UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
April 19, 2021
Date of Report (Date of earliest event reported)
GLOBAL INDEMNITY GROUP, LLC
(Exact name of registrant as specified in its charter)
Delaware | 001-34809 | 85-2619578 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Three Bala Plaza East, Suite 300 Bala Cynwyd, PA | 19004 | |
(Address of principal executive offices) | (Zip Code) |
(610) 664-1500
(Registrant’s telephone number, including area code)
Not Applicable
(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)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Class A Common Shares, no par value 7.875% Subordinated Notes due 2047 | GBLI GBLIL | NASDAQ Global Select Market NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On April 19, 2021, Global Indemnity Group, LLC (the “Company”) announced that David S. Charlton, age 55, was named chief executive of the Company’s insurance operations and was appointed to serve as the principal executive officer of the Company, assuming such responsibilities from Jonathan E. Oltman, president of the Company’s insurance operations, who was previously acting as the Company’s principal executive officer pending appointment of a chief executive. Mr. Oltman will continue in his role as president of the Company’s insurance operations. Furthermore, in connection with Mr. Charlton’s appointment, the board of directors of the Company (the “Board”) has increased the size of the Board from six to seven directors and appointed Mr. Charlton to fill the newly-created directorship, in each case, with effect as of execution of the CEO Agreement (as defined below). Mr. Charlton is a 34-year veteran property and casualty insurance industry senior executive, with particular expertise in excess and surplus, binding authority, small business, and other specialty insurance businesses. Prior to joining the Company, Mr. Charlton served for seven years at Chubb Limited (“Chubb”), where he had been recruited to expand its Westchester Specialty excess and surplus small business division. Prior to Chubb, Mr. Charlton served at Berkshire Hathaway’s United States Liability Insurance Company (“USLI”), including as executive vice president and chief underwriting officer. Mr. Charlton began his insurance career at Philadelphia Consolidated Insurance Companies, where he created and managed the company’s core professional lines casualty division. Mr. Charlton is a graduate of Babson College, a former chairman of the Mid-Atlantic Professional Liability Underwriting Society, and a registered professional liability underwriter.
In connection with Mr. Charlton’s appointment, the Company, Penn-Patriot Insurance Company (“Penn-Patriot”) and Mr. Charlton executed a Chief Executive Officer Agreement (the “CEO Agreement”) on April 19, 2021. The CEO Agreement provides for an employment term from April 19, 2021 through December 31, 2026.
The CEO Agreement provides for an annual base salary of $1,000,000 (“Base Salary”) and an annual target bonus opportunity of $1,000,000 (the “Bonus Opportunity”), payable based on the achievement of certain underwriting results, as determined by the Board, for each year of Mr. Charlton’s term as Chief Executive, with half of any earned Bonus Opportunity payable in the subsequent calendar year and an additional amount payable following a true-up of underwriting results for the applicable year in the fourth calendar year following the applicable year.
The CEO Agreement provides for a grant of 2,000,000 Penn-Patriot book value appreciation rights (the “BVARs”) with an aggregate initial notional value equal to approximately 4% of Penn-Patriot’s book value, which entitle Mr. Charlton to a payment based on the value of the per-BVAR appreciation in Penn-Patriot’s book value over the initial notional value, calculated in accordance with the CEO Agreement. The BVARs will vest by December 31, 2026, subject to the achievement of certain performance goals and Mr. Charlton’s continued employment as of the vesting date, with half of the applicable appreciation value of the BVARs payable on April 1, 2027 and an additional amount payable on April 1, 2030 following a true-up of underwriting results for the applicable performance period. The BVARs will vest in full in the event of a “change in control” of Penn-Patriot (as defined in the CEO Agreement) and a specified portion may vest in the event Mr. Charlton is terminated by Penn-Patriot without cause.
The CEO Agreement provides that Penn-Patriot may terminate Mr. Charlton’s employment at any time for any reason. In the event of Mr. Charlton’s termination by Penn-Patriot, other than in respect of a “Cause Event” (as defined in the CEO Agreement), Mr. Charlton will receive as severance an aggregate amount equal to the lesser of (i) one month of Base Salary for each 12 months of employment and (ii) the Base Salary otherwise payable between the termination date and December 31, 2026 (such Base Salary payments, the “Severance Amount”). Payment of the Severance Amount is contingent upon compliance with the terms in the CEO Agreement, including Mr. Charlton’s executing a general release of claims in favor of the Company, Penn-Patriot and other specified parties.
The CEO Agreement includes perpetual confidentiality and mutual non-disparagement provisions, and two-year post-termination non-competition, customer non-solicitation, and employee non-solicitation and non-hire provisions.
The foregoing description of the CEO Agreement with Mr. Charlton does not purport to be complete and is subject to and qualified in its entirety by reference to the CEO Agreement with Mr. Charlton which is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference.
A copy of the press release announcing Mr. Charlton’s appointment is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 | Other Events |
(d) Exhibits
Exhibit | Description | |
10.1† | Chief Executive Officer Agreement with David Charlton effective April 19, 2021. | |
99.1 | Press release for Global Indemnity Group, LLC dated April 19, 2021. | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
† | Portions of this exhibit, marked by brackets, have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K under the Securities Act of 1933, as amended, because they are both (i) not material and (ii) is of the type that the registrant treats as private or confidential. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Global Indemnity Group, LLC | ||||||
April 20, 2021 | By: | /s/ Stephen W. Ries | ||||
Name: | Stephen W. Ries | |||||
Title: | Secretary |