The Executive Committee (the “Committee”) of the Vizient, Inc. (the “Company”) Board of Directors (the “Board”) shall consist of the Chair of the Board, the chairs of all Board committees, the chair of the board of directors of the University HealthSystem Consortium, a subsidiary of the Company, and the President and Chief Executive Officer. The Chair of the Board shall be the Chair of the Executive Committee.
At all times when the Board is not in session, the Committee is authorized to exercise all of the powers and authority of the Board in the management of the affairs, business and property of the Company, and may authorize the seal of the Company to be affixed to all papers that may require it, except as limited by Delaware General Corporation Law and/or the Company’s Amended and Restated Bylaws.
The Committee is also responsible for evaluating and making recommendations to the Company’s Board relative to credentialing new stockholders, issuing shares of stock and redeeming and purchasing the stock held by any stockholder
The Committee shall meet only as may be necessary between regularly scheduled Board meetings, keep a record of its proceedings and submit such a record to the Board at the next Board meeting. The Committee may adopt procedures as it may deem appropriate or convenient.
The Compensation Committee (the "Committee") shall act on behalf of the Board of Directors (the "Board") to establish the compensation of the senior executives of Vizient, Inc. (the "Company") and to provide oversight of the Company's overall compensation philosophy. The Committee shall also act as the oversight committee with respect to the Company’s short-term incentive plans, long-term executive incentive plans and various qualified and non-qualified benefit plans covering senior executives.
The Committee shall be comprised of at least three independent directors who are not employees of the Company or its affiliates and have no relationship that may interfere with the exercise of their independence from management of the Company. The Committee may include outside directors. The term "outside director" shall mean a person who is not employed by the Company and who is not employed in the active management of a member organization of the Company.
Members shall be appointed by the Chair of the Board and the Nominating Committee for three-year terms and reviewed annually. Committee members are expected to rotate periodically to ensure independence and fresh perspectives.
The Chair of the Board of the Company shall serve as the Committee Chair. The Chair of the Committee is expected to remain in that role for two years to provide continuity.
All Committee members should have knowledge and experience in compensation matters. Members will be provided opportunities for education to ensure compensation knowledge is current and relevant.
Meetings and Procedures
The Committee shall hold no less than three regular meetings in each calendar year. The Committee may request any officer or employee of the Company, the Company’s outside counsel, or representatives of the Company’s independent auditor to attend a meeting of the Committee or to meet with any members of, or advisors to, the Committee. The Committee shall meet in executive session at least once each year in connection with the assessment of the performance and compensation of the Chief Executive Officer ("CEO") and in connection with oversight of succession management, and may meet in executive session at any other time it deems appropriate.
Committee members may attend meetings in person, by conference call or through other means by which each member may hear and be heard by each other member. The Committee may also act by unanimous written consent.
The Committee shall keep a record of its actions and proceedings and make a report thereof to the Board. The Committee will appoint a secretary to record the Committee proceedings. The minutes of all Committee meetings shall be prepared and distributed to the Committee members, approved at subsequent meetings and placed in the Company's records.
Duties and Responsibilities
Compensation Philosophy, Compensation Governance and Committee Performance
Review this Charter at least annually and make recommendations to the Board as conditions dictate.
Review independence of individual Committee members and advisors as conditions and/or changes warrant.
Approve initially and, thereafter, review at least annually and recommend updates as appropriate, the Company's compensation philosophy, strategy and practices (summarized within the Stance and Sources report) as they apply to senior executives and other key employees to ensure the continual support of its objectives and members' interests.
Review and approve the Compensation Discussion and Analysis (CD&A) report and any other public materials reporting on executive compensation at the Company, and present the CD&A annually to the Board
Periodically review risk factors associated with the Company pay practices, including the Company’s reward and recognition programs.
Conduct at least annually a review of the Committee’s performance.
Executive Compensation and Performance Management for Identified Senior Executives of the Company
Establish total compensation strategies and programs for the CEO and the senior executive group, select peer groups and periodically review the competitiveness of compensation levels, taking into account (as applicable and/or required by the Company programs) performance levels.
Establish total compensation including, but not limited to, salary, annual incentives and long-term incentives and benefits for the CEO and review and approve at least annually.
Review and approve total compensation including, but not limited to, salary, annual incentives and long-term incentives and benefits for the other senior executives.
Periodically review total compensation costs and the CEO pay as a multiple of average pay of all full-time employees in the Vizient, Inc., family of companies.
Review and administer the Company’s Short-Term Incentive Plan, Long-Term Executive Incentive Plan, the Deferred Compensation Plan and any and all other compensation plans in which senior executives participate, including pensions, savings plans, special benefits and perquisites. This includes, where applicable, granting awards and approving payments.
Based on the Board-approved business plan, review incentive plan goals, including threshold, target and superior performance levels, to ensure consistency with the business plan. At its discretion, the Committee may adjust performance goals and/or results for extraordinary events or accounting adjustments resulting from significant asset purchases or dispositions or other events not contemplated or otherwise considered by the Committee when the performance measures and targets were set.
Evaluate the performance of the CEO against corporate goals at least annually.
Review and approve selection criteria for senior officer positions and the plans and programs for executive development and advise the Board and the CEO on succession planning and management development initiatives.
Administer and review the Company's Executive Severance Plan, Change in Control Executive Severance Plan and any other termination program or arrangements for senior executives and review and approve any amendments to the CEO’s Employment Agreement.
Periodically review Provista compensation plans.
Broad-based Reward and Recognition Programs
Review, modify, approve and administer all incentive compensation programs, including approval of the overall design of the total executive compensation program below the senior executive level.
Review and approve all significant changes to reward and recognition systems, including but not limited to, any amendments to the Company’s Retirement Plan and 401(k) Plan and matters contained in the Company’s external audit reports with respect to the qualified defined benefit plan and the qualified defined contribution plan.
Periodically review and approve outside director compensation; provided that any outside director on the Committee shall recuse himself/herself from any such discussion and/or approval.
Resources Available to the Committee
The Committee may hire independent compensation consultants, outside counsel and other advisors, or commission special surveys or analyses as it deems necessary to fulfill its responsibilities and duties set forth above. Additionally, the Committee shall have the sole authority to retain and terminate advisors, at the Company's cost, compensation consultants, outside counsel and other advisors as deemed appropriate. The Company, through its senior human resources officers, shall also make available any and all information necessary for the Committee to fulfill its responsibilities and duties.
The Vizient, Inc. (the “Company”) Audit & Compliance Committee (the “Committee”) is established by the Company’s Board of Directors (the “Board”) and this Charter, and any amendments thereto must be approved by the Board. Committee members are appointed by the Chair of the Board and the Nominating Committee. The Committee shall be comprised of at least three independent directors who are not employees of the Company or its affiliates and have no relationship that may interfere with the exercise of their independence from management of the Company. A majority of the Committee members shall be financially literate. Financial literacy includes having accounting or related financial management expertise or direct oversight over financial managers.
The Company’s independent accountants and management team, including the Chief Financial Officer, Chief Accounting Officer, Chief Legal Officer and Compliance Officer, are ultimately accountable to the Committee and to the Board who serve as representatives of the Company’s stockholders. Management is responsible for preparing the Company’s financial statements.
The Committee shall provide assistance to the Board in fulfilling its oversight responsibility to stockholders, members and other stakeholders relating to the:
- Integrity of the Company’s financial statements
- Capability of the Company’s financial reporting processes
- Adequacy of the Company’s systems of internal accounting and financial controls
- Appropriateness of the Company’s business continuity plan and its management of risk
- Qualifications, independence and performance of the Company’s independent accountants
- Adequacy of the Company’s compliance and ethics programs. The Committee also has the responsibility to, when appropriate, recommend to the Board the replacement of the Company’s independent accountants.
- Shall have full access to books, records, facilities and personnel of the Company in order to review and discuss financial statements, systems of internal control, risk management, information systems, compliance and ethics programs, and related legal matters
- Is empowered to investigate any matter within the realm of its responsibility and may retain outside counsel and/or other experts for such purpose.
The Committee, among other things, will:
- Take appropriate actions to set the overall corporate “tone” for uncompromising quality in financial reporting, sound business risk practices, and legal and ethical behavior
- Review compliance and ethics investigations conducted by the Compliance Department
- Review compliance hotline referrals and utilization metrics
- Review the Company’s Standards of Business Conduct
- Review results of audits or attestations related to general compliance, data compliance and privacy matters
- Review annually conflict of interest disclosure statements submitted by the Company’s Board members
- Review compliance and ethics training programs
- Maintain free and open communication with management, independent accountants, internal auditors and third parties retained by the Committee or management for matters within the Committee’s responsibilities
- Discuss with the independent accountants their independence from management and the Company and the matters included in the written disclosures required by the Independence Standards Board
- Discuss with the internal auditors and the independent accountants the overall scope and plans for their respective audits including the adequacy of staffing and compensation
- Discuss with management, the internal auditors, and the independent accountants, and approve the adequacy and effectiveness of the accounting and financial controls, including the Company’s system to monitor and manage business risk
- Review the interim financial statements with management (the Chair of the Committee may represent the entire Committee for the purposes of this review)
- Review with management and the independent auditors the financial statements to be included in the Company’s Annual Report, including their judgment about the quality, not just acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements
- Discuss and approve the results of the annual audit and any other required communications to the Committee by the independent accountants under generally accepted auditing standards
- Review and approve year-end financial performance for employee incentive plan purposes
- Meet separately with the internal auditors and the independent accountants, with and without management present, to discuss the results of their examinations
- Periodically review the Company’s contingent liabilities
- Periodically review this Charter
- Conduct a self-assessment of its performance on an annual basis
- Modify these processes as changing circumstances warrant
- Report its activities to the Board.
The Data and Analytics Advisory Committee (the "Committee") is a standing committee of the Vizient, Inc. (the "Company") Board of Directors (the "Board") authorized to provide input and strategic direction on the data and analytics products and services as well as the quality, safety, and performance improvement services of the Company. These services encompass clinical, operational and supply domains.
The Committee shall be appointed by the Chair of the Board and the Nominating Committee, and shall consist of at least three directors. The Committee is an advisory body that assists the board and Vizient management by providing strategic guidance and expertise relative to Vizient’s analytics and advisory services.
The Data and Analytics Advisory Committee duties and responsibilities shall include:
- Validating members' current and future data needs and further defining the Company's role in meeting those needs, including consideration of data elements, comparative priorities, usage, integration requirements, key user constituencies, data-related services, and user experience expectations.
- Providing input to management on the development and implementation of performance improvement strategies (i.e., IQ program priorities) to drive value to the membership.
- Reviewing, evaluating and providing inputs to the Company's data, analytics and performance improvement programs to advance strategic priorities and areas for potential investment.
- Providing input and guidance for expanding new capabilities and/or potential partnership opportunities related to data, analytics or performance improvement capabilities.
- Providing input and guidance for managing the annual Quality and Accountability ranking programs.
The Committee shall meet a minimum of two times per year.
The Committee shall keep a record of its actions and make regular reports to the Board on its activities. These reports will generally occur after each Committee meeting or at such other times as the Committee deems appropriate.
The Committee shall conduct an annual evaluation of its performance in carrying out its responsibilities and review the adequacy of its charter and recommend any proposed changes to the Board for approval.
The Vizient, Inc. (the “Company”) Finance Committee (the “Committee”) is established by the Company’s Board of Directors (the “Board”) and this Charter, and any amendments thereto must be approved by the Board. Committee members are appointed by the Chair of the Board and the Nominating Committee. The Committee shall be comprised of at least three independent directors who are not employees of the Company or its affiliates and have no relationship that may interfere with the exercise of their independence from management of the Company. A majority of the Committee members shall be financially literate. Financial literacy includes having accounting or related financial management expertise or direct oversight over financial managers.
The Company’s management team, including the Chief Financial Officer is ultimately accountable to the Committee and to the Board who serve as representatives of the Company’s stockholders.
The Committee shall provide assistance to the Board in fulfilling its oversight responsibility to stockholders, members and other stakeholders to:
- Monitor the Company’s financial position
- Ensure prudent use of the Company’s funds for proposed operating budgets
- Monitor the Company’s multiyear financial plan
- Ensure the appropriateness of the Company’s financial policies;
- Evaluate the merit of strategic transactions
- Ensure the Company employs the optimal capital structure
- Ensure equity and debt offerings make good financial sense and will deliver maximum value for the Company
- Ensure dividends and distributions plans make good financial sense for the Company
- Ensure share repurchase plans make good financial sense for the Company
- Ensure the appropriateness of the Company’s investment policies
- Ensure appropriateness of the Company’s retirement and 401(k) investment options and funding of the retirement plan
- Ensure the Company employs optimal tax strategies
- Ensure the Company exercises good judgment in its financial risk management practices
- Carry out other duties as assigned.
Shall have full access to books, records, facilities and personnel of the Company in order to review and discuss issues related to any of the abovementioned responsibilities to safeguard a strong financial position for the Company; and
Is empowered to investigate any matter within the realm of its responsibility and may retain outside counsel and/or other experts for such purpose.
The Committee, among other things, will:
- Review interim financial year-to-date results and projections
- Review financial target range for annual operating budget and multiyear financial plan
- Approve the annual operating budget and capital plan
- Approve the three-year financial plan
- Review financial performance (ROI) of key investments and provide input to the compensation committee on annual incentives associated with the Company’s innovation investments
- Review the performance of investments, including the Company’s corporate portfolio, retirement and 401(k) plans
- Review notes receivable and strategic investments made in other companies
- Review semi-annual treasury function blanket resolution
- Approve the valuation of common stock for new stockholders
- Review and approve, as applicable, member guarantees report (only needs Board approval if the guarantee amount needs to be increased)
- Approve equity and debt financing activities
- Review line of credit utilization report
- Review fees charged by investment managers
- Approve appointment of investment managers
- Approve retirement plan(s) funding recommendation and status
- Approve changes to the investment policy
- Approve strategic transactions such as mergers, acquisitions, divestitures, joint ventures, minority interests and other debt and equity investments
- Approve the valuation of Provista
- Approve the valuation of Vizient
- Review tax matters
- Approve minutes of previous Committee meetings
- Distribute Committee self-assessment email from human resources
- Review executive session self-assessment results with and without the CFO
- Approve the annual Committee meeting planner
- Report significant matters to the Board
- Orient new members and provide continuing education for the Committee members
Exhibit A to the Finance Committee Charter contains the Finance Committee Governance Matrix which outlines the roles and authority of the Vizient, Inc. Board of Directors, the Vizient, Inc. Finance Committee and Vizient, Inc. Management.
Advance materials will be prepared and distributed to the Committee members prior to each meeting. The Committee chair will provide reports to the Board summarizing significant topics and events as presented at the Committee meeting.
The Committee shall conduct an annual performance evaluation of itself. The Committee shall annually review and reassess the adequacy of this Charter and recommend any proposed changes to the Board for approval.
The Innovation Committee (the "Committee") is a standing committee of the Vizient Board of Directors (the "Board") authorized to provide input and strategic direction of the Company's innovation strategy. The Committee shall be appointed by the Chair of the Board and the Nominating Committee, and shall consist of at least three Directors. The Committee shall have and exercise the powers of the Board with respect to the oversight of the Company's innovation strategy including the investment in adjacent and transformational innovations. A majority of the Committee members shall be entrepreneurial in nature, as determined by the Board. Entrepreneurial in nature includes having business development and new product/service expertise.
The Committee duties and responsibilities shall include:
- Providing oversight to the integrity of the Company's innovation strategy process and the adequacy of the Company's systems and controls of innovation development;
- Helping set the overall corporate tone for the innovation strategy and monitoring the capability of the Company's innovation processes;
- Providing input on the appropriateness of the Company's innovation roadmap plan, innovation pipeline and its management of business opportunity and risk;
- Reviewing investment of funds in the Company's corporate innovation plans; and annual performance review of the Company's previous innovation investments;
- Reviewing performance of the Company's innovation investments relative to Management's performance under the relevant incentive compensation plans and making recommendations to the Compensation Committee relating thereto; and
- Reviewing and providing input to the effective completion of innovation prototypes, pilots and new launches
- The Committee shall meet at minimum of three times per year and maintain free and open communication with Management, for matters within the Committee's responsibilities.
- The Committee shall keep a record of its actions and make regular reports to the Board on its activities. These reports will generally occur after each Committee meeting or at such other times the Committee deems appropriate.
The Nominating Committee (the "Committee") of the Vizient, Inc. (the "Company") Board of Directors (the "Board") shall consist of a minimum of four members who shall be appointed by the Chair of the Board and the Committee for one-year terms and eligible for reappointment. The President and Chief Executive Officer shall be a member of the Committee. Of the directors serving on the Committee other than the President and Chief Executive Officer, no less than fifty percent (50%) of such directors shall be concurrently serving as officers of Academic Medical Centers or health systems that include Academic Medical Centers (as defined in the Company's Second Amended and Restated Bylaws (the "Bylaws"). The initial Committee chair shall serve for the same period of time as the initial Chair of the Board. Subsequent Committee chairs shall be appointed by the Chair of the Board and the Committee for a one-year term.
Under the Company Bylaws, the Committee is charged with, among other matters, the responsibility for nominating individuals for election by Company stockholders to the Company's Board. It is the responsibility of the Committee to identify and select as director nominees the most qualified individuals to serve on the Board and, thereby, provide the needed leadership for the Company's future. The Committee develops and utilizes the criteria for selecting Board candidates, which includes executive and board leadership experience, type of health care industry knowledge and experience, business acumen, geography, diversity, and other factors as determined by the Committee. The Committee uses the following principles as a framework for Board membership:
- The majority of the Board shall be made up of directors who are employed in the active management of stockholder organizations. In addition, the Board from time to time may by resolution authorize the election of up to four (4) outside directors. The term "outside director" shall mean a person who is not employed by the Company and who is not employed in the active management of a member organization of the Company.
- After the initial Board that took office as of the closing date of the transaction that formed the Company (the "Initial Board"), and except as specified immediately below, the Board shall consist of four (4) classes of three-year terms each. This principle will provide an important continuity in the leadership of the Company.
- After the Initial Board, each director is generally limited to two consecutive three-year terms. After serving two consecutive three-year terms, a director who possesses attributes that, in the judgment of the Committee warrant continued membership on the Board, could be considered for re-election annually to one-year terms. One-year terms shall be limited and no director may serve more than three consecutive one-year terms. Any director re-elected for a one-year term shall be treated as a member of the Board class for the immediately succeeding year.
- After the Initial Board, if a director serves on the Board as a result of filling a vacancy, the vacancy timeframe does not count towards or impact the director's eligibility to serve for the maximum number of two consecutive three-year terms followed, if deemed warranted, by up to three consecutive one-year terms.
- Under the Bylaws, the Board by resolution can adjust the size of the Board from 15 to 23 directors. The Committee will evaluate from time to time the desirability of decreasing or expanding the size of the Company's Board and skillset and diversity of experience of members and will make recommendations in this regard.
- The Committee shall select individuals as director nominees who have the highest personal and professional integrity, have demonstrated exceptional ability and judgment and shall be most effective, in conjunction with the other directors, in serving the long-term interests of the Company's stockholders.