Business Context and Reporting Period
This Form 8-K Current Report was filed by Greenlight Capital Re, Ltd. on August 15, 2011. The filing addresses Item 5.02 regarding the departure of the Chief Executive Officer and the appointment of a successor, effective as of the report date.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on executive compensation and employment terms.
Material Changes
- CEO Resignation: Leonard Goldberg retired as Chief Executive Officer effective August 15, 2011. He remains a member of the boards of directors for the Registrant and Greenlight Reinsurance, Ltd.
- CEO Appointment: Barton Hedges, previously President and Chief Underwriting Officer since 2006, was promoted to Chief Executive Officer and appointed to the boards of directors effective August 15, 2011.
- Compensation Structure: A new employment agreement was executed for Mr. Hedges, superseding his previous agreement.
Guidance, Outlook, and Management Commentary
The filing details the specific terms of Mr. Hedges' new employment agreement:
- Base Salary: Not less than $500,000 annually.
- Bonus: Annual performance-based bonus with a target equal to 100% of base salary.
- Benefits: Includes a $6,000 monthly housing allowance, participation in employee benefit plans, and tax preparation expense reimbursement.
- Equity Grants:
- Initial grant of options to acquire 100,000 Class A ordinary shares at fair market value.
- Annual grants of options valued at $500,000 (Black Scholes valuation) for each year after 2011, contingent on continued employment.
- Vesting schedule: 25% on the grant date and 25% on each of the first three anniversaries.
- Severance: In the event of termination without "cause" or resignation for "good reason," Mr. Hedges is entitled to accrued compensation, a pro-rated target bonus, and severance equal to one year of base salary and target bonus paid in twelve monthly installments.
- Restrictive Covenants: Includes a six-month non-competition restriction, a twelve-month non-solicitation of employees, and a twenty-four-month non-solicitation of customers.
Investor Verification Checklist
- Verify the exact vesting schedule and exercise price for the 100,000 initial share options granted to Mr. Hedges.
- Confirm the specific performance metrics used to calculate the 100% target bonus.
- Review the definition of "cause" and "good reason" within the employment agreement to understand severance triggers.
- Check subsequent filings for the actual grant date and fair market value of the initial equity award.