Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
(d) In June 2014, the Board of Directors of Benefitfocus, Inc. (the "Company")
established a compensation program for the Company's independent directors not
serving as a designee of an investor under the Seconded Amended and Restated
Voting Agreement dated as of September 2013, by and among the Company and
certain stockholders named therein (the "Voting Agreement"), namely Francis J.
Pelzer V and Stephen M. Swad. Each such director will receive an annual retainer
of $150,000, payable at the director's election either 50% in cash and 50% in
restricted stock units, or RSUs, or 100% in RSUs. The RSUs vest on the first
anniversary of our annual stockholders meeting held in the year of the grant,
or, if earlier, immediately prior to the subsequent year's annual meeting. The
Company will also pay such directors the following cash fees for each quarter
they chair one of the Board committees: Audit, $6,250; Compensation, $2,500; and
any other committee, $1,875.
On June 17, 2014 the Board adopted an Independent Director Agreement which also
requires the Company's non-employee directors, not serving as a designee of an
investor under the Voting Agreement, to own stock in the Company with a cash
value of $225,000 or 3,750 shares, whichever is less. Such director need not own
the requisite number of shares until he has completed three years of service as
a director of the Company. If the ownership requirement is not met after the
director has completed three years of service as a director of the Company, then
all payments made to him by the Company will be entirely in the form of RSUs
until the required ownership level is reached. For purposes of calculating the
number of shares held by a director, shares that are owned directly are counted
along with (a) shares over which the director has investment or voting power,
and (b) shares that may be acquired pursuant to vested, in-the-money options to
acquire Company stock. Shares used to achieve the minimum director ownership
requirement may not be pledged, used as security, or otherwise encumbered by a
On June 17, 2014 Messrs. Pelzer and Swad entered into such Independent Director
Agreements with the Company. The description of the Independent Director
Agreements is qualified in its entirety by reference to the full and complete
terms of the Agreement, a form of which is filed as Exhibit 10.21 to this
Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
10.21 Form of Independent Director Agreement.