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EX-10.1 - EXHIBIT 10.1 - NYMAGIC INC | c97985exv10w1.htm |
EX-99.1 - EXHIBIT 99.1 - NYMAGIC INC | c97985exv99w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 11, 2010
NYMAGIC, INC.
(Exact name of registrant as specified in its charter)
New York | 1-11238 | 13-3534162 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
919 Third Avenue, New York, New York |
10022 |
|
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (212) 551-0600
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:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
To the extent applicable, the information contained in Item 5.02 below is hereby incorporated by
reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
On March 11, 2010, A. George Kallop, the President and Chief Executive Officer of NYMAGIC, INC.
(the Company), announced that he intends to resign as an employee, officer and director
of the Company, effective April 2, 2010. On March 12, 2010, the Board of Directors of the Company
(the Board) appointed George R. Trumbull, III as Senior Executive Vice President of the
Company. In addition, the Board resolved that Mr. Trumbull will become the President and Chief
Executive Officer of the Company upon the effective time of Mr. Kallops resignation on April 2,
2010.
Mr. Trumbull, age 65, has been a director of the Company since 2002 and currently serves on the
Executive Committee and the Underwriting Committee of the Board. Mr. Trumbull was previously the
Chairman and Chief Executive Officer of the Company having been elected to those positions in May
and June 2002, respectively. He served as Chairman of the Board of Directors and Chief Executive
Officer of Encompys, Inc., a software services provider, from February 2001 until May 2002. From
September 1999 to February 2001, Mr. Trumbull was a private investor, and from May 1994 to
September 1999, he served as Chief Executive Officer of AMP Limited, an Australian insurance and
asset management company. Mr. Trumbull also served as the Non-Executive Chairman of Select
Reinsurance Ltd., a Bermuda based reinsurance company from March 2003 until December 2004.
George Trumbull Employment Arrangements
Previously, on May 21, 2008, Mr. Trumbull stepped down as Chairman of the Board. Effective as of
that date, the Company entered into a one year consulting agreement with Mr. Trumbull (the
Trumbull Consulting Agreement). Under the terms of his agreement, Mr. Trumbull
performed consulting services in the form of providing assistance to the Companys Chairman of
the Board as requested in connection with Board matters and to the President and Chief Executive
Officer of the Company as requested in connection with various issues arising in the Companys
operating and risk bearing subsidiaries. Mr. Trumbulls compensation under the Trumbull
Consulting Agreement was $100,000 per year, payable in four equal quarterly payments of $25,000
each. On May 21, 2009 the Company renewed the Trumbull Consulting Agreement, but in lieu of cash
consideration thereunder, Mr. Trumbull was awarded options to purchase 10,000 shares of the
Companys common stock (the Common Stock), under Companys Amended and Restated 2004
Long-Term Incentive Plan. These options vest on May 21, 2010, have an exercise price of $15.00
and expire on May 21, 2012. The Company was also obligated to reimburse Mr. Trumbull for all
reasonable and necessary expenses incurred in connection with the services he provides under the
Trumbull Consulting Agreement.
On March 12, 2010 the Company entered into a new employment agreement with Mr. Trumbull (the
Trumbull Employment Agreement). The Trumbull Employment Agreement, which merges into
it the services Mr. Trumbull performed under the Trumbull Consulting Agreement and ratifies the
option award granted to Mr. Trumbull under it, commenced on March 12, 2010 and will continue
until terminated. Pursuant to the Trumbull Employment Agreement, Mr. Trumbull will serve as the
Companys Senior Executive Vice President from March 12, 2010 to
April 2, 2010, and will serve as the President and Chief Executive Officer of the Company from
April 2, 2010 until the termination of the Trumbull Employment Agreement.
Mr. Trumbull will be paid $42,000 per month (the Cash Compensation) during the period
which the Trumbull Employment Agreement is in effect. As of March 12, 2010, Mr. Trumbull was
granted 20,000 restricted share units under the Companys Amended and Restated 2004 Long-Term
Incentive Plan, which will vest on the first anniversary of the grant date. Mr. Trumbull may
elect to defer receipt of these units as provided in the Trumbull Employment Agreement.
The Trumbull Employment Agreement may be terminated by the Company for any reason, with or without
cause. In the event Mr. Trumbulls engagement with the Company pursuant to the Trumbull Employment
Agreement is terminated for any reason, Mr. Trumbull shall be entitled to his Cash Compensation
through the date of such termination, and he is also eligible for a cash bonus at the sole
discretion of the Human Resources Committee of the Companys Board as well as the elimination of
any restrictions on any restricted share unit grant or deferred stock awards outstanding at the
time of his termination at the sole discretion of the Board.
During the term of the Trumbull Employment Agreement and after termination of the Trumbull
Employment Agreement, Mr. Trumbull will be subject to certain confidentiality and non-solicitation
provisions.
Mariner Partners and Mariner Voting Agreement
On February 20, 2002, certain Company shareholders entered into a voting agreement, which was
amended on March 1, 2002, January 27, 2003, March 12, 2003 and February 24, 2004, with Mariner
Partners, Inc. (Mariner) (a professional asset management company of which William J.
Michaelcheck, a member of the Companys Board, is the beneficial owner of a substantial number of
shares). This voting agreement was substantively amended and restated on October 12, 2005 and
amended again on October 15, 2008, in order to conform its embedded option with section 409H of the
Internal Revenue Code (as amended and restated, the Amended and Restated Voting
Agreement). The Amended and Restated Voting Agreement relates to approximately 15.90 % of the
Companys issued and outstanding shares of Common Stock as of
March 11, 2010. It grants Mariner
an option to purchase 1,350,000 shares of Common Stock from the participating shareholders and
entitles each party to the agreement to designate certain individuals for nomination as Directors
of the Company. The Company is not a party to the Amended and Restated Voting Agreement.
The following parties have entered into the Amended and Restated Voting Agreement: (1) Mariner; (2)
Mr. Mark W. Blackman, a member of the Companys Board and a former Executive Vice President and
Chief Underwriting Officer of the Company; (3) Lionshead Investments, LLC, of which Mr. John N.
Blackman, Jr., a member of the Companys Board from 1975 until May 2004, is a managing member; and,
(4) Mr. Robert G. Simses, the Chairman of the Companys Board, as trustee of the Louise B.
Tollefson 2000 Florida Intangible Tax Trust (2000 FITT) and the Louise B. Blackman
Tollefson Family Foundation (Foundation).
Mr. Blackman, Lionshead Investments, LLC and Mr. Robert G. Simses are referred to below as the
three Participating Shareholders under the Amended and Restated Voting Agreement. The
Participating Shareholders have agreed to certain matters as described below with respect to
225,000 shares of Common Stock held by each of Mr. Blackman and Lionshead Investments,
LLC, and 900,000 shares of Common Stock held by 2000 FITT and Foundation (the Voting
Shares).
Voting. In accordance with the Amended and Restated Voting Agreement, the Participating
Shareholders authorized Mariner, with the approval of any two of the three Participating
Shareholders, to vote all Voting Shares at all shareholder meetings and adjournments of the
meetings or on any action or approval by written consent of the Companys shareholders. If any two
of the three Participating Shareholders fail to approve a vote by Mariner on any matter, Mariner
will not vote on that matter, but (except as set forth below) Mariners failure to vote with
respect to any matter as a result of the provisions of the Amended and Restated Voting Agreement
will not entitle the Participating Shareholders to instead vote their respective Voting Shares on
that matter. However, for matters involving (1) the merger or consolidation of the Company, (2)
the sale of all or substantially all of the Companys assets, (3) the Companys dissolution and/or
liquidation and (4) any recapitalization or stock offering of the Company (each, a Significant
Event), if any two of the three Participating Shareholders fail to approve a vote by Mariner
on a Significant Event, Mariner will not vote on that matter, but Participating Shareholders may
instead vote their respective Voting Shares regarding the Significant Event.
Nominations to the Board of Directors. Under the Amended and Restated Voting Agreement,
Mariner is entitled to nominate four candidates for election to the Companys Board, Mr. Mark W.
Blackman and Lionshead Investments, LLC are each entitled to nominate one candidate, Mr. Simses is
entitled to nominate two candidates and the Chief Executive Officer of the Company is entitled to
nominate three candidates for a total of eleven nominees. Provided that they are legally qualified
to serve as Directors, Mariner is obligated to vote the Voting Shares in favor of the Participating
Shareholders nominees. At the Companys most recent Annual Meeting held on May 21, 2009, Mariner
nominated Messrs. Trumbull, Kallop, Michaelcheck and William D. Shaw, Jr.; the Participating
Shareholders nominated Messrs. John R. Anderson, Glenn Angiolillo, Robert G. Simses and Ronald J.
Artinian; and, the Chief Executive Officer nominated Messrs. John T. Baily, David E. Hoffman and
David W. Young. The Nominating Committee recommended to the Board that each of these candidates as
well as Mr. Blackman and Dennis H. Ferro be nominated for election to the Board at the Annual
Meeting, the Board nominated all of these candidates for election to the Board and all candidates
were elected by the Companys shareholders.
Option. The Amended and Restated Voting Agreement also gives Mariner the right to purchase
up to 1,350,000 shares of Common Stock from the Participating Shareholders. The option exercise
price per share is based on the date the option is exercised. At the time the voting agreement was
originally signed, the option exercise price was $19.00, with the exercise price increasing $0.25
per share every three months, subject to deduction for dividends paid. The exercise price as of
March 11, 2010 is $25.14 per share. Generally, Mariners option will expire 30 days after the
termination of the Amended and Restated Voting Agreement. However, if the Amended and Restated
Voting Agreement is terminated prior to December 31, 2010 by unanimous written notice from the
Participating Shareholders, then the option will continue in full force and effect until the close
of business on December 31, 2010.
Transferability of the Option. The option granted to Mariner is not transferable except in
certain instances, with the assignee agreeing to be bound to the Amended and Restated Voting
Agreement. Mariner is permitted to assign the option, in whole or in part, to any one or more of
Messrs. Michaelcheck, Shaw, Trumbull, and Kallop or any other individual employed by or acting as a
consultant for Mariner in connection with the Company. With the written consent of
at least two Participating Shareholders, Mariner or any assignee as described above is permitted to
assign the option, in whole or in part, to any one or more other persons.
On April 12, 2005, Mariner entered into an agreement with Mr. Trumbull pursuant to which Mariner
assigned to him beneficial ownership of an option to purchase 450,000 shares of Common Stock by
agreeing to hold a portion of the Amended and Restated Voting Agreement option covering 450,000
shares of Common Stock as nominee for Mr. Trumbull, who agreed to be bound to the terms of the
Amended and Restated Voting Agreement. On October 12, 2005 Mr. Trumbull and Mariner amended their
agreement by reducing the number of Amended and Restated Voting Agreement option shares from
450,000 to 337,500. The Company is not a party to this agreement.
In accordance with the terms of a letter agreement between Mariner and Mr. Trumbull, dated April
12, 2005 and amended on October 12, 2005, January 9, 2008 and October 15, 2008, Mr. Trumbull is
entitled to receive a portion of total fees paid by the Company to Mariner as compensation in
consideration of services provided to Mariner relating to the Company. Mr. Trumbull earned $361,117 for
services rendered to Mariner in 2009.
Item 7.01. Regulation FD Disclosure.
A copy of the Companys press release announcing Mr. Kallops announced resignation, along with the
appointment of Mr. Trumbull as Senior Executive Vice President, is attached hereto as Exhibit 99.1
and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are furnished or filed, as applicable, with this Current Report on Form 8-K:
Exhibit No. | Description | |||
10.1 | Agreement, dated March 12, 2010, between NYMAGIC, INC. and
George R. Trumbull, III. |
|||
99.1 | Press Release, dated March 12, 2010. |
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.
NYMAGIC, INC. |
||||
By: | /s/ Thomas J. Iacopelli | |||
Name: | Thomas J. Iacopelli | |||
Title: | Chief Financial Officer and Treasurer | |||
Date: March 17, 2010
EXHIBIT INDEX
Exhibit No. | Description | |||
10.1 | Agreement, dated March 12, 2010, between NYMAGIC, INC. and
George R. Trumbull, III. |
|||
99.1 | Press Release, dated March 12, 2010. |