HEALTHSTREAM INC — Director's Dealing 2018

Mar 20, 2018

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: HEALTHSTREAM INC (HSTM)
CIK: 0001095565
Period of Report: 2018-03-19

Reporting Person: Sousa Michael (Senior Vice President)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2018-03-19	Common Stock	M	6753	$0.00	Acquired	31914	Direct
2018-03-19	Common Stock	F	2079	$24.97	Disposed	29835	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2018-03-19	Restricted Share Units	$0.00	M	1050	Disposed		Common Stock (1050)	Direct
2018-03-19	Restricted Share Units	$0.00	M	1341	Disposed		Common Stock (1341)	Direct
2018-03-19	Restricted Share Units	$0.00	M	2500	Disposed		Common Stock (2500)	Direct
2018-03-19	Restricted Share Units	$0.00	D	7500	Disposed		Common Stock (7500)	Direct
2018-03-19	Restricted Share Units	$0.00	M	1133	Disposed		Common Stock (1133)	Direct
2018-03-19	Restricted Share Units	$0.00	M	729	Disposed		Common Stock (729)	Direct

Footnotes

F1: Shares acquired on vesting of restricted share units.

F2: Shares withheld for payment of tax liability.

F3: Each restricted share unit (RSU) represents the contingent right to receive one share of common stock upon vesting of the unit.

F4: The RSU's are subject to a four year vesting schedule, contingent upon continued service at the time of vesting. 15% vest on March 11, 2015, 20% vest on March 11, 2016, 30% vest on March 11, 2017, and the remaining 35% vest on March 11, 2018.

F5: Not applicable.

F6: The RSU's are subject to a four year vesting schedule, contingent upon continued service at the time of vesting. 15% vest on March 10, 2016, 20% vest on March 10, 2017, 30% vest on March 10, 2018, and the remaining 35% vest on March 10, 2019.

F7: 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 15% vest on March 15, 2016 for the period January 1, 2015 through December 31, 2015; up to 20% vest on March 15, 2017 for the period January 1, 2016 through December 31, 2016; up to 20% vest on March 15, 2018 for the period January 1, 2017 through December 31, 2017; up to 20% vest on March 15, 2019 for the period January 1, 2018 through December 31, 2018; and up to 25% vest on March 15, 2020 for the period January 1, 2019 through December 31, 2019. 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. The performance criteria for 2017 was partially achieved, resulting in the vesting of 2,500 RSUs.

F8: Represents the forfeiture of performance-based RSUs granted to the reporting person on September 24, 2015, which were eligible to vest based on certain annual financial performance criteria. Based on the financial performance over the applicable performance period, it was determined 2,500 RSUs would vest and 7,500 RSUs would be forfeited. Of the 7,500 RSUs forfeited, 5,000 represented RSUs granted in 2015 which failed to vest based on a performance period in 2016, but which continued to be eligible for vesting based on the achievement of catch-up performance criteria for a performance period in 2017 (as such concept is referenced in Note (7) above). Based on the financial performance over the catch-up performance period in 2017, all 5,000 of these RSUs were forfeited.

F9: The RSU's are subject to a four year vesting schedule, contingent upon continued service at the time of vesting. 15% vest on March 17, 2017, 20% vest on March 17, 2018, 30% vest on March 17, 2019, and the remaining 35% vest on March 17, 2020.

F10: The RSU's are subject to a four year vesting schedule, contingent upon continued service at the time of vesting. 15% vest on March 16, 2018, 20% vest on March 16, 2019, 30% vest on March 16, 2020, and the remaining 35% vest on March 16, 2021.