UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 10, 2011
Affirmative Insurance Holdings, Inc.
(Exact name of Registrant as Specified in its Charter)
Delaware | 000-50795 | 75-2770432 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
4450 Sojourn Drive, Suite 500, Addison, Texas | 75001 | |||
(Address of principal executive offices) | Zip Code |
Registrants telephone, including area code: (972) 728-6300
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)) |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Restricted Stock Award Repurchase Agreement.
On August 10, 2011, the Compensation Committee of the Registrants Board of Directors approved the Companys offer to repurchase at par value all shares of restricted Common Stock previously granted by the Registrant to six employee grantees on March 18, 2011. In connection therewith, the Registrants Compensation Committee approved a form of restricted stock repurchase agreement (the Stock Repurchase Agreement) to be offered to each individual grantee in connection with the proposed repurchase transactions.
On August 10, 2011 each individual grantee accepted the Companys offer to repurchase the restricted shares granted on March 18, 2011 by executing a Stock Repurchase Agreement. All of the shares were issued to the individual grantees on a restricted basis, subject to certain time and performance vesting criteria as set forth in separate restricted stock award agreements with each individual grantee. The purchase price for the shares being repurchased from each grantee by the Registrant is $0.01 per share (which is the par value per share of the Registrants Common Stock). Through the August 10, 2011 date of repurchase, none of the restricted shares being repurchased from any grantee had vested on either a time or performance basis, and no dividends had accrued with respect to any of those shares.
As part of the March 18, 2011 restricted stock grants, each grantee executed an irrevocable voting proxy in favor of New Affirmative LLC (NAL), wherein each grantee assigned NAL the grantees right to vote all of the shares of restricted stock until the proxy terminated on the terms and conditions set forth therein. Thus, as a consequence of the instant repurchase by the Registrant, NALs rights to vote any such shares of restricted stock have effectively terminated as of August 10, 2011, at which time those shares ceased to be considered outstanding for voting purposes.
Restricted Share Repurchases from Certain Officers. On August 10, 2011, the Compensation Committee of the Registrants Board of Directors approved the following restricted stock repurchases from Gary Y. Kusumi, the Registrants principal executive officer, Michael J. McClure, the Registrants principal financial officer, and Robert A. Bondi, the Registrants other named executive officer:
Name and Position | Number of Restricted Shares Issued |
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Gary Y. Kusumi, Chief Executive Officer | 210,000 | |||
Michael J. McClure, EVP & Chief Financial Officer | 57,750 | |||
Robert A. Bondi, EVP & President Retail Agency Group | 58,500 |
All of the foregoing shares of restricted stock were repurchased in accordance with the terms and conditions set forth in the Stock Repurchase Agreement, as evidenced by the Registrant and each of Messrs. Kusumi, McClure and Bondi in separate Restricted Stock Award Agreements, the form of which is filed to this Form 8-K as Exhibit 10.1. In all cases, the foregoing Stock Repurchase Agreements provide for, among other things, an effective repurchase date of August 10, 2011.
The descriptions of the terms of the form of Stock Purchase Agreement as set forth herein do not purport to be complete and are qualified in their entirety by reference to the full text thereof, including exhibits, a copy of which being herewith filed as Exhibit 10.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
Description of Exhibit | |
10.1 | Form of Restricted Stock Repurchase Agreement |
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are identified by use of terms such as may, will, should, plan, expect, anticipate, estimate and similar words, although some forward-looking statements are expressed differently. Forward-looking statements represent our managements judgment regarding future events. Although the Registrant believes that the expectations reflected in such forward-looking statements are reasonable, the Registrant can give no assurance that such expectations will prove to be correct. All statements other than statements of historical fact included in this Current Report on Form 8-K are forward-looking statements. The Registrant cannot guarantee the accuracy of the forward-looking statements, and the Registrants actual results could differ materially from those contained any forward-looking statements due to a number of factors, including the statements under the heading Risk Factors contained in the Registrants filings with the Securities and Exchange Commission. Accordingly, such forward-looking statements are subject to a number of risks and uncertainties and may cause actual results to differ materially from the Registrants expressed expectations.
SIGNATURE
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.
AFFIRMATIVE INSURANCE HOLDINGS, INC. | ||||
By: | /s/ Joseph G. Fisher | |||
Date: August 15, 2011 | Name: Joseph G. Fisher | |||
Title: Executive Vice President, General Counsel and Secretary |
Exhibit 10.1
STOCK REPURCHASE AGREEMENT
This Stock Repurchase Agreement (the Agreement) is entered into as of this day of August, 2011, by and between Affirmative Insurance Holdings, Inc., a Delaware corporation, with one of its principal places of business located at 4450 Sojourn Drive, Addison, Texas 75001 (the Company), and the undersigned stockholder of the Company (Stockholder).
Recitals:
WHEREAS, on March 18, 2011, Stockholder and the Company entered into a Restricted Stock Award Agreement (RSAA) (a true and correct copy of which is attached hereto), whereby the Company granted an award of Thousand ( ) shares of the Companys $0.01 par value per share Common Stock to Stockholder, subject to certain restrictions, including restrictions on time and performance vesting and dividend rights (the Restricted Shares); and
WHEREAS, after due consideration by both Stockholder and the Company, the parties hereto have agreed that the Company will repurchase all of the Restricted Shares from Stockholder upon the terms and subject to the conditions set forth in this Agreement.
Agreement:
NOW, THEREFORE, in consideration of the premises and the benefits to be received by each of the parties, as well as the covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Repurchase of Restricted Shares. On the terms and subject to the conditions set forth in this Agreement, the Company agrees to purchase from Stockholder and Stockholder agrees to sell, transfer, convey and deliver to the Company all of his right, title and interest in and to all of his Restricted Shares at the stated price of one cent ($0.01) per share (the par value per share of the Companys Common Stock).
2. Payment for Restricted Shares. The total purchase price for the shares of Restricted Shares shall be dollars ($ ) (the Purchase Price). Upon receipt of the Purchase Price, Stockholder irrevocably appoints any officer of the Company as his attorney-in-fact to take possession of the Restricted Shares and reflect the Companys ownership of the same on the books of the Company.
3. Ownership. Subject to the vesting and other restrictions otherwise set forth in the RSAA, Stockholder represents and warrants that he is the owner of record of all right, title and interest in and to the Restricted Shares.
4. Corporate Good Standing. The Company represents and warrants that the Company is a corporation, duly organized, validly existing, and in good standing under the laws of the State of Delaware.
5. Authority/Binding Effect. Stockholder and the Company each have the requisite power and authority, corporate or otherwise, to execute and deliver this Agreement, to perform their respective obligations under this Agreement and to consummate the transaction contemplated hereby. All requisite action, corporate or otherwise, has been taken to authorize the execution, delivery and performance by
Stockholder and the Company of this Agreement and the consummation of the transaction contemplated hereby, and, with respect to the Company, no other proceedings on the part of the Company are necessary to authorize the execution, delivery and performance of this Agreement and the consummation of the transaction contemplated hereby. This Agreement has been duly executed and delivered by both the Stockholder and the Company and constitutes the legal, valid and binding obligations of Stockholder and the Company, enforceable against Stockholder and the Company in accordance with its terms. Stockholder specifically authorizes the Companys stock transfer agent to remit any certificate(s) representing the Restricted Stock to the Company or, in the alternative, to update its electronic books and records to reflect the instant share repurchase by the Company. Stockholder further specifically acknowledges and agrees that Stockholder: (a) has been afforded ample time and opportunity to review the terms of this Agreement; (b) understands the terms and conditions set forth in this Agreement; and (c) has been afforded sufficient time and opportunity to consult with his personal attorney(s), accountant(s) and/or other professionals regarding the terms of this Agreement before signing the same and becoming a party hereto.
6. No Conflicts; Consents. The execution, delivery and performance by Stockholder and the Company of this Agreement, and the consummation of the transaction contemplated hereby do not: (a) with respect to the Company, conflict with or result in a violation or breach of, or default under, any provision of the Companys organizational documents; or (b) conflict with or result in a violation or breach of any provision of any law or governmental order applicable to Stockholder or the Company. No consent, approval, permit, governmental order, declaration or filing with, or notice to, any governmental authority is required by or with respect to Stockholder or the Company in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (except for any filings that may be required by the U.S. Securities and Exchange Commission as a result of obligations under Section 13 or Section 16 of the Securities Exchange Act of 1934, as amended (the Exchange Act)) .
7. Further Assurances. Each party hereto shall use its commercially reasonable efforts to execute all documents necessary or desirable to effect the transaction contemplated hereunder, including but not limited to any ancillary notices with respect to the revocation/termination of the irrevocable proxy granted by Stockholder to New Affirmative LLC in connection with the original issuance of his Restricted Shares in March 2011, as well as any documentation required as may be required by the Companys transfer agent to verify and/or otherwise document the transaction set forth in this Agreement.
8. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.
9. Entire Agreement, Amendment. This Agreement constitutes the entire agreement between the Company and Stockholder with respect to the transaction contemplated hereby, supersedes all prior or contemporaneous negotiations, communications, discussions and correspondence concerning the subject matter hereof, and may be amended or modified only with the written consent of the Company and Stockholder.
10. Severability. If any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or any remaining provisions of this Agreement.
11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to its conflict of law principles. If any provision of this Agreement is determined by a court of law to be illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.
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12. Counterparts. This Agreement may be executed in separate counterparts, either of which, when so executed, shall be deemed to be an original and both of which, when taken together, shall constitute but one and the same agreement. Signatures of the parties transmitted by facsimile or .pdf shall be deemed to be their originals for all purposes.
13. Recitals. The recitals of this Agreement are hereby incorporated into the body of this Agreement by reference.
WITH THE INTENT TO BE LEGALLY BOUND HEREBY, the above terms and conditions are hereby agreed to and accepted as of the day and year first written above.
AFFIRMATIVE INSURANCE HOLDINGS, INC. |
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By: |
Title: |
STOCKHOLDER |
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Name: |
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