FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 14, 2006
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HEALTH BENEFITS DIRECT CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 333-123081 98-0438502
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2900 Gateway Drive, Pompano Beach, FL 33069
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (954) 944-4447
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On March 14, 2006, the Board of Directors of the Company adopted the
Company's Compensation Plan for Directors (the "Plan"). The Company intends to
submit the Plan for approval of its stockholders within 12 months of the
effective date of the Plan. An aggregate of 1,000,000 shares of common stock,
par value $0.001 per share, of the Company ("Common Stock") have been reserved
for issuance under the Plan in addition to any authorized and unissued shares of
Common Stock available for issuance under the Company's 2005 Non-Employee
Directors Stock Option Plan ("2005 Plan") . The purpose of the Plan is to
provide a comprehensive compensation program to attract and retain qualified
individuals to serve as directors. The Company is authorized to award cash fees
and issue non-qualified stock options under the Plan. The Plan is administered
by the Board or the Compensation Committee of the Board.
The Plan provides for the (i) one-time (a) payment of $250,000 to each
non-employee director who serves as Vice Chairman of the Board (who is not also
Chairman or an Executive Chairman), $125,000 of which is payable upon the
adoption of the Plan and $125,000 of which is payable in twelve equal monthly
installments commencing March 31, 2006 so long as such person remains a director
and is serving in such capacity on the date of each such installment, and (b)
grant of an additional option to purchase 425,000 shares of Common Stock to each
non-employee director who is or has been appointed or elected as Vice Chairman
of the Board (who is not also Chairman or an Executive Chairman) on the later of
the date of (x) such appointment or election, or (y) adoption of the Plan, which
option shall vest and become exercisable as to one-half of the shares subject to
the option six months from the date of grant, and one-half of the shares six
months thereafter; (ii) the payment of $1,000 to each director for each special
or committee meeting of the Board of Directors attended, in person or by
telephone, as reimbursement of fees and expenses of attendance and participation
by such director at such meeting; and (iii) an annual retainer of $1,000 payable
to each director upon appointment as chairperson of a committee of the Board of
Directors. The Plan also provides for (i) the automatic initial grant of an
option to purchase 100,000 shares of Common Stock to each director who joins the
Company's Board, at an exercise price equal to the Fair Market Value, as defined
in the Plan, on the date of such election to the Board, and (ii) the grant of an
option to purchase 10,000 shares of Common Stock to each director reelected to
the Board, at an exercise price equal to the Fair Market Value, as defined in
the Plan, on the date of such reelection to the Board, subject to vesting as
follows: one-third of the shares issuable pursuant to the option shall be
exercisable on the first anniversary of the date of grant, an additional
one-third of the shares shall be exercisable on the second year anniversary of
the date of grant, and the remaining one-third of the shares shall be
exercisable on the third anniversary of the date of grant. Upon removal without
cause, or upon a "change of control" (as defined in the 2005 Plan), all options
shall vest and become immediately exercisable. The term of each option under the
Plan is five years.
The foregoing does not constitute a complete summary of the terms of the
Plan, and reference is made to the complete text of the Plan, which is attached
hereto as Exhibit 10.1.
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
The exhibit listed in the following Exhibit Index is filed as part of this
Current Report on Form 8-K.
Exhibit No. Description
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10.1 Health Benefits Direct Corporation Compensation Plan for
Directors, effective March 14, 2006
10.2 Health Benefits Direct Corporation 2005 Non-Employee
Directors Stock Option Plan (incorporated herein by
reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K/A dated December 22, 2005)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 20, 2006 HEALTH BENEFITS DIRECT CORPORATION
By: /s/ Anthony Verdi
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Anthony Verdi
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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10.1 Health Benefits Direct Corporation Compensation Plan for
Directors, effective March 14, 2006
10.2 Health Benefits Direct Corporation 2005 Non-Employee
Directors Stock Option Plan (incorporated herein by
reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K/A dated December 22, 2005)
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Exhibit 10.1
HEALTH BENEFITS DIRECT CORPORATION
COMPENSATION PLAN FOR DIRECTORS
EFFECTIVE MARCH 14, 2006
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I. General Provisions
1.1 PURPOSE. The purpose of the Health Benefits Direct Corporation
Compensation Plan for Directors (the "Plan") is to provide a comprehensive
compensation program which will attract and retain qualified individuals for
Health Benefits Direct Corporation (the "Company") and its subsidiaries, to
serve on the Company's Board of Directors. In particular, the Plan aligns the
interests of directors with those of the Company's stockholders by providing
that a significant portion of director compensation is directly linked to
increases in the value of the Company's stock.
1.2 DEFINITIONS. Capitalized words and phrases not otherwise defined
herein, shall have the same meaning as the definitions set forth in the
Company's 2005 Non-Employee Directors Stock Option Plan (the "2005 Plan").
FAIR MARKET VALUE. "Fair Market Value" means the average of the high and low
prices of publicly traded shares of Stock, rounded to the nearest cent, on the
principal national securities exchange on which shares of Stock are listed (if
the shares of Stock are so listed), or on the Nasdaq Stock Market (if the shares
of Stock are regularly quoted on the Nasdaq Stock Market), or, if not so listed
or regularly quoted, the closing bid price of publicly traded shares of Stock in
the over-the-counter market, or, if such bid price shall not be available, as
reported by any nationally recognized quotation service selected by the Company,
or as determined by the Board in a manner consistent with the provisions of the
Code. Notwithstanding anything to the contrary herein, in no event shall the
option exercise price be less than the minimum price permitted under the rules
and policies of any national securities exchange on which the shares are then
listed.
1.3 STOCK RESERVED FOR THE PLAN. A total of up to 2,500,000 shares of Stock
shall be subject to the Plan, with a maximum of 1,500,000 shares of Stock
available under the 2005 Plan (reduced to such lesser amount as shall represent
the net amount remaining after taking into account all issuances under the 2005
Plan, plus the amount of any cancelled options under the 2005 Plan), and such
additional number of shares up to a maximum of 1,000,000 additional shares to be
designated from the authorized but unissued shares of the capital stock of the
Company. Stock subject to the Plan may consist of unissued shares or treasury
shares, and such Stock shall be, and hereby is, reserved for issuance by the
Company for such purpose. Any Stock that has not been issued or that is not
subject to outstanding Options at the termination of the Plan shall cease to be
reserved for the purposes of the Plan, but until termination of the Plan the
Company shall at all times reserve a sufficient number of shares of Stock to
meet the requirements of the Plan. Should any Option expire or be canceled prior
to its exercise or vesting in full or should the number of shares to be
delivered upon the exercise or vesting in full of an Option be reduced for any
reason, the shares theretofore subject to such Option or shall thereupon become
available for future grants under the Plan.
II. Cash Fees
2.1 FEES. Each Non-Employee Director who is the Vice-Chairman of the Board
of Directors (who is not also Chairman or an Executive Chairman) shall become
entitled to receive a one-time payment in the amount of $250,000 payable as
follows: (i) $125,000 promptly following the date of adoption of the Plan; and
(ii) $125,000 in 12 equal monthly installments commencing March 31, 2006,
provided such person remains a director and serving in such capacity on the due
date of each such installment.
2.2 MEETINGS. Each director, regardless employment with the Company, shall
receive a fee of $1,000, payable in cash, for each meeting of a committee of the
Board of Directors that he or she attends (either in person or telephonically)
and each special meeting of the Board of Directors attended, as reimbursement
for the fees and expenses of attendance and participation in such meeting. No
fee is payable with respect to attendance at a regular meeting of the Board of
Directors, including the annual meeting occurring immediately after an Annual
Meeting of Stockholders.
2.3 COMMITTEE CHAIRS. A director, regardless of employment with the
Company, appointed to chair any committee of the Board of Directors shall be
paid an additional annual retainer of $1,000 in cash payable upon appointment.
III. Stock Options
3.1 ANNUAL GRANTS OF STOCK OPTIONS - NEW DIRECTORS. As of the close of
business on the date of each Annual Meeting of Stockholders, each director who
has been first elected at such Annual Meeting of Stockholders who is not a
director as of the date of adoption of this Plan, regardless of his or her
employment with the Company, who consents to such appointment as director, shall
be granted an Option to purchase 100,000 shares of Common Stock.
3.2 ANNUAL GRANTS OF STOCK OPTIONS - SITTING DIRECTORS. Any director who is
not eligible to receive a grant of Options pursuant to Section 3.1 hereof, who
as of the close of business on the date of each Annual Meeting of Stockholders,
has been re-elected at such Annual Meeting of Stockholders, regardless of his or
her employment with the Company, who consents to such appointment as director
shall be granted an Option to purchase 10,000 shares of Common Stock.
Notwithstanding the foregoing, any director who is eligible to or receives a
grant under Section 3.1 hereof shall not be eligible for grant pursuant to this
Section 3.2 until the next following Annual Meeting of Stockholders.
3.3 OTHER GRANTS OF STOCK OPTIONS. Each Non-Employee Director who is or has
been appointed or elected Vice Chairman of the Board of Directors (but who is
not an Executive Chairman or Chairman) shall be granted a one-time additional
option to purchase 425,000 shares upon his or her initial appointment or
election, as the case may be, on the later of: (i) the date of such appointment
or election or (ii) the date of adoption of this Plan.
3.4 EXPIRATION DATE OF OPTIONS. All Options granted pursuant to the Plan
shall be non-qualified options and shall expire five (5) years from the date of
grant.
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3.5 OPTION EXERCISE PRICE. The per share price to be paid to exercise an
option shall be the Fair Market Value of the Stock on the date of grant.
3.6 VESTING AND EXERCISE OF OPTIONS. Each option granted under the Plan
pursuant to Section 3.3 hereof will become exercisable as to 1/2 of such options
on the six (6) month anniversary of the date of grant and as to 1/2 of such
options on the twelve (12) months anniversary of the date of grant. Each option
granted under any other Section of the Plan will become exercisable as to 1/3 of
such Option on each of the first, second, and third anniversary of the date of
grant. All options issued under the Plan shall immediately vest upon the
removal, without Cause, of a director but in all other respects shall be
governed in accordance with the terms and provisions of the 2005 Plan which
shall control in the event of an inconsistency between the Plan and the 2005
Plan.
3.7 METHOD OF EXERCISE AND PURCHASE. An Option shall be exercised by giving
written notice to the Secretary, or an Assistant Secretary, of the Company
specifying the number of shares to be purchased and the particular grant being
exercised. Such notice shall be accompanied by a check as payment of the
exercise price of the shares with respect to which such option, or portion
thereof, is exercised. Alternatively, such notice may include an election to
have such shares delivered to a broker-dealer with whom arrangements have been
made to immediately sell the shares and withhold from the net sale proceeds the
full purchase price amount to be delivered to the Company, or by other "cashless
exercise" means. The Company may also require payment of all withholding taxes
to exercise an option, whether or not a broker-dealer arrangement has been used.
IV. Additional Provisions
4.1 The Plan shall be administered by the Board of Directors (or a
Committee thereof authorized by the Board of Directors) which shall have the
power to interpret the Plan and amend it from time to time as it deems proper.
To the fullest extent practicable, however, the terms and conditions of the 2005
Plan shall be applicable to this Plan.
4.2 The Plan shall be submitted for stockholder approval prior to the first
anniversary of adoption.
4.3 The number of shares of Stock covered by any Option shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a split or subdivision of shares, a combination
of shares, or the payment of a stock dividend.
4.4 All Options shall become fully exercisable upon the occurrence of a
Change of Control as defined in the 2005 Plan.
4.5 The Plan shall be governed by and subject to the laws of the State of
Delaware and applicable Federal laws.
4.6 The Plan may be terminated, amended or modified by the Board of
Directors, provided no such amendment or modification shall affect previously
issued Options without the written consent of the Option holder.
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4.7 The Plan will terminate when all shares have been issued under the
Plan, provided the cash payments may continue indefinitely and can be terminated
at any time prior to any new grants (old grants would be unaffected) by the
Board.
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