UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

Allscripts Healthcare Solutions, Inc.

 

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

 

---

 

Allscripts Healthcare Solutions, Inc.
222 Merchandise Mart Plaza, Suite 2024
Chicago, Illinois 60654

 

 

 

---

 

 

 

---

 

 

 

 

---

 

Allscripts Healthcare Solutions, Inc.
222 Merchandise Mart Plaza, Suite 2024
Chicago, Illinois 60654

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 21, 2022

 

 

 

---

 

IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS

The Company’s Proxy Statement for the 2022 Annual Meeting of Stockholders and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 are available at: www.proxyvote.com.

YOUR VOTE IS IMPORTANT. PLEASE EXERCISE YOUR STOCKHOLDER RIGHT TO VOTE AS SOON AS POSSIBLE, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING.

 

 

 

---

 

 

Table of Contents

 

 

 

 

 

 

 

---

 

 

 

PROXY STATEMENT
FOR
2022 ANNUAL MEETING OF STOCKHOLDERS OF

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

General Information

Why am I receiving these materials?

Allscripts Healthcare Solutions, Inc., a Delaware corporation (the “Company”), has made these materials available to you on the Internet or, upon your request, has delivered printed versions of these materials to you by mail, in connection with the Company’s solicitation of proxies for use at the Company’s 2022 Annual Meeting of Stockholders (including any adjournment(s) or postponement(s) thereof, the “Annual Meeting”), to be held on Tuesday, June 21, 2022 at 9:00 a.m., Central time. The Annual Meeting will be a virtual-only meeting held solely by means of live audio webcast. If you have properly registered and been verified, you will be able to virtually attend the Annual Meeting, vote your shares electronically and submit your questions during the meeting via live audio webcast by visiting www.virtualshareholdermeeting.com/MDRX2022.

The proxy materials were first sent or made available to the Company’s stockholders on or about May 6, 2022. You are invited to virtually attend the Annual Meeting and are requested to vote on the proposals described in this proxy statement (this “Proxy Statement”).

What is included in these proxy materials?

These proxy materials include:

If you requested printed versions by mail, these proxy materials also include the proxy card or voting instruction form for the Annual Meeting.

What items will be voted on at the Annual Meeting?

The Company is aware of three items on which stockholders may vote at the Annual Meeting:

Will any other business be conducted at the meeting?

The Company knows of no matters to be submitted to the Company’s stockholders at the Annual Meeting, other than the proposals referred to in this Proxy Statement. If any other matters properly come before the Company’s stockholders at the Annual Meeting, it is the intention of the persons named on the proxy to vote the shares represented thereby on such matters in accordance with their best judgment.

 

 

---

 

 

What are the Board’s voting recommendations?

The Board recommends that you vote your shares:

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

Pursuant to rules adopted by the SEC, the Company uses the Internet as the primary means of furnishing proxy materials to its stockholders. Accordingly, the Company is sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to its stockholders. All stockholders will have the ability to access the proxy materials on the website indicated in the Notice or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or how to request a printed set may be found in the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. The Company encourages its stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of its annual meetings and reduce the cost to the Company associated with the physical printing and mailing of materials.

I share an address with another stockholder, and we received only one paper copy of the proxy materials. How can I obtain an additional copy of the proxy materials?

The Company has adopted an SEC-approved procedure called “householding.” Under this procedure, the Company may deliver a single copy of the Notice and, if applicable, this Proxy Statement and the Annual Report to multiple stockholders who share the same address, unless the Company has received contrary instructions from one or more of the stockholders. This procedure reduces the environmental impact of the Company’s annual meetings and reduces the Company’s printing and mailing costs. Stockholders who participate in householding will continue to receive separate proxy cards. Upon request, the Company will deliver promptly a separate copy of the Notice and, if applicable, this Proxy Statement and the Annual Report to any stockholder at a shared address to which the Company delivered a single copy of any of these documents.

To receive free of charge a separate copy of the Notice and, if applicable, this Proxy Statement and the Annual Report, or separate copies of any future notice, proxy statement, or annual report, stockholders may write or call the Company at: Allscripts Healthcare Solutions, Inc., 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654, Attention: Corporate Secretary, or (312) 447-2495.

If you are receiving more than one copy of the proxy materials at a single address and would like to participate in householding, please contact the Company using the mailing address or telephone number above. Stockholders who hold shares in “street name” (as described below) may contact their brokerage firm, bank, broker-dealer, or other similar organization to request information about householding.

How can I get electronic access to the proxy materials?

The Notice will provide you with instructions regarding how to use the Internet to view the Company’s proxy materials for the Annual Meeting and instruct the Company to send future proxy materials to you by e-mail. If you choose to receive future proxy materials by e-mail, you will receive an e-mail message next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

Who may vote at the Annual Meeting?

Each share of the Company’s common stock has one vote on each item of business at the Annual Meeting (including one vote for each nominee up for election at the Annual Meeting with respect to Proposal One). Only stockholders of record as of the close of business on April 29, 2022 (the “Record Date”) are entitled to receive notice of, to attend, and to vote on the Annual Meeting. As of the Record Date, there were 115,536,855 shares of the Company’s

 

 

---

 

 

common stock issued and outstanding. In addition to stockholders of record of the Company’s common stock, beneficial owners of shares held in street name as of the Record Date can vote using the methods described below.

What is the difference between a stockholder of record and a beneficial owner of shares held in “street name”?

Stockholder of Record. If your shares are registered directly in your name with the Company’s transfer agent, Broadridge Investor Communication Solutions, Inc. (“Broadridge”), you are considered the stockholder of record with respect to those shares, and the Notice was sent directly to you by the Company.

Beneficial Owner of Shares Held in “Street Name”. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the “beneficial owner” of shares held in “street name,” and a Notice was forwarded to you by that organization. As a beneficial owner, you have the right to instruct your broker, bank, trustee, or other nominee how to vote your shares.

If I am a stockholder of record of the Company’s shares, how do I vote?

If you are a stockholder of record, there are four ways to vote:

If I am a beneficial owner of the Company’s shares held in “street name”, how do I vote?

If you are a beneficial owner of shares held in “street name”, there are four ways to vote:

What is the quorum required for the Annual Meeting?

The presence, in person, by remote communication or by proxy, of the holders of not less than one-third of the total number of shares of the Company’s common stock issued and outstanding as of the Record Date and entitled to vote at the Annual Meeting will constitute a quorum. You will be considered part of the quorum if you return a signed and dated proxy card, if you vote over the Internet or by telephone, or if you virtually attend and vote at the Annual Meeting. If a quorum is not present, the Company may propose to adjourn the Annual Meeting to solicit additional proxies.

How are proxies voted?

All shares represented by valid proxies received prior to the taking of the vote at the Annual Meeting will be voted and, where a stockholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the stockholder’s instructions.

 

 

---

 

 

What happens if I do not give specific voting instructions?

Stockholders of Record. If you are a stockholder of record and you (i) indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board; or (ii) sign and return a proxy card or vote by Internet or telephone without giving specific voting instructions, then the persons named as proxy holders, Richard J. Poulton and Leah S. Jones, will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.

Beneficial Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.”

Which proposals are considered “routine” or “non-routine”?

The ratification of the appointment of Grant Thornton as the Company’s independent registered public accounting firm for the year ending December 31, 2022 (Proposal Two) is considered a routine matter under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore no broker non-votes are expected in connection with Proposal Two.

Each of the other proposals, the election of directors (Proposal One) and the advisory resolution to approve the Company’s named executive officer compensation (Proposal Three) are considered non-routine matters under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore broker non-votes may exist in connection with each of Proposals One and Three.

What is the voting requirement to approve each of the proposals?

With respect to the election of directors (Proposal One), in accordance with the policy of majority voting in uncontested director elections set forth in the Company’s by-laws, if the number of shares voted “FOR” any nominee exceeds the number of shares voted “AGAINST” such nominee, he or she will be elected as a director to serve until the Company’s 2023 Annual Meeting of Stockholders and until his or her successor has been duly elected, or until his or her earlier resignation or removal. If any nominee is an incumbent director and fails to receive a majority of the votes cast with respect to his or her nomination, he or she must tender a resignation as director, and such resignation will be considered by the Nominating and Governance Committee of the Board (the “Nominating Committee”) in accordance with the requirements of the Company’s Corporate Governance Guidelines.

Approval of each of Proposals Two and Three requires the affirmative vote of the holders of a majority of the shares present in person, by remote communication or represented by proxy and entitled to vote on such matter.

How are broker non-votes and abstentions treated?

Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present. With respect to the election of directors (Proposal One), a stockholder abstention or broker non-vote with respect to any nominee will have no effect on that nominee’s election. With respect to Proposals Two and Three, a stockholder abstention will have the effect of a vote “AGAINST” the approval of each proposal, but a broker non-vote will have no effect on the approval of the proposal. As noted above, no broker non-votes are expected in connection with Proposal Two.

In order to minimize the number of broker non-votes, the Company encourages you to vote or to provide voting instructions with respect to each proposal to the organization that holds your shares by carefully following the instructions provided in the Notice or voting instruction form.

Can I change my vote after I have voted?

You may revoke your proxy and change your vote at any time before the vote is taken at the Annual Meeting. Prior to the applicable cutoff time, you may change your vote using the Internet or telephone methods described above, in which case only your latest Internet or telephone proxy submitted prior to the Annual Meeting will be counted. You may also revoke your proxy and change your vote by signing and returning a new proxy card or voting instruction

 

 

---

 

 

form dated as of a later date, or by attending the Annual Meeting and voting through the virtual meeting website. However, your virtual attendance at the Annual Meeting will not automatically revoke your proxy unless you properly vote at the Annual Meeting or specifically request that your prior proxy be revoked by delivering a written notice of revocation to the Company’s Corporate Secretary at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654 received prior to the Annual Meeting.

Who will serve as the inspector of election?

A representative of Broadridge will serve as the inspector of election.

Where can I find the voting results of the Annual Meeting?

Preliminary voting results will be announced at the Annual Meeting. Final voting results will be tallied by the inspector of election after the taking of the vote at the Annual Meeting. The Company will publish the final voting results in a Current Report on Form 8-K, which the Company is required to file with the SEC within four business days following the Annual Meeting.

Where are the Company’s principal executive offices located, and what is the Company’s main telephone number?

The Company’s principal executive offices are located at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654. The Company’s main telephone number is (800) 334-8534.

Who is paying the costs of the proxy solicitation?

The Company is providing these proxy materials in connection with the solicitation by the Company’s Board of Directors of proxies to be voted at the Annual Meeting. The Company is paying the costs of the solicitation of proxies. The Company must pay brokerage firms, banks, broker-dealers, or other similar organizations representing beneficial owners of shares held in street name certain fees associated with (i) forwarding the Notice to beneficial owners; (ii) forwarding printed proxy materials by mail to beneficial owners who specifically request them; and (iii) obtaining beneficial owners’ voting instructions. The Company has not, but may in the future decide to, retain a proxy solicitor to assist in the solicitation of proxies. Generally, the fee for such services is approximately $15,000 plus expenses. If the Company does elect to retain a proxy solicitor, the Company will pay the proxy solicitor reasonable and customary fees. In addition to solicitations by mail, the proxy solicitor, if any, and certain of the Company’s directors, officers, and employees, without additional compensation, may solicit proxies on the Company’s behalf in person, by telephone, or by electronic communication.

How can I attend and participate in the Annual Meeting?

Only stockholders of record as of the Record Date or their proxies are entitled to attend the Annual Meeting. Due to the public health impact of the novel coronavirus (COVID-19) pandemic, the Company will be holding the Annual Meeting solely by means of remote communication (i.e., a virtual-only meeting). Stockholders will not be able to attend in person. Stockholders will need to register for the Annual Meeting by 10:59 p.m. Central time (11:59 p.m. Eastern time) on Monday, June 20, 2022 at www.virtualshareholdermeeting.com/MDRX2022. If you have properly registered and been verified you will receive a meeting invitation by e-mail with your unique join link along with a password prior to the meeting date. You will be able to listen, vote and submit questions during the virtual meeting.  

 

If you are a registered or beneficial holder, during the registration process, if you indicated that you will be voting at the meeting, once your registration is approved, an e-mail will be sent to you that will contain your Virtual Control Number.  You will not need the Virtual Control Number to join the meeting, you will need it if you choose to vote during the meeting.

 

If you hold your shares beneficially through a bank or broker, you must provide a legal proxy from your bank or broker during registration and you will be assigned a virtual control number in order to vote your shares during the annual meeting. If you are unable to obtain a legal proxy to vote your shares, you will still be able to attend the 2022 annual meeting (but will not be able to vote your shares) so long as you demonstrate proof of stock ownership. Instructions on how to connect and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/MDRX2022. On the day of the annual meeting, you may only vote during the meeting by e-mailing a copy of your legal proxy to virtualmeeting@viewproxy.com in advance of the meeting.

 

 

---

 

 

 

We have created and implemented the virtual format in order to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no cost. However, you will bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies. A virtual Annual Meeting makes it possible for more stockholders (regardless of size, resources or physical location) to have direct access to information more quickly, while saving the company and our stockholders time and money, especially as physical attendance at meetings has dwindled. We also believe that the online tools we have selected will increase stockholder communication. For example, the virtual format allows stockholders to communicate with us in advance of, and during, the Annual Meeting so they can ask questions of our board of directors or management. During the live Q&A session of the Annual Meeting, we may answer questions as they come in and address those asked in advance, to the extent relevant to the business of the Annual Meeting, as time permits.

 

Both stockholders of record and street name stockholders will be able to attend the Annual Meeting via live audio webcast, submit their questions during the meeting and vote their shares electronically at the Annual Meeting.

 

The Annual Meeting will begin promptly at 9:00 a.m. Central time. Online access will open thirty minutes prior to the start of the Annual Meeting, and you should allow ample time to log in to the virtual meeting website and test your computer audio system.

 

Technicians will be available to assist you with any technical difficulties you may have accessing the Annual Meeting live audio webcast. If you encounter any difficulties accessing the webcast during the check-in or meeting time, please email VirtualMeeting@viewproxy.com or call 866-612-8937.

What is the deadline to propose actions for consideration or to nominate individuals to serve as directors at the 2023 Annual Meeting of Stockholders?

Requirements for Stockholder Proposals to be Considered for Inclusion in the Company’s Proxy Materials. Proposals that a stockholder intends to present at the Company’s 2023 Annual Meeting of Stockholders and wishes to be considered for inclusion in the Company’s proxy statement and form of proxy related to the Company’s 2023 Annual Meeting of Stockholders must be received by no later than January 6, 2023. All proposals must comply with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which lists the requirements for the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals must be delivered to the Company’s Corporate Secretary by mail at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654.

Requirements for Other Stockholder Proposals to be Brought Before the 2023 Annual Meeting of Stockholders and Director Nominations. Notice of any proposal that a stockholder intends to present at the Company’s 2023 Annual Meeting of Stockholders, but does not intend to have included in the Company’s proxy statement related to the Company’s 2023 Annual Meeting of Stockholders, as well as any director nominations, must be delivered to the Company’s Corporate Secretary by mail at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654, not earlier than January 22, 2023, and not later than February 21, 2023. The notice must be submitted by a stockholder of record and must set forth the information required by the Company’s by-laws with respect to each director nomination or other proposal that the stockholder intends to present at the Company’s 2023 Annual Meeting of Stockholders. If you are a beneficial owner of shares held in street name, you can contact the organization that holds your shares for information about how to register your shares directly in your name as a stockholder of record. In addition to satisfying the foregoing requirements under the Company’s by-laws, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 22, 2023.

 

 

 

---

 

 

 

Directors

Listed below are the six nominees for election as a director. Each nominee, with the exception of Richard J. Poulton, currently serves on the Board.  The Board is currently comprised of nine members and will reduce in size to six members effective as of the Annual Meeting.  The following current Board members are not standing for re-election at the Annual Meeting: Mara G. Aspinall, Paul M. Black, Michael A. Klayko and David D. Stevens.

At the Annual Meeting, proxies cannot be voted for a greater number of individuals than the six nominees named in this Proxy Statement. Each of the nominees listed below has consented to serving as a nominee, being named in this Proxy Statement and serving on the Board if elected. Each director elected at the Annual Meeting will serve a one-year term.

The Board comprises a diverse group of leaders in their respective fields. Many of the Company’s directors have senior leadership experience at major domestic and multinational companies. In these positions, they have also gained significant and diverse management experience, including strategic and financial planning, public company reporting, compliance, risk management (including with respect to cybersecurity risk) and leadership development. Many directors also have experience serving as executive officers of, or on boards of directors and board committees of, other public companies, and have an understanding of corporate governance practices and trends. The Board believes that the collective experiences, viewpoints and perspectives of the Company’s nominees for directors result in a Board with the commitment and energy to advance the interests of the Company’s stockholders.

 

 

 

 

 

 

---

 

 

 

Pursuant to the Company’s Corporate Governance Guidelines, for each open Board seat, any initial list from which new director nominees are to be chosen shall include, but not be limited to, qualified women and persons of color.  The Board from time to time will consider the effectiveness of this selection policy in identifying qualified individuals with diversity of viewpoint as potential Board nominees and currently believes it to be effective.

 

Board Skills and Qualifications

The Board and the Nominating Committee believe the skills, qualities, attributes, and experience of the nominees provide the Company with business acumen and a diverse range of perspectives to engage each other and the Company’s management to address effectively the Company’s evolving needs and represent the best interests of the Company’s stockholders. The biographies below describe the skills, qualities, attributes, and experience of the nominees that led the Board and the Nominating Committee to determine that it is appropriate to nominate these directors.

 

 

 

---

 

 

 

 

 

 

---

 

 

 

 

Director Biographies

 

 

 

 

---

 

 

 

 

 

 

 

---

 

 

 

 

 

 

 

 

 

---

 

 

 

Corporate Social Responsibility

Allscripts is a Place Where Technology Meets Humanity.

 

 

SUPPORTING OUR COMMUNITIES

The Allscripts Giveback program is often referred to as the soul of our company and is central to our 2021 pledge to “win in our communities”. Allscripts encourages all associates, no matter where they are in the world, to dedicate one day every year to volunteer with an organization of their choice by providing a paid GiveBack volunteer day. As we adapted to our constantly changing “new normal”, the Allscripts associates never let go of their compassion to help others. In 2021, we were proud to be an ambassador sponsor of Nurse Heroes, an organization that provides support, recognition, and scholarships to nurses around the globe. We were also a top sponsor of JDRF and American Heart Association of the Triangle’s Go Red for Women program, as well as their STEM Goes Red and Healthy Communities initiatives. We celebrated our ACE 2021 event by donating the event registration directly to an early literacy program called Reach Out and Read, raising over $30,000 on behalf of our clients. Finally, we adopted a new software partner called Benevity, which now allows our associates to easily donate, fundraise and volunteer for their favorite local charities. Using this program, we launched several large matching gift campaigns and began incentivizing associates to log volunteer hours. While all of this happened, our associates were busy in their communities volunteering in Habitat for Humanity builds, food banks, animal shelters, community gardens, meal packaging services and more.

 

When we worked collectively, our impact was felt worldwide. Communities supporting and caring for each other – the essence of connecting.

 

2021 GIVEBACK PROGRAM SUMMARY:

 

 

 

---

 

 

 

 

HOW WE SPENT OUR GIVING:

 

 

TYPES OF CHARITIES SUPPORTED BY THIS FUNDING:

 

SUPPORTING OUR ASSOCIATES

Our employees are our lifeblood and we recognize that attracting, retaining and developing talent at all levels is vital to continuing our success and sustainability. We aim to create an inclusive, respectful and open work environment and culture comprising talented employees of diverse backgrounds, in which our employees can grow and advance their careers, with the overall goal of developing, expanding and retaining our workforce to support our business. We strive to sustain a work environment in which each employee’s perspective, background, skills and abilities are valued in support of our mission.  We invest in our employees through high-quality benefits and various health and wellness initiatives and offer competitive compensation packages.

 

 

---

 

 

We actively seek opportunities for regular engagement, communication and transparency by our senior executive leaders with our broader associate workforce. Our CEO reviews overall Company results with employees and leaders at all levels and engages in actions that are aimed at removing barriers to engagement. We regularly solicit feedback through surveys and other mechanisms to gain insights into workplace engagement, what motivates employees to do their best work and overall employee satisfaction. With belief in our associates’ skills and a continuous focus on their development, we were able to promote over 900 associates internally during 2021.

Advancing Diversity, Equity and Inclusion

Allscripts launched a champions network of cross-functional associates from diverse backgrounds and locations to help support the company’s Diversity, Equity and Inclusion (DE&I) program.  The network includes passionate advocates for positive change—visible point people who promote, facilitate and connect colleagues to support important DE&I initiatives.

Allscripts commitment to diversity of background, experiences and thought has been longstanding. ‘Together, we impact people’s lives’ is the foundation our Diversity, Equity and Inclusion (DE&I) program was built upon. Our Champions Network, a diverse network of global associates who are passionate advocates for positive change, is leading the effort in helping us curate and drive learning opportunities as well as community involvement.

Our associates’ diverse personalities, backgrounds and experiences help shape our spirit and culture. We celebrate what makes our associates unique by supporting Enrichment Groups, which are open to all associates, help build a sense of community and foster an environment in which every voice is heard and valued.  Allscripts currently has six Enrichment Groups.

 

 

Since 2013 the Allscripts Women’s Engagement (AWE) enrichment group empowers our female associates to take control of their careers and professional development through sponsored opportunities, such as career development seminars, networking events and mentorship. Allscripts invests in this program for the betterment of any associate who wants to get involved, and to improve the company’s ability to attract, retain and advance women in healthcare IT.

 

 

 

---

 

 

 

Since 2017, Allscripts GenNext program has been helping young professionals at Allscripts develop socially, professionally and civically.  It has helped to educate employees and broaden their perspective on potential career paths and business unit’s objectives and provide networking, exposure and leadership opportunities that otherwise may not be easily available.

 

In 2021, Allscripts introduced four new Enrichment Groups.  The Allscripts Military Veterans and Supporters (AMVS) supports active and retired military personnel and promotes a culture within Allscripts that recognized and serves the ongoing needs of the veteran community.  The Allscripts Black Alliance (ABA) serves as a platform for African American colleagues and allies to support and encourage one another from a place of commonality and shared experience.  The Allscripts Pride Alliance (APA) helps promote an inclusive, safe and open work environment that empowers LGBTQ+ employees and allies, as well as informs and educates Allscripts through networking and outreach initiatives. The mission of Allscripts Hispanic Outreach for Latinos at Allscripts (HOLA) is to assist Hispanics in managing their careers and professional development, while developing Allscripts as a workplace of choice and an opportunity to excel.

 

Safety and Health Policy

At Allscripts, we believe the foundation of our success lies with safeguarding our associates, communities and clients, along with the environments in which they work.  This is an integral part of our corporate belief system, and why we actively promote environmental health and safety excellence throughout our organization.  Allscripts pledges to maintain a safe and healthy workplace for all associates by conducting business and regular assessments that are consistent with our corporate standards and applicable safety and health regulations. To further enhance the health and safety of associates, Allscripts also offers comprehensive resources and training, including specialty programs like active shooter training, blood pressure monitors and an active lifestyle incentive program.

As the COVID-19 pandemic continued through 2021, Allscripts leadership has supported a remote working environment for all operations.  Allscripts’ cross-functional emergency response team—consisting of representatives from various functions including business units, safety, security, medical, facilities, HR, IT legal and communications—meets regularly to evaluate the continued impact of the pandemic and its effects on Allscripts associates.  Wellness programs continued to encourage associates to stay active and connected. The Allscripts benefits team promoted COVID-19 response resources offered by our healthcare partner, which included mental health, work/life balance and telehealth services where available.

 

 

---

 

 

COMMITMENT TO ENVIRONMENTAL SUSTAINABILITY

As a strong supporter of sustainable business practices, Allscripts strives to improve existing and introduce new green sustainability efforts in its daily business operations. Allscripts policies are subject to regular review and amendment when new innovative ways to support a sustainable workplace are established, assuring a continued commitment to the environment.  Allscripts is committed to generating less waste and reducing greenhouse gas emissions when conducting business. Besides our headquarters being located in the award-winning LEED-certified offices at the Merchandise Mart in Chicago, here are just a few of the initiatives we’ve launched:

Our commitment to sustainability is for the long-term. Based on the Sustainability Accounting Standard Board (SASB.org) recommendations for Software & IT Services in the Technology and Communications Sector, we are evaluating the environmental footprint of our hardware.  As a first step, we have consolidated all of our corporate data centers into purpose-build energy efficient locations that include elements like zero water consumption cooling and power design efficiency.

Allscripts Corporate Social Responsibility Report details our progress across our global operations and can be viewed in its entirety in the “Governance” section at www.investor.allscripts.com.  The information on our website, including but not limited to the contents of our Corporate Social Responsibility Report, is not, and shall not be deemed to be, a part of this Proxy Statement or incorporated herein or into any of our other filings with the SEC.

  

 

 

 

---

 

 

 

Corporate Governance

Role of the Board

The Board oversees the Company’s Chief Executive Officer and other senior management in the competent and ethical operation of the Company in support of the long-term interests of the Company’s stockholders. The Company’s Corporate Governance Guidelines are available at the “Governance” section at investor.allscripts.com.

Board Leadership Structure

The Board believes that its current leadership structure best serves the objectives of the Board’s oversight of management, the Board’s ability to carry out its roles and responsibilities on behalf of the Company’s stockholders, and the Company’s overall corporate governance. The Board currently believes that the separation of the Chairman and the Chief Executive Officer roles allows the Company’s Chief Executive Officer to focus his time and energy on operating and managing the Company. The Board periodically reviews this leadership structure to determine whether it continues to best serve the Company and its stockholders.

 

Mr. Klayko, Chairman of the Board, is not standing for re-election at the Annual Meeting. If Mr. Garrison is elected to the Board by the stockholders at the Annual Meeting, the Board intends to appoint Mr. Garrison as the new independent Chairman of the Board.

Board Meetings

The Board met a total of ten times during 2021. The Board has determined that the following incumbent directors who are standing for election at the Annual Meeting are independent under applicable rules of the Nasdaq Stock Market LLC (“Nasdaq”) and the SEC: Mmes. Altman and Zierhoffer and Messrs. Garrison, Judge, and Dave B. Stevens. The Board also determined that the following current directors who are not standing for re-election at the Annual Meeting are independent under such rules: Ms. Aspinall and Messrs. Klayko and David D. Stevens.  The Board also determined that Mr. Black, who currently serves on the Board and is not standing for re-election at the Annual Meeting was not independent under such rules. Mr. Poulton, who currently serves as the Company’s Chief Executive Officer, is also not independent under such rules.

Executive Sessions of Independent Directors

The independent directors of the Company meet regularly in executive session, i.e., with no management directors or management present. These executive sessions may include such topics as the independent directors determine. During these executive sessions, the independent directors have access to members of management and other guests as the independent directors determine.

Annual Board and Committee Evaluations

In accordance with the Company’s Corporate Governance Guidelines, the Nominating Committee is responsible for facilitating an annual evaluation of the Board. The Nominating Committee also oversees the annual performance evaluation of the committees of the Board.  The Nominating Committee also oversees the annual performance evaluation of each director.

Succession Planning

As part of the annual officer evaluation process, the Nominating Committee works with the CEO to facilitate the Board’s planning for CEO succession (and for other members of senior management), as well as to develop plans for interim succession for the CEO (and for other members of senior management) in the event of an unexpected occurrence. Succession planning may also be reviewed more frequently by the full Board as it deems warranted.

 

 

 

---

 

 

 

Committees of the Board

The Board has a standing Audit Committee (the “Audit Committee”) and Compensation Committee (the “Compensation Committee”), in addition to the Nominating Committee. The Board has determined that each of the committee members is independent under applicable Nasdaq and SEC rules for committee memberships. The members of the committees are shown in the tables below.

 

 

The Audit Committee is primarily responsible for assisting the Board in fulfilling its oversight and monitoring responsibility of reviewing the financial information that will be provided to the Company’s stockholders and others; appointing and overseeing the services performed by the Company’s independent registered public accounting firm, as well as pre-approving all services and fees related thereto; overseeing and periodically evaluating the performance and responsibilities of the Company’s internal audit department, including approving the Company’s annual internal audit plan and reviewing the results of internal audits, including management’s responses thereto; reviewing with the Company’s management, internal audit department, and independent registered public accounting firm the Company’s critical accounting policies and its system of internal controls over financial reporting; and overseeing the risk assessments related to the Company conducted by the Company’s management (including internal and third party assessments relating to cybersecurity risk). The Audit Committee is also responsible for reviewing all related party transactions and has the authority to approve all such transactions. The Audit Committee met a total of ten times during 2021.

The Compensation Committee is primarily responsible for reviewing the compensation arrangements for the Company’s executive officers, administering the Company’s equity compensation plans, and reviewing the Board’s compensation. For a further description of the Compensation Committee’s processes and procedures, including the roles of the Company’s management and independent compensation consultants in the Compensation Committee’s decision-making process, see the “Compensation Discussion and Analysis” section below. The Compensation Committee met a total of two times during 2021.

The Nominating Committee assists the Board in identifying and evaluating qualified individuals to become directors, makes recommendations to the Board concerning the size, structure, and composition of the Board and its committees, monitors the process to assess the Board’s effectiveness, and is primarily responsible for the oversight of corporate governance at the Company, including implementation of the Company’s Corporate Governance Guidelines. In April 2022, the Nominating Committee recommended to the full Board each of the nominees named in this Proxy Statement for election to the Board. The Nominating Committee met a total of two times during 2021.

Each of the Audit Committee, the Compensation Committee, and the Nominating Committee operates under written charters adopted by the Board. These charters are available at the “Governance” section at investor.allscripts.com.

During 2021, each member of the Board attended or participated in 75% or more of the aggregate of (i) the total number of meetings of the Board (held during the period for which such person has been a director) and (ii) the total number of meetings held by each committee of the Board on which such person served (during the period that such person served).

There are no family relationships among the Company’s executive officers and directors.

 

 

---

 

 

Consideration of Director Nominees

Stockholder Nominees

The Nominating Committee considers properly submitted stockholder nominations for candidates for membership on the Board in accordance with the Company’s by-laws. Stockholders who wish to nominate directors should follow the instructions under “Requirements for Other Stockholder Proposals to be Brought Before the 2023 Annual Meeting of Stockholders and Director Nominations” in this Proxy Statement.

Director Qualifications

The Nominating Committee and the Board consider on an annual basis the appropriate characteristics, skills and experiences for the Board as a whole and its individual members. In evaluating the suitability of individual Board members, the Board takes into account many factors, including their business and professional accomplishments, integrity, demonstrated ability to make independent analytical inquiries, ability to understand the Company’s business and willingness to devote the necessary time to Board duties. In addition, the Nominating Committee endeavors to identify and evaluate candidates based on their specific healthcare and related industry experience and any other areas that may be expected to contribute to an effective Board. With respect to diversity, the Nominating Committee may consider such factors as differences in viewpoint, professional experience, education, skills, and other individual qualifications that contribute to Board heterogeneity, including characteristics such as gender, race, and national origin.  Pursuant to the Company’s Corporate Governance Guidelines, for each open Board seat, any initial list from which new director nominees are to be chosen shall include, but not be limited to, qualified women and persons of color.  The Board from time to time will consider the effectiveness of this selection policy in identifying qualified individuals with diversity of viewpoint as potential Board nominees and currently believes it to be effective.

Identifying and Evaluating Nominees for Directors

The Nominating Committee utilizes a variety of methods for identifying and evaluating nominees for directors. Candidates may come to the attention of the Nominating Committee through management, current Company directors, Company stockholders, or other persons. These candidates are evaluated and discussed by members of the Nominating Committee from time to time. Candidates may be considered at any point during the year.  

The Nominating Committee considers stockholder recommendations for candidates to the Board in the same manner as candidates identified by the Nominating Committee. Any such recommendation should be delivered to the Company’s Corporate Secretary by mail at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654. Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by the Nominating Committee. If any materials are provided by a Company stockholder in connection with the recommendation of a director candidate, such materials are forwarded to the Nominating Committee. The Nominating Committee also may review materials provided by professional search firms or other parties in connection with a nominee.

Mandatory Retirement Age

The Board has implemented a policy providing that no director who has reached the age of 72 should stand for re-election to the Board, unless the Nominating Committee and the Board, in their discretion, believe an extension would best serve the interests of the Company.

 

Board Oversight of Risk Management

The Board believes that evaluating how the Company’s senior management team manages the various risks confronting the Company is one of its most important areas of oversight. In carrying out this critical responsibility, the Board has designated the Audit Committee with primary responsibility for overseeing enterprise risk management.

In accordance with this responsibility, the Audit Committee monitors the Company’s major financial, operational, privacy, security (including cybersecurity), business continuity, legal and regulatory, and reputational exposures, and reviews the steps management has taken to monitor and control these exposures. The Audit Committee’s oversight includes, among other things, the review of regular reports from the Company’s Senior Vice President, Chief

 

 

---

 

 

Compliance Counsel; the Company’s Vice President, Corporate Audit; the Company’s Vice President, Chief Security Officer; and other members of the Company’s management as to the identification and status of risks to the Company, including financial risks and litigation claims and risks. As with other matters, the Audit Committee regularly discusses these topics with the Board.

Most recently, the Audit Committee has been focused on, among other things, cybersecurity risk and the policies and procedures developed by the Company to mitigate such risks. Allscripts takes privacy and security seriously and has implemented a security framework, based on ISO 27001, that takes into account physical, administrative, and technical safeguards for patient data and confidential data.  These safeguards cover, among other areas, identity and access management, incident response and monitoring, disaster recovery, data protection, secure development lifecycle, and supply chain security.  Security awareness training is regularly provided to staff that is designed to ensure they stay up to date with the changing cyber risk landscape.  Identified cyber risks and mitigation strategies are reviewed with management and the Board on a quarterly basis.

Additionally, when determined by the Board or by the Company’s management to be advisable, the Board or selected committees of the Board may undertake a formal enterprise risk assessment, at which risks facing the Company and associated responses are evaluated in detail. The Board also receives regular financial and business updates from the Company’s senior management, which updates involve detailed reports on financial and business risks facing the Company when applicable.

While the Audit Committee has primary responsibility for overseeing enterprise risk management, each of the other Board committees also considers risk within its area of responsibility. For example, the Nominating Committee reviews legal and regulatory compliance risks as they relate to corporate governance structure and processes, and the Compensation Committee reviews risks related to compensation matters. The Chairman of each of these committees periodically apprises the Board of significant risks and the Company’s management’s response to these risks, as appropriate.

In establishing and reviewing the Company’s executive compensation program, the Compensation Committee considers whether the program encourages unnecessary or excessive risk-taking and has concluded that it does not. The Company’s executive officers’ base salaries are fixed in amount and thus do not encourage risk-taking, and the majority of compensation provided to the Company’s executive officers is in the form of long-term equity awards that help align executive pay with the long-term interests of the Company’s stockholders. The Compensation Committee believes that these awards do not encourage unnecessary or excessive risk-taking because the ultimate value of the awards is tied to the Company’s financial or stock price performance, and because awards are subject to regular vesting schedules to help ensure that a significant component of executive compensation is tied to long-term stockholder value creation.

The Compensation Committee has also reviewed the Company’s compensation programs for employees generally, and has concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee believes that the Company’s annual cash and long-term equity awards provide an effective and appropriate mix of incentives to help ensure the Company’s performance is focused on long-term stockholder value creation and do not encourage short-term risk-taking at the expense of long-term results.

While the Board and its committees oversee risk management strategy, the Company’s management is responsible for implementing and supervising day-to-day risk management processes and reporting to the Board and its committees on such matters.

Audit Committee Financial Experts

The Board has determined that each of Ms. Altman, Ms. Aspinall, Mr. Garrison, Mr. David D. Stevens and Ms. Zierhoffer qualifies as an “audit committee financial expert” as defined under applicable SEC rules. The Board has also determined that each member of the Audit Committee meets the additional criteria for independence of audit committee members set forth in Rule 10A-3(b)(1) under the Exchange Act.

Code of Conduct

The Company has adopted a Code of Conduct that applies to all of its employees, including the Company’s principal executive officer, principal financial officer, and senior accounting officers, as well as to the Board. The Code of

 

 

---

 

 

Conduct is available at the “Governance” section at investor.allscripts.com. The Company intends to comply with any disclosure obligation regarding any changes in, or waivers from, the Code of Conduct by posting such information on the same website or by filing a Form 8-K with the SEC.

 

Certain Relationships and Related Transactions

The Company, or one or more of its subsidiaries, may occasionally enter into transactions with certain “related persons.” Related persons include the Company’s executive officers, directors, beneficial owners of more than 5% of the Company’s common stock, immediate family members of any of these persons, and entities in which one or more of these persons has a direct or indirect material interest. The Company refers to transactions with these related persons as “related party transactions.”

In accordance with the Company’s written policy, the Audit Committee (or, in certain circumstances, disinterested members of the Board) is responsible for the review and approval of each related party transaction exceeding $120,000 in which a related person has a direct or indirect material interest. The Audit Committee considers all relevant factors when determining whether to approve a related party transaction, including, without limitation:

Since January 1, 2021, neither the Board nor the Audit Committee has been made aware of or asked to review and approve any “related party transactions.”  The Company is not aware of any transactions in the last fiscal year where the above policies were not followed.

Anti-Hedging Policy

Under our anti-hedging policy, all Allscripts directors, officers, employees and consultants, as well as their household members and any of their family members whose transactions in the Company’s securities are directed by them or are subject to their influence or control, are prohibited from entering into hedging or monetized transactions or similar arrangements with respect to the Company’s stock, including the purchase or sale of puts or calls or the use of any other derivative instruments.

Attendance of Directors at Annual Meeting of Stockholders

The Company expects all of its directors and director nominees to attend its annual meetings of stockholders, barring emergencies or unusual circumstances.  Where a director is unable to attend an annual meeting in person but is able to do so by electronic conferencing, the Company will arrange for the director’s participation by means where the director can hear and be heard by those present at the meeting. All of the Company’s then-current directors attended the Company’s 2021 Annual Meeting of Stockholders, which was held in a virtual-only format.

Communications with the Board

Any correspondence intended for the Board, or for any individual member or members of the Board, should be directed to the Company’s Corporate Secretary at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654, with a request to forward the communication to the intended recipient(s). In general, any stockholder communication delivered to the Corporate Secretary for forwarding to the Board or specified Board member(s) will be forwarded in accordance with the stockholder’s instructions. However, the Company reserves the right not to forward to Board members any abusive, threatening, or otherwise inappropriate materials, including unsolicited commercial advertisements.

 

 

---

 

 

Information regarding the submission of comments or complaints relating to the Company’s accounting, internal accounting controls, or auditing matters can be found in the Company’s Code of Conduct, which is available at the “Governance” section at investor.allscripts.com.

Compensation of Directors

The Compensation Committee is responsible for reviewing and approving the compensation program for the Company’s non-employee directors. The Compensation Committee utilizes a combination of cash and equity as a way to attract and retain qualified directors. The 2021 non-employee director compensation program did not change as compared to the 2020 non-employee director compensation program.

Cash Compensation

For 2021, the annual retainer paid to the Company’s non-employee directors was $60,000, payable in equal quarterly installments. Non-employee directors also received a retainer of $2,000 for attendance at Board meetings in excess of ten per year, and $1,500 for attendance at each committee meeting. The Chairman of the Board may waive the additional $2,000 fee for the entire Board, and may waive the $1,500 fee for any applicable committee meeting for the attendees thereof. The Chairman of each committee may also waive the $1,500 fee for any committee meeting he chairs. Each non-employee director of the Company is also reimbursed for expenses incurred when attending Board and committee meetings and other Board-related activities.

The Chairman of the Board receives an additional annual retainer in the amount of $100,000, payable in equal quarterly installments. Each Chairman of the Audit Committee, Compensation Committee, and Nominating Committee receives an additional annual retainer of $25,000, $25,000, and $15,000, respectively, for his service as Chairman of the respective committees, payable in equal quarterly installments. Each member of the Audit Committee, Compensation Committee, and Nominating Committee also receives an additional annual retainer of $2,500 per committee served. All of the foregoing payments are pro-rated for the dates of applicable service.

Prior to the beginning of each calendar year, non-employee directors may elect to receive all or a portion of their quarterly cash retainer payment in the form of deferred stock units (“DSUs”). DSUs represent the right to receive shares of the Company’s common stock at the time the director’s Board service ends. The number of DSUs granted is determined by dividing the portion of the cash compensation with respect to which the election is made by the closing price of the Company’s common stock on the date the cash compensation is due to be paid. DSUs issued in lieu of cash compensation are fully-vested.

Equity Compensation

Under the Company’s 2019 Stock Incentive Plan, the Company’s non-employee directors are eligible to receive equity awards in the form of stock options, restricted stock, or restricted stock units (“RSUs”) at the discretion of the Board or the Compensation Committee. For 2021, the value of each annual equity award was $200,000, delivered in the form of RSUs, which fully vest on the first anniversary of the grant date or, if earlier, upon a change of control of the Company. If a non-employee director retires from the Board prior to the first anniversary of the grant date, a pro-rata portion of the RSUs will vest based on the time elapsed from the grant date to the date of retirement. Annual director equity awards are granted after the Company’s annual meeting of stockholders to coincide with the commencement of director terms.

 

 

---

 

 

Director Compensation – 2021

The following table shows information regarding the compensation earned during 2021 by the Company’s non-employee directors who served on the Board during the year. The compensation paid to Mr. Black is shown in the table entitled “Summary Compensation Table – 2021, 2020 and 2019” and the related explanatory tables in the “Executive Compensation” section below. Mr. Black does not receive any additional compensation for his service as a member of the Board.

 

 

 

 

 

 

 

 

 

---

 

 

 

Security Ownership of Certain Beneficial Owners and Managements

The following tables show certain information as of April 29, 2022 (the “Table Date”), unless otherwise indicated, with respect to the beneficial ownership of the Company’s common stock by: (i) each person the Company believes beneficially holds more than 5% of the outstanding shares of the Company’s common stock based solely on the Company’s review of SEC filings; (ii) each director and nominee; (iii) each named executive officer listed in the table entitled “Summary Compensation Table – 2021, 2020 and 2019” under the section entitled “Compensation Discussion and Analysis” below; and (iv) all directors and executive officers as of the Table Date as a group.

Unless otherwise indicated, all persons named as beneficial owners of the Company’s common stock have sole voting power and sole investment power with respect to the shares indicated as beneficially owned.

 

 

 

 

 

---

 

 

 

 

 

 

 

---

 

 

 

Equity Compensation Plan Information

The following table shows information, as of December 31, 2021, concerning shares of the Company’s common stock authorized for issuance under the Company’s equity compensation plans.

 

 

 

 

 

 

 

---

 

 

 

Executive Officers

 

 

 

 

 

 

 

 

---

 

 

 

 

 

 

 

 

 

---

 

 

 

Compensation Discussion and Analysis

This Compensation Discussion and Analysis explains the Company’s executive compensation philosophy and program, the decisions the Compensation Committee made with respect to the Company’s executive compensation program for 2021, and the factors that the Compensation Committee considered in making those decisions. The Compensation Committee has the principal responsibility for establishing, implementing and monitoring the Company’s executive compensation program in accordance with the Company’s executive compensation philosophy and what the Compensation Committee believes to be best practices with respect to executive compensation. This Compensation Discussion and Analysis focuses on the compensation of the Company’s named executive officers (our “NEOs”) for 2021, who were:

*On May 6, 2022, Mr. Black ceased serving as our Chief Executive Officer and Mr. Poulton was appointed Chief Executive Officer and ceased serving as President and Chief Financial Officer.  Also, effective May 6, 2022, Thomas Langan was appointed President and Leah Jones was appointed as our Chief Financial Officer.   Please see the “Management Transition” section for a summary of the compensation decisions made with respect to Mr. Black and Mr. Poulton in connection with their transitions.

Executive Summary

In 2021 the Company continued to make progress on its key strategic and operational imperatives which are intended to deliver sustained improvements in the Company’s products and financials, and in turn to position the Company for sustainable long-term growth both domestically and globally. The Company also continued to execute on the plan began in 2020 to reset and effectively manage the Company’s cost base, portfolio, balance sheet and capital structure. We believe that these efforts built on the positive momentum developed during 2020 to further improve the Company’s stock price and market capitalization during 2021. The Company’s closing stock price per share on December 31, 2020 was $14.44, and the Company’s closing stock price per share on December 31, 2021 was $18.45, a 27.77% increase over that period.

Operationally, in 2021 the Company continued to leverage our longstanding strategic partnership with Microsoft to enable the development and delivery of cloud-based health information technology solutions. This partnership allows the Company to enhance our client’s high availability, cybersecurity, disaster recovery and business continuity capabilities, each of which have become more important during 2021. In addition, Mercy Iowa City selected the Allscripts Sunrise Platform of Health as the core EHR for its community hospital. Mercy Iowa City is an acute care hospital and regional referral center that draws patients from throughout Eastern Iowa. The Company also substantially expanded our partnership with another client, Blessing Health System, to three facilities—Blessing Health Keokuk, Hannibal Clinic, and partner provider Scotland County Hospital. Blessing Health System has also implemented Allscripts® Managed Services and has extended its agreement through 2028. Further, long-term client BronxCare Health System signed an extension with Allscripts into 2031.     

Throughout the COVID-19 pandemic, the Company’s Veradigm business unit has assisted our clients by providing them with the value needed to manage all aspects of the pandemic. One example of that value is the Veradigm StudySource platform which modernizes clinical research and extends the Company’s EHR systems to include research workflows. During 2021 Veradigm signed a partnership agreement with PRA Health Sciences, Inc. (which has since been acquired by ICON) to create an industry leading EHR-based clinical research network, reaching more than 25,000 physicians and 40 million patients across the United States.  Veradigm also signed a teaming agreement to provide the U.S. Centers for Disease Control and Prevention access to the Company’s Health Insights’ EHR data set to advance and assist COVID-19 research, including analyzing and developing insights related to variants, vaccinations, long-term effects and other COVID-19 related questions. In addition, Veradigm signed an agreement

 

 

---

 

 

with Moderna during 2021 to provide research consulting and data analytics services for eight real-world database studies focused on gaining a better understanding of Moderna’s COVID-19 vaccine in the U.S. population.  

Finally, during 2021 we further enhanced the Company’s commitment to diversity, equity and inclusion (“DE&I”), through the launch of four additional employee enrichment groups for associates of diverse backgrounds and locations to help support the Company’s DE&I efforts. We also launched ADP Empower, an initiative through the Allscripts Developer Program that is intended to promote diverse voices in the healthcare technology industry by offering resources and support to underrepresented entrepreneurs.  

The chart below compares the average for the three previous years of the target total compensation opportunity provided to Mr. Black, including base salary, annual bonus and equity awards, to the value for each element of compensation that was realized or realizable by Mr. Black as of the end of 2021. For the three-year period from 2019 to 2021, roughly 194% of Mr. Black’s target compensation has either been realized or is realizable. For the chart below, Mr. Black’s annual bonus amount in the column on the right reflects the average of the actual annual bonuses that he earned during the three-year period, as disclosed in the Summary Compensation Table – 2021, 2020 and 2019. Mr. Black’s 2019, 2020 and 2021 realized or realizable equity includes PSUs and restricted stock units (“RSUs”) either earned and vested or eligible to vest in the future under awards granted in 2019, 2020 and 2021.  All equity awards are valued using $18.45 per share, the closing price of the Company’s common stock on December 31, 2021, and, in the case of PSUs subject to on-going performance periods, estimated performance as of December 31, 2021.

CEO Three-Year Average Target Versus Realized or Realizable Compensation

 

 

 

We believe the realized or realizable compensation and their relationship to target compensation over the three-year cumulative period is reflective of the Compensation Committee’s emphasis on “pay-for performance” in that differences between realized and realizable pay and target compensation, as well as fluctuations compared to prior periods, are primarily the result of our stock performance and our varying levels of achievement against pre-established performance goals under our annual incentive plan for senior executives and the PSUs. The very high percentage of Mr. Black’s total compensation that has been realized or is realizable is reflective of the Company’s positive financial performance over the last three years.

 

The Compensation Committee considered financial and operational results, as well as the Company’s stock price performance, when making compensation decisions for 2021. In designing and overseeing the various elements of the 2021 executive compensation program, the Compensation Committee focused on aligning executive compensation with financial metrics that the Compensation Committee believes are indicative of the Company’s ability to build and sustain growth and continued accountability for our long-term stock price performance with the use of rigorously-designed relative TSR PSUs.

 

 

---

 

 

The charts below illustrate the 2021 target total direct compensation opportunities (i.e., base salary and target short- and long-term incentive opportunities) for the CEO, as well as the average of such opportunities for the Company’s other NEOs. As shown below, 88% of the CEO’s 2021 target total direct compensation, and 86% of the average of the target total compensation for the other NEOs serving as of December 31, 2021 is at-risk compensation that is dependent on either the Company’s financial or stock price performance. Total direct compensation includes annual cash incentive bonus opportunities and PSUs, each of which are dependent on the Company’s financial or stock price performance, and service-based RSUs, the value of which is dependent on the Company’s stock price performance.

 

 

The at-risk elements of the Company’s 2021 executive compensation program are annual incentive cash bonuses and long-term incentive equity awards. With respect to annual incentive cash bonuses, the Compensation Committee approved the Company’s annual incentive cash bonus plan (the “2021 Bonus Plan”) with potential payouts that are fully contingent on the Company’s non-GAAP EPS performance. A threshold level of non-GAAP EPS performance must be attained before payment of any bonuses under the 2021 Bonus Plan.

With respect to equity awards, in 2021 the Compensation Committee approved annual equity grants to the NEOs in the form of:

 

 

 

---

 

 

 

As in recent years, the Compensation Committee chose to structure a significant portion of each NEO’s compensation as at-risk compensation, with the compensation actually realized by each NEO significantly impacted by the financial and/or stock price performance of the Company.  

Executive Compensation Philosophy

The Compensation Committee engages in an ongoing review of the Company’s executive compensation program to evaluate whether the program supports the Company’s compensation objectives and is aligned with the long-term interests of the Company’s stockholders, taking into account input from stockholders including the results of the annual say-on-pay vote. In connection with this ongoing review, the Compensation Committee has continued to monitor the Company’s executive compensation program to evaluate whether the Company maintains best practices with respect to executive compensation.

The Company’s primary objective for its executive compensation program is to attract, retain, and motivate outstanding leaders who will drive the Company’s long-term success. The Compensation Committee seeks to establish and implement a compensation program for the Company’s NEOs that emphasizes pay-for-performance, and is designed to meet the following objectives:

The Company maintains the following balance of compensation practices that it believes enhances its pay-for-performance philosophy and aligns the Company’s executives’ interests with the long-term interests of the Company’s stockholders:

 

 

 

 

---

 

 

 

Consideration of Stockholder Say-on-Pay Vote

The Compensation Committee considers the outcome of the Company’s annual say-on-pay vote when making decisions regarding the Company’s executive compensation program. The Company received approximately 97% support for its say-on-pay vote at the Company’s 2021 Annual Meeting of Stockholders. This 97% approval from stockholders at the Company’s 2021 Annual Meeting of Stockholders follows similar say-on-pay results from 2020 and 2019, which were 95% and 99%, respectively, for those years. The Compensation Committee viewed the outcome of the say-on-pay vote as indicative that an overwhelming majority of the Company’s stockholders view the Company’s approach to executive compensation favorably. Accordingly, the Compensation Committee did not make any changes to the Company’s executive compensation program in response to the 2021 say-on-pay vote. The Company’s management continues to engage in dialogue with many of the Company’s largest stockholders, and the Compensation Committee intends to continue to consider stockholder feedback and the results of the Company’s say-on-pay votes when making future executive compensation decisions.

Compensation Procedures

Compensation Committee

During 2021, Jonathan J. Judge (Chairman), Michael A. Klayko, and Dave B. Stevens served on the Compensation Committee. Mr. Judge joined in May 2016 and became Chairman in May 2018, Mr. Klayko joined in May 2013, and Mr. Stevens joined in May 2017. The Compensation Committee’s responsibilities with respect to executive compensation include:

Role of Management

The primary objective of the Company’s executive compensation program is to align the program with the Company’s financial performance and the long-term interests of the Company’s stockholders. The Compensation Committee believes that this alignment is best achieved through consultations with members of the Company’s senior management, because management is responsible for the Company’s day-to-day operations and for creating and executing the Company’s business plan. As such, the Company’s management provides the Compensation Committee with valuable insights into the Company’s day-to-day operations and future expectations, which the Company believes are supported by the rewards and incentives in the compensation program. In 2021, the Compensation Committee consulted with Mr. Black, Mr. Poulton and Ms. Vakharia in formulating compensation plans. Mr. Black, Mr. Poulton and Ms. Vakharia attended Compensation Committee meetings during which NEO and employee compensation decisions were made, but each was not present during the Compensation Committee’s discussions regarding his or her own compensation. The Compensation Committee also regularly meets in executive session without any members of management present.

Role of Compensation Consultant

The Compensation Committee retained Compensia to serve as its independent compensation consultant with respect to decisions regarding 2021 compensation. Compensia reported directly to the Compensation Committee and participated in Compensation Committee meetings. Compensia did not perform any other services for the Company in 2021. After considering Compensia’s relationship with the Company, the services provided by Compensia, and information provided to the Compensation Committee by Compensia, the Compensation Committee determined that Compensia met the independence requirements to serve as its independent compensation consultant and that Compensia’s work did not raise any conflict of interest.

Specifically, Compensia:

 

 

---

 

 

Market Analysis

The Compensation Committee considers relevant market pay practices and relative performance when setting executive compensation and incentive goals. Market practices, or benchmarks, are based on peer group disclosure. When making compensation decisions, the Compensation Committee considers the market data in conjunction with other factors, such as an officer’s individual tenure and performance, unique qualifications, and role and impact within the Company. Working with Compensia, the Compensation Committee established an updated peer group to be used in designing the Company’s 2021 executive compensation program. The peer group used to evaluate the Company’s 2021 compensation decisions included companies with the following characteristics:

The peer group used to evaluate 2021 compensation decisions consisted of the 21 U.S.-based publicly traded healthcare technology companies and general software companies listed below (the “2021 peer group”). For 2021, the Compensation Committee chose to remove Medidata Solutions, Inc., LogMeIn, Inc., and Navigant Consulting, Inc., due to their acquisitions. To replace those companies, the Compensation Committee chose to add Change Healthcare and R1 RCM, Inc. The Compensation Committee considers each of those companies to be financially or operationally comparable to the Company.

 

 

 

 

---

 

 

 

Elements of Compensation

The Compensation Committee believes that the Company’s compensation programs for its NEOs are competitive and appropriately designed to attract and retain key employees, reward performance, and promote long-term stockholder value. This section describes the elements of the Company’s compensation program for NEOs, together with a discussion of various compensation decisions.

The principal components of the Company’s 2021 executive compensation program were base salary, annual incentive cash bonuses, and long-term incentive equity awards. The Company also provides a 401(k) retirement savings plan with certain matching contributions, group health and welfare plans, and group term life insurance. In addition, the Company provides the NEOs with severance benefits upon a termination of employment under certain circumstances, including following a change of control of the Company, as more fully described elsewhere in this Proxy Statement. The Company does not maintain defined benefit pension plans for its NEOs because the Compensation Committee believes that the existing compensation arrangements enable the Company’s NEOs to adequately plan for their retirement and that wealth creation should primarily be a function of performance for the Company’s stockholders.

Base Salary

Base salaries are paid to the NEOs to compensate them for the performance of their respective job duties and responsibilities. The Compensation Committee reviews base salaries of the NEOs on an annual basis. In setting annual base salaries, the Compensation Committee takes into consideration the Company’s overall financial and operating performance in the prior year, the Company-wide target for base salary increases for all employees, market and competitive salary information, changes in the scope of an NEO’s job responsibilities, and other relevant factors. When considering market and competitive salary information, the Compensation Committee has historically reviewed peer compensation data, although there is no target compensation level. The Compensation Committee also reviews each NEO’s scope of role and performance, as well as the performance of the business units and departments for which he or she is responsible, to the extent applicable. For Mr. Black, the Compensation Committee evaluates his performance and determines any salary adjustment. For each of the other NEOs, the Compensation Committee receives a performance evaluation from the CEO and a recommendation for any salary adjustment. For 2021, the Compensation Committee determined that Mr. Poulton should receive a base salary increase of eleven percent, which is larger than typical annual increases, based on his critical role at the Company encompassing both President and Chief Financial Officer duties and significant impact on the Company’s improved performance since 2020, as well as a review of competitive market data for his roles.

The following table sets forth the base salary rate in effect as of December 31, 2021 for each NEO:

 

 

Annual Incentive Cash Bonuses

Consistent with its approach since 2016, the Compensation Committee chose non-GAAP EPS as the financial performance measure for the 2021 Bonus Plan. The non-GAAP EPS targets established by the Committee tied the 2021 Bonus Plan to a rigorous goal based on a key measure stockholders consider when evaluating the performance of the Company. Non-GAAP EPS is defined as non-GAAP net income divided by weighted average fully diluted shares outstanding in the applicable period. Non-GAAP net income consists of GAAP net income/(loss) as reported, and adds back acquisition-related amortization, stock-based compensation expense, nonrecurring expenses and transaction-related costs, non-cash asset impairment charges, and equity in earnings of unconsolidated investments, in each case net of any related tax effects.

 

 

---

 

 

Mr. Black and Ms. Khorey’s bonus targets, as a percentage of base salary, did not change for 2021. Mr. Black’s target cash bonus was 150% of his base salary and Ms. Khorey’s target cash bonus was 75% of her base salary. For Mr. Poulton, the Committee chose to increase his bonus target to 125% of his base salary for 2021 based on his critical role at the Company and influence on the Company’s materially improved financial position. Ms. Vakharia’s bonus target for 2021 was increased to 75% of her base salary to align with standard practice for the Company’s NEOs.

  

The chart below shows the non-GAAP EPS performance range that the Compensation Committee approved for 2021:

 

 

Bonus payments for the NEOs under the 2021 Bonus Plan were based on the Company’s non-GAAP EPS performance for the year. Pursuant to the approved non-GAAP EPS performance range, the Company’s reported fiscal 2021 non-GAAP EPS of $1.43, which would result in a bonus payment equal to 200% of target bonus for each NEO. Given the performance of each NEO and the achievement over the maximum of the EPS range, the Committee did not exercise its discretion to decrease the cash incentive bonus payout to any NEO. Accordingly, the Committee approved a bonus payout of 200% of target to each NEO under the 2021 Bonus Plan.

 

 

 

---

 

 

 

In July 2021 the Company implemented the Global All In to Win Bonus Plan, which paid each employee of the Company, including the NEOs, a bonus of $1 for each $1 million in revenue generated by the Company from July 1 to December 31, 2021. Pursuant to the Global All In to Win Bonus Plan, each NEO received an additional bonus payment of $788 for 2021.   

 

 

Equity Awards

Under the 2019 Stock Incentive Plan, the Compensation Committee may grant incentive and non-qualified stock options, PSUs, RSUs, and other forms of equity compensation. The Compensation Committee believes that the issuance of equity-based long-term incentive awards to the Company’s NEOs is consistent with its stated objective of establishing an executive compensation program that aligns executives’ interests with the long-term interests of the Company’s stockholders.

In considering annual equity awards, the Compensation Committee conducts an annual review of the Company’s overall equity program, including items such as the Company’s total projected equity budget for the year, the Company’s aggregate equity usage relative to peers, and the available share pool; and it factors that review into its annual award decisions. The Compensation Committee also considers market data for the Company’s peer group, individual factors such as the performance, responsibilities and qualifications of each NEO, each NEO’s past equity awards, and the unvested retention value attributable to past awards when considering the amount and structure of equity awarded to each NEO annually.

For 2021, each of the NEOs was provided 50% of his or her annual equity award in the form of PSUs, and 50% of his or her annual equity award in the form of RSUs. As compared to 2020, the Compensation Committee reduced the percentage of the annual equity awarded to each NEO granted in PSUs from 75% to 50%. The Compensation Committee elected to make this change to align to the Company’s standard executive equity award mix prior to 2020 following a review of the equity practices of the companies in the peer group. Based on this evaluation, the Compensation Committee determined that it was reasonable to return to a mix of 50% PSUs and 50% RSUs for 2021, with such mix previously supported by the Company's stockholders as evidenced by the Company's strong say-on-pay vote support in prior years.

The PSUs were split evenly between PSUs that may be earned based on the Company’s TSR relative to a peer group of broadly comparable companies in terms of industry and revenue range measured over a single three-year performance period; and PSUs that may be earned based on the Company generating free cash flow from continuing operations during 2021 (the “Free Cash Flow PSUs”). The Free Cash Flow PSUs may be earned based on 2021 performance, and then cliff vest at the end of a single three-year vesting period from the grant date to further align compensation outcomes with the long-term interests of the Company’s stockholders. The Compensation Committee chose the free cash flow metric for 2021 rather than the EBITDA margin metric used in 2020 to diversify performance focus in 2021 and because it believed improved cash flow performance would be critical to the Company’s short- and long-term success.

Using three-year relative TSR as the performance measure for 50% of the PSUs granted to each NEO is consistent with the annual approach taken for the Company’s NEOs since 2015. The Company’s relative TSR is determined by comparing the change in the Company’s stock price over the three-year performance period beginning on the grant

 

 

---

 

 

date, taking into account any dividends paid (which are assumed to be reinvested in the stock). The change in value over the performance period is then used to calculate a TSR gain/loss percentage for the performance period. That gain/loss percentage is then compared to the TSR gain/loss percentages of the peer group companies to calculate the Company’s relative TSR percentile. The Compensation Committee believes that using relative TSR as a performance measure provides an objective measure of the Company’s performance relative to other investment alternatives similar to the Company with respect to both industry and company size/value characteristics.

The 2021 TSR PSU awards require above-market performance, with the 60th percentile and 90th percentile (or greater) relative to the peer group required for target and maximum vesting, respectively. In addition, if the Company’s TSR is negative at the end of the three-year performance period, the 2021 TSR PSU awards will be capped at the target payout level even if the Company significantly outperforms the peer group.  

The peer group for measuring relative TSR performance under the 2021 TSR PSU awards consists of the following companies:

 

 

The Compensation Committee selected the 2021 relative TSR peer group based on its review of comparability to the Company on key selection criteria including industry, revenue, market capitalization and stage/time from initial public offering.  The Compensation Committee chose the group of companies listed above because the Compensation Committee determined that those companies are most aligned with the Company when considering the key selection criteria.

 

The Free Cash Flow PSUs represent the remaining 50% of the PSUs granted to each NEO for 2021.  Free cash flow from continuing operations during 2021 measures the cash that the Company had on hand at the end of 2021 after paying operating expenses and capital expenditures. The Company’s management believed that achievement of material free cash flow improvement was the most important metric to continue driving the improvement in the Company’s financial position and stock price during 2021. The Company’s free cash flow performance prior to 2021 was poor. In January 2021, the Company disclosed a goal of generating a range of $90-$100M in free cash flow from continuing operations during 2021. As the vesting target for the Free Cash Flow PSUs, the Compensation Committee chose the midpoint of that disclosed free cash flow generation range.  For the threshold and maximum vesting hurdles the Compensation Committee chose 90% and 115% of the free cash flow generation range, respectively to tie award payouts to a rigorous performance schedule reflecting strong year-over-year improvement. The attainment of the year-end 2021 free cash flow generation range was designed to be challenging but achievable with strong execution of the Company’s operating plan.

 

 

 

---

 

 

 

The chart below shows the 2021 cash flow generation range that the Compensation Committee approved for vesting of the Free Cash Flow PSUs:

 

 

During 2021 the Company generated more than $115M in free cash flow from continuing operations.  Based on the above range that the Compensation Committee approved, the Free Cash Flow PSUs were earned at 200% of target and will vest at the end of a single three-year vesting period on the third anniversary of the grant date.

 

The remaining 50% of the annual equity award made to each NEO for 2021 was in the form of service-based RSUs that vest 1/3 each year for three years.

When determining the amount of the annual equity award for Mr. Black and Mr. Poulton for 2021, the Compensation Committee chose to increase their awards from previous years based on their strong individual performance and the Company’s strong performance during 2020 along with a review of updated competitive market data from Compensia. Mr. Black’s award was increased by $1,250,000 and Mr. Poulton’s award was increased by $1,000,000. For Ms. Vakharia, her 2021 annual equity award was the first award that she received while serving as an executive officer and was determined based on a review of market data, the Company’s historical compensation practices and internal pay equity. The Compensation Committee chose to award Ms. Khorey equity in the same amount she received in 2020. The individual grant decisions reflect a review of quantitative market data and relevant qualitative factors including individual performance, time in role, scope and breadth of duties, and internal pay equity.

 

 

---

 

 

The following table illustrates the annual equity awards made to the NEOs serving as of December 31, 2021 for 2021:

 

 

Pre-2021 Equity Award Vesting Results

The Company granted certain performance-based equity awards prior to 2021 that vest, based in part, on the Company’s 2021 performance. In 2018, the Company granted PSUs to the then-serving NEOs that vest based on the Company’s relative TSR over a single three-year performance period. The awards required the Company’s TSR relative to the peer group to be at the 31^st percentile for any vesting to occur, and TSR relative to the peer group to be at the 60^th percentile for target vesting. The Company’s TSR for the three-year performance period ended February 27, 2021 was -18.18%, which placed the Company at the 18^th percentile relative to the peer group, which was below the threshold required for any vesting to occur and therefore no portion of the awards vested at the end of the performance period.  

Consulting Agreement with Ms. Khorey

Effective August 5, 2021, the Company and Ms. Khorey entered into an amendment (the “Amendment”) to her employment agreement. Pursuant to the Amendment, during a transition period from August 5, 2021 through March 4, 2022, Ms. Khorey would cease to serve as an executive officer, and instead assume the role of Executive Consultant to the Company on a part-time basis. If the Company did not elect to renew her employment upon the expiration of the transition period, such nonrenewal would constitute a termination of employment by the Company without Cause (as defined in Ms. Khorey’s employment agreement), and Ms. Khorey would be eligible for severance benefits in accordance with the terms of the employment agreement. During the transition period, Ms. Khorey was not eligible for a performance bonus for calendar year 2021 and her base salary was reduced to $103,400 per annum, except that her base salary in effect prior to the Amendment would apply for purposes of determining any severance benefits payable following the termination of her employment. The Company did not elect to renew Ms. Khorey’s employment following the transition period and her employment with the Company ended on March 4, 2022. At this time, Ms. Khorey became entitled to receive separation benefits consistent with a termination by the Company without cause. Please see the “Potential Payments Upon Termination or a Change of Control” for a description of the benefits that will be received by Ms. Khorey.

Benefits and Perquisites

Each of the NEOs participates in the health and welfare benefit plans and fringe benefit programs generally available to all other Company employees. Beyond this, the Company generally does not provide the NEOs with significant perquisites and personal benefits in excess of $10,000. The total perquisites provided to each NEO are described in the “2021 All Other Compensation” table included below.

Severance Arrangements in Employment Agreements

The Company has entered into severance arrangements as a component of the employment agreements with certain members of its senior management team, including the NEOs other than Ms. Vakharia. These severance arrangements provide for payments and other benefits if the officer’s employment terminates for a qualifying event or

 

 

---

 

 

circumstance, such as being terminated without “Cause” or leaving employment for “Constructive Discharge,” as these terms are defined in the employment agreements. A termination following a “Change of Control” (as defined in the employment agreements) generally results in the NEOs receiving additional compensation under the employment agreements.

The Company has eliminated single trigger change of control benefits and tax gross-up payments on change of control benefits. Any change of control benefit is “double trigger,” requiring termination of employment under all circumstances, including a situation where the officer is not offered a “Comparable Job” (as defined in each employment agreement) in connection with a “Change of Control,” and the officer terminates employment within 10 days after the “Change of Control.” Additional information regarding the above-referenced employment agreements, including a quantification of benefits that would have been received by each of the NEOs had termination or change of control occurred on December 31, 2021, is found under the heading “Potential Payments upon Termination or Change of Control” section below.

The Compensation Committee believes that these severance and change of control arrangements are an important part of overall compensation for the NEOs, because these arrangements help to secure the continued employment and dedication of the NEOs, notwithstanding any concern that they might have at such time regarding their own continued employment, prior to or following a change of control. The Compensation Committee also believes that these arrangements are important as a recruitment and retention device, as many of the companies with which the Company competes for executive talent have similar arrangements in place for their senior employees.

Stock Ownership Requirements

The Board has approved stock ownership requirements for the Company’s non-employee directors and for certain executives of the Company, including each of the NEOs. The CEO is required to maintain an ownership level with a fair market value equal to six times (6x) his base salary, while the other NEOs are required to maintain an ownership level with a fair market value equal to two times (2x) his or her respective base salary. The initial measurement date is five years from the date on which the NEO became subject to the guidelines. Common stock owned outright, service-based awards outstanding, and deferred stock units are included when determining the ownership level. Stock options and performance-based awards are excluded. If the stock ownership requirement is not met after five years, the NEO will be required to retain shares equal in value to no less than half of the after-tax value of shares vesting from any equity award until the stock ownership requirement is satisfied. The stock ownership requirement for the Company’s non-employee directors is five times (5x) the annual cash retainer then paid to each such director, with no specific period for achievement.

 

Management Transition

Since January 1, 2021, we have experienced a number of senior leadership changes and also completed the sale of our Hospitals and Large Physician Practices business segment on May 2, 2022. The following summarizes the compensation decisions made with respect to the NEOs:

Paul Black. On May 6, 2022, Mr. Black ceased serving as our Chief Executive Officer.  Pursuant to the second amendment to his employment agreement dated December 19, 2012 and amended October 1, 2015 (the “Existing Agreement”), effective May 6, 2022, Mr. Black will remain an employee of the Company, serving as Executive Consultant to the Company, through June 30, 2022.  Unless earlier terminated for Cause (as defined in the Existing Agreement), as of June 30, 2022, Mr. Black’s employment with the Company will terminate without Cause, and he will be entitled to receive the payments and benefits available to him under the Existing Agreement upon a termination of employment without Cause by the Company.  Please see “Potential Payments Upon Termination or a Change of Control” for a description of the amounts payable to Mr. Black in the event of a termination of employment without Cause by the Company.

Richard Poulton. Effective May 6, 2022, Richard Poulton was appointed Chief Executive Officer and ceased serving as President and Chief Financial Officer.  In connection with his appointment as Chief Executive Officer, Mr. Poulton’s base salary was increased to $800,000 and his annual bonus opportunity was increased to $1,000,000, in each case retroactively effective as of the closing of the divestiture of the Hospitals and Large Physician Practices business.  

Tejal Vakharia. Ms. Vakharia continues to serve as Senior Vice President and General Counsel, Marketing and Government Affairs, but in connection with the closing of the divestiture of the Hospitals and Large Physician Practices business, her base salary was increased to $448,000 and her annual bonus opportunity and annual equity award opportunity were increased to $784,000 and $1,200,000, respectively, in each case retroactively effective as of the closing.

 

 

 

 

---

 

 

 

Executive Compensation

Summary Compensation Table – 2021, 2020 and 2019

The following table shows information regarding the compensation of each of the Company’s NEOs for 2021 and, to the extent required by applicable SEC disclosure rules, 2020 and 2019.

 

 

 

 

---

 

 

2021 All Other Compensation

 

 

2021 Grants of Plan-Based Awards

The following table provides information regarding non-equity incentive awards and equity-based awards granted by the Company in 2021.

 

 

 

 

---

 

 

 

 

---

 

 

Outstanding Equity Awards as of December 31, 2021

The following table shows information regarding the outstanding equity awards (consisting of PSU and RSU awards) held by each of the NEOs as of December 31, 2021. As of December 31, 2021, none of the Company’s NEOs held any option awards.

 

 

 

 

---

 

 

 

2021 Stock Vested

The following table shows information regarding the vesting during 2021 of stock awards previously granted to the NEOs. No options were exercised by the NEOs during 2021.

 

 

Potential Payments Upon Termination or Change of Control

The Company has entered into employment agreements with each of the NEOs (other than Ms. Vakharia) that provide for payments in connection with such NEO’s termination, whether upon a change of control or otherwise. The estimated benefits to be provided to the NEOs under the employment agreements in each of those situations are described below, including a summary of payments that would have been required had a termination or change of control taken place on December 31, 2021, based upon the per share closing price of the Company’s common stock ($18.45) on the last trading day of the year.

 

 

---

 

 

Payments Made Upon Termination

The employment agreements for each NEO (other than Ms. Vakharia) provide for payments of certain benefits, as described above, upon the termination of employment. Each NEO’s rights upon a termination of his or her employment depend upon the circumstances of his or her termination. Central to an understanding of the rights of each NEO under the employment agreements is an understanding of the definitions of “Cause” and “Constructive Discharge” that are used in those agreements. For purposes of the employment agreements with each of the NEOs:

The employment agreements require, as a precondition to the receipt of these payments, that the NEO sign a standard form of release of employment claims. They also include non-competition and non-solicitation provisions that apply for one year following such NEO’s termination of employment and a confidentiality provision.

Payment Obligations for Termination by the Company with Cause or upon Death or Disability or by the NEO Without Constructive Discharge

If an NEO (other than Ms. Vakharia) is terminated by the Company for Cause or as a result of such NEO’s death or disability (as defined in the respective employment agreement), or if an NEO terminates his or her employment without Constructive Discharge, he or she is entitled to receive:

Payment Obligations for Termination by the Company Without Cause or Due to Constructive Discharge

If an NEO (other than Ms. Vakharia) is terminated by the Company without Cause or an NEO terminates his or her employment for Constructive Discharge (except during the two-year period following a change of control), he or she is entitled to receive:

 

 

---

 

 

As noted above, in connection with the 2022 management transition, Mr. Black will receive severance under the terms of his existing employment agreement for a termination without cause. Please see the table below for the severance and equity vesting, calculated as of December 31, 2021, payable upon a termination of Mr. Black’s employment without cause.

Payment Obligations Upon Resignation Due to No Comparable Job Following a Change of Control

Pursuant to the employment agreement with Mr. Poulton, if a change of control occurs and prior to such event the NEO is not offered a comparable job by the Company (or its successor), and the NEO resigns on or within ten days of the change of control, then the NEO is entitled to:

A “comparable job” under Mr. Poulton’s employment agreement means employment following a change of control (i) with substantially the same duties and responsibilities as were held by the NEO immediately prior to the change of control; (ii) within 50 miles of the location at which the NEO provides services prior to such change of control; and (iii) at the same or increased base salary and target cash incentive bonus opportunity level as were in effect prior to such change of control. None of the other NEOs are eligible to receive severance upon a resignation due to no comparable job following a change of control.

Severance Upon Termination Without Cause or Due to Constructive Discharge Following a Change of Control

Pursuant to the employment agreements with each of the NEOs (other than Ms. Vakharia), if a change of control occurs and the NEO’s employment is terminated without Cause or due to Constructive Discharge within two years of a change of control or within 180 days before a change of control in connection with such change of control, the NEO will receive:

 

Severance Upon Termination by the Company Without Cause for Ms. Vakharia 

If Ms. Vakharia is terminated by the Company without Cause, under the Company’s general severance plan she is entitled to receive: 

Separation of Ms. Khorey

As discussed above, the employment of Ms. Khorey terminated effective March 4, 2022. In connection with her termination of employment, the Company entered into a separation agreement with Ms. Khorey. The amounts reported in the following table represent the amounts that Ms. Khorey received or will receive in connection with the

 

 

---

 

 

termination of her employment. For purposes of this disclosure, equity awards that have not yet vested are assumed to vest at target performance and also are based upon the per share closing price of the Company’s common stock ($21.40) on the day that her employment terminated. 

 

 

CEO Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company is providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Mr. Black, our Chief Executive Officer.  

We believe that the pay ratio disclosed below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.  SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and apply various assumptions and, as result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies.

 

 

---

 

 

Ratio

For 2021:

Identification of Median Employee

We selected December 31, 2021 as the date on which to determine our median employee.  As of that date, we had approximately 7,869 employees.  Approximately 4,602 employees in the United States and 3,267 employees located outside of the United States were considered for identifying the median employee.

For purposes of identifying the median employee from the employee population base, we considered base salary, bonuses, commissions and overtime for calendar year 2021.  In addition, for employees that commenced employment with the Company after January 1, 2021, we annualized their compensation.  

In determining the annual total compensation of the median employee, such employee’s compensation was calculated in accordance with Item 402(c)(2)(x) of Regulation S-K, as required pursuant to the SEC executive compensation disclosure rules. This calculation is the same calculation used to determine total compensation for purposes of the 2021 Summary Compensation Table with respect to each of the NEOs.

 

 

 

 

 

---

 

 

 

Compensation Committee Report

The information contained in the following report of the Compensation Committee shall not be deemed to be “soliciting material” or to otherwise be considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent that the Company specifically incorporates such information by reference in such filing.

The Compensation Committee has reviewed and discussed with management the disclosures contained in the preceding section entitled “Compensation Discussion and Analysis.” Based on this review and discussion, the Compensation Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” be included in this Proxy Statement for the Annual Meeting and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

 

 

 

 

 

 

---

 

 

 

Audit Committee Report

The following is the report of the Audit Committee with respect to the Company’s audited financial statements for the year ended December 31, 2021. The information contained in this report shall not be deemed to be “soliciting material” or to otherwise be considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates such information by reference in such filing.

Audit Committee Report

The Audit Committee consists of six members: Elizabeth A. Altman, Mara G. Aspinall, P. Gregory Garrison, Dave B. Stevens, David D. Stevens and Carol J. Zierhoffer. All of the members are independent directors as defined in Nasdaq’s listing standards and SEC regulations.  Five of the members are “audit committee financial experts” as defined under applicable SEC rules, and two members are expert in matters related to technology, security and data storage. The Audit Committee has certain duties and powers as described in its written charter adopted by the Board. A copy of the charter can be found on the Company’s website at investor.allscripts.com. The Audit Committee met ten times during the year ended December 31, 2021.

The Audit Committee is primarily responsible for:

During 2021, on no less than a quarterly basis during regularly scheduled meetings, the Audit Committee met with the senior members of the Company’s financial management team. Additionally, the Audit Committee had separate executive sessions  with Grant Thornton, the Company’s independent registered public accounting firm for the year ended December 31, 2021, as well as with the Company’s Chief Executive Officer, President, Chief Financial Officer, Chief Compliance Counsel, Corporate Controller and Head of Internal Audit, at which candid discussions regarding financial management, legal, compliance, security accounting, auditing, and internal control matters took place. In addition, the Audit Committee schedules additional quarterly meetings exclusively dedicated to meeting with the Company’s Chief Compliance Counsel and Chief Security Officer to discuss the effectiveness of the Company’s compliance program and to receive status reports regarding certain compliance and risk matters, including cybersecurity. The Audit Committee’s agenda is established by the Audit Committee’s Chairman.

Throughout the year ended December 31, 2021, the Company’s management completed documentation, testing, and evaluation of the Company’s internal control over financial reporting pursuant to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations. No less than quarterly, the Company’s management provided updates to the Audit Committee regarding progress made to complete management’s assessment of its internal control over financial reporting. The Company’s management concluded that the internal control over financial reporting was effective as of December 31, 2021. Management’s assessment, and Grant Thornton’s report on its audit, of the effectiveness of internal control over financial reporting were included in the Company’s Annual Report on 10-K for the year ended December 31, 2021, which was filed on February 25, 2022 with the SEC. The Audit Committee continues to oversee the Company’s efforts related to its internal control over financial reporting and the Company’s management’s preparations for the evaluation in 2022.

 

 

---

 

 

The Audit Committee is responsible for overseeing the risk assessments conducted by the Company’s management, particularly risks that could present a negative impact, prevent value creation, or erode existing value. These risk assessments include:

In fulfilling its responsibility of appointing and reviewing the services performed by the Company’s independent registered public accounting firm, the Audit Committee carefully reviews the scope of the audit, audit fees, auditor independence matters, and the extent to which the independent registered public accounting firm may be retained to perform non-audit services.

In deciding to engage Grant Thornton as the Company’s independent registered public accounting firm for the year ended December 31, 2021, as well as to reappoint Grant Thornton as the Company’s independent registered public accounting firm for the year ending December 31, 2022, the Audit Committee took into consideration a number of factors, including the professional qualifications of Grant Thornton and its deep institutional knowledge of our business and industry, the qualifications and performance of the lead audit partner, the successor lead audit partner and other key engagement partners, which are regularly rotated in accordance with SEC rules, the quality of the Audit Committee’s ongoing discussions with the firm, and the support available to the Company from Grant Thornton’s regional and national offices.

The Audit Committee has reviewed and discussed the Company’s audited financial statements for the year ended December 31, 2021 with the Company’s management and Grant Thornton. The Audit Committee has also discussed with Grant Thornton the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has also received and reviewed the written disclosures and the letter from Grant Thornton required by applicable requirements of the PCAOB regarding Grant Thornton’s communications with the Audit Committee concerning independence, and has discussed with Grant Thornton its independence from the Company.

In performing all of these functions, the Audit Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements. In its oversight role, the Audit Committee relies on the work and assurances of the Company’s management, which has the primary responsibility for establishing and maintaining adequate internal control over financial reporting and for preparing the Company’s financial statements and other reports; and of the Company’s independent registered public accounting firm, who are engaged to audit and report on the consolidated financial statements of the Company and the effectiveness of the Company’s internal control over financial reporting.

In reliance on these reviews and discussions, and the reports of Grant Thornton, the Company’s independent registered public accounting firm for the year ended December 31, 2021, the Audit Committee recommended to the Board that the audited financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

 

 

 

 

 

 

---

 

 

 

Proposals

Overview of Proposals

This Proxy Statement contains three proposals requiring stockholder action:

Each proposal is discussed in more detail in the pages that follow.

Proposal One – Election of Directors

If elected by the stockholders, each of the currently nominated directors, Mmes. Altman and Zierhoffer and Messrs. Garrison, Judge and Stevens and new director, Richard J. Poulton, will serve until the 2023 annual meeting of stockholders and until his or her successor has been duly elected, or until his or her earlier resignation or removal.

At the Annual Meeting, proxies cannot be voted for a greater number of individuals than the six nominees named in this Proxy Statement. Holders of proxies solicited by this Proxy Statement will vote the proxies received by them as directed on the proxy card or, if no direction is made, for the election of the Board’s six nominees. If any nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxy holders may vote for any nominee designated by the present Board to fill the vacancy.

Vote Required

In accordance with the policy of majority voting in uncontested director elections set forth in the Company’s by-laws, if the number of shares voted “FOR” any nominee exceeds the number of shares voted “AGAINST” such nominee, then he or she will be elected as a director to serve until the Company’s 2023 Annual Meeting of Stockholders and until his or her successor has been duly elected, or until his or her earlier resignation or removal. If any nominee is an incumbent director and fails to receive a majority of the votes cast with respect to his or her nomination, then he or she must tender a resignation as director, and such resignation will be considered by the Nominating Committee in accordance with the requirements of the Company’s Corporate Governance Guidelines.

Recommendations of the Board

The Board unanimously recommends that stockholders vote FOR the election of director nominees Ms. Altman, Mr. Garrison, Mr. Judge, Mr. Poulton, Mr. Stevens and Ms. Zierhoffer.

Proposal Two - Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee has re-appointed Grant Thornton as the Company’s independent registered public accounting firm and as auditors of the Company’s consolidated financial statements for the year ending December 31, 2022. Grant Thornton has served as the Company’s independent registered public accounting firm since March 2014.

At the Annual Meeting, the stockholders are being asked to ratify the appointment of Grant Thornton as the Company’s independent registered public accounting firm for the year ending December 31, 2022. In the event the appointment is not ratified, the Audit Committee will reconsider its selection. Even if this appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its stockholders. A representative of Grant Thornton is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he or she desires to do so, and will be available to respond to questions.

 

 

---

 

 

Fees and Related Expenses Paid to Auditors

The following table shows the fees accrued or paid to the Company’s independent registered public accounting firm for the years ended December 31, 2021 and December 31, 2020.

 

 

Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm

The Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the Company’s independent registered public accounting firm within the four categories identified above.

Prior to engagement, the Audit Committee pre-approves all services to be performed by the independent registered public accounting firm. The fees are budgeted and the Audit Committee has established procedures to pre-approve fee adjustments due to changes in the scope of work or for other reasons. The Audit Committee may delegate pre-approval authority to one or more of its members.

Vote Required

The affirmative vote of the holders of a majority of the shares present in person, by remote communication or represented by proxy and entitled to vote thereon is required to approve this Proposal Two.

Recommendation of the Audit Committee and the Board

The Audit Committee and the Board unanimously recommend that stockholders vote FOR Proposal Two.

Proposal Three – Advisory Vote to Approve Named Executive Officer Compensation

The Company provides its stockholders with the opportunity to cast an annual advisory vote to approve the compensation of its named executive officers as disclosed pursuant to the SEC’s compensation disclosure rules (which disclosure includes the “Compensation Discussion and Analysis” and “Executive Compensation” sections above). The Company believes it is appropriate to seek and take into account the views of its stockholders on the design and effectiveness of the Company’s executive compensation program.

The Compensation Committee seeks to establish and implement a compensation program for the Company’s named executive officers that emphasizes pay-for-performance, and is designed to meet the following objectives: (a) reward outstanding performance for an individual’s performance against corporate goals; (b) provide long-term incentive compensation through equity grants, a material portion of which are performance-based; (c) provide for compensation that is both competitive in the executive market and internally equitable; and (d) align the Company’s named executive officer compensation with the Company’s financial performance and the long-term interests of the Company’s stockholders.

 

 

---

 

 

 

In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, the Board requests that the Company’s stockholders vote to approve the following resolution at the Annual Meeting:

RESOLVED, that the compensation paid to the named executive officers, as disclosed in this Proxy Statement pursuant to the SEC’s executive compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and the narrative disclosures that accompany the compensation tables), is hereby approved.

As an advisory vote, this proposal is not binding on the Company, the Board, or the Compensation Committee, and will not be construed as overruling a decision by the Company, the Board, or the Compensation Committee or creating or implying any additional fiduciary duty for the Company, the Board, or the Compensation Committee. However, the Compensation Committee and the Board value the opinions expressed by the Company’s stockholders in their votes on this proposal, and consider the outcome of the Company’s annual say-on-pay vote when making decisions regarding the Company’s executive compensation program. The Company’s management continues to engage in dialogue with many of the Company’s largest stockholders, and the Compensation Committee will continue to consider material stockholder feedback and the results of the Company’s say-on-pay votes when making future compensation decisions for the Company’s named executive officers.

The Company’s current policy is to provide stockholders with an opportunity to approve the compensation of the Company’s named executive officers each year at the Company’s annual meeting of stockholders. It is expected that the next say-on-pay vote will occur at the Company’s 2023 Annual Meeting of Stockholders.

Vote Required

The affirmative vote of the holders of a majority of the shares present in person, by remote communication or represented by proxy and entitled to vote thereon is required to approve this Proposal Three.

Recommendation of the Board

The Board unanimously recommends that stockholders vote FOR Proposal Three.

Other Matters

The Company knows of no matters to be submitted to the Company’s stockholders at the Annual Meeting, other than the proposals referred to in this Proxy Statement. If any other matters properly come before the stockholders at the Annual Meeting, it is the intention of the persons named on the proxy to vote the shares represented thereby on such matters in accordance with their best judgment.

Dated: May 6, 2022

 

 

 

 

 

---

 

 

 

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. C/O BROADRIDGE P.O. BOX 1342 BRENTWOOD, NY 11717 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode Above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on June 20, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - You will be able to vote during the Virtual Meeting by first registering at www.virtualshareholdermeeting.com/MDRX2022. You will receive a meeting invitation by e-mail with your unique join link along with a password prior to the meeting date. All registrations to attend the Virtual Meeting must be received by 11:59 p.m. ET on June 20, 2022. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on June 20, 2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 0000557163_1 R1.0.0.24 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: For Against Abstain 1a. Elizabeth A. Altman 1b. P. Gregory Garrison 1c. Jonathan J. Judge 1d. Richard J. Poulton 1e. Dave B. Stevens 1f. Carol J. Zierhoffer The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain 2. To ratify the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for the year ending December 31, 2022. 3. To approve, on an advisory basis, the Company's named executive officer compensation. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

 

---

 

 

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. 0000557163_2 R1.0.0.24 ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. This proxy is solicited by the Board of Directors Annual Meeting of Stockholders June 21, 2022 9:00 AM CT The undersigned hereby appoints Richard J. Poulton and Leah S. Jones as proxies, each with the power to appoint his substitute, and hereby authorizes them, and each of them acting singly, to represent and vote, as designated below, all the shares of common stock of Allscripts Healthcare Solutions, Inc., a Delaware corporation ("Allscripts"), held of record by the undersigned at the close of business on April 29, 2022 at the Annual Meeting of Stockholders to be held virtually on June 21, 2022, 9:00 a.m. Central Time, or any adjournment or postponement thereof (the "Annual Meeting"), and authorizes and instructs said proxies to vote in the manner directed below. This proxy, when properly executed, will be voted in the manner directed by the undersigned stockholder. If no direction is made, this proxy will be voted FOR ALL director nominees and FOR proposals 2 and 3. In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting. If you wish to vote by telephone or via the Internet, please read the directions on the reverse side. WHETHER OR NOT YOU PLAN TO ATTEND THIS VIRTUAL MEETING, PLEASE SUBMIT YOUR PROXY PROMPTLY BY TELEPHONE OR THROUGH THE INTERNET OR BY SIGNING, DATING AND RETURNING THE PROXY CARD IN THE ENCLOSED PREPAID ENVELOPE. Continued and to be signed on reverse side

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Form 10-K is/are available at www.proxyvote.com ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. This proxy is solicited by the Board of Directors Annual Meeting of Stockholders May 21, 2018 9:00 AM The undersigned hereby appoints Paul M. Black, Richard J. Poulton and Dennis M. Olis as proxies, each with the power to appoint his or her substitute, and hereby authorizes them, and each of them acting singly, to represent and vote, as designated below, all the shares of common stock of Allscripts Healthcare Solutions, Inc., a Delaware corporation ("Allscripts"), held of record by the undersigned at the close of business on March 26, 2018 at the Annual Meeting of Stockholders to be held on May 21, 2018, 9:00 am Central time at Allscripts' principal offices located at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654, or any adjournment or postponement thereof (the "Annual Meeting"), and authorizes and instructs said proxies to vote in the manner directed below. This proxy, when properly executed, will be voted in the manner directed by the undersigned stockholder. If no direction is made, this proxy will be voted FOR ALL director nominees and FOR proposals 2, 3 and 4. In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting. If you wish to vote by telephone or via the Internet, please read the directions on the reverse side. WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE SUBMIT YOUR PROXY PROMPTLY BY TELEPHONE OR THROUGH THE INTERNET OR BY SIGNING, DATING AND RETURNING THE PROXY CARD IN THE ENCLOSED PREPAID ENVELOPE. Continued and to be signed on reverse side