Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(b), (c), (d), (e)
On August 21, 2020, the board of directors (the "Board") of Benefitfocus, Inc.
(the "Company") appointed Stephen M. Swad, the Company's current Chief Financial
Officer, as Chief Executive Officer and made him a member of the Board, and
appointed Company Vice President and Corporate Controller Alpana Wegner as Chief
Financial Officer. Each of these appointments was effective at the beginning of
the day on Monday, August 24, 2020. Mr. Swad will serve as a Class I director to
hold office until the Company's 2023 annual meeting of stockholders or until his
successor is duly elected and qualified and will not serve on any of the Board's
committees.
Mr. Swad will serve as the Company's "principal executive officer" for SEC
filing purposes, and Ms. Wegner will serve as the Company's "principal financial
officer" and "principal accounting officer" for SEC filing purposes.
Mr. Swad has served as the Company's Chief Financial Officer since July 2019. He
also served as the Company's treasurer during that time. Prior to that, Mr. Swad
served on the Board since December 2013. Previously, Mr. Swad served as Chief
Financial Officer of Vox Media, Inc. from January 2016 until July 2019. From
February 2012 until April 2015, Mr. Swad served as President and Chief Executive
Officer, and a director of Rosetta Stone Inc. (NYSE: RST), a publicly held
language-learning software company, previously serving as its Chief Financial
Officer beginning in November 2010. Prior to joining Rosetta Stone, Mr. Swad
served as the Executive Vice President and Chief Financial Officer of Comverse
Technology, Inc., beginning in May 2009. He also served as Executive Vice
President and Chief Financial Officer of Federal National Mortgage Association
(Fannie Mae) (NASDAQ: FNMA) from May 2007 until August 2008 and has held various
senior financial management positions with then public companies, including AOL
Inc. (now a part of Oath Inc.) and Time Warner Inc. (now a part of Warner Media,
LLC). Additionally, Mr. Swad served on the board of Eloqua, Inc. from August
2011 until February 2013, including between August 2012 and February 2013,
during which time it was a publicly held company. Mr. Swad, a former partner of
KPMG LLP, also served as a Deputy Chief Accountant at the Securities and
Exchange Commission. Swad holds a B.A. in business administration from the
University of Michigan.
Mr. Swad is 59 years old and has no familial relationships with any executive
officer or director of the Company. Other than Mr. Swad's prior compensation for
his service on the Board and as the Company's Chief Financial Officer, there
have been no transactions in which the Company has participated and in which
Mr. Swad had a direct or indirect material interest that would be required to be
disclosed under Item 404(a) of Regulation S-K.
Prior to his appointment as Chief Executive Officer, Mr. Swad was party to an
employment agreement, dated July 2, 2019 (the "Swad Employment Agreement") as
disclosed in Item 5.02 of the Company's Current Report on Form 8-K filed on
July 10, 2019. In connection with Mr. Swad's appointment as Chief Executive
Officer, the Company and Mr. Swad entered into an amendment to the Swad
Employment Agreement dated August 25, 2020 (the "Swad Amendment"). The Swad
Amendment increases Mr. Swad's annual base salary to $475,000, increases the
percentage of his annual salary that he is eligible to receive as an annual
bonus to 100%, extends the time the Company will rent him an apartment in
Charleston through January 2022, provides he will receive restricted stock units
("RSUs") valued at $700,000 vesting in three equal annual installments beginning
on the first anniversary of the grant date, and updates his title and duties to
reflect his becoming the Company's Chief Executive Officer.
--------------------------------------------------------------------------------
Ms. Wegner has served as the Company's Vice President, Corporate Controller
since December 2017, having first joined the Company in April 2017 in the
carrier business unit as general manager. Previously, Wegner worked for
Blackbaud, Inc. (NASDAQ: BLKB) beginning in October 2008. She served first as
director of SEC reporting, then interim Corporate Controller, followed by Vice
President roles as the Chief Financial Officer of the enterprise customer
business unit, and in sales operations. From May 2001 to August 2004, Wegner
served as the director of external reporting and compliance at Allied Waste
Industries, Inc. She also served in the assurance and business advisory segment
of Arthur Andersen LLP. Ms. Wegner holds the CPA designation and received a B.S.
in Accountancy from Arizona State University.
Ms. Wegner is 48 years old and has no familial relationships with any executive
officer or director of the Company. Other than Ms. Wegner's prior compensation
for her service as the Company's Vice President, Corporate Controller, there
have been no transactions in which the Company has participated and in which
Ms. Wegner had a direct or indirect material interest that would be required to
be disclosed under Item 404(a) of Regulation S-K.
In connection with Ms. Wegner's appointment as Chief Financial Officer, the
Company and Ms. Wegner entered into an employment agreement dated August 25,
2020 (the "Wegner Employment Agreement"). The Wegner Employment Agreement
provides that her employment is "at will." Her annual base salary is initially
$350,000 and she is eligible to participate in the Company's Short-Term
Incentive Program, with a target bonus of 50% of her base salary. Ms. Wegner
also will receive a grant of RSUs valued at $250,000, vesting in three equal
annual installments beginning on the first anniversary of the grant date. If the
Company terminates Ms. Wegner without cause or she resigns for good reason
within 12 months of a change of control of the Company, she will receive 12
months' continued salary, COBRA coverage for 12 months and full vesting of all
her equity awards. If the Company terminates Ms. Wegner without cause or she
resigns for good reason at any other time, she will receive the same salary and
COBRA coverage, and additional vesting of all her equity awards that would have
otherwise vested in the 12 months following her termination. Ms. Wegner is
subject to confidentiality, non-competition and non-solicitation covenants for
one year following the termination of her employment.
Effective August 24, 2020 (the "Separation Date"), the Company's President and
Chief Executive Officer and a director, Raymond A. August, resigned from all of
his positions at the Company. The Board is treating this as a termination
without cause. Mr. August was serving as the Company's principal executive
officer. Mr. August's termination was not related to any disagreement with the
Company on any matter relating to the Company's operations, policies or
practices. Mr. August has agreed to remain at the Company for a transition
period ending on January 1, 2021 (the "Termination Date").
Mr. August is party to an employment agreement with the Company dated on or
about June 25, 2014, as amended on or about January 1, 2018 and again on
April 1, 2019 (the "August Employment Agreement"). In connection with his
termination, the Company and Mr. August entered into a separation and release
agreement dated August 24, 2020 (the "Separation Agreement"). Pursuant to the
August Employment Agreement, under the Separation Agreement Mr. August will
receive the benefits for being terminated without cause under the August
Employment Agreement, including: (i) continued payment of his base salary for 18
months following the Termination Date; (ii) payment of a portion of his 2020
annual bonus; (iii) continuation coverage under COBRA for 18 months following
the Termination Date; and (iv) immediate vesting of time-based vesting equity
awards that would have vested within 12 months of the Termination Date, other
than his April 2019 RSU.
--------------------------------------------------------------------------------
The foregoing summaries of the material terms of the Swad Amendment, Wegner
Employment Agreement and the Separation Agreement are subject to the full and
complete terms of the agreements, copies of which are filed as Exhibit 10.1,
10.2 and 10.3 hereto and are incorporated herein by reference. A copy of the
press release regarding the above matters is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 First Amendment to Employment Agreement, dated August 25, 2020, by
and between Benefitfocus.com and Stephen M. Swad.
10.2 Employment Agreement, dated August 25, 2020, by and between
Benefitfocus.com and Alpana Wegner.
10.3 Separation and Release Agreement, dated August 24, 2020, by and
between Benefitfocus.com and Raymond A. August.
99.1 Press release dated August 24, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses