| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
As previously reported in the Current Report on Form 8-K filed on October 26, 2022, Global Indemnity Group, LLC (“GBLI”) and Joseph W. Brown principally agreed to the terms of a Chief Executive Officer Agreement (“CEO Agreement”) on October 21, 2022 setting forth the principal terms of Mr. Brown’s employment as Chief Executive Officer of GBLI. On November 16, 2022, GBLI entered into definitive documentation with Mr. Brown incorporating the agreed-to terms of the CEO Agreement.
The CEO Agreement provides for Mr. Brown’s term of office to run from October 21, 2022 through December 31, 2023 and for an annual base salary of $1,000,000 (“Base Salary”) and a bonus opportunity of $2,000,000, payable in cash by March 15, 2024 (the “Bonus Amount”), subject to Mr. Brown remaining employed with GBLI through December 31, 2023. The CEO Agreement also provides for Mr. Brown’s reimbursement for reasonable work-related lodging, housing and transportation expenses.
The CEO Agreement provides for a grant of 200,000 stock options to acquire GBLI Class A common shares with an exercise price equal to the closing price of GBLI’s Class A common shares on the date of grant. The options vest in four equal tranches as follows: 25% on each of November 1, 2022, February 1, 2023, May 1, 2023 and August 1, 2023 (subject to Mr. Brown remaining employed with the Company through each vesting date), and to the extent vested, are exercisable within 7 years of the grant notwithstanding any earlier termination of employment. The stock options are subject to the terms and conditions for stock options as reflected in the Company’s 2018 Share Incentive Plan and written option agreement.
The CEO Agreement provides that GBLI may terminate Mr. Brown’s employment at any time for any reason. In the event of Mr. Brown’s termination by GBLI other than for “cause” (as defined in the CEO Agreement) and not due to his death or disability, Mr. Brown will receive as severance an aggregate lump-sum cash amount equal to (i) the balance of his Base Salary prorated based on the number of months he served as the Chief Executive Officer of GBLI, and (ii) the Bonus Amount. In addition, if Mr. Brown is terminated without “cause” prior to August 1, 2023, the stock option will accelerate and fully vest. Payment of any severance is contingent upon compliance with the terms in the CEO Agreement, including Mr. Brown’s execution and non-revocation of a general release of claims in favor of GBLI.
The CEO Agreement includes perpetual confidentiality and mutual non-disparagement provisions, and two-year post-termination non-competition and employee and customer non-solicitation provisions.
If the benefits provided for in the CEO Agreement or otherwise payable to Mr. Brown constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, and will be subject to the excise tax imposed by Section 4999 thereof, Mr. Brown will receive a payment from GBLI sufficient to pay such excise tax plus an additional amount sufficient to pay the excise tax and other applicable taxes arising from such payment.
The foregoing description of the CEO Agreement does not purport to be complete and is qualified in its entirety by refence to the full text of the CEO Agreement, a copy of which is attached hereto as Exhibit 10.1, which is incorporate herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
