ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol |
Name of each exchange of which registered | ||
Large accelerated filer | ☐ | ☒ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
• | amend Part III, Items 10, 11, 12, 13, and 14 of the Original Form 10-K to include the information required by such Items; |
• | delete the reference on the cover of the Original Form 10-K to the incorporation by reference of portions of our proxy statement into Part III of the Original Form 10-K; and |
• | file new certifications of our principal executive officer and principal financial officer as exhibits to this Amendment under Item 15 of Part IV hereof, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Because no financial statements are contained within this Amendment, we are not including certifications pursuant to Section 906 of The Sarbanes-Oxley Act of 2002. |
1 | ||||
5 | ||||
44 | ||||
47 | ||||
50 | ||||
51 | ||||
Name |
Age |
Position(s) with Benefitfocus |
Director Since | |||
Douglas A. Dennerline | 62 | Director | August 2014 | |||
A. Lanham Napier | 50 | Director | September 2014 | |||
Coretha M. Rushing | 64 | Director | March 2021 | |||
Zeynep Young | 50 | Director | January 2021 | |||
Stephen M. Swad | 59 | Chief Executive Officer, Director | August 2020 | |||
Francis J. Pelzer V | 50 | Director | May 2013 | |||
Mason R. Holland, Jr. (1) |
56 | Executive Chairman, Director | June 2000 |
(1) | Mr. Holland will not stand for re-election when his current term expires at our 2021 Annual Meeting of Stockholders. |
Audit Committee |
Compensation & Talent Committee |
Nominating & Governance Committee | ||||
Douglas A. Dennerline | ||||||
Francis J. Pelzer V | ||||||
Coretha M. Rushing (1) |
||||||
(1) | Ms. Rushing joined our audit committee in March 2021 when Ana M. White resigned from the board of directors. Ms. White previously joined our audit committee in June 2020 when Mr. Napier stepped down from the committee. |
THE COMPENSATION AND TALENT COMMITTEE | ||
OF THE BOARD OF DIRECTORS | ||
Douglas A. Dennerline | ||
Francis J. Pelzer V | ||
Ana M. White (member of the compensation and talent committee until March 2021) |
• | Stephen M. Swad, |
• | Alpana Wegner, who began service as our Chief Financial Officer (our “CFO”) in August 2020; |
• | Mason R. Holland, Jr., who serves as Executive Chairman of our board of directors until the 2021 Annual Meeting of Stockholders; |
• | Annmarie Fini, who serves as our Executive Vice President of Customer Success (our “EVP”), but due to a reorganization of management, stopped serving as an executive officer in December 2020; |
• | Raymond A. August, who served as our Chief Executive Officer until August 2020 (our “former CEO”); and |
• | James P. Restivo, who served as our Chief Technology Officer (our “former CTO”) until September 2020. |
• | invested in our platform to help remove friction in benefits management and improve the customer experience through AI-backed platform enrollment enhancements; |
• | enhanced Benefit Catalog, including through key partnerships with Lincoln Financial Group and Transamerica; |
• | expedited bringing a resource center devoted to addressing the COVID-19 pandemic and its impact on customers’ benefits-related operations and communications to help them deal with the pandemic; |
• | developed with LIMRA the first data exchange standards focused on post-enrollment data for the employee benefits market not governed by HIPAA; |
• | shifted our workforce strategy to fully remote and enhanced our health and welfare benefits for our associates in response to the COVID-19 pandemic; |
• | swiftly took a series of actions to help address the impact of the COVID-19 pandemic on our business with a view to protecting our associates, customers and business partners, including significantly reducing our underlying expenses, enhancing our financial flexibility, and maintaining our liquidity profile; |
• | strengthened our leadership team with the hiring of our first chief data officer and executive vice president, product and engineering; |
• | delivered open enrollment with a customer satisfaction score from enrolled employees exceeding 90% and improved our employer customer Net Promoter Score (NPS); |
• | successfully transitioned our annual user conference to a fully digital format with record attendance; and |
• | refined our real estate strategy with a focus on optimizing our footprint for the future of work including exiting certain office leases, optimizing our office utilization, and enhancing our associates’ work experience to help improve productivity and effectiveness. |
• | maintained software revenue retention of greater than 90% during a period of global economic unrest; |
• | generated cash from operating activities of $27.7 million, compared to using cash in operating activities of $18.4 million in 2019; |
• | improved GAAP net loss by approximately 47.0% to ($24.3) million, compared to ($45.5) million in 2019; |
• | reduced GAAP net loss per share to ($0.87), compared to ($1.40) for 2019; and |
• | achieved adjusted EBITDA of $44.0 million, compared to $19.0 million in 2019. |
• | implementing executive compensation reductions, including reducing the take-home pay for the Chief Executive Officer to the minimum allowed by law ($684/week) and a 20% salary reduction for the executive leadership team; |
• | implementing a reduction in take-home pay for the Executive Chairman of the board of directors to the minimum allowed by law ($684/week) and a 25% reduction in equity compensation for all non-employee board members; |
• | reduced grants of long-term incentive awards by 25% and shortened the vesting term by 25%; and |
• | suspending merit increases and promotions. |
• | First, we provide the opportunity to participate in our Management Incentive Bonus Program, which provides for payments in both cash and equity if they produce short-term financial, operational, and strategic results that meet or exceed the objectives set forth in our annual operating plan. |
• | Second, we grant PRSUs, which comprise at least one-half of each named executive officer’s long-term incentive compensation award, with the shares of our common stock subject to such awards to be earned over a one-year performance period based on our actual results as measured against pre-established target levels for software services revenue and adjusted EBITDA for such period, and the earned shares, if any, vesting over a subsequent multi-year period. Software services revenue is an indicator of long-term enterprise value creation from revenue that continues for multiple years. Adjusted EBITDA is an indicator of the ongoing financial strength of our business. |
• | Maintain an Independent Compensation and Talent Committee |
• | Retain an Independent Compensation Advisor |
• | Annual Executive Compensation Review |
• | Compensation At Risk |
• | Use a Pay-for-Performance |
• | “Double-Trigger” Change-in-Control |
• | Stock Ownership Policy non-employee members of our board of directors. |
• | No Guaranteed Bonuses |
• | No Executive Retirement Plans non-qualified deferred compensation plans or arrangements to our named executive officers other than the plans and arrangements that are available to all employees. Our named executive officers are eligible to participate in our Section 401(k) retirement savings plan on the same basis as our other employees. |
• | No Tax Payments on Perquisites “gross-ups”) on any perquisites or other personal benefits. |
• | No Excise Tax Payments on Future Post-Employment Compensation Arrangements “gross-ups”) on payments or benefits contingent upon a change in control of the Company. |
• | No Special Welfare or Health Benefits |
• | No Stock Option Re-pricing re-priced to a lower exercise price without the approval of our stockholders. |
• | provide market-competitive compensation and benefit levels that will attract, motivate, reward, and retain a highly talented team of executives within the context of responsible cost management; |
• | establish a direct link between our financial, operational, and strategic objectives and results, as well as our values, and the compensation of our executives; |
• | align the interests and objectives of our executives with those of our stockholders by linking the long-term incentive compensation opportunities to stockholder value creation and their cash incentives to our annual performance; |
• | target performance metrics and milestones at the top quartile of the competitive market to help drive the creation of stockholder value; and |
• | offer total compensation opportunities to our executives that are competitive and fair. |
• | our executive compensation program objectives; |
• | our performance against the financial, operational, and strategic objectives established by the compensation and talent committee and our board of directors; |
• | each individual named executive officer’s knowledge, skills, experience, qualifications, and tenure relative to other similarly situated executives at the companies in our compensation peer group; |
• | the scope of each named executive officer’s role and responsibilities compared to other similarly situated executives at the companies in our compensation peer group; |
• | the prior performance of each individual named executive officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function, and work as part of a team, all of which reflect our core values; |
• | the potential of each individual named executive officer to contribute to our long-term financial, operational, and strategic objectives; |
• | our Chief Executive Officer’s compensation relative to that of our named executive officers, and compensation parity among our named executive officers; |
• | our financial performance relative to our compensation and performance peers; |
• | the compensation practices of our compensation peer group and the positioning of each named executive officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data; and |
• | the recommendations of our Chief Executive Officer with respect to the compensation of our other named executive officers. |
• | consulted with the compensation and talent committee chair and other members between compensation and talent committee meetings; |
• | updated compensation peer group; |
• | provided competitive market data based on the compensation peer group for our executive officer positions and evaluated how the compensation we pay our executive officers compares both to our performance and to how the companies in our compensation peer group compensate their executives; |
• | reviewed and analyzed the base salary levels, annual incentive bonus opportunities, and long-term incentive compensation opportunities of our executive officers; |
• | reviewed and assessed the compensation for our Chief Executive Officer; |
• | reviewed and analyzed the compensation proposals for other senior executive positions; |
• | conducted a competitive market analysis of compensation for the board of directors; and |
• | supported on other ad hoc |
• | revenue—approximately 0.5x to approximately 2.5x our last four fiscal quarter revenue of approximately $265 million (approximately $100 million to $660 million); |
• | market capitalization—approximately 0.3x to approximately 3.0x our 30-day average market capitalization of approximately $849 million (approximately $250 million to $2.5 billion); |
• | industry sector—business to business software—SaaS/Internet services and HR and benefits product focus where possible; and |
• | location—headquartered in the United States. |
AppFolio, Inc. | LivePerson, Inc. | |
Carbonite, Inc. | Model N, Inc. | |
Castlight Health, Inc. | NIC Inc. | |
ChannelAdvisor Corporation | Q2 Holdings, Inc. | |
Cornerstone OnDemand, Inc. | QAD Inc. | |
Evolent Health, Inc. | SPS Commerce, Inc. | |
Five9, Inc. | Tabula Rasa HealthCare, Inc. | |
HealthStream, Inc. | Upland Software, Inc. | |
Inovalon Holdings, Inc. | WageWorks, Inc. (now HealthEquity, Inc.) | |
Instructure, Inc. | Workiva Inc. |
Element |
Type of Element |
Compensation Element(s) |
Objective | |||
Base Salary | Fixed | • Cash |
Designed to attract and retain highly talented executives by providing fixed compensation amounts that are competitive in the market and reward performance | |||
Annual Incentive Bonuses | Variable | • Cash • PRSU awards that may be earned and settled for shares of our common stock |
Designed to motivate our executives to achieve annual business objectives contained in our annual operating plan and provide financial incentives when we meet or exceed these annual objectives | |||
Long-Term Incentive Compensation | Variable | • PRSU awards that may be earned and settled for shares of our common stock • RSU awards that may vest and be settled for shares of our common stock |
Designed to align the interests of our executives and our stockholders by motivating executives to create sustainable long-term stockholder value |
Name |
2019 Base Salary |
2020 Base Salary |
Percentage Adjustment |
|||||||||
Mason R. Holland, Jr. (1) Executive Chairman of the Board |
$ | 325,779 | $ | 325,779 | 0 | % | ||||||
Stephen M. Swad (2) Former CFO |
$ | 425,000 | $ | 425,000 | 0 | % | ||||||
Annmarie Fini (3) EVP |
— | $ | 348,676 | — | ||||||||
Raymond A. August (4) Former CEO |
$ | 525,000 | $ | 525,000 | 0 | % | ||||||
James P. Restivo (5) Former CTO |
$ | 375,000 | $ | 375,000 | 0 | % |
(1) | Mr. Holland’s base salary was temporarily reduced to $35,568 in 2020 as part of the Company’s COVID-19 cost saving efforts. The reduction was in effect from May 17, 2020 until August 23, 2020. |
(2) | Mr. Swad served as our Chief Financial Officer until his appointment as our President and Chief Executive Officer, effective August 24, 2020. The base salary listed reflects his service as Chief Financial Officer. Mr. Swad’s base salary was temporarily reduced to $340,000 in 2020 as part of the Company’s COVID-19 cost saving efforts. This salary reduction was in effect until Mr. Swad’s appointment as President and Chief Executive Officer. |
(3) | Ms. Fini was appointed our Executive Vice President of Customer Success on January 1, 2020 and her base salary was set at $348,676. Ms. Fini’s base salary was temporarily reduced to $278,940 in 2020 as part of the Company’s COVID-19 cost saving efforts. The reduction was in effect from May 17, 2020 until August 23, 2020. |
(4) | Mr. August served as our President and Chief Executive Officer until his separation from our Company, effective August 24, 2020, and his actual annual base salary for 2020 was prorated for this period of service. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer until December 31, 2020. Mr. August’s base salary was temporarily reduced to $35,568 in 2020 as part of the Company’s COVID-19 cost saving efforts. The reduction was in effect from May 17, 2020 until August 20, 2020. |
(5) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020, and his actual annual base salary for 2020 was prorated for this period of service. He continued to serve our Company in an advisory role until December 31, 2020. Mr. Restivo’s base salary was temporarily reduced to $300,000 in 2020 as part of the Company’s COVID-19 cost saving efforts. The reduction was in effect from May 17, 2020 until August 23, 2020. |
Name |
2020 Target Annual Incentive Bonus Opportunity (as a percentage of base salary) |
2020 Target Annual Incentive Bonus Opportunity (cash portion) |
2020 Target Annual Incentive Bonus Opportunity (PRSU portion) |
|||||||||
Stephen M. Swad (1) President, CEO and Director |
100 | % | $ | 41,855 | $ | 0 | ||||||
Alpana Wegner (2) CFO |
50 | % | $ | 61,494 | $ | 24,486 | ||||||
Mason R. Holland, Jr. Executive Chairman of the Board |
100 | % | $ | 162,889 | $ | 162,889 | ||||||
Annmarie Fini EVP |
50 | % | $ | 87,169 | $ | 87,169 | ||||||
Raymond A. August (3) Former President, CEO and Director |
100 | % | $ | 262,500 | $ | 262,500 | ||||||
James P. Restivo (4) Former CTO |
75 | % | $ | 140,625 | $ | 140,625 | ||||||
Stephen M. Swad (1) Former CFO |
75 | % | $ | 159,375 | $ | 159,375 |
(1) | Mr. Swad was appointed as our Chief Financial Officer on July 10, 2019 and served in that role until his appointment as our President and Chief Executive Officer, effective August 24, 2020, and his target annual incentive bonus opportunities for 2020 were prorated for his period of service in each position. The incremental increase in his annual incentive target for his time as Chief Executive Officer is payable in cash. The PRSU portion shown in the table reflects the value of his annual incentive target grant as Chief Financial Officer on May 1, 2020. |
(2) | Ms. Wegner was appointed our Chief Financial Officer, effective August 24, 2020, and her target annual incentive bonus opportunities for 2020 were prorated for this period of service. The cash and |
PRSU portions shown in the table reflect her total target values in 2020. The incremental increase in her annual incentive target for her time as Chief Financial Officer is payable in cash. The PRSU portion shown in the table reflects the value of her annual incentive target grant as Vice President, Corporate Controller on May 1, 2020. |
(3) | Mr. August served as our President and Chief Executive Officer until his separation from our Company, effective August 24, 2020. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer until December 31, 2020. |
(4) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020. He continued to serve our Company in an advisory role until December 31, 2020. |
Name |
PRSU Award (#)(1) |
|||
Mason R. Holland, Jr. (2) Executive Chairman of the Board |
16,283 | |||
Annmarie Fini (3) EVP |
8,713 | |||
Raymond A. August (4) Former President, CEO and Director |
26,240 | |||
James P. Restivo (5) Former CTO |
14,057 | |||
Stephen M. Swad (6) Former CFO |
15,931 |
(1) | Each PRSU award represents a contingent right to receive one share of our common stock. |
(2) | Mr. Holland will serve as our Executive Chairman until the 2021 Annual Meeting of Stockholders. His unvested equity awards will continue to vest until his separation date, and subsequently any unvested equity awards will accelerate and become fully vested. |
(3) | Ms. Fini was appointed our Executive Vice President, effective January 1, 2020. |
(4) | Mr. August served as our President and Chief Executive Officer until his separation from our Company, effective August 24, 2020. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date, other than his RSU granted in April 2019, and any unvested equity awards were forfeited. |
(5) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020. He continued to serve our Company in an advisory role through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date and any unvested equity awards were forfeited. |
(6) | Mr. Swad served as our Chief Financial Officer until his appointment as our President and Chief Executive Officer, effective August 24, 2020. His unvested equity awards continue to vest. When Mr. Swad was appointed our President and Chief Executive Officer, no additional PRSU awards were granted. The incremental increase in his annual incentive target for his time as Chief Executive Officer is payable in cash. The PRSU award shown in the table reflects the annual incentive target grant as Chief Financial Officer on May 1, 2020. |
• | revenue was to be calculated as reflected in our audited financial statements for 2020; and |
• | adjusted EBITDA was to be calculated as net income (or loss) before net interest, taxes, and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense, expense related to the impairment of goodwill and intangible assets, transaction and acquisition-related costs expensed, restructuring costs, gain or loss on extinguishment of debt, and costs not core to our business. |
Revenue (Weighted 30%) |
Achievement Percentage(1) |
Payout Percentage(1) |
||||||
$290,000,000 (Maximum) |
107.4 | % | 150 | % | ||||
$270,000,000 (Target) |
100.0 | % | 100 | % | ||||
$250,000,000 (Threshold) |
92.6 | % | 50 | % | ||||
<$250,000,000 |
<92.6 | % | 0 | % |
(1) | In the event of actual performance between the threshold and target, and target and maximum, performance levels, the payout percentage was to be calculated between each designated segment on a linear basis. |
Adjusted EBITDA (Weighted 70%) |
Achievement Percentage(1) |
Payout Percentage(1) |
||||||
$42,000,000 (Maximum) |
120 | % | 150 | % | ||||
$35,000,000 (Target) |
100 | % | 100 | % | ||||
$28,000,000 (Threshold) |
80 | % | 50 | % | ||||
<$28,000,000 |
<80 | % | 0 | % |
(1) | In the event of actual performance between the threshold and target, and target and maximum, performance levels, the payout percentage was to be calculated between each designated segment on a linear basis. |
Corporate Performance Measure |
Percentage of Measure Achieved |
Payment Percentage |
Plan Weight |
Weighted Payment Percentage |
||||||||||||
Revenue |
99.3 | % | 95.4 | % | 30 | % | 28.6 | % | ||||||||
Adjusted EBITDA |
125.8 | % | 150 | % | 70 | % | 105.0 | % | ||||||||
Total |
133.6 | % |
Name |
Target Annual Incentive Bonus ($) |
Annual Incentive Bonus Payment ($) |
Total Annual Incentive Bonus Payment (# of shares)(1) |
|||||||||
Stephen M. Swad (2) President, CEO and Director |
$ | 168,625 | $ | 150,676 | 0 | |||||||
Alpana Wegner (3) CFO |
$ | 62,125 | $ | 55,512 | 0 | |||||||
Mason R. Holland, Jr. (4) Executive Chairman of the Board |
$ | 325,779 | $ | 146,600 | 14,654 | |||||||
Annmarie Fini EVP |
$ | 174,338 | $ | 78,452 | 7,841 | |||||||
Raymond A. August (5) Former President, CEO and Director |
$ | 525,000 | $ | 236,250 | 23,616 | |||||||
James P. Restivo (6) Former CTO |
$ | 281,250 | $ | 126,563 | 12,651 | |||||||
Stephen M. Swad (2) Former CFO |
$ | 205,594 | $ | 41,597 | 14,337 |
(1) | Represents the number of PRSUs earned, which is capped at the target level. |
(2) | Mr. Swad was appointed as our Chief Financial Officer on July 10, 2019 and served in that role until his appointment as our President and Chief Executive Officer, effective August 24, 2020, and his target annual incentive bonus opportunities for 2020 were prorated for his period of service in each position. All PRSUs granted to Mr. Swad in 2020 were for his service as our Former Chief Financial Officer, and no additional PRSUs were granted and the difference was paid in cash, when his position changed to President and Chief Executive Officer. |
(3) | Ms. Wegner was appointed our Chief Financial Officer, effective August 24, 2020, and previously served as our Vice President, Corporate Controller. Her target annual incentive bonus opportunities for 2020 were prorated for the period of service in each position. The table above reflects her target annual incentive bonus for her period of service as our Chief Financial Officer. During her prior period of service as Vice President, Corporate Controller in 2020, when she was not an executive officer, her target annual incentive bonus was $31,444, the annual incentive bonus payment was $6,391, and the total number of PRSUs earned was 2,202. All PRSUs granted to Ms. Wegner in 2020 were for her service as Vice President, Corporate Controller, and no additional PRSUs were granted and the difference was paid in cash, when her position changed to Chief Financial Officer. |
(4) | Mr. Holland will serve as our Executive Chairman until the 2021 Annual Meeting of Stockholders. His unvested equity awards will continue to vest until his separation date, and subsequently any unvested equity awards will accelerate and become fully vested. |
(5) | Mr. August served as our President and Chief Executive Officer until his separation from our Company, effective August 24, 2020. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date, other than his RSU granted in April 2019, and any unvested equity awards were forfeited. |
(6) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020. He continued to serve our Company in an advisory role through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date and any unvested equity awards were forfeited. |
• | We delayed our annual grant date from April 1 to May 1, 2020. Future vesting dates continue to occur on the anniversary of the date of grant. |
• | We reduced the long-term incentive target goals from 2019 levels by 25% for all executives. |
• | We reduced the vesting period for PRSUs from four years to three years. |
Name |
Performance-Based Restricted Stock Unit Award (maximum #) |
Restricted Stock Unit Award (#) |
Aggregate Grant Date Fair Value ($) |
|||||||||
Mason R. Holland, Jr. (1) Executive Chairman of the Board |
18,318 | 12,212 | $ | 312,017 | ||||||||
Annmarie Fini EVP |
39,211 | 26,141 | $ | 667,897 | ||||||||
Raymond A. August (2) Former President, CEO and Director |
196,806 | 131,204 | $ | 3,352,262 | ||||||||
James P. Restivo (3) Former CTO |
42,172 | 28,115 | $ | 718,333 | ||||||||
Stephen M. Swad (4) Former CFO |
84,438 | 56,292 | $ | 1,438,261 |
(1) | Mr. Holland will serve as our Executive Chairman until the 2021 Annual Meeting of Stockholders. His unvested equity awards will continue to vest until his separation date, and subsequently any unvested equity awards will accelerate and become fully vested. |
(2) | Mr. August served as our President and Chief Executive Officer until his separation from our Company, effective August 24, 2020. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date, other than his RSU granted in April 2019, and any unvested equity awards were forfeited. |
(3) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020. He continued to serve our Company in an advisory role through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date and any unvested equity awards were forfeited. |
(4) | Mr. Swad served as our Chief Financial Officer until his appointment as our President and Chief Executive Officer, effective August 24, 2020. No PRSU awards were granted for his period of service as Chief Executive Officer in 2020. His unvested equity awards continue to vest. |
Software Services Revenue (Weighted 50%) |
Achievement Percentage(1) |
Payout Percentage(1) |
||||||
$248,400,000 (Maximum) |
115 | % | 150 | % | ||||
$216,000,000 (Target) |
100 | % | 100 | % | ||||
$183,600,000 (Threshold) |
85 | % | 50 | % | ||||
<$183,600,000 |
<85 | % | 0 | % |
(1) | In the event of actual performance between the threshold and target, and target and maximum, performance levels, the payout percentage was to be calculated between each designated segment on a linear basis. |
Adjusted EBITDA (Weighted 50%) |
Achievement Percentage(1) |
Payout Percentage(1) |
||||||
$40,250,000 (Maximum) |
115 | % | 150 | % | ||||
$35,000,000 (Target) |
100 | % | 100 | % | ||||
$29,750,000 (Threshold) |
85 | % | 50 | % | ||||
<$29,750,000 |
<85 | % | 0 | % |
(1) | In the event of actual performance between the threshold and target, and target and maximum, performance levels, the payout percentage was to be calculated between each designated segment on a linear basis. |
Corporate Performance Measure |
Percentage of Measure Achieved |
Payment Percentage |
Plan Weight |
Weighted Payment Percentage |
||||||||||||
Software Services Revenue |
99.5 | % | 98.2 | % | 50 | % | 49.1 | % | ||||||||
Adjusted EBITDA |
125.8 | % | 150.0 | % | 50 | % | 75.0 | % | ||||||||
Total |
124.1 | % |
• | We delayed our annual grant date from April 1 to May 1, 2020. Future vesting dates continue to occur on the anniversary of the date of grant. |
• | We reduced the long-term incentive target goals from 2019 levels by 25% for all executives. |
• | We reduced the vesting period for PRSUs from four years to three years. |
Name and principal position |
Year |
Salary ($)(1) |
Stock awards ($)(2) |
Non-equity incentive plan compensation ($) |
All other compensation ($)(3) |
Total ($) |
||||||||||||||||||
Stephen M. Swad (4) |
2020 | $ | 435,250 | (5) |
$ | 1,945,487 | $ | 193,002 | $ | 35,139 | $ | 2,608,878 | ||||||||||||
President, CEO and Director and Former CFO |
2019 | $ | 171,635 | $ | 2,891,200 | $ | 46,929 | $ | 159 | $ | 3,109,923 | |||||||||||||
Alpana Wegner (6) CFO |
2020 | $ | 290,268 | (7) |
$ | 462,504 | $ | 62,015 | $ | 6,766 | $ | 821,553 | ||||||||||||
Mason R. Holland, Jr. (8) |
2020 | $ | 260,175 | (9) |
$ | 416,026 | $ | 146,600 | $ | 3,535 | $ | 826,336 | ||||||||||||
Executive Chairman of the Board |
2019 | $ | 321,602 | $ | 493,272 | $ | 57,719 | $ | 2,294 | $ | 874,887 | |||||||||||||
2018 | $ | 306,288 | $ | 555,462 | $ | 173,361 | $ | 19,158 | $ | 1,054,269 | ||||||||||||||
Annmarie Fini (10) EVP |
2020 | $ | 342,545 | (11) |
$ | 623,359 | $ | 78,452 | $ | 6,769 | $ | 1,051,125 | ||||||||||||
Raymond A. August (12) |
2020 | $ | 417,187 | (13) |
$ | 2,949,983 | $ | 236,250 | $ | 9,960 | $ | 3,613,380 | ||||||||||||
Former President, CEO and Director |
2019 | $ | 518,269 | $ | 6,162,380 | $ | 93,015 | $ | 10,063 | $ | 6,783,727 | |||||||||||||
2018 | $ | 499,346 | $ | 3,372,807 | $ | 279,376 | $ | 21,468 | $ | 4,172,997 | ||||||||||||||
James P. Restivo (14) |
2020 | $ | 369,231 | (15) |
$ | 718,323 | $ | 126,563 | $ | 8,868 | $ | 1,222,985 | ||||||||||||
Former CTO |
2019 | $ | 371,602 | $ | 899,076 | $ | 49,829 | $ | 10,063 | $ | 1,330,570 | |||||||||||||
2018 | $ | 357,674 | $ | 769,256 | $ | 100,715 | $ | 20,874 | $ | 1,248,519 |
(1) | Reflects base salary earned during the fiscal year covered. |
(2) | The reported amounts represent the aggregate grant date fair value of awards of RSUs and PRSUs computed in accordance with FASB ASC Topic 718, excluding the estimate of forfeitures. The reported amounts for PRSUs also assume target performance goals will be achieved and are consistent with the estimate of aggregate compensation cost recognized over the service period determined as of the grant date under FASB ASC Topic 718. For 2020, the grant date fair value of all PRSUs at maximum payout potential are $2,233,139, $478,429, $756,944, $3,620,435 and $861,996 for Mr. Swad, Mr. Holland, Ms. Fini and Messrs. August and Restivo, respectively. Ms. Wegner was not granted PRSUs in her capacity as Chief Financial Officer in 2020. |
(3) | All other compensation consisted of the following in 2020: |
Name |
Year |
Medical Insurance Premiums ($)(1) |
Life Insurance Premiums ($) |
Disability Insurance Premiums ($) |
Health Savings Account Contributions ($) |
401(k) Plan Matching Contributions ($) |
Other ($)(2) |
Total ($) |
||||||||||||||||||||||||
Stephen M. Swad |
2020 | — | $ | 249 | $ | 186 | $ | 1,250 | $ | 6,277 | $ | 27,177 | $ | 35,139 | ||||||||||||||||||
2019 | — | $ | 96 | $ | 63 | — | — | — | $ | 159 | ||||||||||||||||||||||
Alpana Wegner |
2020 | — | $ | 249 | $ | 186 | $ | 1,250 | $ | 5,081 | — | $ | 6,766 | |||||||||||||||||||
Mason R. Holland, Jr. |
2020 | — | $ | 249 | $ | 186 | $ | 1,250 | $ | 1,850 | — | $ | 3,535 | |||||||||||||||||||
2019 | — | $ | 249 | $ | 164 | $ | 1,250 | $ | 631 | — | $ | 2,294 | ||||||||||||||||||||
2018 | $ | 9,831 | $ | 552 | $ | 484 | $ | 1,250 | $ | 7,041 | — | $ | 19,158 | |||||||||||||||||||
Annmarie Fini |
2020 | — | $ | 249 | $ | 186 | $ | — | $ | 6,334 | — | $ | 6,769 | |||||||||||||||||||
Raymond A. August |
2020 | — | $ | 249 | $ | 186 | $ | 1,250 | $ | 8,275 | — | $ | 9,960 | |||||||||||||||||||
2019 | — | $ | 249 | $ | 164 | $ | 1,250 | $ | 8,400 | — | $ | 10,063 | ||||||||||||||||||||
2018 | $ | 9,803 | $ | 1,032 | $ | 749 | $ | 1,250 | $ | 8,634 | — | $ | 21,468 | |||||||||||||||||||
James P. Restivo |
2020 | — | $ | 249 | $ | 186 | $ | 1,250 | $ | 7,183 | — | $ | 8,868 | |||||||||||||||||||
2019 | — | $ | 249 | $ | 164 | $ | 1,250 | $ | 8,400 | — | $ | 10,063 | ||||||||||||||||||||
2018 | $ | 9,803 | $ | 1,032 | $ | 555 | $ | 1,250 | $ | 8,234 | — | $ | 20,874 |
(1) | Historically, we have provided our associates and their qualifying family members with medical insurance at no cost to those individuals. In 2019, the Company moved to a self-funded health plan, and, as a result, as of January 2019, the Company no longer provides this benefit. |
(2) | The Company provided Mr. Swad with a corporate apartment as part of his employment agreement. |
(4) | Mr. Swad served as our Chief Financial Officer until his appointment as our President and Chief Executive Officer, effective August 24, 2020. |
(5) | Mr. Swad’s base salary was temporarily reduced to $340,000 as part of the Company’s COVID-19 cost saving efforts. This salary reduction was in effect until Mr. Swad’s appointment as President and Chief Executive Officer. |
(6) | Ms. Wegner began serving as our Chief Financial Officer on August 24, 2020. |
(7) | Ms. Wegner’s base salary while serving as Vice President, Corporate Controller was $244,860 and following Ms. Wegner’s appointment as Chief Financial Officer on August 24, 2020, her base salary was $350,000. Her total base salary for 2020 reflects the total of the prorated amounts for the respective periods of service. |
(8) | Mr. Holland will serve as our Executive Chairman until the 2021 Annual Meeting of Stockholders. Following his separation date, he will receive the separation benefits as provided in his employment agreement. His unvested equity awards will continue to vest until his separation date, and subsequently any unvested equity awards will accelerate and become fully vested. |
(9) | Mr. Holland’s base salary was temporarily reduced to $35,568 as part of the Company’s COVID-19 cost saving efforts. The reduction was in effect from May 17, 2020 until August 23, 2020. |
(10) | Ms. Fini began serving as our Executive Vice President of Customer Success on January 1, 2020. |
(11) | Ms. Fini’s base salary was temporarily reduced to $278,940 as part of the Company’s COVID-19 cost saving efforts. The reduction was in effect from May 17, 2020 until August 23, 2020. |
(12) | Mr. August served as our President and Chief Executive Officer until his separation from our Company, effective August 24, 2020. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date, other than his RSU granted in April 2019, and any unvested equity awards were forfeited. |
(13) | Mr. August’s base salary was temporarily reduced to $35,568 as part of the Company’s COVID-19 cost saving efforts. The reduction was in effect from May 17, 2020 until August 20, 2020. |
(14) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020. He continued to serve our Company in an advisory role through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date and any unvested equity awards were forfeited. |
(15) | Mr. Restivo’s base salary was temporarily reduced to $300,000 as part of the Company’s COVID-19 cost saving efforts. The reduction was in effect from May 17, 2020 until August 23, 2020. |
Upon Termination without Cause or Resignation for Good Reason – No Change of Control |
Upon Termination without Cause or Resignation for Good Reason – Change of Control |
|||||||||||||||||||||||||||||||
Name |
Cash Severance ($) |
Value of Accelerated Vesting(1) ($) |
Value of Benefits ($) |
Total ($) |
Cash Severance ($) |
Value of Accelerated Vesting(1) ($) |
Value of Benefits ($) |
Total ($) |
||||||||||||||||||||||||
Stephen M. Swad President, CEO and Director |
$ | 814,637 | $ | 1,482,740 | $ | 13,054 | $ | 2,310,431 | $ | 1,450,296 | $ | 3,896,423 | $ | 26,109 | $ | 5,372,828 | ||||||||||||||||
Alpana Wegner CFO |
$ | 450,635 | $ | 259,855 | $ | 13,054 | $ | 723,544 | $ | 450,635 | $ | 702,436 | $ | 13,054 | $ | 1,166,125 | ||||||||||||||||
Mason R. Holland, Jr. Executive Chairman of the Board |
$ | 1,846,775 | $ | 775,462 | $ | 39,163 | $ | 2,661,400 | $ | 1,849,775 | $ | 775,462 | $ | 39,163 | $ | 2,661,400 | ||||||||||||||||
Annmarie Fini EVP |
$ | 174,338 | $ | — | $ | 6,527 | $ | 180,865 | $ | 174,338 | $ | 1,242,398 | $ | 6,527 | $ | 1,423,263 | ||||||||||||||||
Raymond A. August (2) Former President, CEO and Director |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
James P. Restivo (3) Former CTO |
— | — | — | — | — | — | — | — |
(1) | The value of accelerated vesting equals $14.48, the closing sale price per share of our common stock on the Nasdaq Global Market on December 31, 2020, multiplied by the number of shares subject to accelerated vesting. |
(2) | Mr. August served as our President and Chief Executive Officer until his separation from the Company, effective August 24, 2020. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer through December 31, 2020. |
(3) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020. He continued to serve our Company in an advisory role through December 31, 2020. |
Name |
Grant date |
Estimated Future Payouts Under Non-Equity IncentivePlan Awards(1) |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
All other stock awards: Number of time- based RSUs(2) (#) |
Grant Date Fair Value of Stock Awards ($)(3) |
|||||||||||||||||||||||||||||
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
|
||||||||||||||||||||||||||||
Stephen M. Swad (4) President, CEO and Director |
May 1, 2020 | 15,931 | (5) |
15,931 | $ | 162,815 | ||||||||||||||||||||||||||||
May 1, 2020 | 56,292 | (6) |
84,438 | $ | 575,304 | |||||||||||||||||||||||||||||
May 1, 2020 | 56,292 | (7) |
$ | 575,304 | ||||||||||||||||||||||||||||||
May 1, 2020 | $ | 0 | $ | 46,219 | $ | 46,219 | ||||||||||||||||||||||||||||
August 25, 2020 | $ | 0 | $ | 168,625 | $ | 168,625 | ||||||||||||||||||||||||||||
September 1, 2020 | 61,010 | (8) |
$ | 632,064 | ||||||||||||||||||||||||||||||
Alpana Wegner (9) CFO |
January 1, 2020 | 4,726 | (10) |
$ | 99,199 | |||||||||||||||||||||||||||||
May 1, 2020 | 2,447 | (5) |
2,447 | $ | 25,008 | |||||||||||||||||||||||||||||
May 1, 2020 | 11,014 | (7) |
$ | 112,563 | ||||||||||||||||||||||||||||||
May 1, 2020 | $ | 0 | $ | 7,101 | $ | 7,101 | ||||||||||||||||||||||||||||
August 25, 2020 | $ | 0 | $ | 62,125 | $ | 62,125 | ||||||||||||||||||||||||||||
September 1, 2020 | 21,789 | (8) |
$ | 225,734 |
Mason R. Holland, Jr. (11) Executive Chairman of the Board |
May 1, 2020 | 16,283 | (5) |
16,283 | $ | 166,412 | ||||||||||||||||||||||||||||
May 1, 2020 | 12,212 | (6) |
18,318 | $ | 124,807 | |||||||||||||||||||||||||||||
May 1, 2020 | 12,212 | (7) |
$ | 124,807 | ||||||||||||||||||||||||||||||
May 1, 2020 | $ | 0 | $ | 162,889 | $ | 162,889 | ||||||||||||||||||||||||||||
Annmarie Fini EVP |
May 1, 2020 | 8,713 | (5) |
8,713 | $ | 89,047 | ||||||||||||||||||||||||||||
May 1, 2020 | 26,141 | (6) |
39,211 | $ | 267,161 | |||||||||||||||||||||||||||||
May 1, 2020 | 26,141 | (7) |
$ | 267,161 | ||||||||||||||||||||||||||||||
May 1, 2020 | $ | 0 | $ | 87,169 | $ | 87,169 | ||||||||||||||||||||||||||||
Raymond A. August (12) Former President, CEO and Director |
May 1, 2020 | 26,240 | (5) |
26,240 | $ | 268,173 | ||||||||||||||||||||||||||||
May 1, 2020 | 131,204 | (6) |
196,806 | $ | 1,340,905 | |||||||||||||||||||||||||||||
May 1, 2020 | 131,204 | (7) |
$ | 1,340,905 | ||||||||||||||||||||||||||||||
May 1, 2020 | $ | 0 | $ | 262,500 | $ | 262,500 | ||||||||||||||||||||||||||||
James P. Restivo (13) Former CTO |
May 1, 2020 | 14,057 | (5) |
14,057 | $ | 143,663 | ||||||||||||||||||||||||||||
May 1, 2020 | 28,115 | (6) |
42,172 | $ | 287,332 | |||||||||||||||||||||||||||||
May 1, 2020 | 28,115 | (7) |
$ | 287,332 | ||||||||||||||||||||||||||||||
May 1, 2020 | $ | 0 | $ | 140,625 | $ | 140,625 |
(1) | Represents the aggregate cash incentive components of the 2020 annual incentives payable to the named executive officer, as summarized in “ Compensation Discussion and Analysis—Compensation Elements |
(2) | Represents the aggregate equity incentive components of the 2020 annual incentives granted in the form of PRSUs and RSUs to the named executive officer, as summarized in “ Compensation Discussion and Analysis—Compensation Elements |
(3) | The reported amounts represent the aggregate grant date fair value of awards of PRSUs and RSUs computed in accordance with FASB ASC Topic 718, excluding the estimate of forfeitures. The reported amounts for PRSUs also assume target performance goals will be achieved and are consistent with the estimate of aggregate compensation cost recognized over the service period determined as of the grant date under FASB ASC Topic 718. |
(4) | Mr. Swad was appointed our President and Chief Executive Officer, effective August 24, 2020, and resigned as our Chief Financial Officer, effective August 24, 2020. His target annual incentive bonus opportunities for 2020 were prorated for his period of service in each position, and his unvested equity awards continue to vest. |
(5) | A percentage of the PRSUs were to vest upon the achievement of an annual revenue goal and an adjusted EBITDA goal, during the period of January 1, 2020 through December 31, 2020, as summarized in “ Compensation Discussion and Analysis—Compensation Elements |
(6) | A percentage of the PRSUs were to vest upon the achievement of software service revenue and adjusted EBITDA goals during the period of January 1, 2020 through December 31, 2020, as summarized in “ Compensation Discussion and Analysis—Compensation Elements |
(7) | Represents RSUs which vest in three equal annual installments beginning on May 1, 2021, subject to continued employment. |
(8) | The shares subject to this grant of RSUs vest in three equal annual installments beginning on September 1, 2021, subject to continued employment. |
(9) | Ms. Wegner was appointed our Chief Financial Officer, effective August 24, 2020, and previously served as our Vice President, Corporate Controller. Her target annual incentive bonus opportunities for 2020 were prorated for this period of service in each position. |
(10) | Represents RSUs which vest in four equal annual installments beginning on January 1, 2021, subject to continued employment. |
(11) | Mr. Holland will serve as our Executive Chairman until the 2021 Annual Meeting of Stockholders. Following his separation date, he will receive the separation benefits as provided in his employment agreement. His unvested equity awards will continue to vest until his separation date, and subsequently any unvested equity awards will accelerate and become fully vested. |
(12) | Mr. August served as our President and Chief Executive Officer until his separation from our Company, effective August 24, 2020. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date, other than his RSU granted in April 2019, and any unvested equity awards were forfeited. |
(13) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020. He continued to serve our Company in an advisory role through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date and any unvested equity awards were forfeited. |
Stock awards |
||||||||||||||||||||||||||||||||
Name |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
Number of shares or units of stock that have not vested (#) |
Market value of shares or units of stock that have not vested ($)(1) |
Equity incentive plan awards: number of unearned units (#) |
Equity incentive plan awards: market value of unearned units ($)(1) |
||||||||||||||||||||||||
Stephen M. Swad (2) President, CEO and Director |
53,006 | (3) |
$ | 767,527 | ||||||||||||||||||||||||||||
28,912 | (4) |
$ | 418,646 | |||||||||||||||||||||||||||||
56,292 | (5) |
$ | 815,108 | |||||||||||||||||||||||||||||
15,931 | (6) |
$ | 230,681 | |||||||||||||||||||||||||||||
56,292 | (7) |
$ | 815,108 | |||||||||||||||||||||||||||||
61,010 | (8) |
$ | 883,425 | |||||||||||||||||||||||||||||
Alpana Wegner (9) CFO |
367 | (10) |
$ | 5,314 | ||||||||||||||||||||||||||||
1,872 | (11) |
$ | 27,107 | |||||||||||||||||||||||||||||
2,022 | (12) |
$ | 29,279 | |||||||||||||||||||||||||||||
840 | (13) |
$ | 12,163 | |||||||||||||||||||||||||||||
217 | (14) |
$ | 3,142 | |||||||||||||||||||||||||||||
712 | (15) |
$ | 10,310 | |||||||||||||||||||||||||||||
3,248 | (16) |
$ | 47,031 | |||||||||||||||||||||||||||||
4,726 | (17) |
$ | 68,432 | |||||||||||||||||||||||||||||
11,014 | (5) |
$ | 159,483 | |||||||||||||||||||||||||||||
2,447 | (6) |
$ | 35,433 | |||||||||||||||||||||||||||||
21,789 | (8) |
$ | 315,505 | |||||||||||||||||||||||||||||
Mason R. Holland, Jr (18) Executive Chairman of the Board |
1,390 | (13) |
$ | 20,127 | ||||||||||||||||||||||||||||
2,052 | (15) |
$ | 29,713 | |||||||||||||||||||||||||||||
4,939 | (12) |
$ | 71,517 | |||||||||||||||||||||||||||||
1,738 | (19) |
$ | 25,166 | |||||||||||||||||||||||||||||
12,212 | (5) |
$ | 176,830 | |||||||||||||||||||||||||||||
16,283 | (6) |
$ | 235,778 | |||||||||||||||||||||||||||||
12,212 | (7) |
$ | 176,830 |
Annmarie Fini EVP |
1,219 | (13) |
$ | 17,651 | ||||||||||||||||||||||||||||
2,848 | (15) |
$ | 41,239 | |||||||||||||||||||||||||||||
3,853 | (17) |
$ | 55,791 | |||||||||||||||||||||||||||||
6,856 | (12) |
$ | 99,275 | |||||||||||||||||||||||||||||
2,392 | (19) |
$ | 34,636 | |||||||||||||||||||||||||||||
1,450 | (20) |
$ | 20,996 | |||||||||||||||||||||||||||||
26,141 | (5) |
$ | 378,522 | |||||||||||||||||||||||||||||
8,713 | (6) |
$ | 126,164 | |||||||||||||||||||||||||||||
26,141 | (7) |
$ | 378,522 | |||||||||||||||||||||||||||||
7,000 | $ | 10.30 | 10/01/2022 | |||||||||||||||||||||||||||||
2,000 | $ | 13.53 | 05/08/2023 | |||||||||||||||||||||||||||||
Raymond A. August (21) Former President, CEO and Director |
4,545 | (13) |
$ | 65,812 | ||||||||||||||||||||||||||||
22,467 | (22) |
$ | 325,322 | |||||||||||||||||||||||||||||
16,535 | (15) |
$ | 239,427 | |||||||||||||||||||||||||||||
39,806 | (12) |
$ | 576,391 | |||||||||||||||||||||||||||||
18,684 | (19) |
$ | 270,544 | |||||||||||||||||||||||||||||
131,204 | (5) |
$ | 1,899,834 | |||||||||||||||||||||||||||||
26,240 | (6) |
$ | 379,955 | |||||||||||||||||||||||||||||
131,204 | (7) |
$ | 1,899,834 | |||||||||||||||||||||||||||||
James Restivo (24) Former CTO |
5,316 | (13) |
$ | 76,976 | ||||||||||||||||||||||||||||
1,411 | (13) |
$ | 20,431 | |||||||||||||||||||||||||||||
3,576 | (15) |
$ | 51,780 | |||||||||||||||||||||||||||||
4,004 | (19) |
$ | 57,978 | |||||||||||||||||||||||||||||
8,609 | (12) |
$ | 124,658 | |||||||||||||||||||||||||||||
28,115 | (5) |
$ | 407,105 | |||||||||||||||||||||||||||||
14,057 | (6) |
$ | 203,545 | |||||||||||||||||||||||||||||
28,114 | (7) |
$ | 407,091 |
(1) | Based on $14.48 per share which was the closing price of our common stock on the Nasdaq Global Market on December 31, 2020, the last trading day of that fiscal year. |
(2) | Mr. Swad was appointed our President and Chief Executive Officer, effective August 24, 2020, and resigned from the Company as our Chief Financial Officer, effective August 24, 2020. His unvested equity awards continue to vest. |
(3) | The shares subject to this grant of RSUs vest 25% on August 1, 2020. 6.25% of the restricted stock units vest on each three-month anniversary thereafter, subject to continued employment. |
(4) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on August 1, 2020, subject to continued employment. |
(5) | The shares subject to this grant of RSUs vest in three equal annual installments beginning on May 1, 2021, subject to continued employment. |
(6) | The amount reported represents the number of PRSUs granted to the named executive officer on May 1, 2020, as previously described, and assumes target performance goals will be achieved. A percentage of the PRSUs were to vest upon the achievement of an annual revenue goal and an adjusted EBITDA goal, during the period of January 1, 2020 through December 31, 2020, as summarized in “ Compensation Discussion and Analysis—Compensation Elements |
(7) | The amount reported represents the number of PRSUs granted to the named executive officer on May 1, 2020, as previously described, and assumes target performance goals will be achieved. A percentage of the PRSUs were to vest upon the achievement of software service revenue and adjusted EBITDA goals during the period of January 1, 2020 through December 31, 2020, as summarized in “ Compensation Discussion and Analysis—Compensation Elements |
(8) | The shares subject to this grant of RSUs vest in three equal annual installments beginning on September 1, 2021, subject to continued employment. |
(9) | Ms. Wegner was appointed our Chief Financial Officer, effective August 24, 2020, and previously served as our Vice President, Corporate Controller. |
(10) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on October 1, 2017, subject to continued employment. |
(11) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on January 1, 2018, subject to continued employment. |
(12) | The shares subject to this grant of PRSUs represented a contingent right to receive one share of our common stock upon the Company’s achievement of annual recurring revenue bookings percentage growth goals during the period of January 1, 2018 through December 31, 2018 and vest in four equal annual installments beginning on April 1, 2019, subject to continued employment. |
(13) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on April 1, 2018, subject to continued employment. |
(14) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on February 1, 2019, subject to continued employment. |
(15) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on April 1, 2019, subject to continued employment. |
(16) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on November 1, 2019, subject to continued employment. |
(17) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on January 1, 2021, subject to continued employment. |
(18) | Mr. Holland will serve as our Executive Chairman until the 2021 Annual Meeting of Stockholders. Following his separation date, he will receive the separation benefits as provided in his employment agreement. His unvested equity awards will continue to vest until his separation date, and subsequently any unvested equity awards will accelerate and become fully vested. |
(19) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on April 1, 2020, subject to continued employment. |
(20) | The shares subject to this grant of RSUs vest in four equal annual installments beginning on September 1, 2020, subject to continued employment. |
(21) | Mr. August served as our President and Chief Executive Officer until his separation from our Company, effective August 24, 2020. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date, other than his RSU granted in April 2019, and any unvested equity awards were forfeited. |
(22) | The shares subject to this grant of RSUs vest in five equal annual installments beginning on December 31, 2018, subject to continued employment. |
(23) | The shares subject to this grant of RSUs vest in full on April 1, 2023, subject to continued employment. |
(24) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020. He continued to serve our Company in an advisory role through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date and any unvested equity awards were forfeited. |
Stock awards |
||||||||
Name |
Number of shares acquired on vesting (#) |
Value realized on vesting(1) ($) |
||||||
Stephen M. Swad President, CEO and Director |
33,730 | $ | 388,040 | |||||
Alpana Wegner CFO |
4,272 | $ | 53,273 | |||||
Mason R. Holland, Jr. (2) Executive Chairman of the Board |
8,845 | $ | 78,809 | |||||
Annmarie Fini EVP |
11,760 | $ | 122,204 | |||||
Raymond A. August (3) Former President, CEO and Director |
59,500 | $ | 676,524 | |||||
James Restivo (4) Former CTO |
21,179 | $ | 188,704 |
(1) | The aggregate value realized equals the fair market value of the shares acquired, based on the closing sale price of our common stock on the Nasdaq Global Market immediately preceding vesting. |
(2) | Mr. Holland will serve as our Executive Chairman until the 2021 Annual Meeting of Stockholders. Following his separation date, he will receive the separation benefits as provided in his employment agreement. His unvested equity awards will continue to vest until his separation date, and subsequently any unvested equity awards will accelerate and become fully vested. |
(3) | Mr. August served as our President and Chief Executive Officer until his separation from our Company, effective August 24, 2020. He continued to serve our Company during the transition to Mr. Swad as our President and Chief Executive Officer through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date, other than his RSU granted in April 2019, and any unvested equity awards were forfeited. |
(4) | Mr. Restivo served as our Chief Technology Officer until his separation from our Company, effective September 25, 2020. He continued to serve our Company in an advisory role through December 31, 2020. On December 31, 2020, pursuant to his separation agreement, he received immediate vesting of time-based vesting equity awards that would have vested within 12 months of the termination date and any unvested equity awards were forfeited. |
• | the median of the annual total compensation of all our employees of our Company (other than Mr. Swad) was $85,703; and |
• | the compensation of Mr. Swad as Chief Executive Officer annualized for 2020 was $2,648,628. |
Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) |
Total ($) |
|||||||||
Douglas A. Dennerline |
$ | 19,625 | $ | 89,071 | (1) |
$ | 108,696 | |||||
Barry Libert (2) |
— | — | — | |||||||||
A. Lanham Napier |
$ | 8,250 | $ | 89,071 | (1) |
$ | 97,321 | |||||
Francis J. Pelzer V |
$ | 30,000 | $ | 89,071 | (1)(3) |
$ | 119,071 | |||||
Ana M. White |
$ | 16,000 | $ | 61,316 | (1)(4) |
$ | 77,316 |
(1) | On July 1, 2020, the board of directors approved grants of RSUs to each of Messrs. Dennerline and Pelzer for 11,250 shares of our common stock with an aggregate grant date fair value for each director of $125,438, computed in accordance with FASB ASC Topic 718. These grants of RSUs vest on the earlier of July 1, 2021 or the 2021 Annual Meeting of Stockholders of our Company, subject to the director’s continued service on the board. These amounts reflected a 25% reduction in their annual retainer from initially $180,000 to $135,000. |
(2) | Mr. Libert began serving as a director of our Company on September 10, 2020 and resigned on January 26, 2021. |
(3) | Mr. Pelzer also holds an option to purchase 50,000 shares of our common stock, granted to him in 2013 for service on the board of directors. On December 31, 2020, all shares subject to this option were vested. |
(4) | Ms. White received an initial grant of 9,531 restricted stock units when she joined our Company as a director on January 15, 2019 and therefore was not eligible for the annual grant made to directors on July 1, 2020. Ms. White resigned from the board of directors, effective March 23, 2021. |
Plan Category |
Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans |
|||||||||
Equity compensation plans approved by security holders |
||||||||||||
2016 Employee Stock Purchase Plan |
— | $ | — | 98,571 | ||||||||
Second Amended and Restated 2012 Stock Plan, as amended |
2,712,805 | $ | 0.53 | 3,518,804 | ||||||||
|
|
|
|
|
|
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Total |
2,712,805 | $ | 0.53 | 3,617,375 | ||||||||
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|
|
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• | each person or entity known to own beneficially more than 5% of our outstanding common stock as of the date indicated in the corresponding footnote; |
• | each of the named executive officers named in the Summary Compensation table; |
• | each director; and |
• | all current directors and executive officers as a group. |
Name and Address of Beneficial Owner |
Shares Beneficially Owned |
Percentage Beneficially Owned |
||||||
A. Lanham Napier (1) |
5,370,781 | 14.1 | % | |||||
Mason R. Holland, Jr. (2) |
2,727,507 | 8.3 | % | |||||
Raymond A. August (3) |
466,457 | 1.4 | % | |||||
Stephen M. Swad (4) |
136,085 | * | ||||||
James P. Restivo (3) |
83,547 | * | ||||||
Annmarie Fini |
71,848 | * | ||||||
Francis J. Pelzer V (5) |
72,337 | * | ||||||
Douglas A. Dennerline (6) |
25,677 | * | ||||||
Alpana Wegner |
13,986 | * | ||||||
Coretha M. Rushing |
— | * | ||||||
Zeynep Young |
— | * | ||||||
All current directors and executive officers as a group (8 individuals) |
8,346,373 | 21.8 | % | |||||
5% or Greater Stockholders: |
||||||||
BuildGroup Management, LLC (7) |
5,333,334 | 14.0 | % | |||||
Indaba Capital Management, L.P. (8) |
3,097,800 | 9.4 | % | |||||
Brown Brothers Harriman & Co. (9) |
3,097,010 | 9.4 | % | |||||
Blackrock, Inc. (10) |
2,326,999 | 7.1 | % | |||||
The Vanguard Group, Inc. (11) |
2,320,594 | 7.1 | % | |||||
ArrowMark Colorado Holdings LLC (12) |
1,881,994 | 5.7 | % |
* | Less than 1%. |
(1) | Includes 5,333,334 shares of common stock underlying 1,777,778 shares of the Company’s Series A convertible preferred stock held by BuildGroup LLC. Mr. Napier is the Chief Executive Officer and a member of the board of directors of BuildGroup LLC and is the Co-founder and Co-Chief Executive Officer and a member of the board of managers of its investment manager, BuildGroup Management, LLC and therefore, may be deemed to have pecuniary interest in the shares of common stock held by BuildGroup. |
(2) | Includes 2,649,099 shares held by the Holland Family Trust and five shares held by Mr. Holland as custodian for his minor son. Mr. Holland and his wife share voting and investment control over the shares held by the Holland Family Trust. |
(3) | Includes shares that were subject to accelerated vesting in connection with the beneficial owner’s separation from the Company. |
(4) | Includes 33,340 shares held by the Stephen M. Swad Revocable Living Trust. |
(5) | Includes 50,000 shares issuable upon the exercise of options exercisable on or before 60 days after April 20, 2021 and 11,250 shares held upon the vesting of RSUs exercisable within 60 days after April 20, 2021. |
(6) | Includes 11,250 shares held upon the vesting of RSUs exercisable within 60 days after April 20, 2021. |
(7) | Based solely on a Schedule 13D filed with the SEC on June 10, 2020 by BuildGroup Management, LLC. Includes 5,333,334 shares of common stock underlying 1,777,778 shares of the Company’s Series A convertible preferred stock held by BuildGroup LLC. The address of BuildGroup Management, LLC is 3500 Jefferson Street, Suite 303, Austin, Texas 78731. |
(8) | Based solely on a Schedule 13D/A filed with the SEC on March 16, 2021 by Indaba Capital Management, L.P. The address of Indaba Capital Management, L.P. is One Letterman Drive, Building D, Suite DM 700, San Francisco, California 94129. |
(9) | Based solely on a Schedule 13G/A filed with the SEC on February 5, 2021 by Brown Brothers Harriman & Co. (“Brown Brothers”). Includes 3,097,010 shares of common stock held by Brown Brothers as a bank. The address of Brown Brothers is 140 Broadway, New York, New York 10005. |
(10) | Based solely on a Schedule 13G/A filed with the SEC on January 29, 2021 by BlackRock, Inc. Includes 2,579,785 shares of common stock held by BlackRock, Inc. as a parent holding company. The address of BlackRock, Inc. is 55 East 52 nd Street, New York, New York 10055. |
(11) | Based solely on a Schedule 13G/A filed with the SEC on February 10, 2021 by The Vanguard Group, Inc. The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
(12) | Based solely on a Schedule 13G/A filed with the SEC on February 16, 2021 by ArrowMark Colorado Holdings, LLC (“ArrowMark”). Includes 1,881,994 shares of common stock held by ArrowMark as an investment adviser. The address of ArrowMark is 100 Fillmore Street, Suite 325, Denver, Colorado 80206. |
• | the amount involved exceeded or exceeds $120,000; and |
• | any of our directors or executive officers, any holder of 5% of our capital stock or any member of their immediate family had or will have a direct or indirect material interest. |
• | the nature and amount of the related person’s interest in the transaction; |
• | the material terms of the transaction, including, without limitation, the amount and type of transaction; and |
• | any other matters our audit committee deems appropriate, including advice of independent counsel and other relevant advisors (for example, independent real estate advisory firms with respect to leasing matters and/or independent financial advisors with respect to financial transactions). |
2019 |
2020 |
|||||||
Audit Fees |
$ | 2,020,145 | $ | 1,658,714 | ||||
Audit-Related Fees |
— | — | ||||||
Tax Fees |
— | — | ||||||
All Other Fees |
— | — |
31.3 | Certification of the President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | — | — | — | Filed herewith | |||||||||
31.4 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | — | — | — | Filed herewith | |||||||||
32.1 | Certification of the President and Chief Executive Officer, and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | 10-K |
— | 32.1 | March 10, 2021 | |||||||||
101.INS | Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | 10-K |
— | 101.INS | March 10, 2021 | |||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | 10-K |
— | 101.SCH | March 10, 2021 | |||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | 10-K |
— | 101.CAL | March 10, 2021 | |||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | 10-K |
— | 101.DEF | March 10, 2021 | |||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | 10-K |
— | 101.LAB | March 10, 2021 | |||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | 10-K |
— | 101.PRE | March 10, 2021 | |||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | — | — | — | Filed herewith |
# | Management contract or compensatory plan. |
+ | The registrant has received confidential treatment with respect to portions of this exhibit. Those portions have been omitted from the exhibit and filed separately with the SEC. |
Benefitfocus, Inc. | ||||||
Date: April 30, 2021 | By: |
/s/ Alpana Wegner | ||||
Alpana Wegner | ||||||
Chief Financial Officer |
Exhibit 31.3
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Stephen M. Swad, certify that:
1. | I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of Benefitfocus, Inc.; and |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
Date: April 30, 2021 | ||
/s/ Stephen M. Swad | ||
Stephen M. Swad | ||
President and Chief Executive Officer | ||
(Principal executive officer) |
Exhibit 31.4
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Alpana Wegner, certify that:
1. | I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of Benefitfocus, Inc.; and |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
Date: April 30, 2021 | ||
/s/ Alpana Wegner | ||
Alpana Wegner | ||
Chief Financial Officer | ||
(Principal financial and accounting officer) |