The purpose of the Emdeon Management Bonus Program
(the Program) is to provide an incentive to
management level employees of Emdeon and its participating subsidiaries (the Company) who
contribute to the success of the enterprise. The Program offers eligible employees an opportunity
to earn compensation in addition to their salaries, based upon the performance of the Company
(including its Divisions) and the accomplishment of their Individual Goals.
The Compensation Committee of the Board of Directors (the Committee), in consultation with the
Chief Executive Officer of the Company (the CEO), shall administer the Program. The CEO will
oversee and interpret (including the amount payable to any individual participant) any and all
aspects of the Program. The CEO (other than with respect to himself) shall make final
recommendations to the Committee regarding both the amount and the timing of any bonus payments
pursuant to the Program. The Committee shall review and approve the CEOs recommendations.
Program awards made to Covered Officers, as defined in the Emdeon Inc
. 2009 Equity Incentive Plan
(the Incentive Plan), shall be administered as Performance Awards described in the Incentive
Plan. Accordingly, notwithstanding anything herein to the contrary, all grants, decisions,
interpretations and administration with respect to Program awards to Covered Officers shall be
finally made solely by the Committee and consistently with Section 11 of the Incentive Plan.
The Program will be effective from January 1 of each fiscal year of the Company through December 31
of such fiscal year (the Program Year).
Eligible participants generally include regular full-time employees classified as Director level
An employee must be employed or meet the eligibility criteria on or before September 30 of the
Program Year to be eligible to participate in the Program for that year. If a person otherwise
eligible for participation in the Program becomes an employee of the Company during the fiscal
year, the employee will be eligible to receive a prorated portion of the annual bonus based upon
the employees first date of employment. Generally, ineligible participants would include:
||Temporary employees, independent contractors and consultants
||Anyone eligible to participate in a commission plan or other cash incentive plan
||Employees who do not have a signed Trade Secret and Proprietary Information
Agreement on file with the Company
||Anyone not actively employed on the date the bonuses are distributed
||Anyone failing to achieve a personal performance rating for the Program Year of 3, 4
||Any other employee that does not meet the eligibility criteria above
An employee must be an active employee of the Company on the date the bonuses are distributed to
employees to be eligible to receive any payment under the Program.
The target bonus potential is calculated as a percentage of the employees annual salary as of
December 31 of the Program Year to which the bonus relates. The guidelines for determining target
bonus potential are based on the employees level and role. These guidelines, however, may be
adjusted to reflect the significance, scope and level of accountability for a given position.
Adjustments (increases or reductions) to the target bonus potential levels may be made at the
discretion of the CEO. Additionally, certain employee bonus potential amounts are set forth in
written employment agreements. As such, these written agreements shall be controlling.
The funding and payment of bonuses is based upon three separate Program components. The three
components are the Company Performance Targets, Division Performance Targets and Individual Goals.
For all eligible employees, a portion of the bonus potential will be based on the Companys
Performance Targets and Individual Goals. In addition, for those employees whose job
responsibilities are primarily related to a particular Division (Payer, Provider, Pharmacy), a
portion of the bonus potential will also be based on the achievement of Division Performance
The funding of bonuses under the Program is dependent on the achievement of Company Performance
Targets and Division Performance Targets. The Company must declare the payment of bonuses before
any types of payment under this Program can or will be paid. If, and when, bonuses are declared,
financial calculations will be made to determine a funding level for each employee. Individual
bonus payouts are then determined by performance against Individual Goals.
The Program contains several objectives. Each objective has a minimum, target and a maximum level
of performance. For each objective, the bonus payment will range from zero to a maximum percentage
based on the level of performance for that objective. Payment for financial performance between
minimum and target and target and maximum will be linear.
||Company Performance Targets
Payments are contingent upon the Company achieving the Company Performance Targets as shall be set
by the Committee within the first ninety days of a Program Year. The Committee shall choose among
the performance criteria and set the applicable targets as set forth in Section 11 of the Incentive
||Division Performance Targets
For those eligible employees whose job responsibilities are primarily related to a particular
Division (Payer, Provider, Pharmacy), payments for a portion of the employees bonus amount are
contingent upon the Division achieving the Division Performance Targets as shall be set by the
Committee with respect to each Program Year.
The achievement of Individual Goals (based on Company objectives) is a very important component of
the Program. Once the Company and/or the Division have achieved their performance goals, individual
bonus potential can be greatly impacted by the level of achievement of Individual Goals as
determined by each eligible employees manager.
Managers will review each of their bonus-eligible employees and will make a recommendation of 100%
to 0% of the bonus amount based on the achievement of Individual Goals. Managers cannot distribute
or recommend more the 100% of an individual employees target amount. However, the bonus
recommendation can be reduced or increased at the discretion of the CEO.
If an employee is transferred to a new role during the Program Year, the employee will be eligible
to participate in the incentive plan that applies to the new role. However, if an employee who was
not eligible for participation in the Program is promoted to a position eligible for participation
in the Program after September 30th of the Program Year, the employee will not be eligible
to participate in the Program until January 1st of the following year.
If the employee becomes ineligible for this Program due to a transfer, demotion or promotion, the
employee will be eligible to receive a prorated award based on the period of participation in the
Program; provided, that the employee must continue to meet the Conditions For Receiving Payment
set forth below. Such prorated award will be paid at the same time as awards under the Program.
PAYOUT AND TAXATION
The Company anticipates any bonus amounts earned under the Program for each Program Year will be
paid around March of the year following that Program Year after completion of audited financial
statements for the Program Year and final executive and Committee approval. Specific provisions
regarding distribution are outlined below under the Conditions for Receiving Payment section of
Payroll taxes will be withheld from the bonus award as required by law. Bonus awards that employees
receive will be reported as income in the year in which they are paid. Therefore, the bonus payment
with respect to a Program Year, which is expected to be paid in March of the following year, will
be reported as part of an employees total W-2 income for the tax year following the Program Year.
CONDITIONS FOR RECEIVING PAYMENT
No bonus award under this Program will be paid to any employee if employment is terminated, whether
voluntary or involuntary, prior to the actual payment distribution date. However, the Company
retains the authority to make exceptions to the foregoing policy in unusual or meritorious cases
including, but not limited to, the death of an employee during the fiscal year, termination of
employment due to total or partial disability, call to active military service or retirement with
the written consent of the Company.
LIMITATIONS AND/OR ADJUSTMENTS
Bonus compensation under the Program is not an integral part of an employees compensation package.
An employees base salary compensates the employee for the expected results of any given job.
Payment of the bonus compensation is at the discretion of the Company. The Company reserves the
right to review, amend, suspend, and/or terminate the Program, the incentive calculation formulas,
and all other aspects of the Program at any time. Program changes will be based on a determination
of the Companys business needs and do not require prior notification or explanation to eligible
An employees participation in the Program shall not be construed as an employment contract or as a
promise of continuing employment between the Company and the employee. Employment with the Company
is terminable at will.