Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
On September 7, 2021, Midwest Holding Inc. (the "Company") announced the
appointment of Georgette C. Nicholas, age 57, as President and Chief Financial
Officer of the Company effective as of September 8, 2021. The Company and
Ms. Nicholas entered into an employment agreement (the "Employment Agreement")
effective as of September 8, 2021.
Ms. Nicholas previously held the position of CEO and Managing Director for
Genworth Mortgage Insurance Australia, a publicly listed ASX company in Sydney,
Australia from October 2015 through March 2020. She also held various roles with
Genworth Financial, Inc. in investor relations, chief financial officer roles in
the mortgage insurance business and controllership beginning in 2005.
Ms. Nicholas also worked in public accounting, including as a firm director with
The following is a summary of the material features of the Employment Agreement
and is qualified in its entirety by reference to the full text of the Employment
Agreement, a copy of which is filed as Exhibit 10.1 to this Report on Form 8-K.
Capitalized terms used but not defined in this Report on Form 8-K shall have the
meanings given to them in the Employment Agreement.
The initial term of the Employment Agreement is three years but it contains an
"evergreen" feature under which it is automatically extended on an annual basis
for a one year renewal term unless written notice of nonrenewal is given by
either party. If a notice of nonrenewal is given, the term of employment then
ends at the end of the initial term or renewal term, as the case may be, unless
terminated earlier as described below. The Employment Agreement provides for the
Executive to receive a base salary, potential cash bonus, equity compensation,
and certain other benefits, which are summarized below.
Base Salary. The Executive's initial annual base salary is $300,000 ("Base
Salary"). However, the Base Salary may be renegotiated by the parties each
calendar year based on periodic performance reviews, although the Company
retains sole and absolute discretion to maintain or modify the Base Salary. The
Base Salary is payable for up to six months in case of illness or temporary
disability of the Executive.
Bonus. The Executive will be eligible for an annual target bonus of 50% of the
current Base Salary ("Target Bonus"). Notwithstanding, the actual annual bonus
may range from 0% to 100% of the Base Salary and will be determined based upon
achievement of performance goals set by the Compensation Committee of the Board
of Directors of the Company (the "Committee"). For the 2021 performance year,
the Executive will be paid a minimum bonus of $50,000, which becomes payable
upon filing of a Form 10-K with the U.S. Securities and Exchange Commission in
March 2022. The Committee, in its discretion, may pay a pro-rata Target Bonus if
the Executive is not employed at the end of a calendar year, except that if her
employment ceases due to death or disability, a pro-rata target bonus must be
Equity Compensation. The Employment Agreement provides for the grant to the
Executive of a stock option for 43,000 shares of voting common stock. Such grant
shall be subject to the terms and conditions set forth in the Midwest Holding
Inc. 2020 Long-Term Incentive Plan, as in effect and as amended from time to
time (the "Incentive Plan"), together with the Stock Option Agreement between
the Company and Executive. The stock options will have an exercise price of
$41.25 and expire 10 years from the date of grant. The stock options will vest
in equal installments 60 days after each of the first seven anniversaries of the
date of grant, subject to Executive's continuous employment with the Company
through the applicable vesting date, subject to acceleration as described herein
and in connection with certain events as specified under the terms of the
Incentive Plan and the Stock Option Agreement.
Benefits. The Company will provide the Executive retirement and other benefits
as are customarily provided to similarly situated executives of the Company,
including paid vacation, coverage under the Company's medical, life, disability
and other insurance plans, and reimbursement for all reasonable business
expenses in accordance with the Company's expense reimbursement policy.
Termination. The Company or Executive may terminate the Agreement prior to the
expiration of its Term at any time upon written notice.
Effect of Termination; Severance.
In the event of voluntary resignation of employment by Executive without Good
Reason (as defined below) or in connection with her retirement, Executive shall
be entitled to payment of her Base Salary for a period of 12 months following
her resignation and shall be paid any earned but unpaid Target Bonus for the
prior year; provided, that Executive is in compliance with the non-compete
provisions of the Employment Agreement.
In the event of a termination of employment due to (i) death, (ii) permanent
disability, (iii) by the Company for Good Cause (as defined below), or (iv) by
Executive with Good Reason (as defined below), Executive shall be entitled to
payment of any earned but unpaid Base Salary, Target Bonus and other benefits
and unreimbursed business expenses.
In addition to the foregoing, if (i) the Company terminates Executive's
employment except for death, permanent disability or for Good Cause, or
(ii) Executive terminates her employment for Good Reason (a "Qualifying
Termination"), then provided that Executive executes and does not revoke the
release attached as an exhibit to the Employment Agreement (the "Release"), the
Company has agreed to (i) pay Executive, on a quarterly basis, her Base Salary
and Target Bonus for 12 months following her termination, (ii) continued vesting
of all of her outstanding stock options and equity awards through the 12-month
severance period and (iii) to the extent Executive elects to continue health
coverage under our health plan under COBRA, reimburse her for premiums she pays
to extend such coverage for up to 18 months following her termination; provided,
however, that such reimbursement shall cease if she obtains other employment
that offers group health benefits.
Non-Competition. During her employment with the Company and for a period of 12
months thereafter, Executive may not directly or indirectly compete with the
Company within the United States.
Clawbacks. Executive's incentive compensation will be subject to clawback
regulations in effect under applicable law or stock exchange listing standards.
"Good Cause" generally includes (subject to certain cure provisions):
(i) Executive willfully engages in acts or omissions determined to constitute
fraud, breach of fiduciary duty or intentional wrongdoing or malfeasance;
(ii) Executive is convicted of, or enters a plea of guilty or nolo
contendere to charges of, any criminal violation involving fraud, theft or
(iii) Executive is convicted of, or enters a plea of guilty or nolo
contendere to charges of, any non-vehicular felony which has or is substantially
likely to have a material adverse effect on Executive's ability to carry out her
duties under the Employment Agreement or on the reputation or activities of the
(iv) Executive habitually abuses alcohol, illegal drugs or controlled
substances or non-prescribed prescription medicine, and such abuse materially
and adversely interferes with the performance of the Executive's duties and
responsibilities to the Company;
(v) Executive materially breaches the terms of any agreement between Executive
and the Company relating to Executive's employment;
(vi) Executive engages in acts or omissions constituting gross negligence by
Executive in the performance (or non-performance) of her duties; or
(vii) Executive materially fails in the performance of her duties and/or
responsibilities on behalf of the Company.
"Good Reason" generally means (subject to certain cure provisions):
(i) the diminution of any duties, responsibilities, and authorities
inconsistent in any respect with the Executive's position as a President and
Chief Financial Officer;
(ii) any failure by the Company to comply with any of the compensation
provisions of the Employment Agreement (except for isolated, insubstantial and
inadvertent failure not occurring in bad faith and which are remedied by the
(iii) the Company materially breaches the terms of any agreement between the
Executive and the Employer relating to the Executive's employment, or materially
fails to satisfy the conditions and requirements of the Employment Agreement; or
Item 8.01 Other Events.
On September 7, 2021, the Company issued a press release entitled "Midwest
Holding Announces Georgette C. Nicholas as President and Chief Financial
Officer." Attached hereto as Exhibit 99.1 and incorporated herein by reference,
is a copy of the press release.
The information in this report shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and shall not be incorporated by reference into any registration
statement or other document filed under the Securities Act of 1933, as amended,
or the Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
Item 9.01. Financial Statements and Exhibits.
Executive Employment Agreement dated September 8, 2021 by and
10.1 between Midwest Holding Inc. and Georgette C. Nicholas
99.1 Midwest Holding Inc. Press Release dated September 7, 2021.
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