UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:
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:
| 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(s) |
Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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.
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.
2
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
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. |
3
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.
| ALLEGHANY CORPORATION | ||||||||||
| Date: November 19, 2021 | By: | /s/ Kerry J. Jacobs |
||||||||
| Name: | Kerry J. Jacobs | |||||||||
| Title: | Executive Vice President and Chief Financial Officer |
|||||||||
4
Exhibit 10.1
CONSULTING AGREEMENT
CONSULTING AGREEMENT (this “Consulting Agreement”) dated as of this 16th day of November 2021 (the “Agreement Date”), by and between Alleghany Corporation (“Alleghany” or the “Company”) and Weston M. Hicks, located at [Redacted], (“Mr. Hicks”), his affiliates, successors and assigns (collectively, the “Consultant”).
WHEREAS, Mr. Hicks announced his intention to retire as Chief Executive Officer of the Company and that he shall resign from all his positions with the Company and its subsidiaries and affiliates, including as an officer or director thereof, effective December 31, 2021; and
WHEREAS, Mr. Hicks and the Company have agreed that Mr. Hicks shall continue in a consulting capacity with the Company on January 1, 2022 (the “Effective Date”), on the terms set forth herein:
1. Duties and Title.
(a) Consultant shall be responsible for performing the duties of consultant to the Company and certain of its subsidiaries and affiliates as are reasonably requested by the Chief Executive Officer. Such duties shall include, but are not limited to:
(i) providing potential investment themes, ideas and insight for further research, and assisting the Company’s investment team;
(ii) providing views on potential capital market, mergers and acquisitions, or investment opportunities under consideration;
(iii) furnishing a historical perspective on topics and issues at the parent company and subsidiaries; and
(iv) accessing Consultant’s long-term network of contacts and resources.
(b) Consultant’s performance shall be consistent in level with a person of Consultant’s background and experience and with such care as an ordinary prudent person in a like position would use under similar circumstances. The particular amount of time Consultant may spend in fulfilling his obligations under this Consulting Agreement may vary from day to day and week to week.
(c) It is expressly understood and agreed that the Consultant shall have the right to render services to other persons and/or engage in other business activities either in a capacity similar to that in which the Consultant shall be rendering services to the Company or otherwise and that the Consultant specifically shall not be required to devote his entire time and attention to the endeavors herein set forth.
2. Term and Fees.
(a) The term shall begin on the Effective Date and shall remain in effect until December 31, 2022 (the “Term”); provided, however, Consultant may terminate this Consulting Agreement for any reason upon thirty (30) days’ prior written notice to the Company and the Company may terminate this Agreement immediately for Cause, in each case without liability or continuing obligation (except for any compensation earned by Consultant through the date of termination and any incurred but unpaid out-of-pocket expenses incurred by Consultant pursuant to this engagement up to the date of termination). Company may also terminate this Consulting Agreement without Cause, upon thirty (30) days’ prior written notice, provided that, in such case, the Company shall continue to pay Consultant his Monthly Fee until the end of the Term. The Consulting Agreement may be renewed upon mutual agreement of the Parties. Cause shall have the meaning as provided in the Parties’ October 7, 2002 letter agreement.
(b) In exchange for the services rendered by the Consultant hereunder, the Company agrees to pay the Consultant $50,000 per month (the “Monthly Fee”).
(c) The Company and Consultant acknowledge that the Consultant is not an employee, agent, co-venturer, or representative of the Company. Any person employed by Consultant to perform hereunder will, likewise, not be deemed to be an employee of the Company. No amounts payable by Company under this Agreement will be considered salary for pension and incentive compensation purposes. Furthermore, because Consultant is engaged in his/her own independent business, Consultant is not eligible for and will not participate in the Company’s retirement plans, insurance plans and any other benefits normally afforded to employees of the Company. Consultant will bear all responsibility and liability for the payment of all federal, state and local income taxes due on money received from the Company under this Agreement and filing all appropriate tax returns and other forms with respect thereto. Moreover, Consultant will be solely responsible for any worker’s compensation, FICA, withholding tax, unemployment compensation, and any other federal or state payment in connection with the services. Consultant will indemnify and hold the Company and its affiliates harmless from and against any and all such liabilities or claims including, but not limited to, interest assessed or penalty and reasonable attorneys fees incurred, arising from Consultant’s failure to pay such taxes.
3. Representations and Warranties. Consultant represents and warrants that Consultant will perform all services in a workmanlike manner and with professional diligence and skill and Consultant further represents and warrants that the performed services shall conform to all applicable specifications and other performance requirements as set forth herein or in any written correspondence issued by the Company pursuant hereto and will comply with all applicable federal, state, and local laws, statutes, acts, ordinances, rules, codes, standards, and regulations.
4. Assignment. This Agreement is non-assignable by the Consultant without the prior written consent of the Company. The Company and any subsequent assignee may freely assign this Consulting Agreement, in whole or in part, to any party, including a subsidiary of the Company, provided that such party assumes and agrees in writing to keep and perform all of the executory obligations of the Agency hereunder.
2
5. Confidentiality. During the course of the Term, Consultant acknowledges that he will learn about, acquire, have access to, be provided with, and/or have possession, custody or control of confidential information regarding the business, operations, activities, products, services, clients, customers, accounts, and finances of the Company and its affiliates, as well as third parties with whom the Company may do business or contemplate transactions from time to time. Accordingly, Consultant agrees to maintain and ensure the strictest confidentiality of all confidential information in perpuity and adhere to the Company’s Code of Business Conduct and Ethics for Business Partners, including, but not limited to, all requirements regarding the safeguarding of proprietary and confidential information.
6. General Provisions.
(a) Notices. All notices require to be given hereunder shall be in writing and shall be deemed to have been given if (i) delivered personally, (ii) delivered via one-day overnight courier, (iii) transmitted by fax, (iv) emailed or (v) mailed by registered or certified mail (return receipt requested and postage prepaid) to the following listed persons at the addresses specified below, or to such other persons, addresses or fax numbers as a party entitled to notice shall give, in the manner herein above described to others entitled to notice:
If to the Company:
Alleghany Corporation
1411 Broadway, 34th Floor
New York, New York, 10018
Attn: Christopher K. Dalrymple, Esq.
Fax: (212) 759-3295
cdalrymple@alleghany.com
If to Consultant:
Weston M. Hicks
[Redacted]
If given personally or transmitted by facsimile, a notice shall be deemed to have been give when it is received. If given by one-day overnight courier, notice shall be deemed to have been given on the next business day following delivery to the courier. If given by mail, it shall be deemed to have been given on the third business day following the day on which it was posted. Notices and other communications given by attorneys for Consultant and the Company shall be deemed given by, respectively, Consultant and the Company.
(b) Interpretation. The headings contained in this Consulting Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Consulting Agreement.
3
(c) Counterparts. This Consulting Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(d) Waiver. Failure to invoke any right, condition, or covenant in this Consulting Agreement by either party shall not be deemed to constitute or imply a waiver of any rights, condition, or covenant and neither party may rely on such failure. No waiver of any of the provisions hereof shall be effective unless in writing and signed by the party to be charged with such waiver. No waiver shall be deemed a continuing waiver or waiver in respect of any subsequent breach or default, whether of similar or different nature, unless expressly so stated in writing.
(e) Modification. This Consulting Agreement may not be orally cancelled, changed, modified or amended, and no cancellation, change, modification or amendment shall be effective or binding, unless in writing and signed by all of the parties to this Consulting Agreement.
(f) Severability. If any provision of this Consulting Agreement is found to be void or unenforceable by a court of competent jurisdiction, the remaining provisions of this Consulting Agreement shall nevertheless be binding upon the parties with the same effect as though the void or unenforceable part had been severed and deleted.
(g) Prior Agreements. This Consulting Agreement forms the entire understanding between the parties regarding the subject matter hereof. It cancels and supersedes all prior agreements and understandings.
(h) Governing Law. This Consulting Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflict of laws rules thereof to the extent that the general application of the laws of another jurisdiction would be required thereby. The Parties hereby expressly consent to the jurisdiction of the courts of the State of New York and federal courts located therein with respect to any action or proceeding between Consultant and the Company with respect to this Consulting Agreement or any rights or obligation of such party pursuant to this Consulting Agreement and each of the parties agrees that the venue shall be New York County.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of the date first written above.
| Date: | ALLEGHANY CORPORATION | |||||
| By: | /s/ Joseph P. Brandon | |||||
| Name: Joseph P. Brandon | ||||||
| Title: President | ||||||
4
| CONSULTANT | ||
| By: | /s/ Weston M. Hicks | |
| WESTON M. HICKS | ||
5
Exhibit 10.2
November 15, 2021
Weston M. Hicks
[Redacted]
Re: Restricted Stock Unit and Performance Share Vesting
Dear Weston:
Reference is hereby made to (i) the Restricted Stock Unit Award Agreement by and between Alleghany Corporation (the “Company”) and you dated as of January 15, 2019 (the “RSU Agreement”), and (ii) the Performance Share Award Agreements by and between the Company and you dated as of February 21, 2018, January 15, 2019, January 21, 2020 and January 19, 2021 (the “PSU Agreements”).
We are pleased to inform you that, in connection with and subject to your retirement from the Company on December 31, 2021 (the “Retirement Date”) and in further recognition of your contributions to the Company, the Compensation Committee of the Board of Directors of the Company has determined that, effective as of the Retirement Date, (i) you shall become vested in, and have a non-forfeitable right to, 1,562 of the Credited Units granted to you pursuant to the RSU Agreement, and (ii) the accelerated vesting provisions of Section 5(b) of the PSU Agreements shall apply to your retirement from the Company on the Retirement Date determined based on the achievement of “Adjusted Book Value Per Common Share” as of December 31, 2021.
Payment of your vested restricted stock units and performance shares will be made in accordance with the RSU Agreement and the applicable PSU Agreements. All unvested restricted stock units and performance shares (after giving effect to the foregoing acceleration of vesting) shall be automatically forfeited for no consideration on the Retirement Date.
If you are in agreement with the foregoing, please return a signed and dated copy of this letter to Christopher K. Dalrymple by December 31, 2021.
| Sincerely, |
| /s/ Raymond L.M. Wong |
| Raymond L.M. Wong |
| /s/ Weston M. Hicks |
| Weston M. Hicks |
Document and Entity Information |
Nov. 15, 2021 |
|---|---|
| Cover [Abstract] | |
| Entity Registrant Name | ALLEGHANY CORP /DE |
| Amendment Flag | false |
| Entity Central Index Key | 0000775368 |
| Document Type | 8-K |
| Document Period End Date | Nov. 15, 2021 |
| Entity Incorporation State Country Code | DE |
| Entity File Number | 1-9371 |
| Entity Tax Identification Number | 51-0283071 |
| Entity Address, Address Line One | 1411 Broadway |
| Entity Address, Address Line Two | 34th Floor |
| Entity Address, City or Town | New York |
| Entity Address, State or Province | NY |
| Entity Address, Postal Zip Code | 10018 |
| City Area Code | (212) |
| Local Phone Number | 752-1356 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Common Stock, $1.00 par value |
| Trading Symbol | Y |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |