Filed by the Registrant ☒
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Filed by a Party other than the Registrant ☐
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☐
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Preliminary Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
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☐
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Soliciting Material Under §240.14a-12
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Very truly yours,
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Andrew M. O’Brien
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President, Chief Executive Officer, and Director
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1.
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To elect as directors the three Class I nominees named in the attached proxy statement, each for a term of three years and until his or her successor is elected and qualified;
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2.
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To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021; and
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3.
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To transact such other business as may properly come before the meeting or any postponement or adjournment thereof.
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Proposal
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Board Voting Recommendation
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1. Election of three Class I directors
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FOR each nominee
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2. Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm (independent auditors) for the fiscal year ending December 31, 2021.
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FOR
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Proposal
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Vote Required
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Broker Discretionary
Voting Allowed
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1. Election of three Class I directors
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The plurality of the votes cast. This means that the three nominees receiving the highest number of FOR votes will be elected as Class I directors.
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No
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2. Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm (independent auditors) for the fiscal year ending December 31, 2021
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The affirmative vote of the holders of a majority in voting power of the shares of Common Stock of the Company that are present in person or by proxy and entitled to vote on the proposal.
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Yes
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If you are viewing this proxy statement online, you may vote your shares by (i) submitting a proxy by telephone or online by following the instructions on the website or (ii) requesting a paper copy of the proxy materials and following one of the methods described below.
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If you are reviewing a paper copy of this proxy statement, you may vote your shares by (i) submitting a proxy by telephone or online by following the instructions on the proxy card or (ii) completing, dating and signing the proxy card included with the proxy statement and returning it in the preaddressed, postage-paid envelope provided.
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By sending a written notice of revocation to the Secretary of the Company that must be received prior to the Annual Meeting, stating that you revoke your proxy;
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By signing a later-dated proxy card and submitting it so that it is received prior to the Annual Meeting in accordance with the instructions included in the proxy card;
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By submitting another vote by telephone or over the Internet; or
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By attending the Annual Meeting and voting your shares in person before your proxy is exercised at the Annual Meeting.
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generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class;
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we comply with the requirements of the Nasdaq Marketplace Rules on corporate governance; and
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we do not have a stockholder rights plan.
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the quality and integrity of our combined financial statements and our financial reporting process;
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review of our independent registered public accounting firm’s qualifications and independence;
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the performance of our independent registered public accounting firm;
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the integrity of our systems of internal accounting and financial controls; and
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our compliance with legal and regulatory requirements.
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identifying individuals qualified to become Board members;
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recommending to the Board of Directors the director nominees for the next annual meeting of stockholders;
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leading the Board of Directors in its annual review of performance; and
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recommending a code of conduct and, if deemed appropriate by the Compensation, Nominating and Corporate Governance Committee, corporate governance guidelines, to the Board of Directors.
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an annual cash retainer in the amount of $75,000;
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for the chair of any committee of our Board of Directors, an additional annual cash retainer in the amount of $15,000;
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for any member of a committee of our Board of Directors (not including the chair), an additional cash retainer in the amount of $5,000;
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an annual equity award in the form of service-based restricted stock units; and
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reimbursement for all reasonable out-of-pocket expenses incurred in connection with service on our Board of Directors (including affiliated and employee directors).
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Name
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Fees Earned
Or Paid in Cash
($)
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Stock
Awards
($)(1)
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Option
Awards
($)
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Total
Compensation
($)
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Mary A. Chaput
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40,000(2)
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25,205
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—
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65,205
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Randall D. Jones
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42,500(3)
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25,205
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—
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67,705
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Terry P. Mayotte
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42,500(4)
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25,205
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—
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67,705
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Steven B. Lee(5)
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—
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25,205
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—
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25,205
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(1)
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Amount reported represents 100% of the grant date fair value of the restricted stock grant of 1,667 shares given to each of the directors.
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(2)
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Consists of $75,000 annual Board retainer and $5,000 for serving on the Audit Committee, prorated in connection with her appointment to the Board.
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(3)
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Consists of $75,000 annual Board retainer and $10,000 for serving on the Audit Committee, prorated in connection with his appointment to the Board.
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(4)
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Consists of $75,000 annual Board retainer and $15,000 for serving as chair of the Audit Committee, prorated in connection with his appointment to the Board.
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(5)
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Mr. Lee was not considered an independent director as of December 31, 2020 and did not receive a director fee in 2020. However, he did receive a restricted stock grant of 1,667 shares on September 11, 2020.
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Name
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Class
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Term Year
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Age
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Position
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Daniel G. Tully*
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I
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2021
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60
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Chairman; Director
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Mary A. Chaput*
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I
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2021
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71
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Director
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David G. Ellison*
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I
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2021
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38
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Director; Chairman of Compensation, Nominating and Corporate Governance Committee
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Andrew M. O’Brien
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II
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2022
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69
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President and Chief Executive Officer; Director
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Steven B. Lee
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II
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2022
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69
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Director
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Randall D. Jones
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III
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2023
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67
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Director
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Terry P. Mayotte
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III
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2023
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61
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Director; Chairman of Audit Committee
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*
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Nominee for election at the Annual Meeting
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Name
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Age
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Position
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Andrew M. O’Brien
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69
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President and Chief Executive Officer; Director
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Julie A. Baron
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54
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Chief Financial Officer and Treasurer
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Joy N. Edler
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43
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Chief Operating Officer; Corporate Secretary
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Nicholas J. Vassallo
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57
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Chief Accounting Officer
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Jill K. Johnson
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44
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General Counsel
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Matthew J. Spencer
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44
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Chief Information Officer
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Daniel G. Tully
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Mary A. Chaput
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David G. Ellison
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2020
(in thousands)
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2019
(in thousands)
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Audit fees(1)
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$1,025,000
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$527,500
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Audit-related fees(2)
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55,000
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—
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Tax fees(3)
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321,600
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—
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Other fees(4)
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—
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—
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Total
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$1,401,600
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$527,500
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(1)
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Audit fees include (a) the audit of the Company’s financial statements, including statutory audits of certain subsidiaries as required and (b) the reviews of the Company’s unaudited condensed interim financial statements (quarterly financial statements). In 2020, audit fees include work related to the Company’s IPO.
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(2)
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Audit-related fees include fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under “Audit Fees.”
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(3)
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Tax fees include professional services in connection with tax compliance, planning and advice.
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(4)
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All other fees include all other fees for services performed by Deloitte.
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1.
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The Audit Committee has reviewed and discussed the audited financial statements with the Company’s management.
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2.
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The Audit Committee has discussed with its independent registered public accounting firm, Deloitte & Touche LLP, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC.
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3.
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The Audit Committee has received from the independent registered public accounting firm the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the independent registered public accounting firm’s independence from the Company and its management. In addition, the Audit Committee has discussed and considered whether the provision of non-audit services by the Company’s principal auditor, as described above, is compatible with maintaining auditor independence.
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4.
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Based on the review and discussion referred to in paragraphs (1) through (3) above, the Audit Committee recommended to the Company’s Board of Directors the inclusion of the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, for filing with the SEC.
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The Audit Committee
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Terry P. Mayotte, Chair
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Mary A. Chaput
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Randall D. Jones
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Executive
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Position
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Andrew M. O’Brien
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Chief Executive Officer
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Julie A. Baron
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Chief Financial Officer
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Blake A. Baker
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President – Compstar Insurance Services, LLC*
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*
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Mr. Baker served as our President – Compstar Insurance Services, LLC through the end of fiscal 2020, and his employment with the Company ceased effective upon the conclusion of the fiscal year.
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Name and Principal Position
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Year
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Salary
($)(1)
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Bonus
($)(2)
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Stock
Awards
($)
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Option
Awards
($)(3)
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All Other
Compensation
($)
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Total
($)
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Andrew M. O’Brien
Chief Executive Officer
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2020
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445,833
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575,000
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—
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—
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9,106(4)
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1,029,939
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2019
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400,000
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600,000
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—
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—
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8,956(5)
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1,008,956
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Julie A. Baron
Chief Financial Officer
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2020
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300,000
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650,000
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217,916(6)
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62,209
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15,920(7)
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1,246,045
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2019
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202,833
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80,000
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—
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—
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11,401(8)
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294,234
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Blake A. Baker
President – Compstar Insurance Services, LLC(9)
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2020
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401,602
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—
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—
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—
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700,000(10)
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1,101,602
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2019
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—
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—
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—
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—
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—
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—
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(1)
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Represents base salary paid during fiscal 2020 and fiscal 2019, as described below in the section entitled “Narrative to Summary Compensation Table.”
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(2)
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Represents discretionary cash incentive bonuses and bonuses in connection with the IPO paid to each of our named executive officers during the fiscal year ended December 31, 2020 and discretionary cash incentive bonuses paid to each of our named executive officers during the fiscal year ended December 31, 2019.
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(3)
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Amounts do not reflect compensation actually realized by the named executive officer. Each amount represents the grant date fair value of the stock option award made to each individual during the respective fiscal year as determined pursuant to FASB ASC Topic 718. The assumptions used to calculate the value of the option awards granted in fiscal year ended December 31, 2020 are set forth in Note 21, Stock Compensation, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 26, 2021.
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(4)
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Represents $8,550 of 401(k) matching contributions and safe harbor payments and $556 of long-term care payments made during the fiscal year ended December 31, 2020.
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(5)
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Represents $8,400 of 401(k) matching contributions and safe harbor payments and $556 of long-term care payments made during the fiscal year ended December 31, 2019.
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(6)
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Amount shown represents the grant date fair value of a restricted stock units granted on July 16, 2020 as part of the Company’s long-term compensation program. The per share grant date fair value was determined in accordance with FASB ASC Topic 718 and equaled the closing price of a share of our common stock on the date of grant. The dollar amounts shown do not reflect the value of the restricted shares on the day they vest.
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(7)
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Represents $15,675 of 401(k) matching contributions and safe harbor payments and $245 of long-term care payments made during the fiscal year ended December 31, 2020.
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(8)
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Represents $11,156 of 401(k) matching contributions and safe harbor payments and $245 of long-term care payments made during the fiscal year ended December 31, 2019.
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(9)
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Mr. Baker’s employment with the Company was terminated effective at the end of the 2020 fiscal year on December 31, 2020.
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(10)
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Represents severance of $700,000 accrued in the fiscal year ended December 31, 2020 in connection with the termination of Mr. Baker’s employment with the Company on December 31, 2020.
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Name
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Grant
Date
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Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
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Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
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Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
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Option Awards
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Common Units
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Option
Exercise
Price
($)
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Option
Expiration
Date
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Number of
Common
Units That
Have Not
Vested
(#)
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Market
Value of
Common
Units That
Have Not
Vested(1)
($)
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Andrew M. O’Brien
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—
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—
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—
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—
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—
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—
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—
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—
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Julie A. Baron
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7/15/20
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—
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14,050(2)
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—
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15.00
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7/15/30
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7/16/20
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—
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—
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—
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—
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14,050(2)
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$184,055
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Blake A. Baker
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—
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—
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—
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—
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—
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—
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—
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—
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(1)
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Market value of unvested or unearned shares are based on the $13.10 closing price of our stock on December 31, 2020, the last trading day of our 2020 fiscal year.
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(2)
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Options and RSUs vest in three equal annual installments beginning on the first anniversary of the date of grant.
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each person known by us to be a beneficial owner of more than 5% of our Common Stock;
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each of our current directors (which includes all nominees);
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each executive officer named in the Summary Compensation Table; and
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all of our current directors, all named executive officers and all other current executive officers as a group.
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Shares Beneficially
Owned
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Name of beneficial owner
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Number
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Percent
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5% Stockholders:
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Altaris Funds(1)
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28,274,417
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55.28%
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Blake Enterprises entities(2)
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5,109,171
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9.99%
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Named executive officers and directors:
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Andrew M. O’Brien(3)
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4,100,558
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8.02%
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Blake A. Baker
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—
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—
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Julie A. Baron
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—
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—
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Mary A. Chaput(4)
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1,667
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*
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David G. Ellison
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—
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—
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Randall D. Jones(5)
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134,859
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*
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Steven B. Lee(6)
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1,152,702
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2.25%
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Terry P. Mayotte(7)
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1,667
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*
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Daniel G. Tully
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—
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—
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All directors and executive officers as a group (13 persons)
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5,391,453
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10.54%
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*
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Less than one percent
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(1)
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Consists of (i) 23,003,209 shares of our Common Stock held by AHP-BHC LLC and 317 shares of our Common Stock held by AHP-TH LLC and (ii) 5,270,818 shares of our Common Stock held by ACP-BH LLC and 73 shares of our Common Stock held by ACP-TH LLC. Daniel G. Tully and George E. Aitken-Davies are members of the board of managers of Altaris Partners, LLC, which has investment and voting control over the shares held by the Altaris Funds. The address of the Altaris Funds is 10 East 53rd Street, 31st floor, New York, NY 10022. Mr. Tully and David G. Ellison are directors of the Company, and each disclaims beneficial ownership of any shares of our Common Stock that he may be deemed to beneficially own because of his affiliation with Altaris Partners, LLC and its affiliated entities, except to the extent of any pecuniary interest therein.
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(2)
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Consists of (i) 3,251,291 shares of our Common Stock held by Blake Baker Enterprises I, Inc., (ii) 928,940 shares of our Common Stock held by Blake Baker Enterprises II, Inc. and (iii) 928,940 shares of our Common Stock held by Blake Baker Enterprises III, Inc. The Blake Enterprises entities are owned by The Baker Family Trust, dated July 8, 2019, of which Blake Baker is the sole settlor and trustee. As trustee, Mr. Baker has sole voting and dispositive power over 5,109,171 shares of Common Stock. The address of the Blake Enterprises entities is 25736 Oak Meadow Dr., Valencia, CA 91381.
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(3)
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Consists of 4,100,558 shares of our Common Stock held by the Andrew M. O’Brien Premarital Trust, of which Mr. O’Brien is the trustee.
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(4)
|
Consists of 1,667 shares of restricted stock units that vest with 60 days of March 22, 2021.
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(5)
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Includes 1,667 shares of restricted stock units that vest with 60 days of March 22, 2021.
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(6)
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Consists of 92,083 shares of our Common Stock held by Mr. Lee individually, 253,228 shares of our Common Stock held by the Steven B. Lee 2020 GRAT, 805,724 shares of our Common Stock held by the Lee 2020 GST Dynasty Trust, and 1,667 shares of restricted stock units that vest with 60 days of March 22, 2021.
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(7)
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Consists of 1,667 shares of restricted stock units that vest with 60 days of March 22, 2021.
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•
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we have been or are to be a participant;
|
•
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the amount involved exceeded or will exceed $120,000; and
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•
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any of our directors, executive officers, beneficial holders of more than 5% of our capital stock, or any member of their immediate family or person sharing their household had or will have a direct or indirect material interest.
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