UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 22, 2018
1347 PROPERTY INSURANCE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36366 | 46-1119100 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
1511
N. Westshore Blvd., Suite 870, Tampa, FL 33607
(Address of principal executive offices, including Zip Code)
(813) 579-6213
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
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)) |
Indicate by check mark weather the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company [X]
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.
On August 22, 2018, the Compensation and Management Resources Committee (the “Committee”) of the Board of Directors (the “Board”) of 1347 Property Insurance Holdings, Inc. (the “Company”) approved base salaries for Douglas N. Raucy, President and Chief Executive Officer, Daniel E. Case, Chief Operating Officer, John S. Hill, Vice President, Chief Financial Officer and Secretary, and Dean E. Stroud, Vice President and Chief Underwriting Officer of the Company (collectively, the “Executives”), based on management’s recommendations and the employees’ performance.
The new base salaries for the Executives are as follows: (i) Mr. Raucy, $325,000; (ii) Mr. Case, $310,000; (iii) Mr. Hill, $250,000; and (iv) Mr. Stroud, $210,000. The Committee has also approved 2018 year-to-date cash bonuses of $75,000 to Mr. Raucy, $60,000 to Mr. Case, $43,000 to Mr. Hill, and $25,000 to Mr. Stroud.
In addition, on August 22, 2018, the Committee granted 1,000 shares of the Company’s common stock (also referred to as the “Bonus Shares”) and 1,000 restricted stock units (“RSUs”) (equal to the number of the Bonus Shares) to Mr. Hill. These grants were made pursuant to the 1347 Property Insurance Holdings, Inc. 2018 Equity Incentive Plan and the terms and conditions of the Executive Stock Grant Agreement and the Executive Restricted Share Unit Agreement for Share-Matching Grants, forms of which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K (this “Current Report”) and are incorporated herein by reference. Each RSU represents a contingent right to receive one share of the Company’s common stock. These RSUs vest in five equal annual installments beginning with the first anniversary of the grant date, subject to continued employment, with vesting subject to Mr. Hill maintaining ownership of the Bonus Shares through the full five-year vesting period.
Mr. Case’s existing Executive Restricted Stock Unit Agreement Under Share-Matching Program has been amended and restated to provide that the Board has discretion to accelerate vesting of the restricted stock units covered by that agreement upon the occurrence of certain events set forth in the agreement. The amended and restated agreement is filed as Exhibit 10.3 to this Current Report and is incorporated herein by reference.
All descriptions of equity awards in this Current Report are summaries only, do not purport to be complete, and are qualified in their entirety to the full text of the respective agreements, forms of which are filed as exhibits to this Current Report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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.
Date: August 28, 2018
| 1347 PROPERTY INSURANCE HOLDINGS, INC. | ||
| By: | /s/ John S. Hill | |
| John S. Hill | ||
| Chief Financial Officer | ||
Exhibit 10.1
1347 Property Insurance Holdings, Inc.
2018 Equity Incentive Plan
EXECUTIVE STOCK GRANT AGREEMENT
1347 Property Insurance Holdings, Inc. (the “ Company ”) grants to the Grantee named below, in accordance with the terms of the 1347 Property Insurance Holdings, Inc. 2018 Equity Incentive Plan (the “ Plan ”) and this Executive Stock Grant Agreement (the “ Agreement ”), the following number of Shares, on the Date of Grant set forth below. Capitalized terms used in this Agreement without definition shall have the meanings assigned to them in the Plan.
I. NOTICE OF STOCK AWARD
| Name of Grantee: | ||
| Number of Shares: | ||
| Date of Grant: | ||
| Vesting Dates: | Immediately vested on the Date of Grant |
II. STOCK GRANT AGREEMENT
1. Grant of Shares. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee as of the Date of Grant, the number of Shares set forth above (the “ Shares ”). The Shares covered by this Award shall be represented by a stock certificate registered in the Grantee’s name or by uncertificated shares designated for the Grantee in book-entry form on the records of the Company’s transfer agent, subject to the restrictions set forth in this Agreement.
2. Restrictions on Transfer . Any stock certificate issued shall bear all legends required by law, including Rule 144 affiliate legends, as required. The Grantee may transfer the Shares only in accordance with such restrictions.
3. Tax Obligations .
(a) Tax Consequences . The Grantee has reviewed with the Grantee’s own tax advisors the federal, state, local and foreign tax consequences of this Award. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee understands that the Grantee (and not the Company) shall be responsible for any tax liability that may arise as a result of the transactions contemplated by this Agreement and the Plan.
(b) Withholding Taxes . The Grantee may satisfy any federal, state, local or other tax withholding obligation relating to the grant of the Shares under this Agreement by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Grantee by the Company, including withholding from any cash dividends paid in connection with the Shares hereunder) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold Shares from the Shares otherwise issuable to the Grantee under this Agreement; provided, however, that no Shares are withheld with a value exceeding the amount of tax required to be withheld by law based on the maximum statutory tax rates in the applicable taxing jurisdictions; or (iii) delivering to the Company owned and unencumbered Shares. The Grantee agrees to make appropriate arrangements with the Company for the satisfaction of all federal, state, local and other income and employment tax withholding requirements applicable to this Award.
4. Relation to Other Benefits . Any economic or other benefit to the Grantee under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary.
5. No Guarantee of Continued Service . The Grantee acknowledges and agrees that nothing in this Agreement or the Plan confer upon the Grantee any right to continued employment or other service with the Company or any Subsidiary or affiliate.
6. Entire Agreement; Relation to Plan . This Agreement is subject to the terms and conditions of the Plan. This Agreement and the Plan contain the entire agreement and understanding of the parties with respect to the subject matter contained in this Agreement, and supersede all prior written or oral communications, representations and negotiations in respect thereto. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of the Shares.
7. Adjustments . The number and kind of Shares are subject to adjustment as provided in Section 14 of the Plan.
8. Compliance with Law . The Company shall make reasonable efforts to comply with all applicable federal and state securities laws and listing requirements with respect to the Shares; provided, however, notwithstanding any other provision of this Agreement, and only to the extent permitted under Section 409A of the Code, the Company shall not be obligated to deliver any Shares pursuant to this Agreement if the delivery thereof would result in a violation of any such law or listing requirement.
9. Successors and Assigns . Without limiting Section 2, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the permitted successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.
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10. Choice of Law . The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of Delaware, without giving effect to any rule or principle of conflicts or choice of law that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
11. Data Privacy . In order to administer the Plan, the Company may process personal data about the Grantee. Such data includes, but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about the Grantee such as home address and business addresses and other contact information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By signing this Agreement, the Grantee gives explicit consent to the Company to process any such personal data. The Grantee also gives explicit consent to the Company to transfer any such personal data outside the country in which the Grantee works or is employed, including, if the Grantee is not a U.S. resident, to the United States, to transferees that shall include the Company and other persons who are designated by the Company to administer the Plan.
12. Plan and Prospectus Delivery . By signing this Agreement, the Grantee acknowledges that a copy of the Plan, the Plan Summary and Prospectus, and the Company’s most recent Annual Report and Proxy Statement (the “ Prospectus Information ”) either have been received by or provided to the Grantee, and the Grantee consents to receiving the Prospectus Information electronically, or, in the alternative, agrees to contact the Chief Financial Officer of the Company to request a paper copy of the Prospectus Information at no charge. The Grantee also represents that he or she is familiar with the terms and provisions of the Prospectus Information and hereby accepts this Award on the terms and subject to the conditions set forth herein and in the Plan. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Date of Grant.
| 1347 PROPERTY INSURANCE HOLDINGS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| GRANTEE | ||
| Name: | ||
| Address: | ||
| 4 |
Exhibit 10.2
1347 Property Insurance Holdings, Inc.
2018 Equity Incentive Plan
EXECUTIVE RESTRICTED SHARE UNIT AGREEMENT FOR SHARE-MATCHING GRANTS
Summary of Restricted Share Unit Award
1347 Property Insurance Holdings, Inc. (the “ Company ”) grants to the Grantee named below, in accordance with the terms of the 1347 Property Insurance Holdings, Inc. 2018 Equity Incentive Plan (the “ Plan ”) and this Executive Restricted Share Unit Agreement for Share-Matching Grants (the “ Agreement ”), the following number of Restricted Share Units, on the Date of Grant set forth below. Capitalized terms used in this Agreement without definition shall have the meanings assigned to them in the Plan.
| Name of Grantee: | ||
| Number of Restricted Share Units: | ||
| Date of Grant: | ||
| Vesting Dates: | In 20% annual installments on the first, second, third, fourth and fifth anniversaries of the Date of Grant, with vesting subject to the Grantee maintaining ownership of the Bonus Shares through the full five-year vesting period |
Terms of Agreement
1. Grant of Restricted Share Units . Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee as of the Date of Grant, the number of Restricted Share Units set forth above (the “ Restricted Share Units ”). Each Restricted Share Unit shall represent the contingent right to receive Share and shall at all times be equal in value to one Share. The Restricted Share Units shall be credited in a book entry account established for the Grantee until payment in accordance with Section 4 hereof.
2. Vesting of Restricted Share Units .
(a) A ratable portion of the Restricted Share Units (subject to such rounding conventions as maintained by the Company from time to time) shall vest on each of the Vesting Dates set forth above (each, a “ Vesting Date ”), provided that (i) the Grantee shall have remained in the Continuous Service of the Company or a Subsidiary through the applicable Vesting Date and (ii) the Grantee shall have maintained ownership of the Shares granted to the Grantee on the same date as the Date of Grant as the Grantee’s 2018 year-to-date bonus (the “ Bonus Shares ”) through the full five-year vesting period.
(b) Notwithstanding Section 2(a), (i) upon the occurrence of a Change in Control prior to a Vesting Date and during the Grantee’s Continuous Service, the Committee may, in its sole discretion, accelerate the vesting of the Restricted Share Units in full or in part; (ii) in the event of the termination of the Grantee’s Continuous Service as a result of his or her “ Disability ” (defined as the Grantee’s permanent and total disability (within the meaning of Section 22(e) of the Code), as determined by a medical doctor satisfactory to the Company) or death, any outstanding unvested Restricted Share Units shall automatically become vested in full; and (iii) the Committee may, in its sole discretion, provide for the full or partial acceleration of vesting of the Restricted Share Units in connection with the termination of the Grantee’s Continuous Service for any other reason prior to a Vesting Date.
(c) For the purposes of this Agreement, “ Change in Control ” shall mean the occurrence of any of the following:
i. The acquisition by any Person of Beneficial Ownership of 50% or more of either (x) the then outstanding shares of common stock of the Company (the “ Outstanding Company Common Stock ”); or (y) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “ Outstanding Company Voting Securities ”) (the foregoing Beneficial Ownership hereinafter being referred to as a “ Controlling Interest ”); excluding, however, the following: (A) any acquisition directly from the Company (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company); (B) any acquisition by the Company; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; (D) any acquisition by Fundamental Global Investors, LLC, Ballantyne Strong, Inc., Kingsway Financial Services Inc. or any of their affiliates (collectively, the “ Excluded Holders ”); or (E) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (ii) of this Section 2(c); provided further, that for purposes of clause (B), if any Person (other than the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company, any corporation controlled by the Company, or any of the Excluded Holders) shall become the beneficial owner of a Controlling Interest by reason of an acquisition by the Company, and such Person shall, after such acquisition by the Company, acquire Beneficial Ownership of any additional shares of the Outstanding Company Common Stock or any additional Outstanding Company Voting Securities and such Beneficial Ownership is publicly announced, such additional Beneficial Ownership shall constitute a Change in Control; or
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ii. The consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “ Corporate Transaction ”); excluding, however, a Corporate Transaction pursuant to which (A) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (other than (I) the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company, or any corporation controlled by the Company; (II) any Excluded Holder; (III) the corporation resulting from such Corporate Transaction; or (IV) any Person which beneficially owned (directly or indirectly) a Controlling Interest immediately prior to such Corporate Transaction) will beneficially own, directly or indirectly, 50% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors, and (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or
iii. The consummation of a plan of complete liquidation or dissolution of the Company.
3. Forfeiture of Restricted Share Units . The Restricted Share Units that have not yet vested pursuant to Section 2(a) shall be forfeited automatically without further action or notice if the Grantee’s Continuous Service with the Company or a Subsidiary terminates prior to a Vesting Date other than as provided pursuant to Section 2(b).
4. Payment .
(a) Except as may be otherwise provided in this Section, the Company shall deliver to the Grantee (or the Grantee’s estate in the event of death) the Shares underlying the vested Restricted Share Units, together with cash dividend equivalents, if any, as provided pursuant to Section 6(b), within thirty (30) days following the date that the Restricted Share Units become vested in accordance with Section 2.
(b) Notwithstanding Section 4(a), to the extent that the Grantee’s right to receive payment of the Restricted Share Units constitutes a “deferral of compensation” within the meaning of Section 409A of the Code, payment of any vested Restricted Share Units shall be subject to the following rules, to the extent necessary to comply with Section 409A of the Code:
(i) Except as provided in Section 4(b)(ii), the Shares underlying the vested Restricted Share Units (and any related cash dividend equivalents pursuant to Section 6(b)) shall be delivered to the Grantee (or the Grantee’s estate in the event of death) within thirty (30) days after the earlier of: (A) the Grantee’s “separation from service” within the meaning of Section 409A of the Code; (B) the occurrence of a “change in the ownership,” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A of the Code; or (C) the applicable Vesting Date.
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(ii) If the Restricted Share Units become payable as a result of Section 4(b)(i)(A), but not as a result of the Grantee’s death, and the Grantee is a “specified employee” at that time within the meaning of Section 409A of the Code, then the Shares underlying the vested Restricted Share Units (and any related cash dividend equivalents pursuant to Section 6(b)) shall instead be delivered to the Grantee within thirty (30) days after the first business day that is more than six months after the date of his or her separation from service (or, if the Grantee dies during such six-month period, within thirty (30) days after the Grantee’s death).
(c) The Company’s obligations with respect to the Restricted Share Units shall be satisfied in full upon the delivery of the Shares underlying the vested Restricted Share Units and the payment of any related dividend cash equivalents pursuant to Section 6(b).
5. Transferability . The Restricted Share Units (including any related cash dividend equivalents pursuant to Section 6(b)) may not be transferred, assigned, pledged or hypothecated in any manner, or be subject to execution, attachment or similar process, by operation of law or otherwise, unless otherwise provided under the Plan. Any purported transfer or encumbrance in violation of the provisions of this Section 5 shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in such Restricted Share Units.
6. No Dividend, Voting or Other Rights; Dividend Equivalents .
(a) The Grantee shall not possess any incidents of ownership (including, without limitation, dividend and voting rights) in the Shares underlying the Restricted Share Units until such Shares have been delivered to the Grantee in accordance with Section 4 hereof. The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future (and cash dividend equivalents pursuant to Section 6(b)), and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.
(b) From and after the Date of Grant and until the earlier of (i) the time when the Shares underlying the vested Restricted Share Units (if any) are delivered to you in accordance with this Agreement, or (ii) the time that the Restricted Share Units are forfeited in accordance with this Agreement, on each date that the Company pays a cash dividend to holders of its Shares generally, the Company will credit to your account hereunder the right to receive a cash amount equal to the product of (x) the dollar amount of the cash dividend paid per Share paid to stockholders on such date multiplied by (y) the total number of unpaid Restricted Share Units credited to your account under this Agreement as of such date. Subject to and conditioned upon the vesting of the underlying Restricted Share Units, the aggregate amount of all such dividend equivalents credited to your account hereunder shall be paid to you in cash (without interest), at the same time that the Shares underlying your vested Restricted Share Units are delivered to you, and your right to receive any such dividend equivalents shall be automatically and correspondingly forfeited to the extent that the underlying Restricted Share Units are forfeited pursuant to the terms of this Agreement and the Plan.
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7. No Retention Rights . Nothing contained in this Agreement shall confer upon the Grantee any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor limit or affect in any manner the right of the Company and its Subsidiaries to terminate the employment or adjust the compensation of the Grantee.
8. Relation to Other Benefits . Any economic or other benefit to the Grantee under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary.
9. Taxes and Withholding . To the extent the Company or any Subsidiary is required to withhold any federal, state, local or other taxes in connection with the delivery of Shares under this Agreement, then the Company or Subsidiary (as applicable) shall retain a number of Shares otherwise deliverable hereunder with a value equal to the applicable tax withholding (based on the Fair Market Value of the Shares on the date of delivery); provided that in no event shall the value of the Shares retained exceed the amount of taxes required to be withheld based on the maximum statutory tax rates in the Grantee’s applicable taxing jurisdictions. If the Company or any Subsidiary is required to withhold any federal, state, local or other taxes other than upon delivery of the Shares under this Agreement, then the Company or Subsidiary (as applicable) shall have the right in its sole discretion to (a) require the Grantee to pay or provide for payment of the required tax withholding, or (b) deduct the required tax withholding from any dividend equivalent payments and/or from any amount of salary, bonus, incentive compensation or other amounts otherwise payable in cash to the Grantee (other than deferred compensation subject to Section 409A of the Code).
10. Adjustments . The number and kind of Shares deliverable pursuant to the Restricted Share Units are subject to adjustment as provided in Section 14 of the Plan.
11. Compliance with Law . The Company shall make reasonable efforts to comply with all applicable federal and state securities laws and listing requirements with respect to the Restricted Share Units; provided, however, notwithstanding any other provision of this Agreement, and only to the extent permitted under Section 409A of the Code, the Company shall not be obligated to deliver any Shares pursuant to this Agreement if the delivery thereof would result in a violation of any such law or listing requirement.
12. Amendments . Subject to the terms of the Plan, the Committee may modify this Agreement upon written notice to the Grantee. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto. Notwithstanding the foregoing, no amendment of the Plan or this Agreement shall adversely affect the rights of the Grantee under this Agreement without the Grantee’s consent unless the Committee determines, in good faith, that such amendment is required for the Agreement to either be exempt from the application of, or comply with, the requirements of Section 409A of the Code, or as otherwise may be provided in the Plan.
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13. Entire Agreement, Relation to Plan . This Agreement is subject to the terms and conditions of the Plan. This Agreement and the Plan contain the entire agreement and understanding of the parties with respect to the subject matter contained in this Agreement, and supersede all prior written or oral communications, representations and negotiations in respect thereto. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of the Restricted Share Units.
14. Successors and Assigns . Without limiting Section 5, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the permitted successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.
15. Choice of Law . The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of Delaware, without giving effect to any rule or principle of conflicts or choice of law that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
16. Data Privacy . In order to administer the Plan, the Company may process personal data about the Grantee. Such data includes, but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about the Grantee such as home address and business addresses and other contact information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By signing this Agreement, the Grantee gives explicit consent to the Company to process any such personal data. The Grantee also gives explicit consent to the Company to transfer any such personal data outside the country in which the Grantee works or is employed, including, if the Grantee is not a U.S. resident, to the United States, to transferees that shall include the Company and other persons who are designated by the Company to administer the Plan.
17. Plan and Prospectus Delivery . By signing this Agreement, the Grantee acknowledges that a copy of the Plan, the Plan Summary and Prospectus, and the Company’s most recent Annual Report and Proxy Statement (the “ Prospectus Information ”) either have been received by or provided to the Grantee, and the Grantee consents to receiving the Prospectus Information electronically, or, in the alternative, agrees to contact the Chief Financial Officer of the Company to request a paper copy of the Prospectus Information at no charge. The Grantee also represents that he or she is familiar with the terms and provisions of the Prospectus Information and hereby accepts this Award on the terms and subject to the conditions set forth herein and in the Plan. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Date of Grant.
| 1347 PROPERTY INSURANCE HOLDINGS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| GRANTEE | ||
| Name: | ||
| Address: | ||
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Exhibit 10.3
Amended and Restated Executive Restricted Stock Unit Agreement Under Share-Matching Program
NEITHER THE SECURITIES NOR THE SECURITIES ISSUABLE PURSUANT TO THIS AGREEMENT HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, WHICH OPINION SHALL BE SATISFACTORY TO THE COMPANY.
THE SECURITIES (AND THE SECURITIES ISSUABLE PURSUANT TO THIS AGREEMENT) ARE HELD BY AN AFFILIATE OF THE COMPANY AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT THE SECURITIES MAY BE SOLD PURSUANT TO RULE 144 OR ANOTHER AVAILABLE EXEMPTION UNDER SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER.
To : Daniel E. Case (referred to herein as “you”)
1347 Property Insurance Holdings, Inc. (the “Company”) is pleased to confirm that you have been granted a Restricted Stock Unit (“RSU”) Award (this “Award”), effective June 15, 2018 (the “Award Date”). This Award is subject to the terms of this Amended and Restated Executive Restricted Stock Unit Agreement Under Share-Matching Program (this “Agreement”).
| 1. | Acceptance of Terms and Conditions . To be eligible to receive this Award, you must sign this Agreement and return it to John S. Hill, Vice President, Chief Financial Officer and Secretary, within 30 days after the Award Date. By signing this Agreement, you acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against the Company or any subsidiary directly or indirectly, or give rise to any cause of action at law or in equity against the Company. This Award was granted pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c)(4), and not pursuant to the Company’s 2018 Equity Incentive Plan or any other equity incentive plan of the Company, as an inducement that was material to the Participant entering into employment with the Company. By your acceptance of this Agreement, you agree to be bound by all of the terms of this Agreement. |
| 2. | Grant of Restricted Stock Units . Subject to the restrictions, limitations, terms and conditions specified in this Agreement, the Company hereby grants you as of the Award Date 136,054 RSUs. Each RSU represents the contingent right to receive one Common Share upon vesting of the RSU. These RSUs will remain restricted until the applicable vesting date set forth below (each, a “Vesting Date”). Prior to the Vesting Dates, the RSUs are not transferable by you by means of sale, assignment, exchange, pledge, or otherwise, and the transferability of the Common Shares issuable upon vesting of the RSUs are subject to securities law restrictions. On each of the below-stated Vesting Dates on which you continue to be employed by the Company, you will vest in the below-stated percentage of the total number of RSUs awarded in this Agreement, until you are 100% vested, provided that you maintain ownership of the Common Shares purchased under the Company’s share-matching program through the full five-year vesting period: |
| Vesting Date | Vested Percentage of RSUs Awarded | |||
| First Anniversary of the Award Date | 20 | % | ||
| Second Anniversary of the Award Date | 20 | % | ||
| Third Anniversary of the Award Date | 20 | % | ||
| Fourth Anniversary of the Award Date | 20 | % | ||
| Fifth Anniversary of the Award Date | 20 | % | ||
| 3. | Dividend Equivalents . Dividend equivalents, if any, payable on the vested RSUs will be accrued on your behalf for the period between the Vesting Date and the date you are delivered Common Shares. Any such dividends shall be paid to you, without interest, on the date Common Shares are actually delivered to you under the terms of this Agreement. |
| 4. | Death or Disability . In the event that you cease active employment with the Company because of your death or Disability prior to one or more Vesting Dates, all unvested RSUs will vest as of the date of death or the date you are determined to be experiencing a Disability. |
| 5. | Distribution of Shares Upon Vesting . Common Shares will be delivered to you or, in the event of your death, your beneficiary, during the 30-day period following the date the corresponding RSUs vest, except as otherwise provided in this Agreement. |
| 6. | Termination Other than as a Result of Death or Disability. If your employment is terminated by the Company or by you for any reason other than death or Disability, then all unvested RSUs are forfeited on the date of termination. Notwithstanding the foregoing, the Board of Directors of the Company may, in its discretion, accelerate vesting, in full or in part, (i) in the event of your early retirement, provided that you maintain ownership of the Common Shares purchased under the Company’s share-matching program through the full five-year vesting period, or (ii) upon the occurrence of a Change in Control. For the purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following (for the purposes of this Section 6, capitalized terms used and not otherwise defined herein will have the meanings given to such terms in the 1347 Property Insurance Holdings, Inc. 2018 Equity Incentive Plan): |
| i. | The acquisition by any Person of Beneficial Ownership of 50% or more of either (x) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”); or (y) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”) (the foregoing Beneficial Ownership hereinafter being referred to as a “Controlling Interest”); excluding, however, the following: (A) any acquisition directly from the Company (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company); (B) any acquisition by the Company; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; (D) any acquisition by Fundamental Global Investors, LLC, Ballantyne Strong, Inc., Kingsway Financial Services Inc. or any of their affiliates (collectively, the “Excluded Holders”); or (E) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (ii) of this Section 6; provided further, that for purposes of clause (B), if any Person (other than the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company, any corporation controlled by the Company, or any of the Excluded Holders) shall become the beneficial owner of a Controlling Interest by reason of an acquisition by the Company, and such Person shall, after such acquisition by the Company, acquire Beneficial Ownership of any additional shares of the Outstanding Company Common Stock or any additional Outstanding Company Voting Securities and such Beneficial Ownership is publicly announced, such additional Beneficial Ownership shall constitute a Change in Control; or |
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| ii. | The consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which (A) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (other than (I) the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company, or any corporation controlled by the Company; (II) any Excluded Holder; (III) the corporation resulting from such Corporate Transaction; or (IV) any Person which beneficially owned (directly or indirectly) a Controlling Interest immediately prior to such Corporate Transaction) will beneficially own, directly or indirectly, 50% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors, and (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or | |
| iii. | The consummation of a plan of complete liquidation or dissolution of the Company. |
| 7. | Clawback. The RSUs and any cash payment or Common Shares delivered pursuant to this Agreement are subject to forfeiture, recovery by the Company or any clawback or recoupment policy which the Company, by action of its Board of Directors, may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law. |
| 8. | Adjustments . If the number of outstanding Common Shares is changed as a result of a stock split or the like without additional consideration to the Company, the number of RSUs subject to this Award shall be adjusted to correspond to the change in the outstanding Common Shares. |
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| 9. | Rights as a Stockholder . By accepting this Award, you shall have no rights as a stockholder of the Company in respect of the RSUs, including the right to vote until and unless the RSUs have vested and ownership of Common Shares issuable upon vesting of the RSUs has been transferred to you. |
| 10. | Public Offer Waiver . By voluntarily accepting this Award, you acknowledge and understand that your rights under this Agreement are offered to you strictly as an employee of the Company and that this Award of RSUs is not an offer of securities made to the general public. |
| 11. | Restricted Securities. You understand that the RSUs and the Common Shares issuable upon vesting of the RSUs have not been registered under the Securities Act or any applicable state securities laws and are being issued to you in reliance upon exemption from such registration under the Securities Act as well as under applicable state securities laws. By accepting this Award, you confirm that you have been informed that the RSUs and the Common Shares issuable upon vesting of the RSUs are restricted securities under the Securities Act and under applicable state securities laws and may not be resold or transferred unless they are first registered under the federal securities laws and registered or qualified under applicable state securities laws, unless an exemption from such registration or qualification is available. Accordingly, you acknowledge that you are aware that exemptions under the Securities Act or applicable state securities law may not be available to permit the resale of the Common Shares issuable upon vesting of the RSUs and that you are prepared to hold the Common Shares issuable upon vesting of the RSUs for an indefinite period. The certificates representing the Common Shares issuable upon vesting of the RSUs shall bear such restrictive legends as are required or deemed advisable under the provisions of all applicable laws. |
| 12. | Interpretations. Any dispute, disagreement or question that arises under, or as a result of, or in any way relates to the interpretation, construction or application of the terms of this Agreement will be determined and resolved by the Compensation and Management Resources Committee of the Board of Directors of the Company (the “Committee”) or its authorized delegate. Such determination or resolution by the Committee or its authorized delegate will be final, binding and conclusive for all purposes. |
| 13. | No Rights to Continued Employment . By voluntarily acknowledging and accepting this Award, you acknowledge and understand that this Award shall not form part of any contract of employment between you and the Company. Nothing in the Agreement confers on you any right to continue in the employ of the Company or in any way affects the Company’s right to terminate your employment without prior notice at any time or for any reason. You further acknowledge that this Award is for future services to the Company and is not under any circumstances to be considered compensation for past services. |
| 14. | Nature of Grant . In accepting the grant, you acknowledge, understand, and agree that: (a) the RSUs are extraordinary items and are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, pension or welfare or retirement benefits or similar payments; (b) in no event should the RSUs be considered as compensation for, or relating in any way to, past services for the Company, nor are the RSUs or the underlying Common Shares intended to replace any pension rights or compensation; (c) the future value of the underlying Common Shares is unknown and cannot be predicted with certainty; and (d) the Company is not providing any tax, legal or financial advice. |
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| 15. | Miscellaneous . |
| a. | Modification . By accepting this Award, you agree that the granting of the Award is at the discretion of the Committee and that acceptance of this Award is no guarantee that future Awards will be granted to you. The Award of these RSUs is documented by the records of the Committee or its delegate which shall be the final determinant of the number of Common Shares granted and the conditions of this Agreement. The Committee may amend or modify this Award in any manner as permitted by law, provided that no such amendment or modification shall impair your rights under this Agreement without your consent. Notwithstanding anything in this Agreement to the contrary, this Award may be amended by the Company without your consent, including but not limited to modifications to any of the rights granted to you under this Agreement, at such time and in such manner as the Company may consider necessary or desirable to reflect changes in law, including, but not limited to, exchange listing requirements. | |
| b. | Governing Law . All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles. | |
| c. | Successors and Assigns . Except as otherwise provided herein, this Agreement will bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not. | |
| d. | Severability . Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. | |
| e. | Impact Upon Termination of Employment . By voluntarily acknowledging and accepting this Award, you agree that no benefits accruing under this Agreement will be reflected in any severance or indemnity payments that the Company may make or be required to make to you in the future, regardless of the jurisdiction in which you may be located. |
| 16. | Securities Laws. By accepting this Award, you acknowledge and confirm that: (a) you have the knowledge and experience in financial and business matters necessary to exercise, and that you are capable of evaluating the merits and risks relating to the RSUs and the Common Shares issuable upon vesting of the RSUs; and (b) that you are acquiring the RSUs and the Common Shares issuable upon vesting of the RSUs for your own account and not with any view towards a distribution of the Common Shares issuable upon vesting of the RSUs. The issuance of the Common Shares issuable upon vesting of the RSUs shall be subject to you making or entering into such written representations, warranties and agreements as any officer of the Company may reasonably request in order to comply with applicable securities laws and government regulations. |
| 17. | Imposition of Other Requirements. The Company reserves the right to impose other requirements on the RSUs and on any Common Shares acquired under this Award, to the extent the Company determines it is necessary or advisable in order to comply with applicable law or facilitate this Award, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
| 18. | Taxes . You acknowledge that (a) the ultimate liability for any and all taxes payable with respect to your benefits under this Award, including but not limited to federal and state income and employment taxes (collectively, “Tax-Related Items”) are your responsibility and may exceed the amount actually withheld by the Company and (b) the Company (i) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including, but not limited to, the grant, vesting and/or conversion of the RSUs and issuance of Common Shares; (ii) does not commit and is under no obligation to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate your liability for Tax-Related Items; (iii) may be required to withhold or account for Tax-Related Items in more than one jurisdiction if you have become subject to tax in more than one jurisdiction between the Award Date and the date of any relevant taxable event; and (iv) may refuse to deliver the Common Shares to you if you fail to comply with your obligations in connection with the Tax-Related Items as provided in this Section. You agree to pay any such Tax-Related items in cash unless otherwise agreed by the Company. |
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| 19. | Section 409A Provisions . The payment of Common Shares under the Award is intended to be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption set forth in Treasury Regulation §1.409A-1(b)(4). Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit hereunder that constitutes nonqualified deferred compensation under Section 409A of the Code and applicable guidance thereunder is otherwise payable or distributable to you under this Agreement solely by reason of the occurrence of a termination of employment following a Change of Control or due to your Disability, such amount or benefit will not be payable or distributable to you by reason of such circumstance unless the Committee determines in good faith that (i) the termination of employment following a Change in Control constitutes a “separation from service” or the Disability is a “disability”, as the case may be, under Section 409A(a)(2)(A) of the Code and applicable final regulations, or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A by reason of the short-term deferral exemption or otherwise. In no event shall the Company have any responsibility for tax consequences to you (or your beneficiary) resulting from the terms or operation of this Award Agreement. Any payment or distribution that constitutes nonqualified deferred compensation subject to Section 409A and that becomes payable to you while you are a specified employee as defined in Section 409A(a)(2)(B) of the Code on account of separation from service instead shall be made on the earlier of the date that is six months and one day after the date of such separation from service and your death. |
| 20. | Data Privacy . In order to administer this Award, the Company may process personal data about you. Such data includes, but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information and any other information that might be deemed appropriate by the Company to facilitate the administration of this Award. By signing this Agreement, you give explicit consent to the Company to process any such personal data. You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, if you are not a U.S. resident, to the United States, to transferees that shall include the Company and other persons who are designated by the Company to administer this Award. |
The undersigned hereby acknowledges, accepts, and agrees to all terms and provisions of the foregoing Agreement.
| /s/ Daniel E. Case | ||
| Employee | ||
| August 28, 2018 | ||
| Date |
The signed Agreement must be returned to John S. Hill, Vice President, Chief Financial Officer AND SECRETARY, within 30 days OF the Date OF The AGReement.
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