
Christopher A. Holden, Chief Executive Officer and President |
6,000,000 | |||||||
Kevin D. Eastridge, Executive Vice President and Chief Financial Officer |
1,100,00 | |
60% Performance Share Units and 40% Restricted Share Units |
| ||||
Craig A. Wilson, Senior Vice President, General Counsel and Secretary |
700,000 | |||||||
Patrick B. Solomon, Senior Vice President and Chief Strategy Officer |
600,000 |
Vesting of Performance Share Units
Under the 2018 Long-Term Incentive Plan, performance share units granted to the Companys named executive officers and other key employees will cliff vest after a specified performance period based on (i) the Companys total shareholder return compared to the companies included in the S&P Composite 1500 Health Care Index over the same period (the TSR Goals) and (ii) the Companys Adjusted Earnings per Share performance on an absolute-basis (the EPS Goals), subject to the employees continued employment through the performance period. For the performance share units granted in 2018, this performance period will be a three-year period commencing on January 1, 2018 and ending on December 31, 2020. For the Companys named executive officers, the vesting of performance share units will be 70% dependent on the Companys achievement of the EPS Goals and 30% dependent on achievement of the TSR Goals during the performance period.
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The number of shares that will ultimately vest based on achievement of the TSR Goals will be in the range of 0% to 150% of a target share number, with 25% of the target number vesting if the Companys percentile rank is 25%, 100% of the target amount vesting if the Companys percentage rank is 50%, 125% of the target amount vesting if the Companys percentile rank is 75%, and 150% of the target amount vesting if the Companys percentile rank is 75% or more. The number of shares that will ultimately vest based on achievement of the EPS Goals will be in the range of 50% to 150% of a target share number, based upon the Companys actual Adjusted Earnings per Share results across four target levels of performance during the performance period.
Vesting of Restricted Share Units
Restricted share units granted to our named executive officers and other key employees under the Long-Term Incentive Plan will vest in equal installments over a three-year period based on the employees continued employment.
2018 Short-Term Incentive Plan
On February 20, 2018, the Committee also approved the Companys short-term non-equity incentive plan for 2018 (the Short-Term Incentive Plan). Pursuant to the Short-Term Incentive Plan, employees of the Company, including the Companys named executive officers, are eligible to receive cash incentive payments based upon the Companys attainment of certain earnings targets and the achievement of key performance indicators specific to each executives area of responsibility, over the one-year performance period. For 2018, Short-Term Incentive Plan awards for Christopher A. Holden, the Companys Chief Executive Officer and President, Kevin D. Eastridge, the Companys Executive Vice President and Chief Financial Officer, Craig A. Wilson, the Companys Senior Vice President, General Counsel and Secretary, and Patrick B. Solomon, the Companys Senior Vice President and Chief Strategy Officer will be based 80% on achievement of the Companys Adjusted EBITDA targets for 2018 and 20% on the achievement of key performance indicators specific to the executives area of responsibility.
The target and maximum Short-Term Incentive Plan awards that our named executive officers could receive, as a percentage of their base salaries, is set forth in the table below.
Executive Officer |
Target Short-Term Incentive Award (as a % of Base Salary) |
Maximum Short-Term Incentive Award (as a % of Base Salary) |
||||||
Christopher A. Holden, Chief Executive Officer and President |
150 | % | 270 | % | ||||
Kevin D. Eastridge, Executive Vice President and Chief Financial Officer |
100 | % | 180 | % | ||||
Craig A. Wilson, Senior Vice President, General Counsel & Secretary |
75 | % | 180 | % | ||||
Patrick B. Solomon, Senior Vice President and Chief Strategy Officer |
100 | % | 180 | % |
Randel G. Owen, currently the Companys Executive Vice President and President-Ambulatory Services, did not receive an award for 2018 under the Long-Term Incentive Plan or Short-Term Incentive Plan, as he has agreed to serve as an executive officer of the Companys medical transportation business, American Medical Response, Inc. (AMR), following its divestiture, which is expected to be completed during the first quarter of 2018. Mr. Owens compensation will be determined by the new ownership of AMR following the closing of the transaction.
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Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year. |
On February 21, 2018, following the previously announced intention of the Board to adopt a proxy access bylaw, the Board amended and restated the Companys By-Laws (the Bylaws) to implement proxy access. Under the amended Bylaws, a qualifying shareholder, or a group of up to 20 such shareholders, owning at least three percent of the Companys outstanding stock continuously for at least three years, will be able to nominate, and include in the Companys annual meeting proxy materials, qualifying director nominees which shall not exceed the greater of two directors or 20% of the Board (rounded down), provided that the shareholders and nominees satisfy the eligibility, procedural and other requirements specified in the Bylaws.
The amendments to the Bylaws were effective upon approval and also include other conforming changes in connection with the adoption of the proxy access provision, as well as certain other non-substantive changes. The foregoing description of the changes to the Bylaws above is qualified in its entirety by the Third Amended and Restated By-laws of the Company filed herewith as Exhibit 3.1 and incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. |
Description of Exhibit | |
3.1 | Third Amended and Restated By-laws of Envision Healthcare Corporation (as of February 21, 2018). |
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EXHIBIT INDEX
Exhibit No. |
Description of Exhibit | |
3.1 | Third Amended and Restated By-laws of Envision Healthcare Corporation (as of February 21, 2018). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Envision Healthcare Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ENVISION HEALTHCARE CORPORATION | ||||||||
February 26, 2018 | By: | /s/ Kevin D. Eastridge | ||||||
Name: | Kevin D. Eastridge | |||||||
Title: | Executive Vice President and Chief Financial Officer |
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