Atlas Financial Holdings, Inc. (NASDAQ:AFH) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Offices; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On October 7, 2019, Atlas Financial Holdings, Inc. (the “Company”) and its wholly-owned subsidiary Anchor Group Management, Inc. entered into agreements regarding a newly adopted near term incentive program with certain senior executives of the Company, including each of Scott Wollney, Paul Romano and Leslie DiMaggio, the Company’s Chief Executive Officer, Chief Financial Officer and Vice President, Operations, respectively (each such individual, an “Executive,” and each such agreement, an “Agreement”). to the terms of the Agreements, each Executive is entitled to receive, under certain conditions, (i) a cash retention bonus equal to thirty percent (30%) of such Executive’s current base salary (which has not increased since 2017)(a “Retention Amount”), and (ii) an Incentive Amount of up to seventy percent (70%) of such Executive’s current base salary plus a set number of Company common shares (an “Incentive Amount”).
The Retention Amount will be paid in the first payroll period following December 31, 2020, provided the Executive remains employed by the Company or its subsidiaries through such date. In addition, to the extent that an Executive is terminated for any reason other than “for cause” on or before June 30, 2021 and is entitled to any severance amount under any then-existing Company policy, any Retention Amount previously paid will be deducted from any severance payment due.
The Incentive Amount will be paid incrementally (in proportionate amounts of cash and shares) only upon the competition of certain milestones within the eighteen (18) month period from the date of the Agreements; provided, however, that not more than one-sixth (1/6th) of the Incentive Amount will be paid in any quarter, with the first available evaluation period being in the fourth quarter of 2019. The milestones are the same for each Agreement and relate to the (i) transition of gross written paratransit premium to a previously announced agreement with American Financial Group (\”AFG\”) and their subsidiary National Interstate Insurance Company (“NATL”), (ii) placement of gross written non-paratransit premium with alternative markets, (iii) progress with respect to the rehabilitation plan for the ASI Pool Companies (defined below) as represented by regulatory approval of certain expense sharing arrangements and related payments between the Company and its subsidiaries and (iv) sale or disposition of Company assets, all as further described in the Agreements.
The Retention Amount and maximum Incentive Amount for each Executive is as follows:
The terms of all Agreements, including the milestones, are the same other than the award amounts, as set forth above. A form of the Agreements is attached hereto as Exhibit 10.1, and the description of the Agreements set forth herein is qualified in its entirety by the terms of such Agreement.
Item 7.01. Regulation FD Disclosure.
As previously disclosed, the Company’s subsidiaries American Country Insurance Company (“ACIC”) and American Service Insurance, Inc. (“ASIC”) are subject to an agreed order of rehabilitation with the Illinois insurance regulator, and as of August 31, 2019 no new business is being written by such subsidiaries. As previously disclosed, it is expected that Gateway Insurance Company (“GIC,” and, together with ACIC and ASIC, the “ASI Pool Companies”) will also be placed into rehabilitation. Starting in October 2019, non-renewals related to in-force business written by the ASI Pool Companies were initiated consistent with requirements of the Illinois insurance regulator. to regulatory requirements in each state where these companies have in-force business, non-renewal notices are being sent for effective dates beginning later this year. Non-renewals will continue for all business expiring throughout 2020.
In addition, certain states have taken action to suspend or terminate the insurance licenses of the Company’s insurance subsidiaries. Such action were not unanticipated given the order of rehabilitation by the Illinois regulator and related circumstances, and the Company does not believe the actions taken to date will have a material effect on the Company’s business or operations. These actions do not alter the Company\’s strategic plans. No regulatory restrictions have been placed on the Company’s managing general agency operation.
Item 9.01. Financial Statements and Exhibits.
Atlas Financial Holdings, Inc. Exhibit
EX-10.1 2 afh8k101119exh101.htm EXHIBIT 10.1 Exhibit EXHIBIT 10.1Atlas financial holdings,…
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