HEALTH INSURANCE INNOVATIONS, INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Change in Directors or Principal Officers, Other Events, Financial Statements and Exhibits - Insurance News | InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home
Topics
    • Advisor News
    • Annuity Index
    • Annuity News
    • Companies
    • Earnings
    • Fiduciary
    • From the Field: Expert Insights
    • Health/Employee Benefits
    • Insurance & Financial Fraud
    • INN Magazine
    • Insiders Only
    • Life Insurance News
    • Newswires
    • Property and Casualty
    • Regulation News
    • Sponsored Articles
    • Washington Wire
    • Videos
    • ———
    • About
    • Meet our Editorial Staff
    • Advertise
    • Contact
    • Newsletters
  • Exclusives
  • NewsWires
  • Magazine
  • Newsletters
Sign in or register to be an INNsider.
  • AdvisorNews
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Exclusives
  • INN Magazine
  • Insurtech
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Video
  • Washington Wire
  • Life Insurance
  • Annuities
  • Advisor
  • Health/Benefits
  • Property & Casualty
  • Insurtech
  • About
  • Advertise
  • Contact
  • Editorial Staff

Get Social

  • Facebook
  • X
  • LinkedIn
Get our newsletter
Order Prints
March 14, 2013
Share
Share
Post
Email

HEALTH INSURANCE INNOVATIONS, INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Change in Directors or Principal Officers, Other Events, Financial Statements and Exhibits

Edgar Online, Inc.

Item 1.01. Entry Into A Material Definitive Agreement.

On March 14, 2013, Health Plan Intermediaries Holdings, LLC ("HPIH"), a subsidiary of Health Insurance Innovations, Inc. ("HII" or the "Company"), entered into an agreement to terminate certain contract rights with TSG Agency, LLC ("TSG") for an aggregate cash price of $5,500,000 (the "Termination Price"), pursuant to the terms and conditions of an Asset Purchase Agreement (the "Asset Purchase Agreement") by and among the Company, TSG and Ivan Spinner, an individual ("Spinner"). Additionally, there will be approximately $0.3 million of costs related to the transaction. Due to the structure of the transaction, the full amount plus transaction costs will be expensed in the first quarter of 2013 under U.S. generally accepted accounting principles, which we believe will result in a net loss for the quarter. Ivan Spinner, founder and owner of TSG Agency, LLC, a managing general agent of HII, will join HII as an employee. HII expects the transaction to reduce third party commissions otherwise payable to TSG on a quarterly basis beginning in the second quarter of 2013 and forward, which we believe will positively impact our bottom line. We do not expect to incur any material amount of future expense associated with the transaction.

Pursuant to the Asset Purchase Agreement, neither HPIH nor HII acquires or assumes any liabilities of either TSG or Spinner (the "Retained Liabilities"), all of which remain the sole responsibility of TSG or Spinner, as applicable.

The Asset Purchase Agreement provides that, for a period commencing on March 14, 2013 and ending on the later of (a) two years following March 14, 2013 or (b) one year following the date Spinner's employment with HPIH is terminated under the Spinner Employment Agreement (as defined below) (the "Restricted Period"), neither TSG nor Spinner will, directly or indirectly, engage in any activities competitive with the business of the HPIH or its affiliates (subject to certain limited exceptions). In addition, neither TSG nor Spinner is permitted under the Asset Purchase Agreement to solicit any of HPIH or its affiliates' customers, vendors, or personnel during the Restricted Period.

The Asset Purchase Agreement contains representations and warranties customary for a transaction of this type. The representations and warranties of TSG and Spinner survive for a period of 2 years following March 14, 2013, with the exception of certain fundamental representations and warranties, which survive indefinitely. The covenants contained in the Asset Purchase Agreement survive in accordance with their terms.

The Asset Purchase Agreement provides that TSG and Spinner will, jointly and severally, indemnify HPIH for losses arising out of breaches of the representations and warranties of TSG and Spinner, as well as for the failure of TSG or Spinner to comply with their respective covenants under the Asset Purchase Agreement. Notwithstanding the foregoing, TSG and Spinner will not be obligated to indemnify HPIH for any losses unless the aggregate amount of such losses exceed $30,000 (the "Basket"). In the event such losses exceed the Basket, TSG and Spinner are obligated to indemnify HPIH from the first dollar of such losses. The maximum aggregate amount of losses payable by TSG and Spinner will not exceed the aggregate amount of the Termination Price (the "Indemnification Cap"). Losses relating to any Retained Liabilities, breaches of the noncompetition and non-solicitation covenants referenced above, certain other covenants identified in the Asset Purchase Agreement and fraud are not subject to the Basket or the Indemnification Cap.

The description of the Asset Purchase Agreement contained in this Form 8-K is qualified in its entirety by reference to the full text of the Asset Purchase Agreement, a copy of which is attached hereto as Exhibit 10.1, which is hereby incorporated herein in its entirety by reference.

Spinner Employment Agreement.

Pursuant to the transactions contemplated by the Asset Purchase Agreement, HPIH entered into an employment agreement with Spinner (the "Spinner Employment Agreement"). Under the terms and conditions of the Spinner Employment Agreement, HPIH will employ Spinner as its National Sales Director for a term commencing on March 14, 2013 and ending on March 14, 2014, subject to automatic successive one-year renewals unless either HPIH or Spinner gives written notice of termination at least 30 days prior to the expiration of the then current term.

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

Pursuant to the terms of the Employment Agreement, Spinner will receive an annual base salary of $100,000, will be eligible to receive an annual bonus and long term incentive awards as determined at the sole discretion of HPIH, and will have the right to participate in employee benefit plans that HPIH maintains for similarly situated employees, excluding, however, any such bonus, incentive or benefit plans that relate to or are approved in connection with HII's initial public offering of its Class A common stock completed on February 13, 2013. The Spinner Employment Agreement further provides that HII will grant a restricted stock award of 50,000 shares of HII's Class A common stock pursuant to the terms of HII's Long Term Incentive Plan (the "Restricted Stock Award"), which award will vest over 24 months in equal 25% increments every 6 months. The unvested portion of the Restricted Stock Award will automatically vest upon Spinner's termination of employment at any time due to Spinner's death or disability, by HPIH without cause or by Spinner for good reason. In the event of Spinner's termination of employment at any time under circumstances not described above, the unvested portion of the Restricted Stock Award will be forfeited in its entirety. . . .

Item 2.01. Completion of Acquisition or Disposition of Assets.

On March 14, 2013, HPIH completed its termination of contract rights with TSG under the terms of the Asset Purchase Agreement for an aggregate price of $5,500,000, as described in Item 1.01 of this Current Report on Form 8-K and incorporated into this Item 2.01 by reference.

On March 14, 2013, the Company issued a press release announcing the completion of the transactions contemplated by the Asset Purchase Agreement. A copy of the Company's press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

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

Item 5.02 Departure of Directors or Certain Officers; Election of Directors;

Appointment of Certain Officers; Compensatory Arrangements of Certain

          Officers.   Appointment of Directors. 

On March 8, 2013, the Board of Directors (the "Board") of Health Insurance Innovations, Inc. ("we," "us" or the "Company") expanded the Board to seven members and appointed Alex Sink and Anthony J. Barkett to fill the two vacancies on the Board created by such expansion.

Alex Sink presently serves as a senior advisor with the Tampa, Florida based Hyde Park Capital, an investment banking firm specializing in mergers, acquisitions, and capital raising. Ms. Sink is also currently serving as founder and chair of Florida Next Foundation, a non-profit, non-partisan organization focused on diversifying Florida's economy through the growth of small businesses and entrepreneurship. Previously, Ms. Sink served as Florida's Chief Financial Officer from 2007 to 2011, as one of four statewide elected officials. She managed over $15 billion in state treasury funds, was responsible for state accounting and implemented reforms in contracting and transparency for citizens. Ms. Sink also directed the state's insurance consumer advocacy work, focusing on strengthening laws to protect seniors against insurance fraud. In 2010, she was the state's Democratic nominee for governor. Prior to elected office, Ms. Sink had a 26-year career with Bank of America. She retired as president of Florida operations in 2000, managing the state's largest bank with $40 billion in deposits, leading 9000 employees in over 800 branches.

Anthony J. Barkett currently serves as vice-president at Amalie Oil Co., an oil company that develops high-quality, well-engineered petroleum products, a position he has held since 1977. At Amalie Oil Co., Mr. Barkett is responsible for overseeing and coordinating activities in accounting, marketing, sales, operations, information technology and administration. He is also responsible for developing and approving internal controls. From 2007-2012, Mr. Barkett was a board member of the Florida Hospital Foundation and he is currently a committee member at FARA ACE for CURE.

Ms. Sink will also serve on the Board's Audit Committee (the "Audit Committee"), and Mr. Barkett will also be a member of the Board's Nominating and Governance Committee (the "Nominating and Governance Committee") and Board's Compensation Committee (the "Compensation Committee").

Approval of 2013 Outside Director Compensation Program.

On March 8, 2013, the Compensation Committee approved the 2013 Outside Director Compensation Program. The outside directors covered under the 2013 Outside Director Compensation Program are Liana O'Drobinak, A. Gordon Tunstall, Paul E. Avery, Alex Sink and Anthony J. Barkett. The 2013 Outside Director Compensation Program includes both cash compensation and equity grants to the outside directors as described below.

Each outside director will be entitled to a Board meeting fee of $2,000 per meeting. Additionally, the Company will compensate each outside director for his or her attendance at Board committee meetings in the amount of $1,500 per meeting. The Company will pay a reduced rate of $500 per Board or committee meeting if the meeting is held by teleconference. Certain Board members will also receive retainers for their role as Board committee chairs. The Company will pay a retainer to Ms. O'Drobinak of $20,000 as the Audit Committee chair, and a retainer to Mr. Tunstall of $10,000 as the Compensation Committee chair. Additionally, the Company will pay a retainer to Mr. Avery of $5,000 as the Nominating & Governance Committee chair.

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

The Compensation Committee also awarded each outside director on March 8, 2013, stock settled appreciation rights ("SSARs") under the 2013 Outside Director Compensation Program. The Company awarded each outside director 30,000 SSARs, of which 33% of the SSARs vest on August 6, 2013, 33% vest on May 1, 2014, and the remaining unvested SSARs vest on May 1, 2015. Each SSAR has a grant price of $13.97 and expires seven years after the grant date.

Approval of 2013 Annual Incentive Plan.

On March 8, 2013, the Compensation Committee adopted the 2013 Annual Incentive Plan (the "Incentive Plan"). All executive officers and certain other senior management will participate in the Incentive Plan. The Incentive Plan is designed to tie executive compensation to the Company's achievement of its financial and individual performance objectives.

Under the Incentive Plan, each participant has an incentive target specified for that individual which is expressed as a percentage of his or her base salary. The target incentive percentages for certain executive officers are as follows:

   Executive Officer                         Title                      Target Incentive Percentage Michael W. Kosloske      Chief Executive Officer                                              125 % Gary Raeckers            Chief Operating Officer                                               50 % Michael D. Hershberger   Chief Financial Officer                                               50 % Bryan Krul               Senior Vice President-Sales & Operations                              50 % Lori Kosloske            Chief Compliance Officer                                              50 %  

Bonus determinations under the Incentive Plan will be based on the achievement of specified objectives during the year, with a portion of the incentive target allocated to each objective. For the executive officers set forth above, 60% of the incentive target will be based on the Company's earnings before interest, taxes, depreciation and amortization ("EBITDA") for fiscal year 2013, and 40% will be based on the Company's revenues for fiscal year 2013.

The incentive amounts to be paid to participants will depend on the level of achievement of each objective and range between 10% (the "Threshold") and 200% (the "Maximum") of the incentive target allocated to each objective. The Threshold payments will be made if the Company achieves 90% of its performance targets, and the Maximum payments will be made if the Company achieves 120% of its performance targets. If the Company achieves 100% of its performance targets, then the participant will receive 100% of his or her incentive target.

Any incentive amounts earned under the Incentive Plan will be paid in 2014, with 50% of such amount paid in cash and the remaining balance in SSARs. The SSARs will have a three-cliff vesting period and a seven year exercise term.

Approval of 2013 Executive Officer Base Salaries and Equity Compensation.

On March 8, 2013, the Compensation Committee established new annual base salaries for certain executive officers as follows:

   Executive Officer                               Title                         Annual Base Salary Michael W. Kosloske            Chief Executive Officer                       $            595,000 Gary Raeckers                  Chief Operating Officer                       $            250,000 Michael D. Hershberger         Chief Financial Officer                       $            200,000 Bryan Krul                     Senior Vice President-Sales & Operations      $            200,000 Lori Kosloske                  Chief Compliance Officer                      $            200,000  

The Compensation Committee established these salaries as part of its annual executive compensation review. . . .

   Item 8.01. Other Events   

On March 14, 2013, the Company issued a press release announcing the closing of the transactions contemplated by the Asset Purchase Agreement, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits     Exhibit   No.                                     Description  10.1         Asset Purchase Agreement, dated March 14, 2013, by and among Health              Plan Intermediaries Holdings, LLC, TSG Agency, LLC and Ivan Spinner  10.2         Employment Agreement, dated March 14, 2013, by and between Health Plan              Intermediaries Holdings, LLC and Ivan Spinner  10.3         Health Insurance Innovations, Inc. Long Term Incentive Plan              (incorporated herein by reference to Exhibit 10.4 to the Current              Report on Form 8-K filed by the Company on February 13, 2013).  10.4         Form of Restricted Stock Award Agreement (incorporated herein by              reference to Exhibit 10.5 to the Current Report on Form 8-K filed by              the Company on February 13, 2013).  99.1         Press Release, dated March 14, 2013

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

Wordcount:  2229

Advisor News

  • Lifetime income is the missing link to global retirement security
  • Don’t let caregiving derail your clients’ retirement
  • The ‘magic number’ for retirement hits $1.45M
  • OBBBA can give small-business clients opportunities for saving
  • Equitable launches 403(b) pooled employer plan to support nonprofits
More Advisor News

Annuity News

  • Lifetime income is the missing link to global retirement security
  • ‘All-weather’ annuity portfolios aim to sharply limit rainy days
  • Annuity income: The new 401(k) standard?
  • Smart annuity planning can benefit long-term tax planning
  • Agam Capital Announces the Continued Growth of Agam ISAC’s Bermuda Platform
More Annuity News

Health/Employee Benefits News

  • Amid budget challenges, Auburn to offer retirement incentive to city workers
  • Findings from University of Pennsylvania Provides New Data on Managed Care (Is Medicare Home Health Care Utilization Substituting for Long-Term Care? Evidence From Dual Eligible Beneficiaries): Managed Care
  • Helping you age better
  • Carolina Complete Health and WellCare of North Carolina Combine to Form Provider-Led Managed Care Organization: Carolina Complete Health
  • Findings from National Center for HIV Broaden Understanding of HIV/AIDS (Implementation of health insurance navigation for racial/ethnic minority men who have sex with men presenting for community-based HIV testing): Immune System Diseases and Conditions – HIV/AIDS
More Health/Employee Benefits News

Life Insurance News

  • Lifetime income is the missing link to global retirement security
  • AM Best Affirms Credit Ratings of ReliaStar Life Insurance Group Members
  • Voya Financial announces expanded Employee Assistance Program services with TELUS Health
  • How improving the customer experience can build trust
  • AI won’t solve the workforce crisis; here’s what will
More Life Insurance News

- Presented By -

Top Read Stories

More Top Read Stories >

NEWS INSIDE

  • Companies
  • Earnings
  • Economic News
  • INN Magazine
  • Insurtech News
  • Newswires Feed
  • Regulation News
  • Washington Wire
  • Videos

FEATURED OFFERS

Protectors Vegas Arrives Nov 9th - 11th
1,000+ attendees. 150+ speakers. Join the largest event in life & annuities this November.

An FIA Cap That Stays Locked
CapLock™ from Oceanview locks the cap at issue for 5 or 7 years. No resets. Just clarity.

Aim higher with Ascend annuities
Fixed, fixed-indexed, registered index-linked and advisory annuities to help you go above and beyond

Unlock the Future of Index-Linked Solutions
Join industry leaders shaping next-gen index strategies, distribution, and innovation.

Leveraging Underwriting Innovations
See how Pacific Life’s approach to life insurance underwriting can give you a competitive edge.

Bring a Real FIA Case. Leave Ready to Close.
A practical working session for agents who want a clearer, repeatable sales process.

Press Releases

  • RFP #T01825
  • RFP #T01825
  • RFP #T01525
  • RFP #T01725
  • Insurate expands workers’ comp into: CA, FL, LA, NC, NJ, PA, VA
More Press Releases > Add Your Press Release >

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Advisor News
  • Annuity Index
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • From the Field: Expert Insights
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Magazine
  • Insiders Only
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Washington Wire
  • Videos
  • ———
  • About
  • Meet our Editorial Staff
  • Advertise
  • Contact
  • Newsletters

Top Sections

  • AdvisorNews
  • Annuity News
  • Health/Employee Benefits News
  • InsuranceNewsNet Magazine
  • Life Insurance News
  • Property and Casualty News
  • Washington Wire

Our Company

  • About
  • Advertise
  • Contact
  • Meet our Editorial Staff
  • Magazine Subscription
  • Write for INN

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2026 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • InsuranceNewsNet Magazine

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.
Insurance News | InsuranceNewsNet