HEALTHSTREAM INC — Director's Dealing 2018

May 17, 2018

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: HEALTHSTREAM INC (HSTM)
CIK: 0001095565
Period of Report: 2018-05-15

Reporting Person: Sousa Michael (Senior Vice President)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2018-05-15	Restricted Share Units	$0.00	D	11250	Disposed		Common Stock (11250)	Direct
2018-05-15	Restricted Share Units	$0.00	D	5000	Disposed		Common Stock (5000)	Direct
2018-05-15	Restricted Share Units	$0.00	D	4250	Disposed		Common Stock (4250)	Direct
2018-05-15	Restricted Share Units	$0.00	A	35000	Acquired		Common Stock (35000)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	13830	Direct

Footnotes

F1: Each restricted share unit (RSU) represents the contingent right to receive one share of common stock upon vesting of the unit.

F2: Represents the cancellation of unvested performance-based RSUs granted to the reporting person on September 24, 2015, which were eligible to vest based on certain annual financial performance criteria for the years ended December 31, 2018 and 2019, as more specifically set forth in the Current Report on Form 8-K filed by HealthStream, Inc. on May 16, 2018.

F3: Not applicable.

F4: Represents the cancellation of unvested performance-based RSUs granted to the reporting person on September 24, 2015, which were eligible to vest based on certain financial performance criteria for the five years ended December 31, 2019, as more specifically set forth in the Current Report on Form 8-K filed by HealthStream, Inc. on May 16, 2018.

F5: Represents the cancellation of unvested performance-based RSUs granted to the reporting person on December 8, 2016, which were eligible to vest based on certain financial performance criteria for the three years ended December 31, 2019, as more specifically set forth in the Current Report on Form 8-K filed by HealthStream, Inc. on May 16, 2018.

F6: Vesting of these RSUs is contingent upon continued service at the time of vesting and the achievement of certain performance criteria. The performance criteria will be established on an annual basis by the Compensation Committee of the Board of Directors. Up to 10% vest on March 15, 2019 for the period January 1, 2018 through December 31, 2018; up to 15% vest on March 15, 2020 for the period January 1, 2019 through December 31, 2019; up to 20% vest on March 15, 2021 for the period January 1, 2020 through December 31, 2020; up to 25% vest on March 15, 2022 for the period January 1, 2021 through December 31, 2021; and up to 30% vest on March 15, 2023 for the period January 1, 2022 through December 31, 2022. Vesting will be determined based on actual performance. RSUs that do not vest during a performance period may become eligible for vesting during the next performance period.