Exhibit 10.26

BENEFITFOCUS.COM, INC.

EMPLOYMENT AGREEMENT

THIS AGREEMENT (the “Agreement”), is made and entered into this 24th day of
April 2016, by and between: Benefitfocus.com, Inc., having its principal place
of business at 100 Benefitfocus Way, Charleston, SC 29492, (hereinafter referred
to as “Benefitfocus”) and Dennis B. Story whose present address is:
1377 Dresden Dr., # 4261. Brookhaven, GA 30319 (hereinafter referred to as the
“Associate”).

 

1.

Employment. Benefitfocus hereby agrees to employ the Associate in the capacity
of Chief Financial Officer, upon the terms and conditions set out herein, and
the Associate accepts such employment.

 

2.

Term. The term of this Agreement shall commence upon execution, and your
employment shall commence on July 1, 2016. The Associate understands and
acknowledges that employment is “at will” and is terminable at any time at the
will of Benefitfocus or the Associate, notwithstanding any other provisions of
this Agreement, including Section 19 hereof. This Agreement shall remain in
force until terminated at the will of either party or as described in Section 19
of this Agreement.

 

3.

Duties. The Associate shall perform, for Benefitfocus, the duties set out in the
attached Exhibit A entitled “Job Description,” which is incorporated herein and
made a part of this Agreement, along with those other duties as may be assigned
to Associate from time to time by Benefitfocus’ Chief Executive Officer or their
designee.

 

4.

Compensation. The Associate’s initial compensation shall be paid in accordance
with that outlined in Exhibit B entitled “Compensation Program,” which is
incorporated herein and made a part hereof, and is subject to review in
accordance with then current compensation practices of Benefitfocus.

 

5.

Extent of Services. The Associate shall devote his entire time, attention, and
energies to Benefitfocus’ business and shall not, during the term of this
Agreement, be engaged in any other business activity that conflicts with, or
takes the Associate’s time or attention away from, the Associate’s work for
Benefitfocus, whether or not such business activity is pursued for gain, profit
or other pecuniary advantage. The Associate further agrees that he or she will
perform all of the duties assigned to the Associate to the best of his or her
ability and in a manner satisfactory to Benefitfocus, that he or she will
truthfully and accurately maintain all records, preserve all such records, and
make all such reports as Benefitfocus may require; that he or she will fully
account for all money and all of the property of Benefitfocus of which the
Associate may have custody and will pay over and deliver the same whenever and
however the Associate may be directed to do so.

 

6.

Expenses. Benefitfocus agrees to reimburse the Associate for travel and other
expenses incurred while conducting business on behalf of Benefitfocus as long as
they are reasonable and approved by Benefitfocus and comply with government
regulations covering such expenses for business purposes. Such expenses will be
stated on a Benefitfocus furnished expense form, have required receipts, be
signed by the Associate, and sent to Benefitfocus for approval and
reimbursement, all in accordance with Benefitfocus’ reimbursement policies and
procedures as may be in effect from time to time.

 

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7.

Covenant Not to Disclose Trade Secrets and Confidential Information.

 

 

a.

As an employee of Benefitfocus, the Associate will be exposed to “Trade Secrets”
and “Confidential Business Information” (as those terms are defined below).
“Trade Secrets” shall mean information or data of or about Benefitfocus or any
affiliated entity, including, but not limited to, technical or non-technical
data, formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, products plans, or lists
of actual or potential customers, clients, distributors, or licensees, that:
(i) derive economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from their disclosure or use; and (ii) are the subject
of efforts that are reasonable under the circumstances to maintain their
secrecy. To the extent that the foregoing definition is inconsistent with a
broader definition of “trade secret” under applicable law, the latter definition
shall govern for purposes of interpreting the Associate’s obligations under this
Agreement. Except as required to perform his or her obligations under this
Agreement or except with Benefitfocus’ prior written permission, the Associate
shall not use, redistribute, market, publish, disclose or divulge to any other
person or entity any Trade Secrets of Benefitfocus. The Associate’s obligations
under this provision shall remain in force (during or after the Term) for so
long as such information or data shall continue to constitute a “trade secret”
under applicable law. The Associate agrees to cooperate with any and all
confidentiality requirements of Benefitfocus and the Associate shall immediately
notify Benefitfocus of any unauthorized disclosure or use of any Trade Secrets
of which the Associate becomes aware.

 

 

b.

The Associate agrees to maintain in strict confidence and, except as necessary
to perform his or her duties for Benefitfocus, not to use or disclose any
Confidential Business Information at any time, during the term of his or her
employment or for a period of one (1) year after the Associate’s last date of
employment, so long as the pertinent data or information remains Confidential
Business Information. “Confidential Business Information” shall mean any
non-public Information of a competitively sensitive or personal nature, other
than Trade Secrets, acquired by the Associate, directly or indirectly, in
connection with the Associate’s employment (including his or her employment with
Benefitfocus prior to the date of this Agreement), including (without
limitation) oral and written information concerning Benefitfocus or its
affiliates relating to financial position and results of operations (revenues,
margins, assets, net income, etc.), annual and long-range business plans,
marketing plans and methods, account invoices, oral or written customer
information, and personnel information. Confidential Business Information also
includes information recorded in manuals, memoranda, projections, minutes,
plans, computer programs, and records, whether or not legended or otherwise
identified by Benefitfocus and its affiliates as Confidential Business
Information, as well as information which is the subject of meetings and
discussions and not so recorded; provided, however, that Confidential Business
Information shall not include information that is generally available to the
public, other than as a result of disclosure, directly or indirectly, by the
Associate, or that was available to the Associate on a non-confidential basis
prior to its disclosure to the Associate.

 

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c.

Without limiting any of the foregoing, Associate acknowledges that Trade Secrets
and Confidential Business Information exist in all formats in which information
is preserved, including electronic, print, or any other form, and that each term
includes all originals, copies, notes, or other reproductions or replicas
thereof.

 

 

d.

Upon termination of employment, the Associate shall leave with Benefitfocus all
Trade Secrets, Confidential Business Information, and any other business records
relating to Benefitfocus and its affiliates including, without limitation, all
contracts, calendars, and other materials or business records concerning its
business or customers, including all physical, electronic, and computer copies
thereof, whether or not the Associate prepared such materials or records
himself, and Associate shall retain no copies of any such materials. In
addition, upon termination of employment, Associate will immediately return to
Benefitfocus all other property whatsoever of Benefitfocus in his possession or
under his control. If requested, Associate shall certify in writing to
Benefitfocus that no such materials are in his possession.

 

 

e.

As set forth above, the Associate shall not disclose Trade Secrets or
Confidential Business Information. However, nothing in this Section 7 shall
prevent the Associate from (i) disclosing Trade Secrets or Confidential Business
Information pursuant to a court order or court-issued subpoena, so long as the
Associate first notifies Benefitfocus of said order or subpoena in sufficient
time to allow Benefitfocus to seek an appropriate protective order, and provided
that Associate only discloses such information as he or she is actually required
to disclose, or (ii) from reporting violations of law to any governmental agency
or entity, or otherwise making disclosures that are protected under a
whistleblower any law. The Associate agrees that if he or she receives any
formal or informal discovery request, court order, or subpoena requesting that
the Associate disclose Trade Secrets or Confidential Business Information, he or
she will immediately notify Benefitfocus and provide Benefitfocus with a copy of
said request, court order, or subpoena.

 

8.

Covenant Not to Solicit Customers.

 

 

a.

The Associate covenants and agrees that during his or her employment and for a
period of one (1) year following the date of termination of the Associate’s
employment with Benefitfocus, for any reason, whether by the Associate or
Benefitfocus, the Associate shall not (except on behalf of or with the prior
written consent of Benefitfocus) either directly or indirectly, on the
Associate’s own behalf or in the service or on behalf of others, (i) solicit,
divert or appropriate to or for a Competing Business (as defined below), or
(ii) attempt to solicit, divert, or appropriate to or for a Competing Business,
any person or entity that was a customer or prospective customer of Benefitfocus
on the date of termination and with whom the Associate had direct material
contact within six months of the Associate’s last date of employment. For
purposes of this Agreement, the term “Competing Business” shall mean the
business of offering human resource management and benefit administration
services to companies via a Web-based system.

 

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b.

The Associate recognizes and acknowledges that Benefitfocus’ customers and the
specific needs of such customers are essential to the success of its business
and its continued goodwill and that its customer list and customer information
constitute a property interest of Benefitfocus, having been developed by
Benefitfocus at great effort and expense.

 

9.

Covenant Not to Solicit Employees/Consultants. The Associate covenants and
agrees that during his or her employment and for a period of one (1) year
following the date of termination of the Associate’s employment with
Benefitfocus, for any reason, whether by Associate or Benefitfocus, Associate
will not, either directly or indirectly, on the Associate’s own behalf or in the
service or on behalf of others, (i) solicit, divert, or hire away, or
(ii) attempt to solicit, divert, or hire away any employee of or consultant to
Benefitfocus or any of its affiliates engaged or experienced in the Business (as
defined herein), regardless of whether the employee or consultant is full-time
or temporary, the employment or engagement is pursuant to written agreement, or
the employment is for a determined period or is at will. For purposes of this
Agreement, the term “Business” shall mean the business of offering human
resource management and benefit administration services to companies via a
Web-based system.

 

10.

Covenant Not to Compete. The Associate covenants and agrees that during his or
her employment and for a period of one (1) year following the termination of the
Associate’s employment with Benefitfocus (by either party and regardless of the
reason for such termination), Associate will not, hold a position based in or
with responsibility for all or part of the Restricted Territory (as defined
below), with any Competing Business (as defined above) whether as employee,
consultant, or otherwise, in which Associate will have duties, or will perform
or be expected to perform services for such Competing Business, that is or are
the same as or substantially similar to the position held by Associate or those
duties or services actually performed by Associate for Benefitfocus within the
twelve (12) month period immediately preceding the termination of Associate’s
employment with Benefitfocus, or in which Associate will use or disclose or be
reasonably expected to use or disclose any confidential or proprietary
information of Benefitfocus for the purpose of providing, or attempting to
provide, such Competing Business with a competitive advantage with respect to
the Business. As used herein, “Restricted Territory” means the United States of
America, it being understood that Benefitfocus’ business is nationwide in scope,
provided, however, that if a court of competent jurisdiction determines that the
foregoing definition is too broad to be enforced under applicable law, then the
parties agree that “Restricted Territory” will mean any State, province, or
similar political subdivision to which Associate directed, or in which Associate
performed, employment-related activities on behalf of Benefitfocus at the time
of, or during the twelve (12) month period prior to, the termination of
Associate’s employment with Benefitfocus for any reason.

 

11.

Covenants are Independent. The covenants on the part of the Associate contained
in paragraphs 7, 8, 9, 10, 24 and 25 hereof, as well as in each subsection
thereof, shall each be construed as agreements independent of each other and of
any other provision in this Agreement and the unenforceability of one shall not
affect the remaining covenants.

 

12.

Consideration. The Associate acknowledges and agrees that valid consideration
has been given to the Associate by Benefitfocus in return for the promises of
the Associate set forth herein, including the promise of additional compensation
to which the Associate was not entitled prior to the execution of this
Agreement.

 

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13.

Extension of Periods. Each of the time periods described in this Agreement shall
be automatically extended by any length of time during which the Associate is in
breach of the corresponding covenant contained herein. The provisions of this
Agreement shall continue in full force and effect throughout the duration of the
extended periods.

 

14.

Reasonable Restraint. It is agreed by the parties that the foregoing covenants
in this Agreement are necessary for the legitimate business interests of
Benefitfocus and impose a reasonable restraint on the Associate in light of the
activities and Business of Benefitfocus on the date of the execution of this
Agreement.

 

15.

Notices. Any notice required or desired to be given under this Agreement shall
be given in writing, sent by certified mail, return receipt requested, to his or
her residence as shown in the records of Benefitfocus in the case of the
Associate, or to its principal place of business to the attention of General
Counsel, in the case of Benefitfocus.

 

16.

Waiver of Breach. The waiver by Benefitfocus of a breach of any provision of
this Agreement by the Associate shall not operate or be construed as a waiver of
any subsequent breach by the Associate. No waiver shall be valid unless in
writing and signed by Benefitfocus.

 

17.

Assignment. The Associate acknowledges that the services to be rendered by the
Associate are unique and personal. Accordingly, the Associate may not assign any
of his or her rights or delegate any of his or her duties or obligations under
this Agreement. The rights and obligations of Benefitfocus under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of Benefitfocus. The Associate agrees that this Agreement, and the
covenants contained herein, may be assigned by Benefitfocus to any successor
company.

 

18.

Paid Time Off. Associate will be eligible to receive paid time off in accordance
with Benefitfocus’ paid time off policies as detailed in its Associate Handbook,
the provisions of which are subject to change on a prospective basis.

 

19.

Termination. Either party may terminate this Agreement at any time, with or
without cause. In the event that Associate chooses to resign his employment,
Benefitfocus requests fourteen (14) days written notice to Benefitfocus. In such
event, no severance allowance shall be paid to the Associate; but the Associate
shall continue (if agreed to by Benefitfocus) to render his services and shall
be paid his regular compensation up to the date of termination.

 

20.

Entire Agreement; Amendment. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements (whether written or oral and whether express or implied) between the
parties to the extent related to such subject matter. It may be changed only by
an Agreement in writing, signed by the parties hereto.

 

21.

Construction of Agreement. Should any of the provisions or terms of this
Agreement require judicial interpretation, it is agreed that the court
interpreting or construing this Agreement shall not apply a presumption that
such provision(s) or term(s) shall be more strictly construed against one party
by reason of the rule of construction that a document is to be construed more
strictly against the party who prepared it, it being agreed that all parties
have participated in the preparation and review of this Agreement and have had
the opportunity to be represented by counsel.

 

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22.

Arbitration; Governing Law; and Venue. This Agreement, and all transactions
contemplated hereby, shall be governed by, construed and enforced in accordance
with the laws of the State of South Carolina. The parties agree that any
dispute, controversy or claim arising out of or related to this Agreement or any
breach of this Agreement shall be submitted to and decided by binding
arbitration in South Carolina. Arbitration shall be administered exclusively by
American Arbitration Association and shall be conducted by a neutral arbitrator
consistent with the rules, regulations and requirements thereof, including
discovery, which can be accessed at www.adr.org/aaa, as well as any requirements
imposed by state law. The parties agree to arbitrate solely on an individual
basis, and that this agreement does not permit class arbitration or any claims
brought as a plaintiff or class member in any class or representative
arbitration proceeding. The arbitral tribunal may not consolidate more than one
person’s claims, and may not otherwise preside over any form of a representative
or class proceeding. Any award of the Arbitrator(s), is final and binding, and
may be entered as a judgment in any court of competent jurisdiction. In the
event the prohibition on class arbitration is deemed invalid or unenforceable,
then the remaining portions of the arbitration agreement will remain in force.

 

23.

Work Facilities. The Associate shall be provided with such other facilities and
services as are suitable to the Associate’s position and appropriate for the
performance of his or her duties. In the case of an Associate performing the
sales duties and located remote to the main office, it is expected that the
Associate will maintain some form of office at his or her residence, which
contains the necessary equipment to perform the assigned duties.

 

24.

Severability. To the extent that any provision or language of this Agreement is
deemed unenforceable, by virtue of the scope of the business activity prohibited
or the length of time the activity is prohibited, Benefitfocus and Associate
agree that this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies of the State of South Carolina.

 

25.

Remedies for Breach. The Associate recognizes and agrees that a breach by the
Associate of any covenant contained in this Agreement would cause immeasurable
and irreparable harm to Benefitfocus. In the event of a breach or threatened
breach of any covenant contained herein, Benefitfocus shall be entitled to
temporary and permanent injunctive relief, restraining the Associate from
violating or threatening to violate any covenant contained herein, as well as
all costs and fees incurred by Benefitfocus, including attorneys’ fees, as a
result of the Associate’s breach or threatened breach of the covenant.
Benefitfocus and the Associate agree that the relief described herein is in
addition to such other and further relief as may be available to Benefitfocus at
equity or by law. Nothing herein shall be construed as prohibiting Benefitfocus
from pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages from the Associate.

 

26.

Additional Representations and Warranties of Associate. Indemnification by
Associate. The Associate acknowledges and agrees that: (i) the covenants
contained in this Agreement are the essence of this Agreement; (ii) the
Associate has received good, adequate and valuable consideration for each of
these covenants; (iii) each of these covenants is reasonable and necessary to
protect and preserve the interests and properties of Benefitfocus; (iv) each of

 

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these covenants in this Agreement is separate, distinct and severable not only
from the other covenants but also from the remaining provisions of this
Agreement; (v) the unenforceability of any covenants or agreements shall not
affect the validity or enforceability of any of the other covenants or
agreements or any other provision or provisions of this Agreement; and (vi) if
the covenants herein shall ever be deemed to exceed the time, activity, or
geographic limitations permitted by applicable law, then such provisions shall
be and hereby are reformed to the maximum time, activity, or geographical
limitations permitted by applicable law. The Associate represents and warrants
that his acceptance of employment with Benefitfocus has not been improperly
induced with respect to any prior employment and the performance of his duties
hereunder will not conflict with, or result in a violation of, a breach of, or a
default under any contract, agreement, or understanding to which he is a party
or is otherwise bound, including any non-solicitation, non-competition, or other
similar covenant or agreement of a prior employer. In the event that Associate’s
former employer or business associate makes a claim against Benefitfocus
relating to Associate’s employment, Associate shall, at his own expense, defend
and indemnify Benefitfocus from and against any and all allegations, threats,
claims, suits, and proceedings brought by Associate’s former employer or
business associate arising out of a prior employment or shareholder agreement,
including any applicable non-solicitation, non-competition, or other similar
covenant or agreement of a prior employer.

 

27.

At-Will Employment. THE ASSOCIATE UNDERSTANDS AND AGREES THAT THIS AGREEMENT
SHALL IN NO WAY IMPOSE UPON BENEFITFOCUS ANY OBLIGATION TO EMPLOY THE ASSOCIATE
OR TO CONTINUE THE ASSOCIATE’S EMPLOYMENT FOR ANY LENGTH OF TIME. THE EMPLOYMENT
BY BENEFITFOCUS IS, AND AT ALL TIMES SHALL REMAIN, IN THE ABSOLUTE DISCRETION OF
BENEFITFOCUS, WHICH EMPLOYMENT MAY BE TERMINATED BY THE ASSOCIATE OR
BENEFITFOCUS AT WILL.

Signed, sealed and delivered in the presence of:

 

BENEFITFOCUS

   

ASSOCIATE

 

/s/ Raymond A. August

     

/s/ Dennis Story

By:

 

Raymond A. August

   

By:

 

Dennis Story

Its:

 

President and COO

     

Date:

 

4/26/2016

   

Date:

 

4/26/2016

 

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EXHIBIT A

Chief Financial Officer Job

Description

Exhibit A to Employment Agreement dated April 24, 2016.

Reporting to the President and Chief Operating Officer, the Chief Financial
Officer will have responsibility for leading and managing Benefitfocus’s global
finance and accounting function. He/she will also serve as a business partner to
the CEO and the top management team and will participate in the development and
execution of the company’s strategic and business plans. He/she will also be a
key spokesperson for the company, working directly with analysts to clearly
articulate BF’s strategic direction. The CFO must be a “business person” with a
strong financial and operational grounding who is also capable of building a
strong finance team that can deliver results.

Specific duties include:

 

 

•

 

Providing day to day oversight of the financial operations of the company while
ensuring that the numbers are completely accurate and appropriate controls are
in place.

 

 

•

 

Building a “world class” team with an operational focus and superior
capabilities in all areas of Finance.

 

 

•

 

Continuously evaluating the financial infrastructure and making enhancements as
necessary to ensure strong financial controls and processes.

 

 

•

 

Ensuring the existence of “best in class” processes, systems, and people to
deliver accurate and timely financial and management information to the firm and
its investors.

 

 

•

 

Establishing and maintaining financial reporting and disclosure practices
consistent with the highest standards of ethics and compliance.

 

 

•

 

Communicating with the Board and serving as a spokesperson for the Company to
the financial community, in conjunction with the CEO.

 

 

•

 

Participating as a strategic partner in the development of the corporation’s
annual and strategic plans.

 

 

•

 

Assisting in the development of strategic alternatives, including the
establishment of long-term goals and objectives and the evaluation of M&A
opportunities; helping to identify acquisition targets and assisting in the
execution of deals and back-end integration.

 

 

•

 

Identifying opportunities to improve the overall performance of the firm.

 

 

•

 

Enhancing the overall organizational understanding and knowledge of the firm’s
economics and financials.

 

 

•

 

Oversight for real estate and facilities.

 

 

•

 

Other duties as assigned.

 

CONFIDENTIAL & PROPRIETARY

 

Exhibit A & B to Employment Agreement

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EXHIBIT B

Benefitfocus.com, Inc.

Compensation Program for Dennis B. Story

Exhibit B to Employment Agreement dated April 24, 2016.

 

1.

Salary: As compensation for services rendered by the Associate, Benefitfocus
shall pay a salary of $ 16666.66 per pay period (which annualizes to $400,000),
payable in accordance with Benefitfocus’ customary payroll practices as in
effect from time to time. All compensation paid to Associate shall be subject to
withholding for such federal, state and local taxes as Benefitfocus determines
are required to be withheld pursuant to applicable law.

 

2.

Annual Review: Annual salary reviews will occur on or around the annual budget
process for Benefitfocus.

 

3.

Annual Bonus Opportunity: You are eligible to participate in the Benefitfocus
management incentive bonus program at the CFO level, which is up to 75% of your
base pay, subject to adoption by the Board of Directors from time to time, and
conditioned on achievement of annual performance targets. The targets for
achieving the Bonus will be the same company targets set for the entire
Executive Management Team as adjusted at the beginning of each year. In general,
you must be employed by Benefitfocus on the date on which a bonus is paid in
order to earn and receive the bonus.

 

4.

Equity Awards. During the Employment Term, You shall be eligible to participate
in the Benefitfocus.Com, Inc. 2012 Stock Plan, or any successor plan, subject to
the terms of the Benefitfocus.Com, Inc. 2012 Stock Plan as amended or successor
plan, as determined by the Board or the Compensation Committee, in its
discretion.

 

 

a)

Initial Restricted Stock Unit Award: In accordance with the Benefitfocus.com,
Inc. 2012 Stock Plan, you will receive two Benefitfocus restricted stock unit
grant awards valued at $3,500,000 and $600,000, measured at the time of the
grant utilizing a 20 day running average (or such other method as the Board of
Directors determines appropriate), and subject to approval by the board of
directors. You will be receiving the formal Annual Award Grant Notice and
accompanying documentation at the next quarterly grant date, tentatively
scheduled for July 1, 2016. This grant will have a four-year vesting period, and
will be subject to the terms of an RSU award agreement between you and
Benefitfocus.

 

 

b)

Annual Restricted Stock Unit Bonus: You will be eligible to receive an annual
RSU award of up to 125% of your base salary, subject to approval by the Board of
Directors. These RSU awards will have a four-year vesting period, and will be
subject to the terms of an RSU award agreement between you and Benefitfocus.

 

 

c)

PSU: To the extent approved by the Board of Directors of Benefitfocus, you will
receive Performance Stock Units in a value up to $250,000 subject to such
performance conditions as determined by the Board of Directors.

 

CONFIDENTIAL & PROPRIETARY

 

Exhibit A & B to Employment Agreement

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7.

Relocation Reimbursement: Benefitfocus reimburse Associate for all reasonable
relocation expenses incurred by Associate relating to his relocation to
Charleston, SC in accordance with the terms of the Company’s relocation policy.
If the Associate terminates his employment without Cause or is terminated by the
Company for Cause prior to May 31, 2017, the Executive shall be required to
repay the Company the gross amount of any relocation expenses reimbursed.

 

8.

Normal Hours of Work: Full time executive positions are expected to work the
amount of time needed to meet or exceed all job duties and performance
expectations as assigned by the President and CEO.

 

9.

Benefits: You are eligible for all Benefitfocus associate benefit programs
including but not limited to Health Insurance, Life Insurance, Disability
Insurance, 401(k) Retirement Program, and more, subject to the terms and
conditions of such programs. Nothing in this Agreement or Compensation Program
alters or limits Benefitfocus’ rights to modify or terminate any such programs
in its sole discretion.

 

10.

Paid Time Off and Paid Holidays: Your paid time off will follow the company
schedule, as outlined in the benefit summary.

 

11.

Severance:

 

 

a)

In the event that Benefitfocus terminates your employment without Cause, as
defined herein, at any time prior to a Change of Control, as defined herein,
then upon your execution of a general release of claims satisfactory to
Benefitfocus within the time allowed for execution, which release is not revoked
by you during any revocation period allowed by law, Benefitfocus will provide
you with the following severance benefits: (i) salary continuation for a period
of twelve (12) months at your then-current rate of base salary; (ii) a portion
of your targeted annual bonus determined in accordance with the applicable
paragraph below; and (iii) if you are eligible for, elect and remain eligible
for COBRA continuation coverage, Benefitfocus will pay the share of the premium
it was paying prior termination during the period you are receiving severance.

 

 

b)

In the event that Benefitfocus or its acquirer terminates your employment
without Cause as defined herein, at the time of or within twelve (12) months
following a Change of Control, as defined herein, then upon your execution of a
general release of claims satisfactory to Benefitfocus within the time allowed
for execution, which release is not revoked by you during any revocation period
allowed by law, Benefitfocus or its acquirer will provide you with the following
severance benefits: (i) salary continuation for a period of twelve (12) months
at your then-current rate of base salary; (ii) a portion of your targeted annual
bonus determined in accordance with the applicable paragraph below; (iii) if you
are eligible for, elect and remain eligible for COBRA continuation coverage,
Benefitfocus or its acquirer will pay the share of the premium it was paying
prior to termination during the period you are receiving severance.

 

 

c)

In either case, the severance benefits will be payable to you beginning on the
sixtieth (60th) day following the termination of your employment, provided that
Benefitfocus, in its sole discretion, may begin the payments earlier.

 

CONFIDENTIAL & PROPRIETARY

 

Exhibit A & B to Employment Agreement

  3

BENEFITFOCUS.COM, INC.

    (02/2016)

--------------------------------------------------------------------------------

 

d)

For purposes of this document, you will receive the same severance benefits as
upon a termination without Cause if you notify Benefitfocus of your decision to
terminate your employment with Benefitfocus within three (3) months of the
occurrence of either of the following: (i) a material decrease to your base
salary or targeted annual bonus without your consent to an amount less than the
then current amount immediately preceding the decrease, or (ii) a material
diminution of your authority, job duties, or responsibilities without your
consent.

 

 

e)

As used herein, “Cause” shall mean a determination by Benefitfocus’ board of
directors of any of the following: (i) your violation of any applicable material
law or regulation respecting the business of Benefitfocus; (ii) your commission
of a felony or a crime involving moral turpitude, (iii) any act of dishonesty,
fraud or misrepresentation in relation to your duties to Benefitfocus,
(iv) failure to perform in any material respect your duties hereunder after
twenty (20) days written notice and an opportunity to cure such failure and a
reasonable opportunity to present to Benefitfocus’ board of directors your
position regarding any dispute relating to the existence of such failure;
(v) your failure to attempt in good faith to implement a clear and reasonable
directive from Benefitfocus’ board of directors or to comply with any of
Benefitfocus’ policies and procedures which failure is material and occurs after
written notice from Benefitfocus’ board of directors; (vi) any act of gross
misconduct which is materially and demonstrably injurious to Benefitfocus; or,
(vii) your breach of fiduciary responsibility.

 

 

f)

A “Change of Control” shall be deemed to have occurred if any of the following
conditions have occurred: (i) the merger or consolidation of Benefitfocus with
another entity, where Benefitfocus is not the surviving entity and where after
the merger or consolidation (A) its stockholders prior to the merger or
consolidation hold less than 50% of the voting stock of the surviving entity and
(B) its directors prior to the merger or consolidation are less than a majority
of the directors of the surviving entity; (ii) the sale of all or substantially
all of Benefitfocus’ assets to a third party where subsequent to the transaction
(A) its stockholders hold less than 50% of the stock of said third party and
(B) its directors are less than a majority of the board of directors of said
third party; or (iii) a transaction or series of transactions, including a
merger of Benefitfocus with another entity where Benefitfocus is the surviving
entity, whereby (A) 50% or more of the voting stock of Benefitfocus after the
transaction is owned actually or beneficially by parties who held less than 30%
of the voting stock, actually or beneficially, prior to the transaction(s) and
(B) its board of directors after the transaction(s) or within 60 days thereof is
comprised of less than a majority of Benefitfocus’ directors serving prior to
the transaction(s).

 

12.

Application of Internal Revenue Code Section 409A: All provisions of this
Agreement will be interpreted in a manner consistent with Section 409A of the
Internal Revenue Code and the regulations and other guidance thereunder and any
state law of similar effect (collectively “Section 409A”). Notwithstanding
anything to the contrary set forth herein, any payments and benefits provided
under this Exhibit B that constitute “deferred compensation” within the meaning
of Section 409A will not commence in connection with your termination of
employment unless and until you have also incurred a “separation from service”
(as such term is defined in Treasury Regulation Section 1.409A-1(h), unless
Benefitfocus

 

CONFIDENTIAL & PROPRIETARY

 

Exhibit A & B to Employment Agreement

  4

BENEFITFOCUS.COM, INC.

    (02/2016)

--------------------------------------------------------------------------------

reasonably determines that such amounts may be provided to you without causing
you to incur the additional 20% tax under Section 409A. The parties intend that
each installment of the severance benefits payments provided for above is a
separate “payment” for purposes of Treasury Regulation
Section 1.409A-2(b)(2)(i). For avoidance of doubt, the parties intend that
payments of the severance benefits satisfy, to the greatest extent possible, the
exemptions from the application of Section 409A provided under Treasury
Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5), and 1.409A-1(b)(9). However,
if Benefitfocus determines that the severance benefits constitute “deferred
compensation” under Section 409A and you are, on the termination of service, a
“specified employee” of Benefitfocus, as such term is defined in Section 409A,
then, solely to the extent necessary to avoid the incurrence of the adverse
personal tax consequences under Section 409A, the timing of the severance
benefit payments will be delayed until the earlier to occur of: (i) the date
that is six months and one day after your separation from service, or (ii) the
date of your death (such applicable date, the “Specified Employee Initial
Payment Date”), and Benefitfocus will (A) pay you a lump sum amount equal to the
sum of the severance benefits payments that you would otherwise have received
through the Specified Employee Initial Payment Date if the commencement of the
payment of the severance benefits had not been so delayed pursuant to this
paragraph, and (B) commence paying the balance of the severance benefits in
accordance with the applicable payment schedules set forth in this Agreement.

 

CONFIDENTIAL & PROPRIETARY

 

Exhibit A & B to Employment Agreement

  5

BENEFITFOCUS.COM, INC.

    (02/2016)