Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As reported by Alleghany Corporation (the "Company") in its Current Report on
Form 8-K, dated March 3, 2021, Weston M. Hicks informed the Company that he had
determined to (i) retire from his position as Chief Executive Officer and as a
director of the Company, effective on December 31, 2021 (the "Retirement Date")
and (ii) step down as the Company's President effective at the conclusion of the
Company's annual meeting of stockholders on April 23, 2021.
At a meeting of the Board of Directors (the "Board") of the Company on
November 16, 2021, the Board authorized the Company to enter into a consulting
agreement with Mr. Hicks (the "Consulting Agreement"). Pursuant to the
Consulting Agreement, the Company agreed to pay Mr. Hicks a consulting fee of
$50,000 per month for a period of one year, renewable for additional one-year
terms, for consulting services primarily related to investments and potential
strategic opportunities matters.
On November 15, 2021, in connection with Mr. Hicks's retirement, the Company's
Compensation Committee of the Board of Directors (the "Compensation Committee")
determined that:
(i) pursuant to a letter agreement (the "Letter Agreement"), Mr. Hicks's
outstanding performance share awards under the 2017 Long Term Incentive Plan
("2017 LTIP") would be amended such that the awards would be paid to him on a
pro rata basis, based upon his service through the Retirement Date and the
Committee's determination and certification at its February 23, 2022 meeting of
the financial performance objectives governing such performance share awards as
of December 31, 2021;
(ii) pursuant to the Letter Agreement, Mr. Hicks's outstanding time-based
vesting restricted stock unit award under the 2017 LTIP would be paid to him on
a pro rata basis, based upon his service through the Retirement Date; and
(iii) the Company would pay Mr. Hicks's premiums for primary and excess health
insurance plans via the Consolidated Omnibus Budget Reconciliation Act (COBRA)
through December 31, 2023.
The foregoing summaries of the Consulting Agreement and Letter Agreement are
qualified by reference to the Consulting Agreement and Letter Agreement,
respectively, which are filed herewith as Exhibit 10.1 and Exhibit 10.2,
respectively.
On November 16, 2021, the Compensation Committee also determined to make a
payout to Mr. Hicks of his 2021 annual incentive opportunity under the 2015
Management Incentive Plan ("MIP") at $3,510,000, representing his maximum
opportunity, subject to the Company achieving the 2021 financial performance
objective at a level necessary to sufficiently fund the 2021 MIP incentive pool
amount. In making this determination, the Compensation Committee considered the
Company's projected 2021 financial performance, an evaluation by the Board of
Mr. Hicks's performance in 2021, including his achievement of his 2021
individual objectives which had been provided to the Board in January 2021.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1 Consulting Agreement, dated November 16, 2021, between the Company
and Weston M. Hicks. *
10.2 Letter Agreement, dated November 15, 2021, between the Company and
Weston M. Hicks. *
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* Certain information contained in this Exhibit has been redacted in accordance
with Item 601(a)(6) of Regulation S-K.
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