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Form 8-K Amtrust Financial Servic For: May 20

May 21, 2015 4:17 PM EDT


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)
May 20, 2015
  
AmTrust Financial Services, Inc.
(Exact name of registrant as specified in its charter)
 

Delaware
 
001-33143
 
04-3106389
(State or other jurisdiction
 
(Commission
 
(IRS Employer
of incorporation)
 
File Number)
 
Identification No.)
 

59 Maiden Lane, 43rd Floor, New York, New York
10038
(Address of principal executive offices)
 
(Zip Code)
 


Registrant’s telephone number, including area code
(212) 220-7120

 


 
(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 (see General Instruction A.2. below):
 

 
¨
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 240.133-4 (c))
 







Item 1.01    Entry into a Material Definitive Agreement.

On May 20, 2015, AmTrust Financial Services, Inc., as Guarantor (the “Company”), and four of its wholly-owned subsidiaries, AmTrust International Insurance, Ltd., AmTrust Corporate Capital Limited, AmTrust Corporate Member Limited and AmTrust Corporate Member Two Limited, entered into an Amendment Agreement (the “Amendment”) to its Amended Facility Agreement dated November 25, 2014, with ING Bank, N.V., London Branch (“ING”) (the “Amended Facility Agreement”). The Amendment modifies the definition of “Permitted Convertible Notes” contained in the Amended Facility Agreement to incorporate the consent received from ING on December 5, 2014, which the Company requested in advance of its exchange offer to certain holders of the Company’s 5.5% Convertible Senior Notes due 2021 and the simultaneous private placement of the Company’s 2.75% Convertible Senior Notes due 2044.

The description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 5.02    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 20, 2015, the shareholders of the Company, upon the recommendation of the Company’s Board of Directors, approved the Amended and Restated AmTrust Financial Services, Inc. 2007 Executive Performance Plan (the “Executive Performance Plan”).

The Executive Performance Plan is a cash incentive plan that was adopted to help the Company increase shareholder value and the success of the Company by motivating participating key executives to perform to the best of their abilities and to achieve objectives by providing for incentive awards intended to qualify as tax-deductible “performance-based” compensation for purposes of Section 162(m) of the Internal Revenue Code. The Executive Performance Plan was amended and restated in order to (i) provide for a consistent maximum incentive payment amount for all participants, and (ii) provide greater flexibility to the Compensation Committee (a) to select from additional performance objectives for incentive award opportunities, (b) to exercise negative discretion to reduce incentive awards otherwise earned, and (c) to further amend the Executive Performance Plan. As amended and restated, the Executive Performance Plan also includes a provision for forfeiture and recoupment of incentives pursuant to any applicable compensation recovery policy the Company may adopt.  

The Executive Performance Plan is administered by the Compensation Committee of the Company’s Board of Directors (or a subcommittee thereof), which has authority, among other things, to (i) determine which eligible executive officers and other employees will be participants, (ii) establish the performance objectives with respect to any awards made under the Executive Performance Plan, and (iii) establish the amount compensation payable to any participant and the other terms and conditions of awards, subject to the limitations set forth in the Executive Performance Plan.

The maximum award payable under the Executive Performance Plan to any one participant for any one performance period will not exceed $6 million. Payment of any awards under the Executive Performance Plan will be conditioned upon achievement of objective performance goals based upon one or more of the objectively measured financial and operational criteria specified in the Executive Performance Plan, as determined by the Compensation Committee.

The description of the Executive Performance Plan is qualified in its entirety by reference to the full text of the plan, which is included as Appendix A to the Company’s definitive proxy statement on Schedule 14A filed on March 31, 2015 and incorporated herein by reference.

Item 5.07
Submission of Matters to a Vote of Security Holders.

The Company held its 2015 Annual Meeting of Shareholders on May 20, 2015. The certified results of the matters voted upon at the meeting, which are more fully described in the Company’s proxy statement, are as follows:












Description of Matters Submitted
                        
    
1.
Election of Directors:
 
 
 
 
 
 
 
For
 
Withheld
 
 
 
Donald T. DeCarlo
54,305,034

 
11,703,318

 
 
 
Susan C. Fisch
65,391,708

 
616,644

 
 
 
Abraham Gulkowitz
63,879,016

 
2,129,336

 
 
 
George Karfunkel
64,611,014

 
1,397,338

 
 
 
Michael Karfunkel
51,689,852

 
14,318,500

 
 
 
Jay J. Miller
53,864,886

 
12,143,466

 
 
 
Barry D. Zyskind
64,984,912

 
1,023,440

 
 
 
 
 
 
 
 
 
 
 
For
 
Against
 
Abstain
2.
Approval of the Amended and Restated AmTrust Financial Services, Inc. 2007 Executive Performance Plan
58,382,856

 
7,504,337

 
121,159


Item 9.01    Exhibits.

(d)
Exhibits.

Exhibit No.
 
Description
 
 
 
10.1
 
Amendment, dated May 20, 2015, to the Amending and Restating Agreement, dated November 25, 2014, among AmTrust Corporate Capital Limited, AmTrust Corporate Member Limited, AmTrust Corporate Member Two Limited, AmTrust International Insurance, Ltd., AmTrust Financial Services, Inc., and ING Bank N.V., London Branch, as the Original Bank, Agent, Issuing Bank and Security Trustee.
10.2
 
Amended and Restated AmTrust Financial Services, Inc. 2007 Executive Performance Plan (incorporated by reference to Appendix A to the Company’s definitive proxy statement on Schedule 14A filed on March 31, 2015).







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. 
 

 
AmTrust Financial Services, Inc.
 
(Registrant)
 

Date
May 21, 2015
 

 
/s/ Stephen Ungar
 
Stephen Ungar
 
SVP, General Counsel and Secretary
 


Exhibit 10.1

AmTrust Corporate Capital Limited
AmTrust Corporate Member Limited
AmTrust Corporate Member Two Limited
as Corporate Members

and

AmTrust International Insurance, Ltd.
as Account Party

and

AmTrust Financial Services, Inc.
as Guarantor

and

The Banks and Financial Institutions
Listed in Schedule 1 of the Amended Facility Agreement
as Original Banks

and

ING BANK N.V., LONDON BRANCH
as Agent

and

ING BANK N.V., LONDON BRANCH
as Issuing Bank

and

ING BANK N.V., LONDON BRANCH
as Security Trustee


Amendment Agreement
relating to a Credit Facility Agreement


Execution Version




Contents
1    Definitions and construction    1
2    Amendments to the Amended Facility Agreement    2
3    Representations and warranties    2
4    Continuity and further assurance    2
5    Amendments    3
6    Transfers    3
7    Incorporation of terms    3
8    Finance Document    3
9    Governing law    3































    



 
i




This Agreement dated     20 May 2015 is made
Between:
(1)
AmTrust Corporate Capital Limited, a company incorporated in England under registered number 08128684 whose registered office is at 2 Minster Court, Mincing Lane, London EC3R 7BB (ACCL);
(2)
AmTrust Corporate Member Limited, a company incorporated in England under registered number 03621278 whose registered office is at 1 Great Tower Street, London EC3R 5AA (ACML);
(3)
AmTrust Corporate Member Two Limited, a company incorporated in England under registered number 05264527 whose registered office is at 1 Great Tower Street, London EC3R 5AA (ACM2L);
(4)
AmTrust International Insurance, Ltd., a company incorporated in Bermuda under registered number 9551 whose registered office is at 7 Reid Street, Suite 400, Hamilton HM11, Bermuda (the Account Party);
(5)
AmTrust Financial Services, Inc., a corporation organised under the laws of Delaware whose registered office is at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808 (the Guarantor);
(6)
The Banks and Financial Institutions Listed In Schedule 1 of the Amended Facility Agreement (the Original Banks);
(7)
ING Bank N.V., London Branch (the Agent);
(8)
ING Bank N.V., London Branch (the Issuing Bank); and
(9)
ING Bank N.V., London Branch (the Security Trustee).
Recitals
(A)
Under the Amended Facility Agreement, the Banks (as defined therein) have made available to the Account Party, subject as provided therein, a letter of credit facility of up to £235,000,000 (or equivalent in other eligible currencies):
(i)
to provide Funds at Lloyd's on behalf of ACCL to support its underwriting at Lloyd's as a member of Syndicate 2526 as constituted for the 2015 and all prior open years of account;

(ii)
to provide Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of Syndicate 1206 as constituted for the 2015 and all prior open years of account; and

(iii)
to provide Funds at Lloyd's on behalf of ACM2L to support its underwriting at Lloyd's as a member of Syndicate 44 as constituted for the 2015 and all prior open years of account.

(B)
The parties hereto have agreed to amend the Amended Facility Agreement on the terms of this Agreement.
It is agreed as follows:
1    Definitions and construction
1.1    Definitions
Words and expressions defined in the Amended Facility Agreement, as amended by this Agreement, shall have the same meanings in this Agreement. In addition in this Agreement, unless the context otherwise requires, the following definitions apply:
Amended Facility Agreement means the letter of credit facility agreement dated 26 November 2013 as amended and restated on 25 November 2014 between ACCL, the Account Party, the Guarantor, and ING Bank N.V., London Branch, and as acceded to by ACML and ACM2L.
1.2    Interpretation

 
1




The principles of construction set out in clause 1.2 (Interpretation) of the Amended Facility Agreement shall apply to this Agreement, insofar as they are relevant to it, as they apply to the Amended Facility Agreement.
1.3    Miscellaneous
The provisions of clauses 1.3 to 1.9 of the Amended Facility Agreement shall apply to this Agreement as if references therein to "this Agreement" were references to this Agreement.
2    Amendments to the Amended Facility Agreement
With effect on and from the date of this Agreement, the Amended Facility Agreement shall be amended as follows:
2.1    A new definition of "Amendment Agreement" shall be inserted as follows:
""Amendment Agreement" means the amendment agreement dated 20 May 2015 between the parties to this Agreement pursuant to which the terms of this Agreement were amended."
2.2
Part (d) of the definition of "Permitted Convertible Notes" shall be deleted in its entirety and replaced with the following:

"(d)    the aggregate principal amount of Indebtedness permitted to be issued or     incurred under this definition shall not exceed $280,000,000 at any time outstanding."
2.3    A new definition of "First Amendment Date" shall be inserted as follows:
""First Amendment Date" means the date of the Amendment Agreement"."
2.4
From the First Amendment Date, any reference in any Finance Document to the Amended Facility Agreement shall be read and construed for all purposes as a reference to the Amended Facility Agreement as amended by this Agreement.
3    Representations and warranties
3.1
Subject to Clause 3.2, each Obligor represents and warrants that each of the representations and warranties set out in clauses 12.2 to 12.33 of the Amended Facility Agreement, construed as if references therein to "this Agreement" were references to this Agreement, is true and correct in all material respects (or, to the extent any such representation or warranty is qualified as to "material", "Material Adverse Change" or similar wording, in all respects) as at the date of this Agreement.
3.2
Each Obligor gives each representation and warranty under Clause 3.1 in respect of itself only, and only to the extent that the terms of the relevant clause make the relevant clause applicable in respect of it.
4    Continuity and further assurance
4.1    Continuing obligations
The rights and obligations of the parties under the Amended Facility Agreement and the other Finance Documents shall continue in full force and effect, uninterrupted by the amendment hereunder, save insofar as they are amended hereby. Each Obligor that has granted Security pursuant to the Security Documents confirms that the Security created by the relevant Security Documents shall continue fully to secure the obligations of the relevant Obligors under the Amended Facility Agreement notwithstanding the extension of its purpose and the amendment of its provisions.


4.2    Actions already taken

 
2




Any action already taken and any payment already made by a party under the Amended Facility Agreement prior to the date of this Agreement shall be treated as having been taken or made notwithstanding the amendment hereby, and shall not be required to be taken or made again by reason of the amendment hereby.
4.3    Further assurance
Each of the parties shall do all acts and things necessary to give effect to the amendments effected or to be effected pursuant hereto.
5    Amendments
The parties may agree to further amendments to the Amended Facility Agreement in accordance with the terms thereof without being required to amend or terminate this Agreement.
6    Transfers
Any transfer or assignment made in accordance with the terms of the Amended Facility Agreement shall have the same effect in relation to the rights and obligations of the parties under this Agreement as it has in relation to their rights and obligations under the Amended Facility Agreement.
7    Incorporation of terms
The provisions of clauses 17.5 (Indemnity against costs), 31 (Miscellaneous), 34 (Notices) and 35.2 to 35.7 (Applicable Law and Jurisdiction) of the Amended Facility Agreement shall be incorporated into this Agreement as if set out herein and as if references therein to "this Agreement" were references to this Agreement.
8    Finance Document
This Agreement is designated by the Agent and the Account Party as a Finance Document.
9    Governing law
This Agreement and any contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
AS WITNESS the hands of the duly authorised representatives of the parties hereto the day and year first before written.

 
3





Execution pages
ACCL
Signed for and on behalf of
AmTrust Corporate Capital Limited
)
)



sign here: /s/ Jeremy Cadle
 
 

print name: Jeremy Cadle
 
 
 
 
 
job title: Director

ACML
Signed for and on behalf of
AmTrust Corporate Member Limited
)
)



sign here: /s/ Jeremy Cadle
 
 

print name: Jeremy Cadle
 
 
 
 
 
job title: Director

ACM2L
Signed for and on behalf of
AmTrust Corporate Member Two Limited
)
)
)



sign here: /s/ Jeremy Cadle
 
 

print name: Jeremy Cadle
 
 
 
 
 
job title: Director

Account Party
Signed for and on behalf of
AmTrust International Insurance, Ltd.
)
)



sign here: /s/ Stephen Ungar
 
 

print name: Stephen Ungar
 
 
 
 
 
job title: Secretary

Guarantor
Signed for and on behalf of
AmTrust Financial Services, Inc.
)
)



sign here: /s/ Harry Schlachter
 
 

print name: Harry Schlachter
 
 
 
 
 
job title: Senior Vice President, Treasurer

 
4




Original Banks
Signed for and on behalf of
ING Bank N.V., London Branch
)
)



sign here: /s/ Mariette Groen
 
 

print name: Mariette Groen
 
 
 
 
 
job title: Director
 
 
 
 
 
 
 
 

sign here: /s/ Mike Sharman
 
 

print name: Mike Sharman
 
 
 
 
 
job title: Managing Director



Agent
Signed for and on behalf of
ING Bank N.V., London Branch
)
)



sign here: /s/ Mariette Groen
 
 

print name: Mariette Groen
 
 
 
 
 
job title: Director
 
 
 
 
 
 
 
 

sign here: /s/ Mike Sharman
 
 

print name: Mike Sharman
 
 
 
 
 
job title: Managing Director


 
5





Issuing Bank
Signed for and on behalf of
ING Bank N.V., London Branch
)
)



sign here: /s/ Mariette Groen
 
 

print name: Mariette Groen
 
 
 
 
 
job title: Director
 
 
 
 
 
sign here: /s/ Mike Sharman
 
 
print name: Mike Sharman
 
 
 
 
job title: Managing Director
Security Trustee
Signed for and on behalf of
ING Bank N.V., London Branch
)
)



sign here: /s/ Mariette Groen
 
 

print name: Mariette Groen
 
 
 
 
 
job title: Director
 
 
 
 
 
sign here: /s/ Mike Sharman
 
 
print name: Mike Sharman
 
 
 
 
 
job title: Managing Director


 
6



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