def14a
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
Filed by
the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
MEDASSETS, 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):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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Total fee paid: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee
was paid previously. Identify the previous filing
by registration statement number, or the Form or
Schedule and the date of its filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Filing Party: |
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Date Filed: |
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MEDASSETS,
INC.
100 North Point Center East,
Suite 200
Alpharetta, Georgia 30022
April 15, 2011
Dear Stockholders:
On behalf of the Board of Directors, I am pleased to invite you
to attend the 2011 Annual Meeting of Stockholders of MedAssets,
Inc. on May 26, 2011 at 11:00 a.m. local time, at 200
North Point Center East, Suite 200, Alpharetta, Georgia,
30022. The purpose of the meeting is to: elect four Class I
directors; ratify the appointment of our independent registered
public accounting firm; hold an advisory vote on executive
compensation; and hold an advisory vote on the frequency of
holding an advisory vote on executive compensation.
The Notice of Annual Meeting of Stockholders and Proxy Statement
accompanying this letter describe the business to be conducted
at the meeting and provide details on the matters on which you
are being asked to vote. Also enclosed is a proxy/voting
instruction card as well as a copy of our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010.
Your vote is important no matter how many shares you own.
Regardless of whether you plan to attend the meeting, I
encourage you to vote promptly through our internet site at
www.medassets.com, by telephone or by completing and
returning the enclosed proxy card in the enclosed return
envelope, to ensure that your shares will be represented at the
meeting. If you do attend the meeting and prefer to vote in
person, you may withdraw your proxy at that time.
Sincerely yours,
John A. Bardis
Chairman, President and Chief Executive Officer
TABLE
OF CONTENTS
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MEDASSETS,
INC.
100 North Point Center East,
Suite 200
Alpharetta, Georgia 30022
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON MAY 26,
2011
To the Stockholders of MedAssets, Inc.:
The 2011 Annual Meeting of Stockholders (the Annual
Meeting) of MedAssets, Inc., a Delaware corporation (the
Company), will be held at 200 North Point Center
East, Suite 200, Alpharetta, Georgia, 30022, on
May 26, 2011 at 11:00 a.m. local time, for the
following purposes:
1. to elect four Class I directors to serve for a
three-year term until the annual meeting of the Companys
stockholders to be held in 2014;
2. to ratify the appointment by the Board of Directors of
the Company of KPMG LLP as independent registered public
accounting firm for the Company for the fiscal year ending
December 31, 2011;
3. to hold an advisory vote on executive compensation;
4. to hold an advisory vote on the frequency of holding an
advisory vote on executive compensation; and
5. to transact such other business as may properly be
brought before the Annual Meeting or any adjournment or
postponement thereof.
The Board of Directors has fixed the close of business on
April 15, 2011 as the record date for the determination of
stockholders entitled to receive notice of, and to vote at, the
Annual Meeting and any adjournment or postponement thereof. A
list of stockholders of record will be available for inspection
at the meeting and, during the 10 days prior to the
meeting, in the Investor Relations office at the Companys
address listed above.
All stockholders are cordially invited to attend the Annual
Meeting. Whether you plan to attend the Annual Meeting or
not, you are requested to complete, sign, date and return the
enclosed proxy card as soon as possible in accordance with the
instructions on the proxy card. A pre-addressed, postage prepaid
return envelope is enclosed. Alternatively for your convenience,
you can cast your vote on the internet through our Company
website at www.medassets.com or by telephone.
By order of the Board of Directors,
Jonathan H. Glenn
Executive Vice President, Chief Legal and
Administrative Officer and Corporate Secretary
April 15, 2011
Important Notice Regarding the Availability of Proxy
Materials for the Stockholder Meeting to Be Held on May 26,
2011.
The Companys Proxy Statement and Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010 are available
at www.medassets.com.
MEDASSETS,
INC.
100 North Point Center East,
Suite 200
Alpharetta, Georgia 30022
PROXY
STATEMENT
GENERAL
The Board of Directors of MedAssets, Inc. (the
Company) is furnishing this proxy statement (the
Proxy Statement) to all stockholders of record in
connection with its solicitation of proxies for the 2011 annual
meeting of stockholders of the Company (the Annual
Meeting) and any adjournment or postponement thereof. The
Annual Meeting will be held at the Companys corporate
headquarters in Alpharetta, Georgia, located at 200 North Point
Center East, Suite 200, on May 26, 2011 at
11:00 a.m., local time. A copy of the Companys Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2010 is being mailed
to all stockholders with this Proxy Statement. The
Companys Annual Report on
Form 10-K
is also available on the internet in the Investor Relations
section of the Companys website at
www.medassets.com. The approximate mailing date of this
Proxy Statement is May 2, 2011.
Proxy
Information
Proxies in the form enclosed are being solicited by, or on
behalf of, the Companys Board of Directors (the
Board of Directors or the Board). The
persons named in the accompanying form of proxy have been
designated as proxies by the Board of Directors.
The Board unanimously recommends a vote: (i) FOR the
nominees for election as Class I directors of the Company
listed herein; (ii) FOR the ratification of the
appointment by the Board of KPMG LLP as the independent
registered public accounting firm for the Company for the fiscal
year ending December 31, 2011; (iii) FOR the
approval of the compensation of our named executive officers;
and (iv) FOR the option of once every year as the
frequency with which stockholders are provided an advisory vote
on executive compensation.
Stockholders who submit proxies may revoke them at any time
before they are voted by either submitting a new proxy or by
personal ballot at the Annual Meeting.
Record
Date and Voting
As of April 15, 2011, the Company had outstanding
58,607,420 shares of common stock, par value $.01 per
share, entitled to be voted at the Annual Meeting. Each share is
entitled to one vote on each matter submitted to a vote of
stockholders. Only stockholders of record at the close of
business on April 15, 2011 will be entitled to vote at the
Annual Meeting. If your shares are registered directly in your
name with the Companys transfer agent, Computershare
Trust Company, N.A., you are considered to be, with respect
to those shares, the stockholder of record, and these proxy
materials are being sent directly to you. As the stockholder of
record, you have the right to submit your voting proxy directly
to the Company using the enclosed proxy card, to vote in person
at the Annual Meeting, to vote by telephone or to vote promptly
through our internet site at www.medassets.com.
If your shares are held in a stock brokerage account or by a
bank or other nominee, you are considered the beneficial owner
of shares held in street name. These proxy materials
are being forwarded to you by your broker, who is considered,
with respect to those shares, the stockholder of record. As the
beneficial owner, you have the right to direct your broker to
vote your shares, and your broker or nominee has enclosed a
voting instruction card for you to use. If your shares are held
by a broker or nominee, please return your voting card as early
as possible to ensure that your shares will be voted in
accordance with your instructions. You are also invited to
attend the Annual Meeting; however, since you are not the
stockholder of record, you may not vote these shares in person
at the meeting.
Under Delaware law and the Companys by-laws, the presence
of a quorum is required to transact business at the Annual
Meeting. A quorum is defined as the presence, either in person
or by proxy, of a
majority of the shares entitled to vote. Abstentions and broker
non-votes are considered to be shares present for the purpose of
determining whether a quorum exists. A broker non-vote occurs
when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not
received voting instructions from the beneficial owner.
Under Delaware law, the Companys certificate of
incorporation and the by-laws, directors are elected (as
described in Proposal No. 1 below) by a plurality of
the votes of the shares present, in person or by proxy, and
entitled to vote at the Annual Meeting. The proposal to ratify
the appointment of our independent auditors (as described in
Proposal No. 2) must be ratified by the
affirmative vote of a majority of the shares of common stock
present, either in person or by proxy, and entitled to vote at
the Annual Meeting. The advisory proposal to adopt a resolution
approving the compensation of our named executive officers and
the advisory proposal to select the frequency with which
stockholders are provided an advisory vote on executive
compensation (as described, respectively, in
Proposal No. 3 and Proposal No. 4 below)
each require the affirmative vote of a majority of the shares of
common stock present, either in person or by proxy, and entitled
to vote at the Annual Meeting. Abstentions and broker non-votes
will have no effect on the outcome of a vote for the purpose of
electing directors. Brokers do not have discretionary voting
power with respect to an election of directors or
Proposals Nos. 3 and 4. With respect to Proposal Nos.
3 and 4, broker non-votes are not considered to be shares
entitled to vote, but abstentions are considered to be shares
entitled to vote and, therefore, abstentions will have the
effect of votes against Proposal No. 3 and vote for
none of the options in Proposal No. 4.
Stockholders of record may appoint proxies to vote their shares
by signing, dating and mailing the enclosed proxy card in the
envelope provided. Proxies will be voted as directed, unless
revoked at or before the Annual Meeting. Any stockholder who
attends the Annual Meeting and elects to vote in person may at
the meeting revoke a previously designated proxy. Otherwise,
revocation of a proxy will be effective only if a stockholder
advises the Corporate Secretary of the revocation in a writing,
including a later-dated proxy, that is received by the Corporate
Secretary on or before May 25, 2011.
2
SECURITY
OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides summary information regarding the
beneficial ownership of shares of our common stock as of
April 15, 2011 by: (i) each of our directors and
director nominees; (ii) each of our executive personnel who
have been deemed named executive officers, or NEOs
pursuant to Securities and Exchange Commission (SEC)
rules; (iii) all of our NEOs and directors as a group and
(iv) each person or group known to the Company to
beneficially own more than 5% of our common stock.
Beneficial ownership of shares is determined under the rules
promulgated by the SEC, and generally includes any shares over
which a person exercises sole or shared voting or investment
power. The percentage of beneficial ownership of our common
stock is based on 58,607,420 issued shares of our common stock
outstanding as of April 15, 2011.
Except as indicated by footnote and subject to applicable
community property laws, each person identified in the table
possesses sole voting and investment power with respect to all
shares of common stock held by them.
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Number of Shares
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Percentage of Shares
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Name and Address of Beneficial Owner
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Beneficially Owned(1)
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Beneficially Owned
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NEOs and Directors(2)
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John A. Bardis(3)
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2,222,246
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3.8
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%
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Rand A. Ballard(4)
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585,790
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*
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Lance M. Culbreth(5)
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69,476
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Allen W. Hobbs(6)
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135,862
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*
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L. Neil Hunn(7)
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179,315
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*
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Samantha Trotman Burman(8)
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63,604
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*
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Harris Hyman IV(9)
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62,593
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*
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Vernon R. Loucks, Jr.(10)
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75,804
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*
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Terrence J. Mulligan(11)
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212,425
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*
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C.A. Lance Piccolo(12)
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166,312
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*
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John C. Rutherford(13)(19)
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3,371,433
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5.8
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%
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Patrick T. Ryan
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35,000
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Samuel K. Skinner
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4,696
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Bruce F. Wesson(14)(16)
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4,538,379
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7.7
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%
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All NEOs and Directors as a group
(14 persons)(15)
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11,722,925
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20.0
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5% Stockholders
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Galen Management, LLC(16)
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4,458,115
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7.6
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%
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680 Washington Blvd, 11th Floor
Stamford, CT 06901
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William Blair & Company, L.L.C.(17)
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3,836,466
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6.5
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222 W. Adams
Chicago, IL 60606
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Brown Capital Management, LLC(18)
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3,788,813
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6.5
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1201 N. Calvert Street
Baltimore, MD 21202
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Parthenon Capital, LLC(19)
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3,399,117
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5.8
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%
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265 Franklin Street, 18th Floor
Boston, MA 02110
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T. Rowe Price Associates, Inc.(20)
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3,018,215
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5.1
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100 East Pratt Street
Baltimore, MD 21202
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3
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Less than one percent |
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(1) |
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Pursuant to regulations of the SEC, shares are deemed to be
beneficially owned by a person if such person
directly or indirectly has or shares the power to vote or
dispose of such shares, or has the right to acquire the power to
vote or dispose of such shares within 60 days, including
any right to acquire through the exercise of any option, stock
settled stock appreciation right (SSARs), warrant or
right. The number of shares of common stock issuable upon the
exercise of SSARs as described below is based on the closing
market price of the Companys common stock on
April 15, 2011. Any SSARs with exercise prices which are
less than this price are excluded from the number of shares
beneficially owned. The actual number of shares of common stock
to be issued following an actual exercise of SSARs will be based
on the closing market price of the Companys common stock
at the time of exercise. |
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The address of each officer or director listed in the table
above is:
c/o MedAssets,
Inc., 100 North Point Center East, Suite 200, Alpharetta,
Georgia 30022. |
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Includes: (i) 112,378 shares of common stock that
Mr. Bardis may be deemed to beneficially own through the
Bardis Children 2007 Trust; (ii) 36,800 shares of
common stock owned by immediate family members of
Mr. Bardis; (iii) 159,707 shares of unvested
restricted common stock subject to performance and service
vesting criteria issued under the Companys Long Term
Performance Incentive Plan; (iv) 177,816 shares of
common stock issuable upon the exercise of options exercisable
as of April 15, 2011; (v) 3,240 shares of common
stock issuable upon the exercise of SSARs exercisable as of
April 15, 2011; and (vi) 2,028 shares of common
stock issuable upon the exercise of options which are scheduled
to become exercisable within 60 days of such date. |
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Includes: (i) 115,850 shares of unvested restricted
common stock subject to performance and service vesting criteria
issued under the Companys Long Term Performance Incentive
Plan; (ii) 130,223 shares of common stock issuable
upon the exercise of options exercisable as of April 15,
2011; (iii) 2,350 shares of common stock issuable upon
the exercise of SSARs exercisable as of April 15, 2011; and
(iv) 2,531 shares of common stock issuable upon the
exercise of options which are scheduled to become exercisable
within 60 days of such date. |
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Includes: (i) 21,024 shares of unvested restricted
common stock subject to performance and service vesting criteria
issued under the Companys Long Term Performance Incentive
Plan; (ii) 22,565 shares of common stock issuable upon
the exercise of options exercisable as of April 15, 2011;
(iii) 323 shares of common stock issuable upon the
exercise of SSARs exercisable as of April 15, 2011; and
(iv) 945 shares of common stock issuable upon the
exercise of options which are scheduled to become exercisable
within 60 days of such date. |
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Includes: (i) 36,765 shares of unvested restricted
common stock subject to performance and service vesting criteria
issued under the Companys Long Term Performance Incentive
Plan; (ii) 97,513 shares of common stock issuable upon
the exercise of options exercisable as of April 15, 2011;
(iii) 746 shares of common stock issuable upon the
exercise of SSARs exercisable as of April 15, 2011; and
(iv) 838 shares of common stock issuable upon the
exercise of options which are scheduled to become exercisable
within 60 days of such date. |
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(7) |
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Includes: (i) 82,953 shares of unvested restricted
common stock subject to performance and service vesting criteria
issued under the Companys Long Term Performance Incentive
Plan; (ii) 90,575 shares of common stock issuable upon
the exercise of options exercisable as of April 15, 2011;
(iii) 1,683 shares of common stock issuable upon the
exercise of SSARs exercisable as of April 15, 2011; and
(iv) 4,104 shares of common stock issuable upon the
exercise of options which are scheduled to become exercisable
within 60 days of such date. |
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(8) |
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Includes: (i) 34,972 shares of common stock issuable
upon the exercise of options exercisable as of April 15,
2011; and (ii) 1,247 shares of common stock issuable
upon the exercise of SSARs exercisable as of April 15, 2011. |
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(9) |
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Includes: (i) 41,638 shares of common stock issuable
upon the exercise of options exercisable as of April 15,
2011; and (ii) 2,494 shares of common stock issuable
upon the exercise of SSARs exercisable as of April 15, 2011. |
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(10) |
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Includes: (i) 3,310 shares of common stock issuable
upon the exercise of options exercisable as of April 15,
2011; and (ii) 2,494 shares of common stock issuable
upon the exercise of SSARs exercisable as of April 15, 2011. |
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(11) |
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Includes: (i) 174,352 shares that Mr. Mulligan
may be deemed to beneficially own through the Terrence J.
Mulligan Living Trust; (ii) 34,688 shares of common
stock issuable upon the exercise of options exercisable as of
April 15, 2011; and (iii) 3,385 shares of common
stock issuable upon the exercise of SSARs exercisable as of
April 15, 2011. Does not include shares of common stock
owned by immediate family members of Mr. Mulligan;
Mr. Mulligan disclaims beneficial ownership of such shares. |
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(12) |
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Includes: (i) 41,638 shares of common stock issuable
upon the exercise of options exercisable as of April 15,
2011; and (ii) 2,494 shares of common stock issuable
upon the exercise of SSARs exercisable as of April 15, 2011. |
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(13) |
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Includes: (i) 37,199 shares of common stock issuable
upon the exercise of options exercisable as of April 15,
2011; and (ii) 2,494 shares of common stock issuable
upon the exercise of SSARs exercisable as of April 15, 2011. |
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(14) |
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Includes: (i) 58,859 shares of common stock issuable
upon the exercise of options exercisable as of April 15,
2011; and (ii) 2,850 shares of common stock issuable
upon the exercise of SSARs exercisable as of April 15, 2011. |
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(15) |
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Includes: (i) 407,609 shares of unvested restricted
common stock subject to service vesting criteria issued under
the Companys Long Term Performance Incentive Plan;
(ii) 712,532 shares of common stock issuable upon the
exercise of options exercisable as of March 25, 2010;
(iii) 64,878 shares of common stock issuable upon the
exercise of SSARs exercisable as of March 25, 2010;
(iv) 27,571 shares of common stock issuable upon the
exercise of options which are scheduled to become exercisable
within 60 days of such date; and (v) 58 shares of
common stock issuable upon the exercise of SSARs which are
scheduled to become exercisable within 60 days of such date. |
|
(16) |
|
Based upon a joint Schedule 13G/A filed with the SEC on
February 10, 2011 by Galen Partners III, L.P., Galen
Partners International III, L.P., Galen Employee Fund III,
L.P., Galen Partners IV, L.P., Galen Partners International IV,
L.P., Galen Employee Fund IV, L.P., Claudius, L.L.C.,
Claudius IV, L.L.C., Wesson Enterprises, Inc., Galen Management,
L.L.C., Bruce F. Wesson and L. John Wilkerson. |
|
(17) |
|
Based upon a joint Schedule 13G filed with the SEC on
February 8, 2011 by William Blair & Company,
L.L.C. |
|
(18) |
|
Based upon a joint Schedule 13G/A filed with the SEC on
April, 11, 2011 by Brown Capital Management, LLC. |
|
(19) |
|
Based upon a joint Schedule 13G/A filed with the SEC on
February 14, 2011 by Parthenon Capital, LLC; Parthenon
Investors, L.P.; PCIP Investors and John C. Rutherford. |
|
(20) |
|
Based upon a joint Schedule 13G/A filed with the SEC on
February 11, 2011 by T. Rowe Price Associates, Inc. |
5
CORPORATE
GOVERNANCE AND BOARD MATTERS
Board of
Directors
Set forth below are the names of the persons nominated as
directors as well as those whose terms do not expire this year,
their ages (as of April 1, 2011), their offices in the
Company, if any, background information about their principal
occupations or employment and the length of their tenure as
directors.
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Name
|
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Age
|
|
Position
|
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John A. Bardis
|
|
|
54
|
|
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Director (Chairman), President and Chief Executive Officer
|
Rand A. Ballard
|
|
|
56
|
|
|
Director, Senior Executive Vice President, Chief Operating
Officer and Chief Customer Officer
|
Patrick T. Ryan(1)
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52
|
|
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Director, President, Spend and Clinical Resource Management
Segment
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Samantha Trotman Burman(2)
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43
|
|
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Director
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Harris Hyman IV(2)
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51
|
|
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Director
|
Vernon R. Loucks, Jr.(3)
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76
|
|
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Director
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Terrence J. Mulligan(3)
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|
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65
|
|
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Director (Vice-Chairman)
|
C.A. Lance Piccolo(3)
|
|
|
70
|
|
|
Director
|
John C. Rutherford(3)
|
|
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61
|
|
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Director
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Samuel K. Skinner(3)
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|
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72
|
|
|
Director
|
Bruce F. Wesson(2)
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68
|
|
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Director (Vice-Chairman)
|
|
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(1) |
|
Mr. Ryan was elected as a director of the Company effective
November 16, 2010. |
|
(2) |
|
Current member of our Audit Committee. |
|
(3) |
|
Current member of our Compensation, Governance &
Nominating Committee. |
John A. Bardis has been Chairman, President and Chief
Executive Officer of MedAssets since its founding in June 1999.
Beginning with American Hospital Supply and Baxter
International, he held various senior management positions,
including Vice President of the Baxter Operating
Room Division and General Manager of the Eastern Zone.
Mr. Bardis left Baxter in 1987 to join Kinetic Concepts.
Kinetic Concepts, a NASDAQ traded company, was the nations
largest specialty bed and medical equipment rental company at
the time of his departure as President in 1992. From 1992 to
1997, Mr. Bardis was President and CEO of TheraTx, Inc.,
another NASDAQ traded company, which was a leading provider of
rehabilitation services and operator of skilled nursing
facilities. In 1995, TheraTx was named the second fastest
growing public company in America by INC. Magazine, growing from
$15mm to over $500mm in revenue in 5 years. Mr. Bardis
was named Entrepreneur of the year by INC Magazine in 1995.
Mr. Bardis graduated with a B.S. in Business from the
University of Arizona. Mr. Bardis serves on the boards of
USA Wrestling (the national governing body for amateur
wrestling), The Health Careers Foundation, Heart for Africa, and
is Chairman of the Atlanta Fire Youth Hockey Club.
Mr. Bardis was Team Leader of the U.S. Greco-Roman
Wrestling Team for the 2007 World Championships and the 2008
Beijing Olympics. Mr. Bardis has more than 25 years of
experience in the healthcare industry. Mr. Bardis
experience in growing companies and his knowledge of all aspects
of the Companys business and the healthcare industry
strongly qualify him to continue to serve as the Companys
Chairman and Chief Executive Officer.
Rand A. Ballard has served as our Senior Executive Vice
President since October 2008 and our Chief Operating Officer and
Chief Customer Officer since October 2006. Mr. Ballard has
been a director since 2003. Prior to serving as our Chief
Operating Officer, Mr. Ballard served as President of
MedAssets Supply Chain Systems and led our sales team. Prior to
joining MedAssets in November 1999, Mr. Ballards most
recent experience was as Vice President, Health Systems Supplier
Economics and Distribution for Cardinal Healthcare.
Mr. Ballard holds an M.B.A. from Pacific Lutheran
University with a triple major in finance, operations, and
marketing. He was a deans list undergraduate at the
U.S. Military Academy at West Point and
6
holds a Bachelor of Science degree with concentration in nuclear
physics, nuclear engineering, and business law. Mr. Ballard
has served as Chairman of the Board of the Meals on Wheels
Association of America Foundation and Chairman of the Healthcare
Industry Group Purchasing Association (HIGPA). Mr. Ballard
is Chairman of the Healthcare Industry Supply Chain Institute
and Vice President of The Health Careers Foundation, a
non-profit organization providing scholarships and low interest
loans to non-traditional students pursuing a degree in the
healthcare field. Mr. Ballards intimate knowledge of
our current and potential clients garnered from his extensive
experience in the healthcare industry position him well to serve
on the Board of Directors.
Patrick T. Ryan has served as our President of the Spend
and Clinical Resource Management segment and as a director since
November 2010 following our acquisition of The Broadlane Group.
Mr. Ryan has been in the healthcare field since 1980, with
specific experience in finance, operations,
direct-to-consumer
marketing, strategic development, service and sales. At
Broadlane, Mr. Ryan served as chairman and chief executive
officer since 2008. Prior to joining Broadlane, Mr. Ryan
served as chief executive officer and a director of PolyMedica
Corporation, the nations largest
direct-to-consumer
provider of blood glucose testing supplies and related services
to people with diabetes. He also served as the chairman and
chief executive officer of Physicians Dialysis, Inc. from the
companys inception in 2000 until it was acquired in 2004
by DaVita Inc. Mr. Ryan began his career working for
American Hospital Supply Corporation, and has served as a
director for numerous private and public companies. He holds a
B.A. in political science and sociology from the University of
Rochester. Mr. Ryans extensive experience in the
healthcare industry, specifically with respect to healthcare
supply chain and group purchasing, positions him well to serve
on the Board of Directors.
Samantha Trotman Burman has served as one of our
directors since August 1999 and has served as a member of the
Audit Committee of the Board of Directors since January 2000.
From 1998 to 2003, Mrs. Burman worked as a Principal and
then Partner at Parthenon Capital, a Boston-based private equity
investment firm. From 1996 to 1998, Mrs. Burman served as
Chief Financial Officer of Physicians Quality Care, a physician
practice management firm. Mrs. Burman served as an
Associate at Bain Capital, a private equity investment firm,
from 1993 to 1996. Mrs. Burman holds a M. Eng. and B.A.
from Cambridge University in England, as well as, an M.B.A. with
Distinction from Harvard Business School.
Mrs. Burmans qualification as a financial expert
under the SEC rules implementing Section 407 of the
Sarbanes-Oxley Act and her financial acumen enable
Mrs. Burman to contribute greatly to the Boards
handling of all financial matters of the Company.
Harris Hyman IV has served as a director and a
member of the Audit Committee of the Board of Directors since
March 2005. Mr. Hyman is Senior Principal of Flexpoint Ford
LLC, a private equity firm focused on the healthcare and
financial services sectors. From 2003 to 2007, Mr. Hyman
served as a General Partner of Grotech Capital Group, a private
equity firm where he was responsible for the firms
healthcare investment activity. Prior to 2003, Mr. Hyman
was a Managing Director of Credit Suisse First Boston, where he
served as Co-Head of Healthcare Mergers and Acquisitions.
Mr. Hyman served on the Board of Directors of United
BioSource Corporation from 2003 to 2010 and currently serves on
the Board of Directors of Eagle Hospital Physicians, Inc.
Mr. Hyman received a B.S.E. degree, magna cum laude, from
Princeton University and an M.B.A. from Harvard Business School.
Mr. Hymans extensive experience in the healthcare
industry, specifically with respect to the capital markets and
mergers and acquisitions, allows him to provide an important
perspective on the Companys corporate operations.
Vernon R. Loucks, Jr. has served as a director since
September 2007 and is a member of the Compensation, Governance
and Nominating Committee of the Board of Directors.
Mr. Loucks is Chairman of the Board of the Aethena Group,
LLC, a health care merchant banking firm and Chairman of
Advanced Proton Systems, Inc. Mr. Loucks is the retired
Chairman of Baxter International Inc., a healthcare company with
operations in over 100 countries, where he held the title of
Chief Executive Officer from 1980 through 1998 and Chairman of
the Board from 1987 through 1999. Mr. Loucks served as
Chief Executive Officer of Segway LLC and Senior Fellow of the
Yale Corporation. Mr. Loucks served on the Board of
Directors for Affymetrix, Inc. from 1993 to 2008, Anheuser-Busch
Companies, Inc. from 1988 to 2008, Edwards Lifesciences Corp.
from 2000 to 2008, Oscient Pharmaceuticals, Inc. (formerly
Genome Therapeutics, inc.) from 2004 to 2005, Pain Therapeutics
Inc. from 2003 to 2007, Segway, Inc. from 2000 to 2009, and
recently
7
retired as a director of Emerson Electric Co. having served on
the Board since 1979. Mr. Loucks holds a bachelors
degree in history from Yale University, a masters degree
from the Harvard Graduate School of Business Administration and
is a veteran of the U.S. Marine Corps. Mr. Loucks
brings over 40 years of experience in the healthcare
industry to his service on the Board and his experience serving
on the boards of directors of other publicly traded companies is
also a valuable asset to the Board of Directors.
Terrence J. Mulligan has served as one of our directors
since June 1999, and currently serves as Vice-Chairman of the
Board of Directors and Chairman of the Senior Advisory Board.
Additionally, he also serves as Chairman of the Compensation,
Governance and Nominating Committee. Mr. Mulligan retired
in 1996 from Baxter International, after serving 26 years
with the company where he was Group Vice President of Health
Systems, and prior to that, was Senior Vice President of
Corporate Sales and Marketing. He was a member of both the
Senior Management and Operating Management Committees at Baxter
International. Mr. Mulligan serves on the Board of
Directors of Wellmark, Inc., headquartered in Des Moines, Iowa,
and on the Board of Visitors of the Henry B. Tippie College of
Business, the University of Iowa. Mr. Mulligan holds a
B.S.S.E. from the University of Iowa. Mr. Mulligan served
in the United States Army from
1968-1970
and was stationed in Heidelberg, Germany. Mr. Mulligan was
awarded the Army Commendation Medal as a 1st. Lieutenant, for
Meritorious Service in Europe in 1970.
Mr. Mulligan brings over 40 years of experience in the
healthcare industry, and the breadth and depth of his knowledge
of the industry, his previous service on the compensation
committees of three publicly traded companies and his
exceptional tenure on the Board of Directors well qualifies him
to serve as a director and as Chairman of the Compensation,
Governance and Nominating Committee.
C.A. (Lance) Piccolo has served as one of our directors
since April 2004 and is a member of the Compensation, Governance
and Nominating Committee of the Board of Directors.
Mr. Piccolo has been the President and Chief Executive
Officer of HealthPic Consultants, Inc., a private consulting
company, since September 1996. From August 1992 until September
1996, he was Chairman of the Board and Chief Executive Officer
of Caremark International Inc. Mr. Piccolo served on the
Board of Directors of Chemtura Corporation from 1999 to 2009.
Mr. Piccolo serves on the Board of Directors of American
TeleCare, Inc. and on the Board of Directors and Compensation
Committee of CVS Caremark Corporation and NovaMed, Inc.
Mr. Piccolo is a trustee of Boston University and a member
of the Kellogg Graduate School of Management Advisory Board of
Northwestern University. Mr. Piccolo holds a Bachelor of
Science degree from Boston University. Mr. Piccolo is a
veteran of the U.S. Marine Corps. Mr. Piccolos
extensive experience serving on the boards of directors of other
publicly traded companies in the healthcare industry provides an
important viewpoint for the Board of Directors.
John C. Rutherford has served as one of our directors
since August 1999 and is a member of the Compensation,
Governance and Nominating committee of the Board of Directors.
From 1998 to the present, Mr. Rutherford has served as a
Managing Partner of Parthenon Capital, a private equity
investment firm. From 1991 to 1998, Mr. Rutherford was the
Chairman of the Parthenon Group, a consulting firm.
Mr. Rutherford served on the Board of Directors of Kenexa
Corp. from 1999 to 2006 and serves on the boards of several
privately held companies. A native of Wellington, New Zealand,
Mr. Rutherford holds a B.E. (1st Class Honors)
degree from the University of Canterbury, an M.S. in Computer
Science from the University of Connecticut and an M.B.A. from
Harvard Business School. Mr. Rutherfords long
experience in private equity investment and his significant
tenure on the Board of Directors provides intimate and vital
knowledge of the Company to the Board of Directors.
Samuel K. Skinner was elected to the Board of Directors
of MedAssets, Inc. in November 2009. He is the retired Chairman,
President and CEO of U.S. Freightways Corporation.
Mr. Skinner holds a Bachelor of Science degree from the
University of Illinois (Urbana) and a J.D. degree from DePaul
University Law School. Mr. Skinner was previously President
of the Commonwealth Edison Company and its holding company,
Unicom Corporation (now Exelon Corporation). After retiring from
Commonwealth Edison Company and Unicom, Mr. Skinner served
as Co-Chairman of Hopkins & Sutter, a national law
firm based in Chicago. Prior to joining Commonwealth Edison, he
served as Chief of Staff to President George H.W. Bush. Prior to
his White House service, Mr. Skinner served in the
Presidents cabinet for nearly three years as Secretary of
Transportation and was credited with numerous successes,
including the development of the Presidents National
Transportation Policy and the passage of landmark aviation and
surface transportation legislation. From 1968 to 1977,
Mr. Skinner served in the office of the United States
Attorney for the Northern
8
District of Illinois and was United States Attorney from 1975 to
1977. From 1977 to 1989, Mr. Skinner practiced law as a
senior partner in the Chicago law firm Sidley &
Austin. Mr. Skinner served on the Board of Directors for
Dade Behring Inc. from 2005 to 2009 and Midwest Air Group, Inc.
from 1996 to 2008. Mr. Skinner serves on the Board of
Directors of APAC Customer Services, Inc., Navigant Consulting
Inc., Express Scripts Inc., Echo Global Logistics, Inc. and CBOE
Holdings. In addition to his significant business experience,
Mr. Skinners experience in government and law
provides and important perspective to the Board of Directors
with respect to the legal and regulatory framework in which the
Company operates.
Bruce F. Wesson has served as one of our directors since
June 1999 and currently serves as Vice-Chairman of our Board of
Directors and Chairman of the Audit Committee of the Board of
Directors. Mr. Wesson is a Managing Director of Galen
Management, a healthcare venture firm, and is a general partner
of Galen Partners, L.P. Mr. Wesson served over twenty three
years with the Corporate Finance Division of Smith Barney,
Harris Upham & Co. Inc. (Smith Barney), an
investment banking firm, most recently as Senior Vice President
and Managing Director. While at Smith Barney, Mr. Wesson
headed the Major Account Group, which was
responsible for many of the firms largest accounts. He
also chaired the Valuation Committee, which supervised all
valuation opinions provided by the firm. Mr. Wesson served
as a director of Chemtura Corporation from 1980 to 2010.
Mr. Wesson serves as a Director and as a member of the
Compensation Committee of Acura Pharmaceuticals, Inc., a
specialty pharmaceutical company. In addition, Mr. Wesson
has served as a Director (since 2006), including as Vice Lead
Director (since 2008) of Derma Sciences, Inc., a
manufacturer of dermatological products and also serves on the
Board of Directors for several privately held companies.
Mr. Wesson holds a B.A. from Colgate University and a
M.B.A. from Columbia Graduate Business School.
Mr. Wessons experience as Senior Vice President and
Managing Director of Smith Barneys Corporate Finance
Department and as the founder of Galen Partners, a health care
private equity firm, brings to the board extensive knowledge of
the capital markets and corporate finance, as well as
entrepreneurial experience.
Term of
Directors and Composition of Board of Directors; Independent
Directors
The Board of Directors consists of eleven members. In accordance
with the terms of our amended and restated certificate of
incorporation, the Board of Directors is divided into three
staggered classes of directors of, as nearly as possible, the
same number. At each annual meeting of stockholders, a class of
directors will be elected for a three-year term to succeed the
directors of the same class whose terms are then expiring. As a
result, a portion of our Board of Directors will be elected each
year.
The division of the three classes and their respective
re-election years are as follows:
|
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|
|
the Class I directors term will expire at the Annual
Meeting (our Class I directors are Mrs. Burman and
Messrs. Ballard, Loucks and Rutherford, each of whom has
been nominated for election at the Annual Meeting);
|
|
|
|
the Class II directors term will expire at the annual
meeting of stockholders to be held in 2012 (our Class II
directors are Messrs. Piccolo, Ryan, Skinner and
Wesson); and
|
|
|
|
the Class III directors term will expire at the
annual meeting of stockholders to be held in 2013 (our
Class III directors are Messrs. Bardis, Hyman and
Mulligan).
|
Our amended and restated certificate of incorporation authorizes
our Board of Directors to fix the number of directors from time
to time by a resolution of the majority of our Board of
Directors. Our amended and restated by-laws, which may be
amended by our Board of Directors, provide that the number of
directors will be not less than three nor more than 15. Any
additional directorships resulting from an increase in the
number of directors will be distributed among the three classes
so that, as nearly as possible, each class will consist of
one-third of the directors. The division of our Board of
Directors into three classes with staggered three-year terms may
delay or prevent a change of our management or a change in
control.
9
In general, persons recommended by stockholders will be
considered on the same basis as candidates from other sources.
If a stockholder wishes to nominate a candidate to be considered
for election as a director at the 2012 Annual Meeting of
Stockholders, he or she must use the procedures as set forth in
our by-laws (see also Stockholder Communications with the
Board of Directors below.) If a stockholder wishes simply
to propose a candidate for consideration as a nominee by the
compensation, governance and nominating committee, the
stockholder should submit any pertinent information regarding
the candidate to the compensation, governance and nominating
committee in care of the Companys Corporate Secretary by
mail at: MedAssets, Inc., 100 North Point Center East,
Suite 200, Alpharetta, Georgia 30022.
Our Board of Directors has determined that each of our
non-management directors is independent as defined
under the U.S. Securities Exchange Act of 1934, as amended
(the Exchange Act), and NASDAQ Global Select Market
rules.
Board
Leadership Structure
The Board of Directors has determined that the appropriate
leadership structure for the Board of Directors at this time is
for Mr. Bardis, the Companys President and Chief
Executive Officer, to serve as Chairman of the Board of
Directors, with Messrs. Mulligan and Wesson, each an
independent director, serving as Vice Chairmen of the Board of
Directors. In addition, Messrs. Mulligan and Wesson chair
the compensation, governance and nominating committee and the
audit committee, respectively, and each of these committees is
composed solely of independent directors. The Company does not
have a lead director, but our independent directors meet in
executive session without management present as frequently as
they deem appropriate, typically at the time of each regular
board meeting.
We have employed the leadership structure of having a combined
Chairman and Chief Executive Officer since the company was
founded, and we believe that this has proven to be an effective
structure for leadership of the Company. The Board of Directors
believes that having a united Chairman and Chief Executive
Officer, two independent Vice Chairmen, a board with a majority
of independent directors who meet regularly in executive
session, and independent chairmen for the Boards audit
committee and compensation, governance and nominating committee
provides an ideal form of leadership for the Company and the
Board of Directors at this time. Furthermore, our independent
directors believe that Mr. Bardis in-depth knowledge
of the Companys industry and businesses make him the
best-qualified director to serve as Chairman. The Board of
Directors may subsequently decide, however, to change that
leadership structure, and we do not have a formal policy to
require that the Chief Executive Officer or any other member of
management serve as Chairman of the Board.
Boards
Role in Risk Oversight
The Board of Directors is responsible for overseeing the risk
management policies of the Company. The Board of Directors
evaluates and discusses management policies with respect to
operational and financial risk assessment and enterprise risk
management. Our full Board of Directors regularly engages in
discussions of the most significant risks facing the Company and
how these risks are being managed, and the board receives
reports on risk management from senior officers of the Company
and from the audit committee and compensation, governance and
nominating Committee as part of their regular reporting process.
These committees also oversee our corporate compliance programs.
Additionally, the audit committee oversees the internal audit
function of the Company.
Members of the senior management team of the Company (including
its Chief Financial Officer and Chief Legal and Administrative
Officer) report directly to our Chairman and Chief Executive
Officer, providing him with information concerning the
Companys risk profile. These executive officers also
present information regarding the risk profile directly to the
Board of Directors from time to time. The Board of Directors
believes that the work undertaken by the Board, the audit
committee, the compensation, governance and nominating committee
and the Companys senior management team enables the Board
to effectively oversee the Companys risk management
processes.
10
Board
Operations and Meetings
The Board of Directors met fourteen times during the fiscal year
ended December 31, 2010. Each director who served during
such period attended at least 75% of the meetings of the Board
of Directors, with the exception of Mr. Loucks who attended
71%. A number of these were informational meetings called on
short notice to provide updates regarding potential acquisitions
with which the Company was involved, and at which no action of
the Board of Directors was taken.
The Company does not have a formal policy with regard to Board
member attendance at the annual stockholders meeting. All
directors are encouraged to attend each annual
stockholders meeting.
The Boards operation and responsibilities are governed by
the Companys certificate of incorporation, by-laws,
charters for the Boards standing committees and Delaware
law. Our certificate of incorporation and by-laws generally
eliminate the personal liability of our directors for breaches
of fiduciary duty as a director and indemnify directors and
officers to the fullest extent permitted by Delaware law.
We have also entered into indemnity agreements with each of our
directors and executive officers, which provide for mandatory
indemnity of an executive officer or director for any
claims they may be subject to by reason of the fact
that the indemnitee is or was an executive officer or director
of ours, if the indemnitee acted in good faith and in a manner
the indemnitee reasonably believed to be in or not opposed to
our best interests and, in the case of a criminal proceeding,
the indemnitee had no reasonable cause to believe that the
indemnitees conduct was unlawful. These agreements also
obligate us to advance expenses to an indemnitee provided that
the indemnitee will repay advanced expenses in the event the
indemnitee is not entitled to indemnification. Indemnitees are
also entitled to partial indemnification and indemnification for
expenses incurred as a result of acting at our request as a
director, officer or agent of a corporation, limited liability
company, partnership, joint venture, trust or other entity or
enterprise owned or controlled by us.
Insofar as indemnification for liabilities arising under the
U.S. Securities Act of 1933, as amended (the
Securities Act), may be permitted to our directors,
officers and controlling persons pursuant to the above statutory
provisions or otherwise, we have been advised that, in the
opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable.
Section 16(a)
Beneficial Ownership Reporting Compliance
Our executive officers, directors and persons who beneficially
own more than ten percent of our common stock are required to
file reports of ownership and changes in ownership with the SEC
under Section 16(a) of the Exchange Act. These reporting
persons are also required to furnish us with copies of all
Section 16(a) forms they file. Based solely upon its review
of the copies of reports furnished to the Company through the
date hereof, the Company believes that all Section 16(a)
filing requirements applicable to its executive officers,
directors and ten percent stockholders were complied with during
the fiscal year ended December 31, 2010.
Code of
Ethics
We have adopted standards of business conduct (Standards
of Business Conduct), which apply to all of our directors,
officers, and employees. Our Standards of Business Conduct are
available on our website at www.medassets.com, under Corporate
Governance. Any person may request a copy without charge by
writing to us at MedAssets, Inc., 100 North Point Center East,
Suite 200, Alpharetta, Georgia 30022. We intend to disclose
on our website any amendment to, or waiver from, a provision of
our Standards of Business Conduct that applies to directors and
executive officers and that is required to be disclosed pursuant
to the rules of the SEC.
Non-Management
Director Compensation
All members of our Board of Directors are reimbursed for
reasonable expenses in connection with their service including
expenses incurred in attending meetings of our Board of
Directors. Historically, directors have been compensated for
their service on our Board of Directors through periodic equity
grants, with the specific form of equity, timing and number
determined at the discretion of the Board.
11
The table below includes compensation information for our
non-management directors for 2010.
2010
Non-Management Director Compensation Table
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Restricted
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Fees Earned
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Stock
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SSARs
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Name of Director
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or Paid in Cash ($)
|
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Awards ($)(1)
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Awards ($)(1)
|
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Total ($)
|
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Samantha Trotman Burman(2)
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50,006
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45,558
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95,564
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|
Harris Hyman IV(2)
|
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100,000
|
|
|
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50,006
|
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|
|
45,558
|
|
|
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195,564
|
|
Vernon R. Loucks, Jr.(3)
|
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|
|
|
|
|
|
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91,116
|
|
|
|
91,116
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|
Terrence J. Mulligan(4)
|
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|
|
|
|
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100,224
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100,224
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|
C.A. Lance Piccolo(3)
|
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|
|
|
|
|
|
|
|
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91,116
|
|
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91,116
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John C. Rutherford(3)
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|
|
91,116
|
|
|
|
91,116
|
|
Samuel K. Skinner(5)
|
|
|
|
|
|
|
99,991
|
|
|
|
|
|
|
|
99,991
|
|
Bruce F. Wesson(4)
|
|
|
|
|
|
|
|
|
|
|
100,224
|
|
|
|
100,224
|
|
|
|
|
(1) |
|
These amounts represent the aggregate grant date fair value of
awards granted to the directors in 2010, determined under FASB
ASC Topic 718. For information on the valuation assumptions with
respect to awards made, refer to footnote 10 of the Notes to
Consolidated Financial Statements of the Companys Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2010 filed with the
SEC on March 1, 2011. These amounts: i) reflect the
companys aggregate accounting expense for
these awards, rather than the companys 2010
accounting expense, and ii) do not necessarily correspond
to the actual value that will be recognized by the directors.
With the exception of the equity award granted to
Mr. Skinner on February 25, 2010 (see footnote 6
below), the restricted stock and
stock-settled
stock appreciation rights (or SSARs) equity awards had a grant
date fair market value of $21.27 and $6.00, respectively, as
determined using the Black-Scholes valuation model. The vesting
terms of the shares of restricted stock and SSARs called for
vesting on the first day of each month beginning on
January 1, 2010, such that 100% of the equity awards would
be fully vested on December 1, 2010. |
|
(2) |
|
Mrs. Burman and Mr. Hyman were each granted an award
of 2,351 shares of restricted stock and 7,593 SSARs on
January 15, 2010. Additionally, Mr. Hyman was paid an
additional $100,000 in connection with his service as a director
and his exceptional efforts and involvement regarding the
Companys acquisition pursuits. As of December 31,
2010, Mrs. Burman had 50,061 awards outstanding and
Mr. Hyman had 64,223 awards outstanding. |
|
(3) |
|
Messrs. Loucks, Piccolo and Rutherford were each granted an
award of 15,186 SSARs on January 15, 2010. As of
December 31, 2010, Mr. Loucks had 33,488 awards
outstanding, Mr. Rutherford had 67,377 awards outstanding
and Mr. Piccolo had 71,816 awards outstanding. |
|
(4) |
|
Messrs. Mulligan and Wesson were each granted an award of
16,704 SSARs on January 15, 2010. As of December 31,
2010, Mr. Mulligan had 74,017 awards outstanding and
Mr. Wesson had 92,697 awards outstanding. |
|
(5) |
|
Mr. Skinner was granted an equity award of
4,231 shares of restricted stock on January 15, 2010
and 465 shares of restricted stock on February 25,
2010. The latter award had a grant date fair market value of
$21.50. As of December 31, 2010, Mr. Skinner had 2,130
awards outstanding. |
12
BOARD
COMMITTEES
Our Board of Directors has established an audit committee and a
compensation, governance and nominating committee. Our Board may
establish other committees from time to time to facilitate the
management of our company.
AUDIT
COMMITTEE
Our audit committee oversees a broad range of issues surrounding
our accounting and financial reporting processes and audits of
our financial statements. Our audit committee: (i) assists
our Board in monitoring the integrity of our financial
statements, our compliance with legal and regulatory
requirements, our independent auditors qualifications and
independence and the performance of our internal audit function
and independent auditors; (ii) assumes direct
responsibility for the appointment, compensation, retention and
oversight of the work of any independent registered public
accounting firm engaged for the purpose of performing any audit,
review or attest services and for dealing directly with any such
accounting firm; (iii) provides a medium for consideration
of matters relating to any audit issues; and (iv) prepares
the audit committee report that the SEC rules require be
included in our annual proxy statement or annual report on
Form 10-K.
The members of our audit committee for the fiscal year ended
December 31, 2010 were Mrs. Burman and
Messrs. Hyman and Wesson, each of whom is
independent as defined under the Exchange Act and
NASDAQ Global Select Market rules. Mr. Wesson is our audit
committee chairman. Mrs. Burman is a financial expert under
the SEC rules implementing Section 407 of the
Sarbanes-Oxley Act. Our audit committee acts pursuant to a
written charter adopted by the Board of Directors, a copy of
which is available free of charge on the Companys website
at www.medassets.com. Our audit committee held 14
meetings during the fiscal year ended December 31, 2010
with each committee member attending not less than 75% of these
meetings.
Pre-Approval
Policies and Procedures
Pursuant to its charter, our audit committee is responsible for
reviewing and pre-approving all audit and permitted non-audit
services provided by the Companys independent registered
public accounting firm. The audit committee may delegate
pre-approval authority to the chairman of the audit committee,
in which case such approval must be presented to the full audit
committee at its next scheduled meeting. The audit committee
pre-approved all audit, audit-related, tax and other services
provided by KPMG LLP, the Companys independent registered
public accounting firm for the fiscal year ended
December 31, 2010, for the recently completed fiscal year.
Independent
Auditor Service Fees
On March 2, 2010, we dismissed BDO Seidman, LLP (now known
as BDO USA, LLP) as independent registered public accounting
firm for the Company, which we reported on March 8, 2010
via a Current Report on
Form 8-K.
The decision to dismiss BDO Seidman, LLP was approved by the
Audit Committee of the Board of Directors of the Company. BDO
Seidman, LLPs audit reports on the Companys
consolidated financial statements for the fiscal years 2008 and
2009 did not contain an adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty,
audit scope or accounting principles. During the Companys
2008 and 2009 fiscal years and through the date of the
Form 8-K:
(i) there were no disagreements with BDO Seidman, LLP on
any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which, if
not resolved to BDO Seidman, LLPs satisfaction, would have
caused BDO Seidman, LLP to make reference to the subject matter
in connection with their reports on the Companys
consolidated financial statements for such years; and
(ii) there were no reportable events, within the meaning
set forth in Item 304(a)(1)(v) of
Regulation S-K.
The Company provided BDO Seidman, LLP with a copy of the
disclosures in the Current Report on
Form 8-K
and requested that BDO Seidman, LLP furnish it with a letter
addressed to the Securities and Exchange Commission stating
whether or not BDO Seidman, LLP agreed with the Companys
statements in the
Form 8-K.
BDO Seidman LLPs letter stating its agreement with such
statements was included as an exhibit to the
Form 8-K
filing.
13
On and effective March 2, 2010, KPMG LLP was engaged to
serve as the Companys independent registered public
accounting firm, replacing BDO Seidman, LLP. KPMG LLP audited
the Companys consolidated financial statements for the
fiscal year ended December 31, 2010.
During the Companys 2008 and 2009 fiscal years and through
March 2, 2010, neither the Company, nor any party on the
Companys behalf, consulted KPMG LLP with respect to
(i) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of the
audit opinion that might be rendered on the Companys
consolidated financial statements, and no written report or oral
advice was provided to the Company that KPMG LLP concluded was
an important factor considered by the Company in reaching a
decision as to any accounting, auditing or financial reporting
issue, or (ii) any matter that was subject to any
disagreement, as defined in Item 304(a)(1)(iv) of SEC
Regulation S-K
and the related instructions thereto, or a reportable event
within the meaning set forth in Item 304(a)(1)(v) of SEC
Regulation S-K.
The following is the breakdown of aggregate fees billed by our
independent registered public accounting firms to the Company
for professional services in the last two fiscal years:
|
|
|
|
|
|
|
|
|
Description
|
|
2010(2)
|
|
|
2009(1)
|
|
|
Audit Fees
|
|
$
|
1,653,372
|
|
|
$
|
983,941
|
|
Audit-Related Fees
|
|
|
80,000
|
|
|
|
|
|
Tax Fees
|
|
|
55,000
|
|
|
|
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
$
|
1,788,372
|
|
|
$
|
983,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The fees for 2009 were billed by BDO Seidman, LLP (now known as
BDO USA, LLP), the Companys independent registered public
accounting firm for the fiscal year ended December 31, 2009. |
|
(2) |
|
The fees for 2010 were billed by KPMG LLP, the Companys
independent registered public accounting firm for the fiscal
year ended December 31, 2010. |
Audit Fees. This category includes fees and
expenses related to the audit of our annual financial statements
and the effectiveness of our internal controls over financial
reporting. This category also includes the review of financial
statements included in our Quarterly Reports on
Form 10-Q
and services that are normally provided by the independent
auditors in connection with regulatory filings or engagements,
consultations provided on audit and accounting matters that
arose during, or as a result of, the audits or the reviews of
interim financial statements, reviews of offering documents and
registration statements for debt and issuance of related comfort
letters, reviews of acquisition and integration accounting in
connection with reviews of business combinations, review of
required regulatory filings of financial statements of business
acquired, additional audit work necessary for acquired
businesses, and the preparation of any written communications on
internal control matters.
Audit-Related Fees. This category consists of
assurance and related services that are reasonably related to
the performance of the audit or review of our financial
statements and are not reported above under Audit
Fees.
Tax Fees. This category consists of
professional services rendered for tax compliance services and
tax advice. The services for the fees disclosed under this
category are for technical tax advice and tax compliance
services.
All Other Fees. This category consists of fees
for services provided by KPMG LLP, other than fees for the
services listed in the other categories.
Report of
the Audit Committee of the Board of Directors
Our audit committee has reviewed and discussed with management
and the independent registered public accounting firm, KPMG LLP,
the audited financial statements for the fiscal year ended
December 31, 2010. In
14
addition, our audit committee has discussed with the independent
registered public accounting firm the matters required to be
discussed by the Statement on Auditing Standards No. 61,
Communications with Audit Committees, as amended, by the
Auditing Standards Board of the American Institute of Certified
Public Accountants.
The independent registered public accounting firm provided to
the audit committee the written disclosures and the letter from
the independent registered public accounting firm required by
Public Company Accounting Oversight Board Rule 3526,
Communication with Audit Committees Concerning
Independence. The audit committee has reviewed and
discussed with the independent registered public accounting firm
the firms independence and has considered the
compatibility of any non-audit services with the auditors
independence.
Based on its review of the audited financial statements and the
various discussions referred to above, the audit committee has
recommended to the Board of Directors that the audited financial
statements be included in the Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010.
Bruce F. Wesson, Chairman
Samantha Trotman Burman
Harris Hyman IV
COMPENSATION,
GOVERNANCE AND NOMINATING COMMITTEE
Our compensation, governance and nominating committee reviews
and recommends policy relating to the compensation and benefits
of our officers and employees, including reviewing and approving
corporate goals and objectives relevant to compensation of the
Chief Executive Officer and other senior officers, evaluating
the performance of these officers in light of those goals and
objectives and reviewing and approving the compensation of these
officers based on such evaluations. The committee also produces
a report on executive officer compensation as required by the
SEC to be included in our annual proxy statement or annual
report on
Form 10-K.
Additionally, the compensation, governance and nominating
committee oversees and assists our Board of Directors in
identifying, reviewing and recommending nominees for election as
directors; advises our Board of Directors with respect to Board
composition, procedures and committees; recommends directors to
serve on each committee; oversees the evaluation of our Board of
Directors and our management; and develops, reviews and
recommends corporate governance guidelines. The committee also
reviews and evaluates, at least annually, the performance of the
Board and its committees.
Our compensation, governance and nominating committee acts
pursuant to a written charter adopted by the Board of Directors,
a copy of which is available free of charge on the
Companys website at www.medassets.com. The members
of our compensation, governance and nominating committee are
Messrs. Loucks, Mulligan, Piccolo, Rutherford and Skinner,
each of whom is independent as defined under the
Exchange Act and NASDAQ Global Select Market rules.
Mr. Mulligan serves as chairman of the committee.
Our compensation, governance and nominating committee held seven
meetings during the fiscal year ended December 31, 2010
with each committee member attending not less than 75% of these
meetings, with the exception of Mr. Loucks who attended 71%.
Director
Candidate Nominating Procedures
The compensation, governance and nominating committee may
consider candidates recommended by stockholders as well as other
sources such as other directors, officers or independent search
firms. To date, the Company has not engaged any search firm to
assist in identifying or evaluating potential nominees. For each
potential candidate, the compensation, governance and nominating
committee may consider all factors it deems relevant, such as a
candidates personal integrity and sound judgment,
diversity of business and professional skills and experience,
independence, industry-specific knowledge, possible conflicts of
interest, general reputation and expertise and the extent to
which the candidates diverse skills and attributes would
fill a present need on the Board of Directors. In addition,
while not required of any one candidate, the
15
compensation, governance and nominating committee considers
experience, education, training or other expertise in business
or financial matters and prior experience serving on the boards
of public companies. The Board of Directors and the
compensation, governance and nominating committee believe that
diversity of backgrounds and viewpoints is an important
attribute of the Board for Directors. Both the Board of
Directors and the compensation, governance and nominating
committee conduct formal self-evaluations each year that include
an assessment of whether the diversity of the Board of
Directors, among other factors, is adequately considered in
identifying and discussing director candidates. The
compensation, governance and nominating committee believes that,
as a group, the nominees below bring a diverse range of
backgrounds, experiences and perspectives to the Boards
deliberations. While the compensation, governance and nominating
committee carefully considers this diversity when considering
nominees for director, the Company has not established a formal
policy regarding diversity in identifying director nominees.
Collectively, the composition of the Board must meet the
applicable NASDAQ listing requirements. In evaluating any
candidate as a director nominee, the compensation, governance
and nominating committee also evaluates the contribution of the
proposed nominee toward compliance with the applicable NASDAQ
listing standards.
After a potential candidate is initially evaluated by the Board,
the individual may be invited to meet with various members of
the compensation, governance and nominating committee and other
members of the Board who evaluate the candidates
credentials, experience, interest and willingness to serve.
Board members discuss these matters, as well as the
individuals potential to be an effective Board member,
among themselves. If the discussions and evaluation are
sufficiently supportive, the individual is invited to serve on
the Board.
In general, persons recommended by stockholders will be
considered on the same basis as candidates from other sources.
If a stockholder wishes to nominate a candidate to be considered
for election as a director at the 2012 Annual Meeting of
Stockholders using the procedures set forth in the by-laws, it
must follow the procedures described in Stockholder
Proposals 2012 Annual Meeting. If a
stockholder wishes simply to propose a candidate for
consideration as a nominee by the compensation, governance and
nominating committee, it should submit any pertinent information
regarding the candidate to the compensation, governance and
nominating committee in care of the Companys Corporate
Secretary by mail at: MedAssets, Inc., 100 North Point Center
East, Suite 200, Alpharetta, Georgia 30022.
Compensation
Committee Interlocks and Insider Participation
None of our executive officers serve as a member of the Board of
Directors or compensation committee of any entity that has one
or more executive officers who serve on our Board of Directors
or compensation, governance and nominating committee. In 2010,
we did not enter into or materially modify any contractual
arrangements with any member of our compensation, governance and
nominating committee or their affiliates.
COMPENSATION
DISCUSSION AND ANALYSIS
Executive
Summary
Since the Companys founding, the officers and employees of
MedAssets have focused on five primary business objectives: to
continually improve our suite of solutions; to further penetrate
our existing customer base; to attract new customers; to
leverage operating efficiencies and economies of scale and
scope; and to maintain an internal environment that fosters a
strong and dynamic culture. We believe that a concentration on
these objectives will ensure that we fulfill the purposes of
enhancing the financial strength of our customers and delivering
value to our shareholders. We also believe that in order to
achieve these objectives, we must recruit and retain top-tier
talent by providing a market-based compensation program which
rewards successful performance.
Our compensation philosophy is based upon our strong commitment
to prudent financial management. Our policies and practices seek
to align the interests and incentives of our employees with
those of our stockholders through a pay-for-performance
compensation program. Our objective is to provide our employees
with competitive base pay and to annually review and if
appropriate adjust this compensation based on employee and
company performance. Our incentive compensation plans are
structured so that our employees
16
benefit only when our company meets its performance targets. We
provide short-term, cash-based incentive compensation
opportunities which are funded upon achievement of
pre-established growth-based financial objectives, and paid for
the achievement of individual objectives. In addition, to assure
our employees are focused both on short-term and sustained
long-term performance, certain key positions are eligible for
equity incentive awards.
Compensation
Philosophy and Objectives
We are committed to prudent financial stewardship. Our
compensation philosophy and practices reflect this commitment as
we seek to align the interests and incentives of our employees
with those of our stockholders through a
pay-for-performance
compensation program that serves to attract and retain
outstanding people. Accordingly, a material portion of the
compensation of each NEO is derived from the achievement of
Company-wide performance objectives which are determined each
year based on our operating budget. The specific measurements
upon which compensation in 2010 was based are discussed further
below.
We believe compensation plans that are tied to financial
performance are the optimal way of providing incentives to each
NEO. We believe these goals are linked to performance criteria
that are within each NEOs control and reward behaviors which
drive long-term stockholder value.
Determination
of NEO Compensation
Role
of the Compensation, Governance and Nominating Committee (the
Committee)
Our Committee oversees our overall compensation program and
practices, including its design and the actual compensation paid
to each NEO. The Committee operates under a written Charter that
is available on the Companys website at www.medassets.com.
In making compensation determinations, the members of the
Committee review and consider external market data and advice
provided by their independent consultant, the recommendations of
the Chief Executive Officer, their own assessment of the Company
and each NEOs performance, and the scope of each
NEOs responsibilities and experience. Based on their
evaluation and judgment, the Committee reviews and approves
compensation, and any changes thereto, for each NEO other than
Mr. Bardis, and makes a recommendation to the Board of
Directors (or Board), which makes the final
determination concerning Mr. Bardis compensation.
Role
of the Chief Executive Officer and Senior
Management
Mr. Bardis typically meets with the Committee and makes
initial compensation recommendations with respect to each NEO.
Mr. Bardis shares with the Committee his evaluation of each
executive with respect to recent contributions and performance,
strengths and weaknesses, as well as career development and
succession plans. His recommendations are based, in part, on the
compensation benchmark information previously discussed, which
is reviewed separately by the Committee. Mr. Bardis
evaluation is supported by information, analysis, and advice
provided from time to time by the Companys Chief Financial
Officer, Chief Legal and Administrative Officer and the Senior
Vice President of Human Resources.
Role
of Compensation Consultants
The Committee has the authority to hire compensation consultants
and other advisors to assist the Committee in its deliberations.
Pearl Meyer & Partners, an independent consultant,
reports to and their work is directed by the Committee. Pearl
Meyer & Partners does not provide other services to
the Company that are not directly related to the strategy,
design, and implementation of the executive compensation
program. Although the scope of assistance can vary year to year
based on the Committees needs, the Committee has requested
the following primary services from Pearl Meyer &
Partners:
|
|
|
|
|
Provide periodic updates on market trends and emerging practices
that may impact the executive compensation programs at the
Company;
|
|
|
|
Conduct an independent review of executive compensation levels
relative to market pay levels for similar positions in similar
organizations;
|
17
|
|
|
|
|
Assist with the design of short-term and long-term incentive
compensation programs;
|
|
|
|
Assist with the development of the size and structure of the
Companys equity incentive plans; and
|
|
|
|
Attend and participate in Committee meetings upon request.
|
Role
of Compensation Surveys and Peer Group Data
We must compete to recruit and retain each NEO. Accordingly, we
periodically review our pay levels relative to market pay levels
for similar positions within similar companies. In assessing our
pay levels relative to market pay levels, we review and consider
relevant pay data from various reputable surveys (Watson Wyatt,
Mercer Human Resource Consulting, and other similar data
providers) and from the public filings of companies with similar
characteristics whom we refer to as the Compensation Peers. The
market data gathered from the surveys and the Compensation Peers
provides a useful reference point, but the Committee does not
benchmark or target a precise pay level relative to the
collected market data.
In October 2009, the Committee requested a market assessment of
executive compensation levels and long-term incentive plan
design practices from Pearl Meyer & Partners for use
in its decision making for executive compensation for 2010. As
part of this process, the following peer companies (or
Compensation Peers) were selected by Pearl
Meyer & Partners and approved by the Committee:
|
|
|
|
|
Ariba, Inc.
|
|
|
|
Aspen Technology, Inc.
|
|
|
|
athenahealth, Inc.
|
|
|
|
Blackbaud, Inc.
|
|
|
|
Blackboard, Inc.
|
|
|
|
Computer Programs & Systems, Inc.
|
|
|
|
Concur Technologies, Inc.
|
|
|
|
Eclipsys Corporation
|
|
|
|
Emdeon, Inc.
|
|
|
|
HLTH Corporation
|
|
|
|
HMS Holdings Corporation
|
|
|
|
Informatica Corporation
|
|
|
|
Micostrategy, Inc.
|
|
|
|
Phase Forward, Inc.
|
|
|
|
Quality Systems, Inc.
|
|
|
|
SPSS, Inc.
|
The Compensation Peers were selected based on their potential as
competitors for business, investor capital,
and/or
executive talent; while also seeking to maintain a reasonable
overall size comparison as measured by revenue and market
capitalization. The Committee periodically reviews the
Compensation Peers to ensure alignment with the Companys
business strategy, financial success, and talent requirements.
Compensation
Components
Compensation for our NEOs consists of the following elements:
|
|
|
|
|
Salary;
|
|
|
|
Annual cash incentives and discretionary bonuses;
|
|
|
|
Equity awards; and
|
|
|
|
Other compensation
|
Total compensation for each NEO is intended to be competitive
with executives serving in a comparable capacity at the
Compensation Peers, as well as to align each NEOs
interests with the interests of our stockholders. We incorporate
both short-term performance elements (salary and annual
cash-based incentive opportunities) which reward the achievement
of desired annual financial performance, and long-term
performance elements (equity awards) which reward the
achievement of sustained long-term financial performance.
Various forms of other compensation are also evaluated and
incorporated as deemed necessary.
We do not arbitrarily set a fixed weighting to any individual
component of compensation, as we believe that total compensation
for each NEO must be specifically tailored to meet the
competitive characteristics over
18
time applicable to each NEOs unique role, as well as the
performance of the business function or unit for which each NEO
is responsible.
Salary
Salaries for our NEOs are set forth in employment agreements and
are subject to review on an annual basis by the Committee. With
respect to the salary of Mr. Bardis, the Committee makes a
recommendation to the Board, which makes the final
determination. The determination of salaries for NEOs other than
Mr. Bardis are based on his recommendations, which are
based on information gathered by the Committees
compensation consultant, as well as data obtained through recent
recruitment efforts, if appropriate and applicable, and the
internal executive compensation structure to determine both
internal and external competitiveness.
In February, 2010, the Committee (and full Board for
Mr. Bardis) approved annual salary increases for the
existing NEOs in order to bring these salaries in line with
current market pay levels. NEO annual salaries were unchanged in
2008 and 2009, with Mr. Bardis salary remaining
constant in 2007, 2008 and 2009. Effective April 1, 2010,
the new annual salaries attributable to those individuals which
are also NEOs in this Proxy were the following:
Mr. Bardis $568,475;
Mr. Ballard $440,595 and
Mr. Hunn $340,595.
As provided in his employment agreement and in conjunction with
his promotion to Senior Vice President, Chief Accounting Officer
in November 2010, Mr. Culbreths annual salary was set
at $225,000. Mr. Hobbs base salary for 2010 was
$339,999.
Salary earned by each NEO in 2010 is shown in the 2010
Summary Compensation Table below.
Annual
Cash Incentive Program and Discretionary Cash
Bonuses
In 2010, the NEOs participated in our annual cash incentive
program. Awards under the program are based upon a target cash
incentive, which is a specific percentage of each NEOs
salary. The target cash incentive was initially set forth in the
employment agreement of each of our NEOs (as applicable) but is
subject to review on an annual basis by the Committee based on
an analysis of the practices of the Compensation Peers.
Each NEOs target is approved by the Committee early in the
year, although a change in an NEOs responsibilities or his
extraordinary performance over the course of the year could
result in a modification of his target by the Committee (i.e.,
the percentage of salary).
The following chart shows the target cash incentive for each of
our NEOs for 2010 (stated as a percentage of salary).
|
|
|
|
|
|
|
2010 Target Cash
|
Name of Executive
|
|
Incentive
|
|
|
(As a % of salary)
|
|
John A. Bardis
|
|
|
60
|
%
|
L. Neil Hunn
|
|
|
40
|
%
|
Rand A. Ballard
|
|
|
50
|
%
|
Allen W. Hobbs
|
|
|
40
|
%
|
Lance M. Culbreth(1)
|
|
|
20
|
%
|
|
|
|
(1) |
|
In conjunction with his appointment to Senior Vice President,
Chief Accounting Officer on November 16, 2010,
Mr. Culbreths target cash incentive was changed to
35%. Any cash incentive for Mr. Culbreth for 2010 would be
prorated, accordingly. |
Each NEO is a member of a larger corporate pool (the
Pool) and earns his target cash incentive based on
the degree to which certain of our annual financial performance
objectives, as described below, are achieved plus satisfaction
of individual management objectives (subject to adjustment by
the Committee).
19
For 2010, the Pool is funded as follows:
|
|
|
|
|
Funding begins if the Company achieves 88.5% of the
Companys budgeted consolidated adjusted EBITDA for the
fiscal year.
|
|
|
|
Funding increases on a straight line basis thereafter based on
achievement greater than 88.5% up to 96.7%.
|
|
|
|
Funding of 75% if the Company achieves more than 96.7%, up to
100%.
|
|
|
|
If greater than 100% (over-achievement) is achieved, then 75% of
any overachievement amount is eligible for funding to the Pool
at the discretion of the Committee.
|
The Companys budgeted consolidated adjusted EBITDA for
2010 was $128,200,000. The Companys actual consolidated
adjusted EBITDA for 2010 (when adjusting for the impact of the
bonus accrual release and the Broadlane acquisition) was less
than the amount required for initial funding, or $113,457,000.
As a result, the Pool was not funded and no annual cash
incentives were earned by the NEOs under the incentive program.
The Committee may also choose, in its discretion, to authorize
cash bonus awards to NEOs for outstanding individual
performance, which constitutes significant accomplishments
achieved in part or in full by the NEO in helping to advance the
business during the year. In December 2010, Mr. Hunn was
paid a cash bonus of $250,000 for his exceptional performance
related to the Companys acquisition of The Broadlane
Group, which closed in November 2010. Other NEO discretionary
bonus amounts related to 2010 performance have not yet been
determined as of the date of this filing. These amounts, if any,
are expected to be determined within the next 30 days.
Annual cash incentive and discretionary cash bonus amounts
earned by each NEO for 2010 are shown in the 2010 Summary
Compensation Table below.
Equity
Awards
Historically, we have used equity compensation in the form of
stock option, stock-settled stock appreciation rights and
restricted stock awards to motivate and reward our NEOs for the
achievement of sustained financial performance and the
enhancement of stockholder value. Award size and frequency is
reviewed annually and is based on competitiveness with the
previously defined competitive market as well as each NEOs
demonstrated level of performance over time.
In making individual awards, the Committee considers the recent
performance of each NEO, the value of the NEOs previous
awards and our views on NEO retention and succession planning.
As with cash compensation, Mr. Bardis recommends equity
awards for each other NEO to the Committee for its
consideration. Equity awards typically fall into three
categories for NEOs:
|
|
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|
|
awards related to the hiring of an executive officer;
|
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|
|
awards related to individual performance of the executive
officer; and
|
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|
|
awards related to the promotion of an executive officer.
|
Equity
Award Timing
The Company has a specific, written policy regarding equity
award grant timing for our employees that has been followed
consistently since the Companys initial public offering
and that is intended to ensure that the timing of equity grants
is not influenced by material non-public information. According
to this policy, Committee meetings are scheduled to occur during
open trading windows and the exercise price of any applicable
equity instrument granted is the closing stock price on the day
the grants are approved by the Committee.
Long-Term
Performance Incentive Plan
In late 2008, the Board adopted, upon the recommendation of the
compensation committee, the MedAssets, Inc. Long-Term
Performance Incentive Plan (the Plan). The Plan
provides for the grant of stock
20
options, stock appreciation rights, restricted stock, restricted
stock units, performance awards and other stock-based awards
(collectively, Awards) to our current and
prospective employees, non-employee members of the Board, and
other service providers. The Plan was approved by the
stockholders of the Company at the Companys 2008 Annual
Meeting of Stockholders.
The Plan was designed to promote the creation of long-term value
for the Companys stockholders by aligning the interests of
the senior management team with those of the stockholders and to
aid in the Companys ability to attract, retain and
motivate qualified individuals to become and remain employees,
officers, directors and consultants of the Company. Given the
entrepreneurial culture of the Company, the Committee and Board
believe that talented employees create a competitive advantage
and that recruiting, motivating, and retaining such talented
employees requires that such individuals have a vested interest
in the long-term success of the business. Accordingly, the Board
adopted the Plan as a part of its broader compensation strategy,
which had been and will continue to have a material portion of
compensation in the form of equity-based long-term incentive
opportunities.
2009 NEO
Equity Awards Under the Plan
On January 5, 2009, the Committee granted equity awards to
the existing NEOs under the Plan in the form of service-based
and performance-based restricted stock and stock-settled stock
appreciation rights. The Committee does not plan on granting
additional equity awards under the Plan to NEOs (unless related
to a promotion) until after 2011, as these grants were intended
to cover a three year period. The Committee resolved that
Diluted Cash Earnings per Share growth, or Diluted Cash EPS
growth, should be used as the performance objective for the
awards of SSARs and restricted stock subject to vesting based on
the Companys financial performance. Diluted Cash EPS, a
non-GAAP measure, is defined as the Companys fully-diluted
net income per share excluding non-cash acquisition-related
intangible amortization, non-cash share-based compensation
expense and certain Board approved non-recurring items on a
tax-adjusted basis. The Companys management team and Board
believe the use of Diluted Cash EPS as the measure for vesting
is appropriate as it can be used to analyze the Companys
operating performance on a consistent basis by removing the
impact of certain non-cash and non-recurring items from the
Companys operations, and by rewarding organic growth and
accretive business transactions. The audit committee of the
Companys Board is responsible for validating the
calculation of Diluted Cash EPS growth over the relevant period.
The shares of restricted stock granted subject to
performance-based vesting criteria vest as follows: 50% vesting
based on achievement of a 15% compounded annual growth rate of
Diluted Cash EPS for the three-year period ending
December 31, 2011; Pro rata vesting of between 50% and 100%
based on achievement of a compounded annual growth rate of
Diluted Cash EPS between 15% and 25% for the three-year period
ending December 31, 2011; 100% vesting based on achievement
of a 25% compounded annual growth rate of Diluted Cash EPS for
the three-year period ending December 31, 2011. In addition
to meeting the performance targets as discussed above, the
grantees must be employed by the Company for a full four years
through December 31, 2012 in order for the awards that are
subject to performance-based vesting criteria to vest. The
shares of restricted stock granted subject to service-based
vesting criteria vest 100% on December 31, 2012. 100% of
the performance-based SSARs vest upon the achievement of a 25%
compounded annual growth rate of Diluted Cash EPS for the
three-year period ending December 31, 2011. The
service-based SSARs vest 25% annually beginning on
December 31, 2009.
2010 NEO
Equity Awards Under the Plan
In November, 2010, following his promotion to Senior Vice
President, Chief Accounting Officer, the Committee granted
equity awards to Mr. Culbreth under the Plan in the form of
service-based and performance-based restricted stock and SSARs.
See the 2010 Grants of Plan-Based Awards Table and
related narrative disclosure for specific details regarding
these awards.
See the 2010 Outstanding Equity Awards Table for all
outstanding NEO equity award grants as of December 31, 2010.
21
Other
Compensation
Retirement
and Other Benefits
The MedAssets, Inc. Retirement Savings Plan, or the Savings
Plan, is a qualified defined contribution retirement savings
plan in which the NEOs are eligible to participate along with
other employees. The Savings Plan has the following major
provisions:
|
|
|
|
|
contributions are made on a tax-deferred basis or post-tax
through a Roth option which was added to the Savings Plan in
2010;
|
|
|
|
for 2010, participants could contribute up to $16,500 of total
compensation if under the age of 50 or $21,500 if age 50 or
older;
|
|
|
|
contributions are limited and governed by the Internal Revenue
Code of 1986, as amended, or the Code;
|
|
|
|
the company matches 50% of the first six percent of a
participants base pay as contributed by each participant
to the Savings Plan; and
|
|
|
|
all participant contributions vest immediately; our matching
contribution vests equally over a
5-year
period starting with the participants date of hire.
|
We do not maintain any other deferred compensation or
supplemental executive retirement plan.
Perquisites
In September 2009, the Committee revised the Companys
policy regarding executive perquisites, effective
January 1, 2010, to eliminate financial planning fees and
memberships paid for by the Company. As a result, all executives
(including NEOs) are now afforded the same type of benefits. Any
executive subsidy is to be limited to that which we and the
Committee believe is reasonable and consistent with our overall
compensation philosophy, specifically any which help support our
ability to remain competitive and retain the services of our
executives. In 2010, company executives (including NEOs)
received a nominal healthcare benefits subsidy from the Company
on healthcare insurance premiums paid by executives related to
the Companys health plan. Effective January 1, 2011,
this nominal subsidy was discontinued.
Other compensation earned by each NEO in 2010 is shown in the
2010 Summary Compensation Table and associated
footnotes below.
Other Key
Compensation Related Decisions
Pearl Meyer & Partners, the Committees
independent compensation consultants, advised and assisted the
Committee regarding the following other key compensation related
matters impacting executive compensation for 2010 and 2011:
Minimum
Stock Ownership Requirements (NEOs/Board)
In February 2010, the Company adopted minimum stock ownership
requirements for NEOs. The purpose of the minimum stock
ownership requirements is to ensure that NEOs achieve and
maintain a minimum level of stock ownership in order to further
align their interests with stockholders. The minimum stock
ownership requirements range from 20,000 shares for a
Senior Vice President to 100,000 shares for our Chief
Executive Officer. Shares counted toward the requirement include
all shares directly and indirectly owned by the executive plus
one third of any outstanding equity awards. Covered executives
have five years from adoption of or entry into the policy to
comply, with compliance monitored annually by the Committee.
In April 2010, the Company adopted minimum stock ownership
requirements for the Board. The purpose of the minimum stock
ownership requirements is to ensure that directors achieve and
maintain a minimum level of stock ownership in order to further
align their interests with stockholders. The minimum stock
ownership requirement is 7,500 shares. Shares counted
toward the requirement include all shares directly and
indirectly owned by the director plus one third of any
outstanding equity awards. Covered directors have five years
from adoption of or entry into the policy to comply, with
compliance monitored annually by the Committee.
22
Beyond award vesting periods and these minimum stock ownership
requirements, there are no additional stock holding periods.
Employee
Stock Purchase Plan
In April 2010, the Board adopted the MedAssets, Inc. Employee
Stock Purchase Plan (the ESPP), which was approved
by stockholders at the 2010 Annual Meeting of Stockholders. The
ESPP will allow our employees (including any qualified NEO) to
purchase our stock during designated periods through the use of
payroll deductions. By encouraging our employees to become
stockholders, we believe we will motivate our employees to
increase the value and profitability of the Company.
NEO
Employment Agreement Changes in 2011
We entered into employment agreements with Messrs. Bardis,
Hunn and Ballard (in August 2007) and Mr. Culbreth (in
November 2010), on terms and conditions that the Committee
determined were necessary and advisable for the long-term
retention of these key executives, particularly in the event of
a change in control of the company. The terms include severance
payments in the event of a separation from service to the
Company under certain conditions (which payments are increased
in the event that the separation occurs within two years after a
change in control).
In February 2011, the Committee reviewed the terms of our
executive officers employment agreements and determined
that certain changes to the agreements were necessary to comply
with current best practices in the compensation of
executives of publicly-traded companies. Pursuant to the terms
of the agreements, in the event that any payment under the
agreements constituted an excess parachute payment
under Section 280G of the Internal Revenue Code
(Code), the officers were entitled to
gross-up
payments to cover the 20% excise tax which could be imposed on
such payments pursuant to Section 4999 of the Code. The
total estimated amount of these
gross-up
payments (applicable to Messrs. Bardis, Hunn, Ballard and
Culbreth) as provided in the Potential
Payments Upon Termination or Change in Control section
below if such officers employment was terminated on
December 31, 2010 immediately following a change in
control, was approximately $6.6 million. The Committee
concluded that this excise tax
gross-up
provision should be eliminated from all executive agreements. As
a result, the existing employment agreements for our NEOs were
amended and restated to remove the
gross-up
provision.
Additionally, the Committee determined it necessary and
advisable for the long-term retention of these key executives
that all unvested equity awards held by the executive
automatically vest following the executives termination by
the Company without cause or by the executive for good reason.
The existing employment agreements for our NEOs were amended and
restated to reflect these changes.
See the Narrative Disclosure to Summary Compensation Table
and Grants of Plan-Based Awards Table and the
Potential Payments Upon Termination or Change In
Control sections below for more information on these
employment agreements.
Compensation,
Governance and Nominating Committee Report
We, the Compensation, Governance and Nominating Committee of the
Board of Directors of MedAssets, Inc., have reviewed and
discussed the Compensation Discussion and Analysis with
management. Based on such review and discussion, we have
recommended to the Board that the Compensation Discussion and
Analysis be included in this Proxy Statement.
By the current members of the MedAssets Compensation, Governance
and Nominating Committee consisting of:
Terrence J. Mulligan, Chairman
Vernon R. Loucks, Jr.
C.A. Lance Piccolo
John C. Rutherford
Samuel K. Skinner
23
ADDITIONAL
INFORMATION REGARDING EXECUTIVE COMPENSATION
Named
Executive Officers
The following table sets forth the name, age and position, as of
April 1, 2011, of our named executive officers of the
Company who are not also a director or director nominee.
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|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
|
L. Neil Hunn(1)
|
|
|
39
|
|
|
President, Revenue Cycle Technology
|
Allen W. Hobbs
|
|
|
53
|
|
|
President, Client Management, Field Operations and Sales
|
Lance M. Culbreth(2)
|
|
|
41
|
|
|
Senior Vice President, Chief Accounting Officer
|
|
|
|
(1) |
|
On January 4, 2011, the Company announced that Mr. L.
Neil Hunn, the Companys Executive Vice President and
Chief Financial Officer, who had also been serving as President
of Revenue Cycle Technology since January 2010, would assume
this operational leadership position on a full-time basis
effective April 1, 2011 following a three-month transition
period of the CFO role. Additionally, the Company announced that
Mr. Charles O. Garner, the Companys Senior Vice
President, Corporate Development since June 2008, was appointed
by the Board to serve as the Companys Executive Vice
President and Chief Financial Officer effective April 1,
2011. |
|
(2) |
|
On November 16, 2010, the Company announced that
Mr. Scott E. Gressett, the Companys Senior Vice
President and Chief Accounting Officer, assumed the position of
Executive Vice President and General Manager, Spend Management
Operations. Additionally, Mr. Lance M. Culbreth, the
Companys Vice President and Corporate Controller
since January 2006, was appointed by the Board to serve as the
Companys Senior Vice President and Chief Accounting
Officer. |
L. Neil Hunn has served as our President, Revenue
Cycle Technology since January 2010. Mr. Hunn also most
recently served as Executive Vice President and Chief Financial
Officer from June 2007 to March 2011. Mr. Hunn joined
MedAssets as Vice President of Corporate Development in October
2001 and was named Senior Vice President of Corporate
Development in 2005. Later, Mr. Hunn served as our
President, MedAssets Net Revenue Systems until he assumed the
role of CFO. From 1998 to 2001, Mr. Hunn was the Segment
Executive for Professional Services and Director of Business
Development for CMGI where he oversaw the operations of
CMGIs professional services division. Prior to his duties
as Segment Executive, Mr. Hunn led the corporate and merger
strategy for several CMGI business units. Before CMGI,
Mr. Hunn worked for both The Parthenon Group and Deloitte
Consulting where he worked on strategic growth as well as
corporate turn-around strategies in technology, retail, and
hospitality industries. Mr. Hunn received his MBA from
Harvard University and graduated summa cum laude from Miami
University (Ohio) with degrees in Finance and Accountancy.
Allen W. Hobbs has served as our President, Client
Management, Field Operations and Sales since December 2009.
Mr. Hobbs joined MedAssets in 2003 as Senior Vice
President, Sales through our acquisition of OSI Systems, Inc.
where he served as Principal and Executive Vice President.
Later, Mr. Hobbs served as our President, Revenue Cycle
Management Sales until he assumed his current role. Prior to OSI
Systems, Mr. Hobbs was Executive Vice President Sales and
CEO for Transcend Services, Inc., a medical records outsourcing
company, from 1992 to 1996. From 1980 to 1992, Mr. Hobbs
held various positions including Senior Vice President
International Business Development, and President, Medical
Systems Support within HBOC, Inc., now McKesson. Mr. Hobbs
graduated from the University of Georgia with a Bachelor of
Business Administration degree in Finance and a minor
concentration in Computer Science.
Lance M. Culbreth has served as our Senior Vice
President, Chief Accounting Officer since November 2010.
Mr. Culbreth joined the Company in November 1999 as Senior
Accountant, and served in such capacity until he was promoted to
Vice President and Corporate Controller in 2006. He has been
instrumental in the development and leadership of the
Companys accounting department. Mr. Culbreth has over
17 years of experience in the accounting and finance
industry, including having previously worked for Arthur
Andersen, LLP as a senior audit associate from January 1998 to
October 1999 where he performed audit and other
24
transaction services for enterprise clients in a variety of
industries. Mr. Culbreth also served in various accounting
roles for Serologicals, Inc., a biotechnology company, from
January 1994 to December 1997. Mr. Culbreth graduated from
the University of Georgia with a Bachelor of Business
Administration degree in Accounting.
COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS
The following table sets forth the cash and non-cash
compensation paid or incurred on our behalf to our chief
executive officer and chief financial officer (including any
individual who served in either capacity during the year) and
each of our other named executive officers for 2010:
2010
Summary Compensation Table
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
|
|
Stock
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
SSARs
|
|
Plan
|
|
All Other
|
|
|
|
|
Fiscal
|
|
Salary
|
|
Bonus
|
|
Awards(s)
|
|
Award(s)
|
|
Award(s)
|
|
Compensation
|
|
Compensation
|
|
Total
|
Name and Position
|
|
Year
|
|
($)
|
|
($)(4)
|
|
($)
|
|
($)
|
|
($)
|
|
($)(3)
|
|
($)(5)
|
|
($)
|
|
John A. Bardis
|
|
|
2010
|
|
|
|
533,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,935
|
|
|
|
541,776
|
|
Chairman of the Board,
|
|
|
2009
|
|
|
|
400,000
|
|
|
|
|
|
|
|
2,354,081
|
|
|
|
|
|
|
|
1,669,414
|
|
|
|
|
|
|
|
23,535
|
|
|
|
4,447,030
|
|
President and Chief
|
|
|
2008
|
|
|
|
400,000
|
|
|
|
10,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
226,512
|
|
|
|
61,031
|
|
|
|
698,031
|
|
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L. Neil Hunn(1)
|
|
|
2010
|
|
|
|
321,970
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,907
|
|
|
|
579,878
|
|
President,
|
|
|
2009
|
|
|
|
250,000
|
|
|
|
|
|
|
|
1,222,727
|
|
|
|
|
|
|
|
867,105
|
|
|
|
|
|
|
|
12,239
|
|
|
|
2,352,071
|
|
Revenue Cycle Technology
|
|
|
2008
|
|
|
|
249,724
|
|
|
|
43,620
|
|
|
|
|
|
|
|
99,089
|
|
|
|
|
|
|
|
94,380
|
|
|
|
7,752
|
|
|
|
494,565
|
|
Rand A. Ballard
|
|
|
2010
|
|
|
|
411,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,278
|
|
|
|
418,864
|
|
Senior Executive Vice President,
|
|
|
2009
|
|
|
|
305,000
|
|
|
|
|
|
|
|
1,707,629
|
|
|
|
|
|
|
|
1,210,985
|
|
|
|
|
|
|
|
19,733
|
|
|
|
3,243,347
|
|
Chief Operating Officer and
|
|
|
2008
|
|
|
|
312,332
|
|
|
|
31,070
|
|
|
|
|
|
|
|
99,089
|
|
|
|
|
|
|
|
143,930
|
|
|
|
3,232
|
|
|
|
589,653
|
|
Chief Customer Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allen W. Hobbs
|
|
|
2010
|
|
|
|
330,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,166
|
|
|
|
380,935
|
|
President,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Client Management,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Field Operations & Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lance M. Culbreth
|
|
|
2010
|
|
|
|
181,385
|
|
|
|
|
|
|
|
381,375
|
(2)
|
|
|
|
|
|
|
549,436
|
(2)
|
|
|
|
|
|
|
7,311
|
|
|
|
1,119,507
|
|
Senior Vice President,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Accounting Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
On January 4, 2011, the Company announced that Mr. L.
Neil Hunn, the Companys Executive Vice President and
Chief Financial Officer, who had also been serving as President
of Revenue Cycle Technology since January 2010, would assume
this operational leadership position on a full-time basis
effective April 1, 2011 following a three-month transition
period of the CFO role. Additionally, the Company announced that
Mr. Charles O. Garner, the Companys Senior Vice
President, Corporate Development since June 2008, was appointed
by the board to serve as the Companys Executive Vice
President and Chief Financial Officer effective April 1,
2011. |
|
(2) |
|
These amounts represent the aggregate grant date fair value of
awards granted to Mr. Culbreth in 2010, determined under
FASB ASC Topic 718. For information on the valuation assumptions
with respect to awards made, refer to footnote 10 of the Notes
to Consolidated Financial Statements of the Companys
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010 filed with the
SEC on March 1, 2011. These amounts: i) reflect the
Companys aggregate accounting expense for
these awards, rather than the Companys 2010
accounting expense, and ii) do not necessarily correspond
to the actual value that will be recognized by
Mr. Culbreth. A significant portion of the awards have
perfomance-based vesting terms which are tied to specific
Company financial performance, plus Mr. Culbreth must be
employed through December 31, 2012. Refer to 2010 NEO
Equity Awards Under the Plan above and the 2010
Grants of Plan-Based Awards Table and related narrative
disclosure below for more information on these awards. |
|
(3) |
|
The Companys actual consolidated adjusted EBITDA for 2010
was less than 88.5% of budgeted consolidated adjusted EBITDA, or
the threshold required to initiate funding. As a result, the
Pool was not funded and no annual cash incentives were earned by
the NEOs. For more information on the 2010 annual cash incentive
program, refer to Annual Cash Incentive Program and
Discretionary Cash Bonuses above. |
25
|
|
|
(4) |
|
In December 2010, Mr. Hunn was paid a cash bonus of
$250,000 for his exceptional performance related to the
Companys acquisition of The Broadlane Group, which closed
in November 2010. Other NEO discretionary bonus amounts related
to 2010 performance have not yet been determined as of the date
of this filing. These amounts, if any, are expected to be
determined within the next 30 days. Please see the
Annual Cash Incentive and Discretionary Cash Bonuses
section above for more information regarding the
Committees discretion in awarding cash bonuses. |
|
(5) |
|
Mr. Bardis other compensation was $7,935. The total
amount of matching contributions made by the Company on his
behalf related to the Savings Plan was $6,125.
Mr. Hunns other compensation was $7,907. The total
amount of matching contributions made by the Company on his
behalf related to the Savings Plan was $6,097.
Mr. Ballards other compensation was $7,278. The total
amount of matching contributions made by the Company on his
behalf related to the Savings Plan was $6,130.
Mr. Hobbs other compensation was $50,166.
Mr. Hobbs earned $43,718 in sales commissions for 2010. The
total amount of matching contributions made by the Company on
his behalf related to the Savings Plan was $6,125.
Mr. Culbreths other compensation was $7,311. The
total amount of matching contributions made by the Company on
his behalf related to the Savings Plan was $5,500. |
Term of
the Named Executive Officers
Each executive officer, including our NEOs, serves at the
discretion of the Board of Directors and holds office until his
successor is elected and qualified or until his earlier
resignation or removal. There are no family relationships among
any of our directors or executive officers, including our NEOs.
Grants of
Plan-Based Awards
2010
Grants of Plan-Based Awards Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future
|
|
|
All Other Stock
|
|
|
All Other SSARs
|
|
|
|
|
|
|
|
|
Payments Under Non-
|
|
|
Awards: Number
|
|
|
Awards: Number
|
|
|
Exercise or
|
|
|
|
|
|
Equity Incentive Plan
|
|
|
of Shares of
|
|
|
of Securities
|
|
|
Base Price
|
|
|
|
Grant
|
|
Awards($)(1)
|
|
|
Stock or Units
|
|
|
Underlying
|
|
|
of SSARs
|
|
Name of Executive
|
|
Date
|
|
Threshold
|
|
|
Target
|
|
|
(#)
|
|
|
SSARs (#)
|
|
|
Awards ($)(2)
|
|
|
John A. Bardis
|
|
N/A
|
|
|
3,410
|
|
|
|
341,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L. Neil Hunn
|
|
N/A
|
|
|
1,362
|
|
|
|
136,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rand A. Ballard
|
|
N/A
|
|
|
2,202
|
|
|
|
220,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allen W. Hobbs
|
|
N/A
|
|
|
1,323
|
|
|
|
132,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lance M. Culbreth
|
|
N/A
|
|
|
396
|
|
|
|
39,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/23/2010
|
|
|
|
|
|
|
|
|
|
|
21,024
|
|
|
|
|
|
|
|
|
|
|
|
11/23/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,774
|
|
|
|
18.14
|
|
|
|
|
(1) |
|
The amounts shown in these columns represent the annual cash
incentive threshold and target compensation potential for each
NEO for 2010. The target amount for each NEO is the target cash
incentive based on a predetermined percentage of their 2010
salary. Funding is initiated (threshold) for each NEO based on
the achievement of a minimum level of performance required to
initially fund the incentive plan. There is no set maximum
payout amount. Actual amounts paid may be increased over and
above the target incentive amount at the discretion of the
compensation, governance & nominating committee. For
more information on the annual cash incentive opportunity
program, refer to Annual Cash Incentive Program and
Discretionary Cash Bonuses above. The actual amounts
earned by the NEOs for 2010 are reported in the Summary
Compensation Table under the column entitled Non-Equity
Incentive Plan Compensation and are further described in
note 3 of the 2010 Summary Compensation Table
above. |
|
(2) |
|
The exercise price per SSAR assigned at the date of grant was
set equal to the fair market value per share of $18.14. |
26
Narrative
Disclosure to Summary Compensation Table and Grants of
Plan-Based Awards Table
The material terms of the employment agreements for
Messrs. Bardis, Hunn and Ballard (entered into in August
2007) and Mr. Culbreth (entered into in November 2010), are
as follows:
|
|
|
|
|
The agreements contain an initial three-year (or, in the case of
Messrs. Hunn and Culbreth, two-year) term with an automatic
one-year extension each year thereafter unless either party
provides written notice to the other of its intention not to
renew the agreement at least 12 months prior to the
expiration of the then-current term.
|
|
|
|
The agreements provide for a base annual salary of $400,000 for
Mr. Bardis, $250,000 for Mr. Hunn, $305,000 for
Mr. Ballard and $225,000 for Mr. Culbreth in each case
subject to increase as may be approved by the Chief Executive
Officer or the compensation, governance and nominating committee
(for Mr. Bardis). See Salary section of the
Compensation Discussion and Analysis above for
details on increases to the salaries of Messrs. Bardis,
Hunn and Ballard in 2010.
|
|
|
|
Each NEO shall be eligible to participate in an annual cash
incentive program established by the Board of Directors in
respect of each fiscal year during the employment term, with an
annual target cash incentive of 60% of base salary in the case
of Mr. Bardis, 40% of base salary in the case of
Mr. Hunn, 50% of base salary in the case of
Mr. Ballard and 35% of base salary in the case of
Mr. Culbreth.
|
|
|
|
The employment agreements contain standard confidentiality
provisions and subject the NEOs to non-competition and
non-solicitation obligations during the term of employment and
for 36 months in the case of Mr. Bardis,
60 months in the case of Mr. Ballard, and 24 months in
the cases of Messrs. Hunn and Culbreth following
termination of employment for any reason.
|
A breakdown of restricted stock awards granted to
Mr. Culbreth on
11/23/2010
is as follows: 7,066 (service-based), 13,958
(performance-based). The shares of restricted stock subject to
performance-based vesting criteria vest as follows: 50% vesting
based on achievement of a 15% compounded annual growth rate of
Cash EPS for the three-year period ending December 31,
2011; Pro rata vesting of between 50% and 100% based on
achievement of a compounded annual growth rate of Cash EPS
between 15% and 25% for the three-year period ending
December 31, 2011; 100% vesting based on achievement of a
25% compounded annual growth rate of Cash EPS for the three-year
period ending December 31, 2011. In addition to meeting the
performance targets as discussed above, Mr. Culbreth must
be employed by the Company through December 31, 2012 in
order for the awards that are subject to performance-based
vesting criteria to vest. The shares of restricted stock subject
to service-based vesting criteria vest 100% on December 31,
2012.
A breakdown of SSARs awards granted on
11/23/2010
to Mr. Culbreth is as follows: 51,777 (service-based),
25,997 (performance-based). 100% of the performance-based SSARs
vest upon the achievement of a 25% compounded annual growth rate
of Cash EPS for the three-year period ending December 31,
2011. None of the performance-based SSARs will vest unless the
Company achieves the aforementioned 25% Diluted Cash EPS growth
rate. In addition to meeting the performance targets as
discussed above, Mr. Culbreth must be employed by the
Company through December 31, 2012 in order for the awards
that are subject to performance-based vesting criteria to vest.
48,000 service-based SSARs vest equally (over the course of
60 months) beginning on November 1, 2010 such that
100% of the SSARS will be fully vested on October 1, 2015.
3,777 service-based SSARs vest 50% on December 31, 2010 and
25% annually beginning on December 31, 2011.
Aggregate
Stock Option Exercises
The following table provides information for the NEOs on stock
option award exercises during 2010 including the number of
shares acquired upon exercise and the resulting pre-tax value
realized from the exercise. No vested SSARs were exercised by
the NEOs. The amounts shown in the Pre-Tax Value Realized on
Exercises column equal the number of shares for which the
options were exercised multiplied by the
27
difference between the fair value of a share of stock at the
time of exercise and the stock option exercise price.
2010
Stock Option Exercises Table
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
Pre-Tax
|
|
|
|
Acquired on
|
|
|
Value Realized on
|
|
Name of Executive
|
|
Exercises (#)
|
|
|
Exercises ($)
|
|
|
John A. Bardis(4)
|
|
|
|
|
|
|
|
|
L. Neil Hunn(1)
|
|
|
20,200
|
|
|
|
390,971
|
|
Rand A. Ballard(4)
|
|
|
|
|
|
|
|
|
Allen W. Hobbs(2)
|
|
|
93,450
|
|
|
|
1,551,203
|
|
Lance M. Culbreth(3)
|
|
|
2,600
|
|
|
|
50,544
|
|
|
|
|
(1) |
|
On January 4, 2010, Mr. Hunn exercised 1,550 stock
options with an exercise price of $2.86 and fair value of
$21.58. On February 24, 2010, Mr. Hunn exercised 1,550
stock options with an exercise price of $2.86 and fair value of
$21.55. On March 1, 2010, Mr. Hunn exercised 1,600
stock options with an exercise price of $2.86 and fair value of
$21.59. On April 16, 2010, Mr. Hunn exercised 3,100
stock options with an exercise price of $2.86 and fair value of
$21.55. On May 3, 2010, Mr. Hunn exercised 3,100 stock
options with an exercise price of $2.86 and fair value of
$22.93. On June 3, 2010, Mr. Hunn exercised 3,100
stock options with an exercise price of $2.86 and fair value of
$23.00. On July 2, 2010, Mr. Hunn exercised 100 stock
options with an exercise price of $2.86 and fair value of
$22.95. On July 6, 2010, Mr. Hunn exercised 3,000
stock options with an exercise price of $2.86 and fair value of
$22.98. On August 2, 2010, Mr. Hunn exercised: 2,126
stock options with an exercise price of $2.86 and fair value of
$23.63 and 974 stock options with an exercise price of $9.29 and
fair value of $23.63. |
|
(2) |
|
On January 4, 2010, Mr. Hobbs exercised 8,000 stock
options with an exercise price of $2.09 and fair value of
$21.49. On February 24, 2010, Mr. Hobbs exercised
8,000 stock options with an exercise price of $2.09 and fair
value of $21.05. On March 1, 2010, Mr. Hobbs exercised
8,000 stock options with an exercise price of $2.09 and fair
value of $21.56. On November 26, 2010, Mr. Hobbs
exercised 4,800 stock options with an exercise price of $2.09
and fair value of $18.60. On November 29, 2010,
Mr. Hobbs exercised 12,758 stock options with an exercise
price of $2.09 and fair value of $18.45 and 12,442 stock options
with an exercise price of $3.75 and fair value of 18.45. On
December 14, 2010, Mr. Hobbs exercised 39,450 stock
options with an exercise price of $3.75 and fair value of $19.41. |
|
(3) |
|
On June 28, 2010, Mr. Culbreth exercised: i) 335
stock options with an exercise price of $1.56 and fair value of
$23.92; ii) 129 stock options with an exercise price of
$2.86 and fair value of $23.92; and iii) 2,136 stock
options with an exercise price of $5.04 and fair value of $23.92. |
|
(4) |
|
Messrs. Bardis and Ballard did not exercise any stock
options in 2010. |
28
Outstanding
Equity Awards at 2010 Fiscal Year-End
The following table provides information on the equity award
holdings by the NEOs as of December 31, 2010. Information
regarding vesting terms for each grant can be found in the
footnotes following the table. For additional information about
our equity awards, refer to Equity Awards above.
Outstanding
Equity Awards Table (as of December 31, 2010)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Plan
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Awards:
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Market
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
Market
|
|
Number of
|
|
Value of
|
|
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Value of
|
|
Unearned
|
|
Unearned
|
|
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Shares of
|
|
Shares of
|
|
Shares of
|
|
Shares of
|
|
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
Restricted
|
|
Restricted
|
|
Restricted
|
|
Restricted
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Option/SSAR
|
|
Option/SSAR
|
|
Stock That
|
|
Stock That
|
|
Stock That
|
|
Stock That
|
|
|
|
|
Options/SSARs
|
|
Options/SSARs
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
Name of Executive
|
|
Grant Date
|
|
Exercisable (#)
|
|
Unexercisable (#)
|
|
SSARs (#)
|
|
Price ($)
|
|
Date
|
|
Vested (#)
|
|
Vested (15) ($)
|
|
Vested (#)
|
|
Vested (18) ($)
|
|
John A. Bardis
|
|
|
4/21/2004
|
(1)
|
|
|
21,506
|
|
|
|
|
|
|
|
|
|
|
|
1.56
|
|
|
|
4/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2005
|
(2)(3)
|
|
|
3,334
|
|
|
|
|
|
|
|
|
|
|
|
2.86
|
|
|
|
2/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2005
|
(4)
|
|
|
12,455
|
|
|
|
|
|
|
|
|
|
|
|
2.86
|
|
|
|
2/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/14/2005
|
(6)
|
|
|
49,335
|
|
|
|
|
|
|
|
|
|
|
|
2.86
|
|
|
|
9/14/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/5/2006
|
(7)
|
|
|
30,600
|
|
|
|
3,601
|
|
|
|
|
|
|
|
9.68
|
|
|
|
7/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2006
|
(8)(3)
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
9.68
|
|
|
|
10/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/10/2007
|
(9)(3)
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
9.29
|
|
|
|
9/10/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/10/2007
|
(10)
|
|
|
16,533
|
|
|
|
8,267
|
|
|
|
|
|
|
|
9.29
|
|
|
|
9/10/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(12)
|
|
|
60,771
|
|
|
|
60,771
|
|
|
|
|
|
|
|
14.74
|
|
|
|
1/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(13)
|
|
|
|
|
|
|
|
|
|
|
239,803
|
|
|
|
14.74
|
|
|
|
1/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,236
|
|
|
|
1,074,835
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106,471
|
|
|
|
2,149,649
|
|
L. Neil Hunn
|
|
|
7/5/2006
|
(7)
|
|
|
10,799
|
|
|
|
1,201
|
|
|
|
|
|
|
|
9.68
|
|
|
|
7/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/10/2007
|
(10)
|
|
|
36,359
|
|
|
|
18,667
|
|
|
|
|
|
|
|
9.29
|
|
|
|
9/10/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/17/2007
|
(10)
|
|
|
26,666
|
|
|
|
13,334
|
|
|
|
|
|
|
|
9.29
|
|
|
|
9/17/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/2008
|
(11)
|
|
|
8,546
|
|
|
|
6,536
|
|
|
|
|
|
|
|
15.95
|
|
|
|
3/25/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(12)
|
|
|
31,565
|
|
|
|
31,565
|
|
|
|
|
|
|
|
14.74
|
|
|
|
1/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(13)
|
|
|
|
|
|
|
|
|
|
|
124,555
|
|
|
|
14.74
|
|
|
|
1/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,651
|
|
|
|
558,274
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,302
|
|
|
|
1,116,547
|
|
Rand A. Ballard
|
|
|
4/21/2004
|
(1)
|
|
|
25,807
|
|
|
|
|
|
|
|
|
|
|
|
1.56
|
|
|
|
4/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2005
|
(2)(3)
|
|
|
3,334
|
|
|
|
|
|
|
|
|
|
|
|
2.86
|
|
|
|
2/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2005
|
(4)
|
|
|
12,455
|
|
|
|
|
|
|
|
|
|
|
|
2.86
|
|
|
|
2/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/5/2006
|
(7)
|
|
|
24,600
|
|
|
|
3,601
|
|
|
|
|
|
|
|
9.68
|
|
|
|
7/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2006
|
(8)(3)
|
|
|
13,890
|
|
|
|
|
|
|
|
|
|
|
|
9.68
|
|
|
|
10/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/10/2007
|
(9)(3)
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
9.29
|
|
|
|
9/10/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/10/2007
|
(10)
|
|
|
16,533
|
|
|
|
8,267
|
|
|
|
|
|
|
|
9.29
|
|
|
|
9/10/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/2008
|
(11)
|
|
|
8,546
|
|
|
|
6,536
|
|
|
|
|
|
|
|
15.95
|
|
|
|
3/25/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(12)
|
|
|
44,083
|
|
|
|
44,083
|
|
|
|
|
|
|
|
14.74
|
|
|
|
1/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(13)
|
|
|
|
|
|
|
|
|
|
|
173,952
|
|
|
|
14.74
|
|
|
|
1/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,617
|
|
|
|
779,677
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,233
|
|
|
|
1,559,334
|
|
Allen W. Hobbs
|
|
|
7/5/2006
|
(7)
|
|
|
10,667
|
|
|
|
1,601
|
|
|
|
|
|
|
|
9.68
|
|
|
|
7/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/10/2007
|
(10)
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
9.29
|
|
|
|
9/10/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/2008
|
(11)
|
|
|
5,171
|
|
|
|
3,955
|
|
|
|
|
|
|
|
15.95
|
|
|
|
3/25/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(12)
|
|
|
13,989
|
|
|
|
13,990
|
|
|
|
|
|
|
|
14.74
|
|
|
|
1/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(13)
|
|
|
|
|
|
|
|
|
|
|
55,203
|
|
|
|
14.74
|
|
|
|
1/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,255
|
|
|
|
247,428
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,510
|
|
|
|
494,857
|
|
Lance M. Culbreth
|
|
|
4/18/2006
|
(5)
|
|
|
1,961
|
|
|
|
|
|
|
|
|
|
|
|
5.04
|
|
|
|
4/18/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/5/2006
|
(7)
|
|
|
2,879
|
|
|
|
321
|
|
|
|
|
|
|
|
9.68
|
|
|
|
7/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/10/2007
|
(10)
|
|
|
5,333
|
|
|
|
2,667
|
|
|
|
|
|
|
|
9.29
|
|
|
|
9/10/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/17/2007
|
(10)
|
|
|
5,333
|
|
|
|
2,667
|
|
|
|
|
|
|
|
9.29
|
|
|
|
9/17/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/2008
|
(11)
|
|
|
5,171
|
|
|
|
3,955
|
|
|
|
|
|
|
|
15.95
|
|
|
|
3/25/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/5/2009
|
(12)
|
|
|
6,067
|
|
|
|
6,066
|
|
|
|
|
|
|
|
14.74
|
|
|
|
1/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/23/2010
|
(16)
|
|
|
1,888
|
|
|
|
1,889
|
|
|
|
|
|
|
|
18.14
|
|
|
|
11/23/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/23/2010
|
(17)
|
|
|
1,599
|
|
|
|
46,401
|
|
|
|
|
|
|
|
18.14
|
|
|
|
11/23/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/23/2010
|
(13)
|
|
|
|
|
|
|
|
|
|
|
25,997
|
|
|
|
18.14
|
|
|
|
11/23/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/23/2010
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,066
|
|
|
|
142,663
|
|
|
|
|
|
|
|
|
|
|
|
|
11/23/2010
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,958
|
|
|
|
281,812
|
|
|
|
|
(1) |
|
These stock options vest equally (over the course of
60 months) on the first day of each month beginning on
May 1, 2004, such that 100% of the options were fully
vested on April 1, 2009. |
|
(2) |
|
These stock options vest equally (over the course of
36 months) on the first day of each month beginning on
March 1, 2005, such that 100% of the options were fully
vested on February 1, 2008. |
29
|
|
|
(3) |
|
These stock option grants were awarded as compensation for
service on our Board of Directors. |
|
(4) |
|
These stock options vest equally (over the course of
60 months) on the first day of each month beginning on
March 1, 2005, such that 100% of the options were fully
vested on February 1, 2010. |
|
(5) |
|
These stock options vest equally (over the course of
60 months) on the first day of each month beginning on
May 1, 2006, such that 100% of the options were fully
vested on April 1, 2011. |
|
(6) |
|
These stock options vest equally (over the course of
60 months) on the first day of each month beginning on
October 1, 2005, such that 100% of the options were fully
vested on September 1, 2010. |
|
(7) |
|
These stock options vest equally (over the course of
60 months) on the first day of each month beginning on
August 1, 2006, such that 100% of the options will be fully
vested on July 1, 2011. |
|
(8) |
|
These stock options vest equally (over the course of
36 months) on the first day of each month beginning on
October 1, 2006, such that 100% of the options were fully
vested on September 1, 2009. |
|
(9) |
|
These stock options vest equally (over the course of
36 months) on the first day of each month beginning on
September 1, 2007, such that 100% of the options were fully
vested on August 1, 2010. |
|
(10) |
|
These stock options vest equally (over the course of
60 months) on the first day of each month beginning on
September 1, 2007, such that 100% of the options will be
fully vested on August 1, 2012. |
|
(11) |
|
These stock options vest equally (over the course of
60 months) on the first day of each month beginning on
March 1, 2008, such that 100% of the options will be fully
vested on February 1, 2013. |
|
(12) |
|
These service-based SSARs vest 25% annually beginning on
December 31, 2009. |
|
(13) |
|
These performance-based SSARs vest upon the achievement of a 25%
compounded annual growth rate of Cash EPS for the three-year
period ending December 31, 2011 and requires the grantees
be employed by the Company through December 31, 2012. |
|
(14) |
|
These service-based restricted shares vest 100% on
December 31, 2012. |
|
(15) |
|
These performance-based restricted shares vest as follows: 50%
vesting based on achievement of a 15% compounded annual growth
rate of Cash EPS for the three-year period ending
December 31, 2011; pro rata vesting of between 50% and 100%
based on achievement of a compounded annual growth rate of Cash
EPS between 15% and 25% for the three-year period ending
December 31, 2011; 100% vesting based on achievement of a
25% compounded annual growth rate of Cash EPS for the three-year
period ending December 31, 2011. In addition to meeting the
performance targets as discussed above, the grantees must be
employed by the Company for a full four years through
December 31, 2012 in order for the awards that are subject
to performance-based vesting criteria to vest. |
|
(16) |
|
These service-based SSARs vest 50% on December 31, 2010 and
25% annually thereafter. |
|
(17) |
|
These service-based SSARs vest equally (over the course of
60 months) on the first day on the first day of each month
beginning on November 1, 2010, such that 100% of the
options will be fully vested on October 1, 2015. |
|
(18) |
|
The market value is computed using the closing market price
($20.19) of the companys stock on December 31, 2010. |
30
Potential
Payments Upon Termination or Change In Control
The information in the table below describes and quantifies
certain estimated compensation that would become payable
following a change in control or termination of employment of
certain of our NEOs. The table assumes that the change in
control or termination of employment occurred on
December 31, 2010. The compensation shown below does not
include forms of compensation generally available to all
salaried employees upon termination of employment, such as
distributions under the Savings Plan, disability benefits and
accrued vacation pay.
Please refer to the Other Key Compensation Related
Decisions section above regarding NEO employment
agreement changes in 2011.
Potential
Payments Upon Termination or Change In Control (at
December 31, 2010)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
Target
|
|
|
|
Value of
|
|
Unvested
|
|
Value of
|
|
|
|
|
|
|
|
|
Cash
|
|
Healthcare
|
|
Unvested
|
|
Restricted Stock
|
|
Tax
|
|
|
|
|
|
|
|
|
Incentive
|
|
Benefits
|
|
Options/SSARs
|
|
Awards
|
|
Gross-Up
|
|
|
|
|
Event
|
|
Salary ($)(6)
|
|
($)
|
|
($)
|
|
($)(7)(9)
|
|
($)(9)
|
|
($)(8)(9)
|
|
Total ($)
|
|
John A. Bardis
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,766,120
|
|
|
|
3,224,484
|
|
|
|
|
|
|
|
4,990,604
|
|
|
|
|
(2
|
)
|
|
|
1,705,425
|
|
|
|
1,023,255
|
|
|
|
27,121
|
|
|
|
1,766,120
|
|
|
|
3,224,484
|
|
|
|
2,838,465
|
|
|
|
10,584,870
|
|
|
|
|
(3
|
)
|
|
|
1,136,950
|
|
|
|
682,170
|
|
|
|
27,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,846,241
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
341,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
341,085
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L. Neil Hunn
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,240,070
|
|
|
|
1,674,821
|
|
|
|
|
|
|
|
2,914,891
|
|
|
|
|
(2
|
)
|
|
|
681,190
|
|
|
|
272,476
|
|
|
|
26,984
|
|
|
|
1,240,070
|
|
|
|
1,674,821
|
|
|
|
1,277,891
|
|
|
|
5,173,432
|
|
|
|
|
(3
|
)
|
|
|
340,595
|
|
|
|
136,238
|
|
|
|
26,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
503,817
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
136,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
136,238
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rand A. Ballard
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,343,995
|
|
|
|
2,339,011
|
|
|
|
|
|
|
|
3,683,006
|
|
|
|
|
(2
|
)
|
|
|
1,321,785
|
|
|
|
660,893
|
|
|
|
18,525
|
|
|
|
1,343,995
|
|
|
|
2,339,011
|
|
|
|
2,026,693
|
|
|
|
7,710,902
|
|
|
|
|
(3
|
)
|
|
|
881,190
|
|
|
|
440,595
|
|
|
|
18,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,340,310
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
220,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
220,298
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lance M. Culbreth
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
185,348
|
|
|
|
424,475
|
|
|
|
|
|
|
|
609,823
|
|
|
|
|
(2
|
)
|
|
|
450,000
|
|
|
|
157,500
|
|
|
|
26,182
|
|
|
|
263,632
|
|
|
|
424,475
|
|
|
|
476,931
|
|
|
|
1,798,720
|
|
|
|
|
(3
|
)
|
|
|
225,000
|
|
|
|
78,750
|
|
|
|
26,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
329,932
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
78,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,750
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Events:
|
|
|
(1) |
|
Change in Control. Pursuant to the terms of certain of the NEO
equity agreements: in the event of a change in control, all
equity awards held which have not previously vested prior to the
date of such change in control fully vest upon such change in
control. |
|
(2) |
|
Change in Control and Qualifying Termination. Pursuant to the
terms of the NEO employment agreements: in the event that the
NEOs employment is terminated by us without
cause or by the NEO with good reason
within the two-year period following a change in control, the
NEO will be entitled to, subject to the execution of a release,
(i) full vesting of all equity awards, (ii) three
times (or, in the case of Messrs. Hunn and Culbreth two
times) salary and annual target cash incentive amounts, and
(iii) payment of COBRA premiums for the lesser of
18 months or the remaining term of employment (see also
footnote 9). |
|
(3) |
|
Qualifying Termination Other Than in Connection With a Change in
Control. Pursuant to the terms of the NEO employment agreements:
in the event that the NEOs employment is terminated by us
without cause or by the NEO with good
reason at any time (other than during the two years
following a change in control), the NEO will be entitled to,
subject to the execution of a release, (i) two times (or,
in the case of Messrs. Hunn and Culbreth one year of)
salary and target annual cash incentive payments; and |
31
|
|
|
|
|
(ii) payment of COBRA premiums for the lesser of
18 months or the remaining term of employment (see also
footnote 9). In the event Mr. Culbreth is terminated by us
without cause or by him with good reason
within the first two years following the commencement of his
employment agreement, Mr. Culbreth will be entitled to,
subject to the execution of a release, (i) two times salary
and target annual cash incentive payments; and (ii) payment
of COBRA premiums for the lesser of 18 months or the
remaining term of employment. |
|
(4) |
|
Termination by Death or Disability. Pursuant to the terms of the
NEO employment agreements: in the event that the NEOs
employment is terminated by virtue of his death or disability,
the target cash incentive for 2010 would be earned assuming the
companys financial performance objectives were achieved
and approved by the compensation, governance &
nominating committee. |
|
(5) |
|
Termination for Cause or Voluntary Resignation. Pursuant to the
terms of the NEO employment agreements: in the event that an
NEOs employment is terminated by us with cause
or voluntarily by the NEO, no obligation exists. |
|
(6) |
|
The salary amounts are based on annual base salaries as of
December 31, 2010. |
|
(7) |
|
The amounts in this column are based on the fair value of those
unvested option/SSAR awards which were outstanding as of
December 31, 2010. The amounts are calculated by taking the
fair value per share of stock ($20.19, closing price on
December 31, 2010) minus the related exercise price of
each option/SSAR multiplied by the number of options/SSARs. |
|
(8) |
|
Pursuant to the terms of the NEOs employment agreement: in
the event that any payment under the agreements constitutes an
excess parachute payment under Section 280G of
the Internal Revenue Code, the NEOs are entitled to a
gross-up
payment to cover the 20% excise tax which may be imposed on such
payment pursuant to Section 4999 of the Internal Revenue
Code (amount shown is an estimate of the
gross-up
that would have been payable if such NEOs employment was
terminated on December 31, 2010 immediately following a
change in control). |
|
(9) |
|
NEO employment agreements were amended and restated in 2011 to:
i) eliminate the tax-gross up provision and ii) allow
for the immediate vesting of all unvested equity awards held by
the NEO following the NEOs termination by the Company
without cause or by the executive for good reason. |
For more information regarding material conditions and
obligations under these agreements, refer to Narrative
Disclosure to Summary Compensation Table and Grants of
Plan-Based Awards Table above.
Equity
Compensation Plan Information
The information regarding securities authorized for issuance
under the Companys equity compensation plans is set forth
below, as of December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
Weighted-
|
|
|
Remaining Available
|
|
|
|
|
|
|
Average Exercise
|
|
|
for Future Issuance
|
|
|
|
Number of Securities
|
|
|
Price of
|
|
|
Under Equity
|
|
|
|
to be Issued Upon
|
|
|
Outstanding
|
|
|
Compensation Plans
|
|
|
|
Exercise of
|
|
|
Options,
|
|
|
(excluding securities
|
|
|
|
Outstanding Options,
|
|
|
Warrants and
|
|
|
reflected in column
|
|
Plan Category
|
|
Warrants and Rights
|
|
|
Rights
|
|
|
(a))
|
|
|
Equity compensation plans approved by security holders
|
|
|
8,793,829
|
(1)
|
|
$
|
13.70
|
|
|
|
953,297
|
(2)
|
Equity compensation plans not approved by security holders
|
|
|
610,000
|
(3)
|
|
|
18.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total(4)
|
|
|
9,403,829
|
|
|
$
|
13.99
|
|
|
|
953,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This amount includes 4,433,829 common stock options, 4,322,497
SSARs and 37,503 common stock warrants issued under our Long
Term Performance Incentive Plan (effected in 2008), 2004 Long
Term Equity Incentive Plan, and 1999 Stock Incentive Plan. |
32
|
|
|
(2) |
|
All securities remaining available for future issuance are
issuable under our Long Term Performance Incentive Plan. See
Note 10 to our Consolidated Financial Statements in our
Form 10-K
for discussion of the equity plans. |
|
(3) |
|
Represents 425,000 SSARs and 185,000 restricted stock units
issued pursuant to the MedAssets, Inc. 2010 Special Stock
Incentive Plan (the Plan). The Plan was adopted by
the Companys stockholders on November 23, 2010 in
connection with the Broadlane Acquisition. No further equity
grants will be issued under the Plan. |
|
(4) |
|
The above number of securities to be issued upon exercise of
outstanding options, warrants and rights does not include
133,687 options issued in connection with our acquisition of OSI
Systems, Inc. in June 2003. These options have a weighted
average exercise price of $1.56. |
33
BOARD OF
DIRECTORS
PROPOSAL NO. 1
Election of Directors
The Board of Directors consists of eleven members. In accordance
with the terms of our amended and restated certificate of
incorporation, the Board of Directors is divided into three
staggered classes of directors of, as nearly as possible, the
same number. At each annual meeting of stockholders, a class of
directors will be elected for a three-year term to succeed the
directors of the same class whose terms are then expiring. Each
of the four individuals identified below has been nominated to
stand for election for a three-year term that expires at the
2014 annual meeting of the Companys stockholders. Each of
these individuals has consented to be named as a nominee in this
proxy statement and to serve as a director until the expiration
of his respective term and until such nominees successor
has been elected or qualified or until the earlier resignation
or removal of such nominee.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR THE ELECTION OF EACH OF THE COMPANYS
NOMINEES ON THE ENCLOSED PROXY CARD.
Should any one or more of the nominees named in this proxy
statement become unable to serve for any reason or, for good
cause, will not serve, which is not anticipated, the Board of
Directors may designate substitute nominees, unless the Board of
Directors by resolution provides for a lesser number of
directors. In this event, the proxy holders will vote for the
election of such substitute nominee or nominees.
The Board has nominated Mrs. Samantha Trotman Burman and
Messrs. Rand A. Ballard, Vernon R. Loucks, Jr. and
John C. Rutherford for election as Class I directors at our
2011 Annual Meeting of Stockholders for a term of three years to
serve until the 2014 annual meeting of stockholders, and until
their respective successors have been elected and qualified. The
Class II directors (Messrs. C.A. Lance Piccolo,
Patrick T. Ryan, Samuel K. Skinner and Bruce F. Wesson) and the
Class III directors (Messrs. John A. Bardis, Harris
Hyman IV and Terrence J. Mulligan) will serve until the
annual meetings of stockholders to be held in 2012 and 2013,
respectively, and until their respective successors have been
elected and qualified.
The following is a brief listing of the term as a director of
our Board, principal occupation, business experience and other
directorships of the nominees for election as Class I
Directors.
Nominees
for Directors in Class I
(The
term of these nominee directors would expire at the annual
meeting of stockholders in 2014)
Samantha Trotman Burman has served as one of our
directors since August 1999 and has served as a member of the
Audit Committee of the Board of Directors since January 2000.
From 1998 to 2003, Mrs. Burman worked as a Principal and
then Partner at Parthenon Capital, a Boston-based private equity
investment firm. From 1996 to 1998, Mrs. Burman served as
Chief Financial Officer of Physicians Quality Care, a physician
practice management firm. Mrs. Burman served as an
Associate at Bain Capital, a private equity investment firm,
from 1993 to 1996. Mrs. Burman holds a M. Eng. and B.A.
from Cambridge University in England, as well as, an M.B.A. with
Distinction from Harvard Business School.
Mrs. Burmans qualification as a financial expert
under the SEC rules implementing Section 407 of the
Sarbanes-Oxley Act and her financial acumen enable
Mrs. Burman to contribute greatly to the Boards
handling of all financial matters of the Company.
Rand A. Ballard has served as our Senior Executive Vice
President, Chief Operating Officer and Chief Customer Officer
since October 2006 and has been a director since 2003. Prior to
serving as our Chief Operating Officer, Mr. Ballard served
as President of MedAssets Supply Chain Systems and led our sales
team. Prior to joining MedAssets in November 1999,
Mr. Ballards most recent experience was as Vice
President, Health Systems Supplier Economics and Distribution
for Cardinal Healthcare. Mr. Ballard holds an M.B.A. from
Pacific Lutheran University with a triple major in finance,
operations, and marketing. He was a deans list
undergraduate at the U.S. Military Academy at West Point
and holds a Bachelor of Science degree with concentration in
nuclear physics, nuclear engineering, and business law.
Mr. Ballard has served as Chairman of the Board of the
Meals on Wheels Association of America Foundation and Chairman
of the Healthcare Industry Group Purchasing Association (HIGPA).
Mr. Ballard is Chairman of the Healthcare
34
Industry Supply Chain Institute and Vice President of The Health
Careers Foundation, a non-profit organization providing
scholarships and low interest loans to non-traditional students
pursuing a degree in the healthcare field.
Mr. Ballards intimate knowledge of our current and
potential clients garnered from his extensive experience in the
healthcare industry position him well to serve on the Board of
Directors.
Vernon R. Loucks, Jr. has served as a director since
September 2007 and is a member of the Compensation, Governance
and Nominating Committee of the Board of Directors.
Mr. Loucks is Chairman of the Board of the Aethena Group,
LLC, a health care merchant banking firm and Chairman of
Advanced Proton Systems, Inc. Mr. Loucks is the retired
Chairman of Baxter International Inc., a healthcare company with
operations in over 100 countries, where he held the title of
Chief Executive Officer from 1980 through 1998 and Chairman of
the Board from 1987 through 1999. Mr. Loucks served as
Chief Executive Officer of Segway LLC and Senior Fellow of the
Yale Corporation. Mr. Loucks served on the Board of
Directors for Affymetrix, Inc. from 1993 to 2008, Anheuser-Busch
Companies, Inc. from 1988 to 2008, Edwards Lifesciences Corp.
from 2000 to 2008, Oscient Pharmaceuticals, Inc. (formerly
Genome Therapeutics, inc.) from 2004 to 2005, Pain Therapeutics
Inc. from 2003 to 2007, Segway, Inc. from 2000 to 2009, and
recently retired as a director of Emerson Electric Co. having
served on the Board since 1979. Mr. Loucks holds a
bachelors degree in history from Yale University, a
masters degree from the Harvard Graduate School of
Business Administration and is a veteran of the U.S. Marine
Corps. Mr. Loucks brings over 40 years of experience
in the healthcare industry to his service on the Board and his
experience serving on the boards of directors of other publicly
traded companies is also a valuable asset to the Board of
Directors.
John C. Rutherford has served as one of our directors
since August 1999 and is a member of the Compensation,
Governance and Nominating committee of the Board of Directors.
From 1998 to the present, Mr. Rutherford has served as a
Managing Partner of Parthenon Capital, a private equity
investment firm. From 1991 to 1998, Mr. Rutherford was the
Chairman of the Parthenon Group, a consulting firm.
Mr. Rutherford served on the Board of Directors of Kenexa
Corp. from 1999 to 2006 and serves on the boards of several
privately held companies. A native of Wellington, New Zealand,
Mr. Rutherford holds a B.E. (1st Class Honors)
degree from the University of Canterbury, an M.S. in Computer
Science from the University of Connecticut and an M.B.A. from
Harvard Business School. Mr. Rutherfords long
experience in private equity investment and his significant
tenure on the Board of Directors provides intimate and vital
knowledge of the Company to the Board of Directors.
35
APPOINTMENT
OF AUDITORS
PROPOSAL NO. 2
Ratification of the Appointment of Auditors
The Board of Directors upon the recommendation of the Audit
Committee has retained KPMG LLP as independent registered public
accounting firm to report on the consolidated financial
statements of the Company for the fiscal year ending
December 31, 2011 and to perform such other services as may
be required of them.
The Board of Directors has directed that management submit the
appointment of the independent registered public accounting
firm, KPMG LLP, for ratification by the stockholders at the
Annual Meeting. Representatives of KPMG LLP are expected to be
present at the Annual Meeting, will have the opportunity to make
a statement if they desire to do so and will also be available
to respond to appropriate stockholder questions.
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
THE
RATIFICATION OF THE APPOINTMENT OF KPMG LLP
AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM.
36
ADVISORY
VOTE ON EXECUTIVE COMPENSATION
PROPOSAL NO. 3
Advisory Vote on Executive Compensation
The recently enacted Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, (the Dodd-Frank Act),
enables our stockholders to vote to approve, on an advisory
(nonbinding) basis, the compensation of our named executive
officers as disclosed in this proxy statement in accordance with
the SECs rules.
As described in detail under the heading Compensation
Discussion and Analysis our executive compensation
program is designed to attract, motivate, and retain our named
executive officers, who are critical to our success. Under this
program, our named executive officers are rewarded for the
achievement of specific annual and long-term financial,
strategic and corporate goals. Please read the
Compensation Discussion and Analysis section
for additional details about our executive compensation program,
including information about the fiscal year 2010 compensation of
our named executive officers.
The compensation, governance & nominating committee
(Committee) of the board of directors frequently
reviews the compensation program for our named executive
officers to ensure the achievement of the desired goal of
aligning our executive compensation structure with our
stockholders interests and current market practices. As a
result of its review and analysis process, over the course of
fiscal years 2010 and 2011, the Committee made the following
changes to our executive compensation practices:
|
|
|
|
|
modified the Companys policy regarding executive
perquisites, effective January 2010, to eliminate financial
planning fees and memberships all executives
(including NEOs) are now afforded the same type of benefits;
|
|
|
|
adopted minimum stock ownership requirements for NEOs, effective
February 2010; and
|
|
|
|
amended and restated all NEO employment agreements to eliminate
the excise tax
gross-up
provision following a change in control, as set forth in the
Compensation Discussion and Analysis.
|
We are asking our stockholders to indicate their support for our
named executive officer compensation as described in this proxy
statement. This proposal, commonly known as a
say-on-pay
proposal, gives our stockholders the opportunity to express
their views on our named executive officers compensation.
This vote is not intended to address any specific item of
compensation, but rather the overall compensation of our named
executive officers and the philosophy, policies and practices
described in this proxy statement. Accordingly, we will ask our
stockholders to vote FOR the following resolution at
the Annual Meeting:
RESOLVED, that the Companys stockholders approve, on
an advisory basis, the compensation of the named executive
officers, as disclosed in the Companys Proxy Statement for
the 2011 Annual Meeting of Stockholders pursuant to the
compensation disclosure rules of the Securities and Exchange
Commission, including the Compensation Discussion and Analysis,
the 2010 Summary Compensation Table and the other related tables
and disclosure.
The
say-on-pay
vote is advisory, and therefore not binding on the Company, the
Committee or our board of directors. Our board of directors and
our Committee value the opinions of our stockholders and to the
extent there is any significant vote against the named executive
officer compensation as disclosed in this proxy statement, we
will consider our stockholders concerns and the Committee
will evaluate whether any actions are necessary to address those
concerns.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED
EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT
PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE
SECURITIES AND EXCHANGE COMMISSION.
37
ADVISORY
VOTE ON FREQUENCY OF AN
ADVISORY VOTE ON EXECUTIVE COMPENSATION
PROPOSAL NO. 4
Advisory Vote on the Frequency of an Advisory Vote on Executive
Compensation
The Dodd-Frank Act also enables our stockholders to indicate how
frequently we should seek an advisory vote on the compensation
of our named executive officers, as disclosed pursuant to the
SECs compensation disclosure rules, such as
Proposal No. 3 of this proxy statement. By voting on
this Proposal No. 4, stockholders may indicate whether
they would prefer an advisory vote on named executive officer
compensation once every one, two, or three years.
After careful consideration of this Proposal, our board of
directors has determined that an advisory vote on executive
compensation that occurs every year is the most appropriate
alternative for the Company, and therefore our board of
directors recommends that you vote for a one-year interval for
the advisory vote on executive compensation.
Our board concluded that an annual advisory vote on executive
compensation will allow our stockholders the best opportunity to
provide us with their ongoing input on our executive
compensation program. The board believes that this approach is
consistent with our philosophy of seeking input from, and
engaging in discussions with, our stockholders on corporate
governance matters and our executive compensation philosophy,
policies and practices. We understand that our stockholders may
have different views as to what is the best approach for the
Company, and we look forward to hearing from our stockholders on
this Proposal.
You are being asked to vote on the following resolution:
RESOLVED, that the Companys stockholders recommend,
on an advisory basis, that the frequency with which the
stockholders of the Company shall have an advisory vote on the
compensation of its named executive officers as set forth in the
Companys proxy statement is: (i) every three years,
(ii) every two years, (iii) every one year, or
(iv) abstain.
The option of one year, two years or three years that receives
the affirmative vote of a majority of the shares of common stock
present, either in person or by proxy, and entitled to vote at
the Annual Meeting will be the frequency for the advisory vote
on executive compensation that has been approved by
stockholders. Whether or not any option receives a majority, the
Board will consider the outcome of the stockholder vote in
determining the frequency with which the Company will hold an
advisory vote on executive compensation. However, because this
vote is advisory and not binding on the board of directors or
the Company in any way, the board may decide that it is in the
best interests of our stockholders and the Company to hold an
advisory vote on executive compensation more or less frequently
than the option approved by our stockholders, if any.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
OPTION OF ONCE EVERY YEAR AS THE FREQUENCY WITH WHICH
STOCKHOLDERS ARE PROVIDED AN ADVISORY VOTE ON EXECUTIVE
COMPENSATION, AS DISCLOSED PURSUANT TO THE COMPENSATION
DISCLOSURE RULES OF THE SECURITIES AND EXCHANGE
COMMISSION.
38
OTHER
VOTING MATTERS
Management does not know of any matters other than the foregoing
that will be presented for consideration at the Annual Meeting.
However, if other matters properly come before the Annual
Meeting, the proxy holders will vote upon them in accordance
with their best judgment.
CERTAIN
RELATIONSHIPS
Registration
Rights Agreement
We are a party to a registration rights agreement with certain
holders of our common stock and certain of our employees,
including affiliates of Galen Management, LLC, Parthenon
Capital, LLC and Messrs. Terrence J. Mulligan, John A.
Bardis and Scott E. Gressett. The shares of stock held by these
parties are referred to as registrable securities. Under the
terms of the registration rights agreement, we have, among other
things:
|
|
|
|
|
agreed to use our diligent best efforts to effect up to two
registered offerings upon request from certain holders of our
common stock;
|
|
|
|
agreed to use our best efforts to qualify for registration on
Form S-3,
following which holders of registrable securities party to the
registration rights agreement will have the right to request an
unlimited amount of registrations on
Form S-3; and
|
|
|
|
granted certain incidental or piggyback registration
rights with respect to any registrable securities held by any
party to the registration rights agreement if we determine to
register any of our securities under the Securities Act, either
for our own account or for the account of other security holders.
|
Our obligation to effect any demand for registration by the
holders of our common stock discussed in the first and second
bulleted item above is subject to certain conditions, including
that the registrable securities to be included in any such
registration have an anticipated aggregate offering price in
excess of certain thresholds specified in the registration
rights agreement. We may, in certain circumstances, defer any
registration. In an underwritten offering, the representative of
underwriters, if any, has the right, subject to specified
conditions, to limit the number of registrable securities such
holders may include.
In connection with any registration effected pursuant to the
terms of the registration rights agreement, we will be required
to pay for all of the fees and expenses incurred in connection
with such registration, including registration fees, filing fees
and printing fees. However, the underwriting discounts and
selling commissions applicable to the sale of registrable
securities included in any registration will be paid by the
persons including such registrable securities in any such
registration. We have also agreed to indemnify persons including
registrable securities in any registration affected pursuant to
the terms of the registration rights agreement and certain other
persons associated with any such registration, in each case on
the terms specified in the registration rights agreement.
Review,
Approval or Ratification of Transactions with Related
Parties
Our Board of Directors has adopted certain policies and
procedures with respect to related party transactions. These
policies and procedures require that certain transactions,
subject to specified exceptions and other than one that involves
compensation, between us and any of our directors, executive
officers or beneficial holders of more than 5% of our common
stock (on an as converted basis), or any immediate family member
of, or person sharing the household with, any of these
individuals, be consummated only if (i) approved or
ratified by our audit committee and only if the terms of the
transaction are comparable to those that could be obtained in
arms-length dealings with an unrelated third party or
(ii) approved by the disinterested members of our Board of
Directors. Our policies and procedures with respect to related
party transactions also apply to certain charitable
contributions by us or our executive officers and to the hiring
of any members of the immediate family of any of our directors
or executive officers as our permanent full-time employees. The
approval of our compensation, governance and nominating
committee is required to approve any transaction that involves
compensation to our directors and executive officers.
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All related party transactions will be approved by our audit
committee. Pursuant to the written charter of our audit
committee, the audit committee is responsible for reviewing and
approving, prior to our entry into any transaction involving
related parties, all transactions in which we are a participant
and in which any parties related to us has or will have a direct
or indirect material interest. In reviewing and approving these
transactions, the audit committee is required to obtain, or is
required to direct our management to obtain on its behalf, all
information that the committee believes to be relevant and
important to a review of the transaction prior to its approval.
Following receipt of the necessary information, a discussion is
required to be held of the relevant factors, if deemed to be
necessary by the committee, prior to approval. If a discussion
is not deemed to be necessary, approval may be given by written
consent of the committee. No related party transaction is
permitted to be entered into prior to the completion of these
procedures.
The audit committee is required to approve only those related
party transactions that are determined to be in, or not
inconsistent with, the best interests of us and our
stockholders, taking into account all available facts and
circumstances as the committee determines in good faith to be
necessary. No member of the audit committee shall participate in
any review, consideration or approval of any related party
transaction with respect to which the member or any of his or
her immediate family members is the related party.
Arrangement
with JJB Aviation, LLC
We have an agreement with John A. Bardis, our chief executive
officer, for the use of an airplane owned by JJB Aviation, LLC
(JJB), a limited liability company owned by
Mr. Bardis. We pay Mr. Bardis at market-based rates
for the use of the airplane for business purposes. The audit
committee of the board of directors reviews such usage of the
airplane annually. During the fiscal year ended
December 31, 2010 and fiscal quarter ended March 31,
2011, we incurred charges of approximately $1,913,000 and
$382,000, respectively, related to transactions with
Mr. Bardis.
Employment
of Messrs. Daniel Mulligan and Kevin Patterson
Daniel Mulligan (Mr. Mulligan), the son of
Terrence J. Mulligan, a Company director, is employed by the
Company as vice president-deputy general counsel.
Mr. Mulligans current annual salary is $165,212, and
he is eligible for an annual bonus of up to 20% of salary
earned. Kevin Patterson, the
son-in-law
of C.A. Lance Piccolo, a Company director, is employed as a
regional vice president in the Companys spend and clinical
resource management business. Mr. Pattersons current
annual salary is $99,743. Additionally, Mr. Patterson
earned $14,048 in commissions for 2010.
STOCKHOLDER
COMMUNICATIONS WITH THE BOARD
To date, the Board has not developed formal processes by which
stockholders may communicate directly with directors because it
believes that the existing informal process, in which any
communication sent to the Board, either generally or in care of
the Chief Executive Officer, Corporate Secretary, or another
corporate officer, is forwarded to all members of the Board, has
served the stockholders needs. In view of recently adopted
disclosure requirements by the SEC related to this issue, the
Company may consider development of more specific procedures.
Until any other procedures are developed and posted on the
Companys corporate website, any communication to the Board
should be mailed to the Board, in care of the Companys
Corporate Secretary, at the Companys headquarters in
Alpharetta, Georgia. The mailing envelope must contain a clear
notation indicating the enclosed letter is a
Stockholder-Board Communication or
Stockholder-Director
Communication. All such letters must identify the author
as a stockholder and clearly state whether the intended
recipients are all members of the Board or just certain
specified individual directors. Such communications will be
forwarded to the Board of Directors or the specified individual
director to whom the communication is directed unless such
communication is unduly hostile, threatening, illegal or
similarly inappropriate, in which case the Corporate Secretary
has the authority to discard the communication or to take
appropriate legal action regarding such communication.
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STOCKHOLDER
PROPOSALS 2012 ANNUAL MEETING
Any proposals of stockholders of the Company intended to be
included in the Companys proxy statement and form of proxy
relating to the Companys next annual meeting of
stockholders must be in writing and received by the Secretary of
the Company at the Companys office at 100 North Point
Center East, Suite 200, Alpharetta, Georgia, 30022 on or
after January 27, 2012 but no later than February 26,
2012. In the event that the next annual meeting of stockholders
is called for a date that is not within 30 days before or
after May 26, 2012, in order to be timely, notice by the
stockholder must be received no later than a reasonable time
before the Company begins to print and mail its proxy materials.
For any other proposal that a stockholder wishes to have
considered at the 2012 annual meeting of the Companys
stockholders, and for any nomination of a person for election to
the Board at the 2012 annual meeting of the Companys
stockholders, the Company must have received written notice of
such proposal or nomination during the period beginning
January 27, 2012 and ending February 26, 2012. In the
event that the next annual meeting of stockholders is called for
a date that is not within 30 days before or after
May 26, 2012, in order to be timely, notice by the
stockholder must be received no later than the close of business
on the tenth day following the day on which notice of the annual
meeting was mailed or public disclosure of the date of the
annual meeting was made, whichever occurs first.
Proposals and nominations that are not received by the dates
specified will be considered untimely. In addition, proposals
and nominations must comply with Delaware law, our by-laws, and
the rules and regulations of the SEC.
Any stockholder interested in making a proposal is referred to
Article II, Section 4 of our by-laws.
INCORPORATION
BY REFERENCE
The SEC allows us to incorporate by reference the
information that we file with them, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is
considered to be part of this proxy statement. We incorporate by
reference our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010.
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SOLICITATION
OF PROXIES
Proxies in the form enclosed are being solicited by the Board of
Directors. Proxies may be solicited by mail, advertisement,
telephone, facsimile, telegraph and email, and personally by
directors or executive officers. In addition, the Company may
request banks, brokers and other custodians, nominees and
fiduciaries to forward proxy materials to the beneficial owners
of common stock and obtain their voting instructions. The
Company will reimburse those firms for their expenses in
accordance with the rules promulgated by the SEC and applicable
stock exchanges.
The total cost of solicitation of proxies with respect to the
Annual Meeting will be borne by the Company. MacKenzie Partners,
Inc. has been retained to assist in soliciting proxies for a fee
of $5,000, plus distribution costs and other costs and expenses.
The SEC has adopted rules that permit companies and
intermediaries (such as brokers) to satisfy delivery
requirements for proxy statements with respect to two or more
shareholders sharing the same address by delivering a single
proxy statement addressed to those shareholders. This process,
known as householding, potentially means extra
convenience for shareholders and cost savings for companies.
This year, a number of brokers with customers who are our
shareholders will be householding our proxy
materials unless contrary instructions have been received from
the customers. We will promptly deliver, upon oral or written
request, a separate copy of the proxy statement to any
shareholder sharing an address to which only one copy was
mailed. Requests for additional copies should be directed to:
Investor Relations, MedAssets, Inc., 100 North Point Center
East, Suite 200, Alpharetta, Georgia, 30022, (866)
323-6332.
Once a shareholder has received notice from his or her broker
that the broker will be householding communications
to the shareholders address, householding will
continue until the shareholder is notified otherwise or until
the shareholder revokes his or her consent. If, at any time, a
shareholder no longer wishes to participate in
householding and would prefer to receive separate
copies of the proxy statement, the shareholder should so notify
his or her broker. Any shareholder who currently receives
multiple copies of the proxy statement at his or her address and
would like to request householding of communications
should contact his or her broker or, if shares are registered in
the shareholders name, the Company, at the address or
telephone number provided above.
The Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010 and the Proxy,
as well as directions to the location of the Annual Meeting, are
available to all investors on the internet in the Investor
Relations section of the Companys website at
www.medassets.com and will be provided to any stockholder
of record at the close of business on April 15, 2011
without charge upon written request to MedAssets, Inc., 100
North Point Center East, Suite 200, Alpharetta, Georgia
30022, Attention: Investor Relations.
By order of the Board of Directors,
John A. Bardis
Chairman, President and Chief Executive Officer
42
PROXY
The undersigned hereby appoints Jonathan H. Glenn and John A. Bardis and each of them, the
attorneys and proxies of the undersigned, with full power of substitution, to vote on behalf of the
undersigned all the shares of stock of MEDASSETS, INC. (the Company), which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the Company to be held at 200 North Point
Center East, Suite 200, Alpharetta, Georgia, 30022 on May 26, 2011 at 11:00 a.m. (local time) and
at all adjournments or postponements thereof, hereby revoking any proxy heretofore given with
respect to such stock.
PROXY VOTING INSTRUCTIONS
INTERNET Access www.investorvote.com and follow the on-screen instructions. Have
your proxy card available when you access the web page. You may enter your voting instructions up
until 11:59 p.m. Eastern Time on May 25, 2011;
MAIL Date, sign and mail your proxy card in the envelope provided as soon as possible;
TELEPHONE Call toll-free 1-800-652-VOTE (1-800-652-8683) in the United States, Canada and
Puerto Rico and follow the instructions. Have your proxy card available when you call. You may
provide your voting instructions up until 11:59 p.m. Eastern Time on May 25, 2011; or
IN PERSON You may vote your shares in person by attending the Annual Meeting.
The undersigned authorizes and instructs said proxies to vote as follows:
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1.
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To elect four Class I directors.
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o FOR all nominees listed below
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o WITHHOLD AUTHORITY |
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(except marked to the contrary below)
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to vote for all nominees listed below |
Mrs. Samantha Trotman Burman and Messrs. Rand A. Ballard, Vernon R. Loucks, Jr. and John C. Rutherford
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(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEES NAME IN THE SPACE PROVIDED BELOW.) |
Withhold Authority:__________________________________
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2. |
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To ratify the appointment of KPMG LLP, as the independent registered public
accounting firm for the Company for the fiscal year ending December 31, 2011. |
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o FOR
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o AGAINST
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o ABSTAIN |
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To approve the compensation of our named executive officers. |
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o FOR
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o AGAINST
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o ABSTAIN |
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To select the option of every one year, two years or three years as the
frequency with which stockholders are provided an advisory vote on executive
compensation. |
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o ONE YEAR
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o TWO YEARS
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o THREE YEARS |
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o ABSTAIN |
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I hereby authorize the Companys designated proxies to vote, in their discretion, on such other
business and matters incident to the conduct of the meeting as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
The Board of Directors recommends a vote
FOR Proposal Nos. 1, 2 and 3 and a vote of ONE YEAR for Proposal No. 4.
(continued and to be signed on reverse side)
FOLD AND DETACH HERE
PLEASE COMPLETE THIS PROXY AND DATE AND SIGN ON REVERSE SIDE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE, OR VOTE EITHER BY INTERNET OR
TELEPHONE.
(continued from reverse side, which should be read before signing)
This Proxy when properly executed will be voted in the manner directed herein and in the discretion
of the aforementioned proxies on all other matters which may properly come before the Annual
Meeting and any adjournments or postponements thereof. If no instruction to the contrary is
indicated, this Proxy will be voted FOR all nominees for director and FOR Item 2 and FOR Item 3 and
FOR ONE YEAR for Item 4.
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Dated:
, 2011 |
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Please sign exactly as your name or names appear at the left. |
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Please return this proxy in the accompanying business reply envelope even if you expect to attend
in person.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
FOLD AND DETACH HERE
IMPORTANT:
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD
IN THE ENCLOSED ENVELOPE OR VOTE EITHER BY INTERNET OR TELEPHONE.