Hagerty Establishes Executive Severance Plan and Updates Employment Agreements for Leadership Team

Severance Protections Upon Regular Termination Without Cause

Under the newly adopted Severance Plan, executives receive defined severance benefits when terminated without Cause or when they resign for Good Reason outside a Change in Control Period. McKeel Hagerty is entitled to continued base salary payment for 24 months, while other eligible executives receive 18 months of continued salary. These termination protections are conditioned upon the executive's execution of an effective release agreement, a standard protection for the company.

The severance package during a Regular Termination also includes a pro rata portion of the annual cash bonus for the year of termination based on actual company performance, with certain executives' individual performance deemed achieved at 100% of target. Additionally, executives receive any earned but unpaid annual cash bonus from prior years and payment of COBRA premiums during the applicable severance period. The filing states that these benefits do not apply to voluntary resignations absent Good Reason, terminations due to death or disability, retirement, or similar circumstances.

Enhanced Change in Control Termination Benefits

The Severance Plan provides substantially more generous benefits upon a Change in Control Termination, which occurs when an executive is terminated without Cause or resigns for Good Reason during the Change in Control Period—defined as three months before through 24 months after a Change in Control event. During such a termination, McKeel Hagerty receives a lump-sum payment equal to 24 months of base salary, while other eligible executives receive 18 months of base salary in a single lump-sum payment rather than ongoing installments.

Beyond salary continuation, Change in Control Termination benefits include the pro rata bonus and prior-year earned bonuses available under a Regular Termination scenario. McKeel Hagerty receives an additional lump-sum payment equal to 200% of his annual target cash bonus, whereas other eligible executives receive 150% of their annual target cash bonus. The plan also provides accelerated vesting of equity awards, with performance-based awards vesting based on the greater of target performance and actual performance achieved. COBRA premium payments during the applicable period round out the change-of-control protection package.

McKeel Hagerty's Compensation Structure and Enhanced Protections

McKeel Hagerty, the company's chief executive, maintains a base salary of not less than $1,200,000, consistent with the salary level effective January 1, 2025. His amended and restated Employment Agreement, which supersedes his prior agreement dating to January 1, 2018, also provides for a target annual incentive opportunity of at least 280% of base salary. This represents a significant incentive component tied to the achievement of performance goals, subject to his continued employment through the applicable payment date.

Beyond cash compensation, Mr. Hagerty receives an annual refresher equity award under the company's 2021 Stock Incentive Plan with a target grant-date value of at least $200,000 per year. His agreement also includes eligibility for executive travel and security benefits under company policy and participation in the newly established Severance Plan. Upon a qualifying termination, Mr. Hagerty is entitled to continued salary, continued participation in the annual incentive plan, continued vesting of equity awards, and continued health and dental benefits for 24 months, subject to execution of a release.

Russell Page's Executive Employment Agreement and Compensation

Russell Page has entered into a new Employment Agreement effective July 15, 2026, establishing his compensation terms and benefits framework. Under the agreement, Mr. Page receives an annual base salary of not less than $650,000 and is eligible to participate in the company's Amended and Restated Annual Incentive Plan. His target annual incentive opportunity is not less than 100% of base salary for each calendar year, contingent on continued employment through the applicable payment date and achievement of designated performance goals.

Mr. Page is also eligible to receive annual equity awards under the company's 2021 Stock Incentive Plan, with a target grant-date value of not less than 100% of his then-current base salary for each annual grant. The agreement provides full participation in the newly adopted Severance Plan, aligning his protections with other senior executives at the company. The specific nature of Mr. Page's executive role was not disclosed in the filing.

Patrick McClymont's Updated Compensation and Equity Awards

Patrick McClymont's amended and restated Employment Agreement supersedes his prior amended agreement effective September 6, 2022, establishing updated compensation terms. Mr. McClymont is entitled to a base salary of not less than $650,000 and continued eligibility to participate in the Annual Incentive Plan with a target incentive opportunity of not less than 100% of base salary. His continued employment through the end of the applicable plan year is required for bonus eligibility, subject to achievement of designated performance goals.

Notably, Mr. McClymont's equity compensation reflects the highest target grant-date value among the disclosed executives outside of Mr. Hagerty. His amended agreement provides continued eligibility to receive annual equity awards under the Equity Plan with a target grant-date value for each annual grant of not less than 175% of his then-current base salary. Mr. McClymont is also eligible to participate in the Severance Plan, bringing his termination protections in line with other senior leaders.

Kenneth Ahn and Jeffrey Briglia Employment Agreement Updates

Kenneth Ahn's amended and restated Employment Agreement, effective July 15, 2026, supersedes his prior agreement dated January 1, 2023. Under the updated terms, Mr. Ahn is entitled to a base salary of not less than $650,000 and continued eligibility to participate in the Annual Incentive Plan. His target incentive opportunity is not less than 100% of base salary for each calendar year, subject to continued employment through the end of the applicable plan year and achievement of performance goals. The filing indicates that Mr. Ahn is eligible for annual equity awards under the Equity Plan and participation in the Severance Plan, though specific equity grant values were not disclosed in the announcement.

Jeffrey Briglia's employment agreement was also amended and restated effective July 15, 2026. However, the filing does not contain specific details regarding Mr. Briglia's compensation structure, base salary, incentive opportunity targets, or equity grant values. Investors seeking information about Mr. Briglia's updated terms would need to refer to additional disclosure documents or seek clarification from the company directly.

Restrictive Covenant Enforcement and Severance Forfeiture

The Severance Plan includes important conditions that executives must satisfy to receive severance benefits. An executive's right to receive benefits terminates if the executive engages in a "Prohibited Action," which includes a breach of confidentiality, non-competition, non-solicitation, non-disparagement, or other restrictive covenants contained in the executive's employment agreement. This provision gives the company significant leverage to enforce compliance with restrictive covenants as a condition of severance payments.

The filing states that all severance benefits under the plan are conditioned upon the executive's execution of an effective release agreement with the company. This requirement ensures that executives waive potential legal claims against the company in exchange for severance payments. The combination of restrictive covenant enforcement and release requirements reflects standard market practice in executive severance arrangements and provides the company with contractual protections against subsequent litigation or competitive harm.

Modernization of Executive Governance Framework

The company disclosed that these actions were taken in connection with Hagerty's broader review of its executive employment arrangements and are intended to modernize and align the company's employment agreement framework across its executive leadership team. The Employment Agreements generally preserve executives' existing roles and compensation arrangements, except as specifically described in the updated terms, while updating the form and terms to reflect the company's current executive compensation and governance practices.

This modernization effort suggests the company undertook a comprehensive review of whether its executive arrangements remained competitive and aligned with contemporary governance standards. By standardizing the severance and change-of-control provisions across the leadership team through the new Severance Plan, Hagerty has created a unified framework rather than maintaining individual ad-hoc arrangements. The supplemental nature of the Severance Plan—which supplements but does not duplicate severance benefits under individual employment agreements—indicates the company sought to layer protections rather than create conflicts or duplication.

Impact on Investor Considerations and Future Disclosures

The adoption of the Executive Severance and Change in Control Plan and the updated employment agreements represent material corporate governance actions that may be of interest to investors evaluating executive retention and change-of-control scenarios. The enhanced severance protection for McKeel Hagerty—particularly the 200% bonus multiple and 24-month salary continuation upon a change in control—reflect the company's assessment of his value and the potential costs associated with losing continuity at the chief executive level during a strategic transaction.

Investors should note that the full text of the Severance Plan and the form of Severance Plan Participation Agreement are attached as exhibits to the company's disclosure and are incorporated by reference. The specific terms governing each executive's employment arrangements are contained in their individual Employment Agreements, details of which were partially disclosed in this announcement. The immediate share price impact was not clear from available public information at the time of filing.