CPSI 2018 Proxy Statement

25 The Company interpolates between the threshold, target and maximum award amounts. The actual performance shares earned by the NEOs, if any, are issued as shares of restricted stock following the certification by the Compensation Committee of the Company’s achievement of the performance goal set forth above. Such shares of restricted stock are subject to time-based vesting, with one-third of the shares vesting on each of the first three anniversaries of the certification. In order to vest, the executive is required to remain employed by us as an executive on each vesting date. Actual Results In 2017, the Company achieved 103.74% of Adjusted EPS in 2016, resulting in the eligible NEOs receiving 93.7% of their target award amounts under the terms of the 2017 performance share awards. The individual target number of performance shares, including the dollar value of such target number, for the NEOs who received performance share awards for 2017 and the number of shares earned based on the level of achievement of Adjusted EPS growth, were as follows: Name Dollar Value of Target Award Target Number of Performance Shares Actual Performance Shares Earned J. Boyd Douglas $400,000 15,123 14,170 Matt J. Chambless $300,000 11,342 10,627 David A. Dye $400,000 15,123 14,170 Christopher L. Fowler $400,000 15,123 14,170 Troy D. Rosser $322,350 9,783 9,167 Sales Commissions. One of our current NEOs - Troy D. Rosser - was compensated in 2017 in part through the payment of commissions. The amount of commissions earned by Mr. Rosser is included in the “Salary” column of the Summary Compensation Table on page 31 of this Proxy Statement. Mr. Rosser, Senior Vice President–Sales, is responsible for overseeing all of the Company’s sales and marketing efforts. As the Company’s second highest ranking officer with a direct responsibility for sales, Mr. Rosser has received each year since 2006 a commission, payable monthly, equal to 1.0% of the Company’s gross profit from sales of software systems and hardware and provision of services to new customers that are invoiced during the first year after the date of installation. Such commission rate would increase to 1.5% on gross profit exceeding $29,300,000. Mr. Rosser has also received since 2006 a commission, payable monthly, equal to 0.5% of the Company’s gross profit from sales of software systems and hardware and provision of services to existing customers. Commissions from sales of software and hardware become payable at the time of completion of the installation of the applicable hardware and/or software. Commissions from sales of business management, consulting and managed IT services become payable at the time that the Company recognizes revenue from such sales under GAAP. Other than for the potential increase in commission rate (from 1.0% to 1.5%) on gross profit from sales of software and hardware to new customers, there are no threshold, target or maximum amounts or quotas established for the calculation of commissions due to Mr. Rosser. In the event that a customer defaults on payment for software, hardware or business management services, all commissions paid to Mr. Rosser on the defaulted accounts are deducted from future commissions. In the event that partial payment from a customer is received, commissions are deducted pro rata based on the amount of the payment received. Other than in the event of an executive’s death, the Company discontinues all commission payments upon termination of the executive’s employment with the Company. The Compensation Committee approved the specific sales metrics for Mr. Rosser’s commission arrangement based on input from the CEO and the estimated amount of total compensation that would be payable based on historical sales information. The commissions are designed to reward Mr. Rosser for Company performance directly related to sales activities. As previously described, there are no threshold, target or maximum amounts or quotas established for the calculation of commissions due to Mr. Rosser. 2018 Compensation Actions As discussed under “Compensation Philosophy and Objectives—Compensation Improvements for 2018,” the Compensation Committee has made a number of significant improvements to our executive compensation program, including transitioning from a one-year to a three-year performance period for the performance share awards granted to our executive officers, adding a TSR performance modifier to our long-term equity incentive awards and increasing the percentage of the long-term equity awards that is granted in performance share awards while reducing the percentage granted as time-based restricted stock. These changes to the executive compensation program were implemented for the first time in 2018. Base Salaries and Sales Commissions. At its meeting on March 6, 2018, the Compensation Committee established 2018 base salaries and commission arrangements for the NEOs. The Compensation Committee did not approve any changes to the annual base salaries or commission arrangements of our NEOs for 2018. See “Elements Used to Achieve Compensation Objectives— Base