| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On January 17, 2024, Global Indemnity Group, LLC (“GBLI”) and Joseph W. Brown principally agreed to the terms of a Chief Executive Officer Agreement (“2024 CEO Agreement”) setting forth the principal terms of Mr. Brown’s continued employment as Chief Executive Officer of GBLI.
The 2024 CEO Agreement commences on January 1, 2024 and continues in one-year intervals, expiring on December 31, 2028. The minimum annual base salary is $1,000,000 (“Base Salary”) with a minimum annual bonus opportunity of $2,000,000, payable in cash by March 15 of each year beginning on March 15, 2025 (the “Bonus Amount”), subject to Mr. Brown remaining employed with GBLI through December 31 of the previous year. The 2024 CEO Agreement also provides for Mr. Brown’s reimbursement for reasonable work-related lodging, housing and transportation expenses.
The 2024 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 on the first business day of each quarter in 2024 (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 2023 Share Incentive Plan and written option agreement.
The 2024 CEO Agreement further provides that on the first business day of each year, beginning in 2025, if Mr. Brown is employed by the Company, he shall be granted 50,000 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, if granted, will vest on December 31, 2028 (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 share incentive plan in place at the time of the grant.
The 2024 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 2024 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 during that year, and (ii) the full Bonus Amount. In addition, an granted, but unvested stock options granted on or after January 1, 2025 will vest and become fully exercisable. 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 2024 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 2024 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 2024 CEO Agreement does not purport to be complete and is qualified in its entirety by refence to the full text of the 2024 CEO Agreement.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
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Exhibit
No. | | Description |
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| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
