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) March 3, 2010 (March 2,
2010)
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AmTrust Financial Services,
Inc.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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001-33143
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04-3106389
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(State
or other jurisdiction
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(Commission
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IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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59
Maiden Lane, 6th
Floor, New York, New York
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10038
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(Address
of principal executive offices)
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(Zip
Code)
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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):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.133-4 (c))
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ITEM
5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
(e) On
March 2, 2010, the Registrant entered into new employment agreements dated as of
March 1, 2010 with each of Ronald E. Pipoly, Jr., Registrant’s Chief Financial
Officer, Michael J. Saxon, Registrant’s Chief Operating Officer, and Christopher
M. Longo, Registrant’s Chief Information Officer. The new employment
agreements supersede all prior employment agreements between the Registrant and
each of the foregoing officers. The terms of the agreements are
described below:
1. Ronald
E. Pipoly, Jr.
Pursuant
to Mr. Pipoly’s employment agreement, he has agreed to serve as our Chief
Financial Officer. Mr. Pipoly’s term of employment under his agreement continues
until February 28, 2013, at which time the employment agreement will
automatically renew for successive one year terms, unless Mr. Pipoly or the
Registrant provides 90 days’ written notice of an intention not to renew (the
“Employment Period”). Mr. Pipoly is entitled to an annual salary review
commencing on March 1, 2011. Effective March 1, 2010, Mr. Pipoly receives an
annual base salary in the amount of $500,000. Mr. Pipoly is entitled to an
annual bonus comparable to the other senior executives of the Registrant,
subject to a cap equal to three times his then current salary. Mr. Pipoly is
also entitled to other bonus payments in the discretion of the Board of
Directors.
In the
event of disability, the Registrant may terminate Mr. Pipoly’s employment upon
five days’ written notice; however, Mr. Pipoly will be entitled to receive his
salary and any unreimbursed expenses following the disability termination date
for a period which is the greater of one year or the remainder of the Employment
Period. In the event Mr. Pipoly dies during his term of employment, his heirs
will be entitled to receive his salary following the date of death for a period
which is the greater of one year or the remainder of the Employment
Period.
The
Registrant may terminate Mr. Pipoly’s employment at any time for cause and, upon
such an event, the Registrant will have no further compensation or benefit
obligation to Mr. Pipoly after the date of termination. Cause is defined in Mr.
Pipoly’s employment agreement as (i) habitual or gross negligence in the
performance of his duties and responsibilities with the Registrant, including a
failure to perform such duties and responsibilities, provided such performance
or neglect is not corrected (assuming it is correctable) by Mr. Pipoly within
twenty (20) business days after receipt of written notice from the Registrant;
(ii) any material breach by Mr. Pipoly of the employment agreement or any other
agreement with the Registrant or any of its affiliates to which Mr. Pipoly is a
party, provided such performance or neglect is not corrected (assuming a
reasonable person would believe it is correctable) by Mr. Pipoly within twenty
(20) business days after receipt of written notice from the Registrant; (iii)
breach of a fiduciary duty to the Registrant or failure to act in the best
interests of the Registrant; (iv) the arrest (following an investigation of the
facts which results in a determination by the Registrant of Mr. Pipoly’s
culpability) of, conviction of, or admission by, Mr. Pipoly of a felony or crime
involving moral turpitude, whether or not committed in the course of performing
services for the Registrant; (v) the Commission by Mr. Pipoly of any acts of
moral turpitude, including the commission by Executive of embezzlement, theft or
any other fraudulent act; or (vi) violation of the Registrant’s policies,
provided such violation is not corrected (assuming a reasonable person would
believe it is correctable) by Mr. Pipoly within twenty (20) business days after
receipt of written notice from the Registrant.
Mr.
Pipoly has agreed to keep confidential all information regarding the Registrant
that he receives during the term of his employment and thereafter. Mr. Pipoly
has also agreed that upon termination of employment he will not compete with the
Registrant for a period of one year following the date of termination and will
not solicit any customer or employee of the Registrant or solicit any entity
that has been contacted by the Registrant regarding a possible acquisition by
the registrant for purposes of acquiring that entity, for three years after
termination.
2. Michael
J. Saxon
Pursuant
to Mr. Saxon’s employment agreement, he has agreed to serve as the Chief
Operating Officer of the Registrant. Mr. Saxon’s term of employment under this
agreement continues until February 28, 2013, at which time the employment
agreement will automatically renew for successive one year terms, unless Mr.
Saxon or the Registrant provides 90 days’ written notice of an intention not to
renew (the “Employment Period”). Mr. Saxon is entitled to an annual salary
review beginning on March 1, 2011. Effective March 1, 2010, Mr. Saxon receives
an annual base salary in the amount of $600,000. Mr. Saxon is entitled to
an annual profit bonus equal to one percent (1%) of the Registrant’s “profit”
for the fiscal year, provided that the annual profit is no less than 75% of the
profit target for that year. “Profit” as defined in the agreement as
the Company’s after-tax net income for the calendar year, excluding investment
gains and losses and extraordinary and non-recurring income, as determined in
accordance with generally accepted accounting principles on a consistent basis,
including appropriate reserves, by the Company’s independent public
accountants. The “profit target” is, for each calendar year during
the Employment Period, the greater of the profit for the preceding calendar year
and the profit of the Registrant for the annual period ended December 31,
2009. The annual profit bonus is subject to a cap, which shall be the
amount equal to (i) three times Mr. Saxon’s then current salary if the profit is
more than 110% of the profit target; (ii) two times Mr. Saxon’s then current
salary if the profit is 110% or less, but greater than 100% of the profit
target; and (iii) Mr. Saxon’s then current salary if the profit is 100% or less,
but equal to or greater than 75% of the profit target. Mr. Saxon may
also receive other bonus payments determined at the sole discretion of the Board
of Directors.
In the
event of disability, the Registrant may terminate Mr. Saxon’s employment
agreement upon five days’ written notice; however, he will be entitled to
receive his salary and any unreimbursed expenses following the disability
termination date for a period which is the greater of one year or the remainder
of the Employment Period. In the event Mr. Saxon dies during his term of
employment, his heirs shall be entitled to receive his salary and any
unreimbursed expenses from the date of his death for a period which is the
greater of one year or the remainder of the Employment Period.
The
Registrant may terminate Mr. Saxon’s employment at any time for cause and, upon
such an event, the Registrant will have no further compensation or benefit
obligation to Mr. Saxon after the date of termination. Cause is defined in Mr.
Saxon’s employment agreement as (i) habitual or gross negligence in the
performance of his duties and responsibilities with the Registrant, including a
failure to perform such duties and responsibilities, provided such performance
or neglect is not corrected (assuming it is correctable) by Mr. Saxon within
twenty (20) business days after receipt of written notice from the Registrant;
(ii) any material breach by Mr. Saxon of the employment agreement or any other
agreement with the Registrant or any of its affiliates to which Mr. Saxon is a
party, provided such performance or neglect is not corrected (assuming a
reasonable person would believe it is correctable) by Mr. Saxon within twenty
(20) business days after receipt of written notice from the Registrant; (iii)
breach of a fiduciary duty to the Registrant or failure to act in the best
interests of the Registrant; (iv) the arrest (following an investigation of the
facts which results in a determination by the Registrant of Mr. Saxon’s
culpability) of, conviction of, or admission by, Mr. Saxon of a felony or crime
involving moral turpitude, whether or not committed in the course of performing
services for the Registrant; (v) the Commission by Mr. Saxon of any acts of
moral turpitude, including the commission by Executive of embezzlement, theft or
any other fraudulent act; or (vi) violation of the Registrant’s policies,
provided such violation is not corrected (assuming a reasonable person would
believe it is correctable) by Mr. Saxon within twenty (20) business days after
receipt of written notice from the Registrant.
Mr. Saxon
has agreed to keep confidential all information regarding the Registrant that he
receives during the term of his employment and thereafter. Mr. Saxon has also
agreed that upon termination of employment he will not compete with the
Registrant for a period of one year from the date of termination and will not
solicit any customer or employee of the Registrant or solicit any entity that
has been contacted by the Registrant regarding a possible acquisition by the
Registrant for purposes of acquiring that entity, for three years after
termination.
3. Christopher
M. Longo
Pursuant
to Mr. Longo’s employment agreement, he has agreed to serve as the Chief
Information Officer of the Registrant. Mr. Longo’s term of employment under this
agreement continues until February 28, 2013, at which time the employment
agreement will automatically renew for successive one year terms, unless Mr.
Longo or the Registrant provides 90 days’ written notice of an intention not to
renew (the “Employment Period”). Mr. Longo is entitled to an annual salary
review beginning on March 1, 2011. Effective March 1, 2010, Mr. Longo receives
an annual base salary in the amount of $500,000. Mr. Longo is entitled to an
annual profit bonus equal to one percent (1%) of the Registrant’s profit for the
fiscal year, provided that the annual profit is no less than 75% of the profit
target for that year. “Profit” as defined in the agreement as the
Company’s after-tax net income for the calendar year, excluding investment gains
and losses and extraordinary and non-recurring income, as determined in
accordance with generally accepted accounting principles on a consistent basis,
including appropriate reserves, by the Company’s independent public
accountants. The “profit target” is, for each calendar year during
the Employment Period, the greater of the profit for the preceding calendar year
and the profit of the Registrant for the annual period ended December 31,
2009. The annual profit bonus is subject to a cap, which shall be the
amount equal to (i) three times Mr. Longo’s then current salary if the profit is
more than 110% of the profit target; (ii) two times Mr. Longo’s then current
salary if the profit is 110% or less, but greater than 100% of the profit
target; and (iii) Mr. Longo’s then current salary if the profit is 100% or less,
but equal to or greater than 75% of the profit target. Mr. Longo may
also receive other bonus payments determined at the sole discretion of the Board
of Directors.
In the
event of disability, the Registrant may terminate Mr. Longo’s employment
agreement upon five days’ written notice; however, he will be entitled to
receive his salary and any unreimbursed expenses following the disability
termination date for a period which is the greater of one year or the remainder
of the Employment Period. In the event Mr. Longo dies during his term of
employment, his heirs shall be entitled to receive his salary and any
unreimbursed expenses from the date of his death for a period which is the
greater of one year or the remainder of the Employment Period.
The
Registrant may terminate Mr. Longo’s employment at any time for cause and, upon
such an event, the Registrant will have no further compensation or benefit
obligation to Mr. Longo after the date of termination. Cause is defined in Mr.
Longo’s employment agreement as (i) habitual or gross negligence in the
performance of his duties and responsibilities with the Registrant, including a
failure to perform such duties and responsibilities, provided such performance
or neglect is not corrected (assuming it is correctable) by Mr. Longo within
twenty (20) business days after receipt of written notice from the Registrant;
(ii) any material breach by Mr. Longo of the employment agreement or any other
agreement with the Registrant or any of its affiliates to which Mr. Longo is a
party, provided such performance or neglect is not corrected (assuming a
reasonable person would believe it is correctable) by Mr. Longo within twenty
(20) business days after receipt of written notice from the Registrant; (iii)
breach of a fiduciary duty to the Registrant or failure to act in the best
interests of the Registrant; (iv) the arrest (following an investigation of the
facts which results in a determination by the Registrant of Mr. Longo’s
culpability) of, conviction of, or admission by, Mr. Longo of a felony or crime
involving moral turpitude, whether or not committed in the course of performing
services for the Registrant; (v) the Commission by Mr. Longo of any acts of
moral turpitude, including the commission by Executive of embezzlement, theft or
any other fraudulent act; or (vi) violation of the Registrant’s policies,
provided such violation is not corrected (assuming a reasonable person would
believe it is correctable) by Mr. Longo within twenty (20) business days after
receipt of written notice from the Registrant.
Mr. Longo
has agreed to keep confidential all information regarding the Registrant that he
receives during the term of his employment and thereafter. Mr. Longo has also
agreed that upon termination of employment he will not compete with the
Registrant for a period of one year from the date of termination and will not
solicit any customer or employee of the Registrant or solicit any entity that
has been contacted by the Registrant regarding a possible acquisition by the
Registrant for purposes of acquiring that entity, for three years after
termination.
The
preceding descriptions of the employment agreements with Messrs. Pipoly, Saxon
and Longo are qualified in their entirety by the agreements filed herewith as
Exhibit 10.1, 10.2 and 10.3, respectively.
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ITEM 9.01
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FINANCIAL STATEMENTS AND
EXHIBITS.
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Exhibit Number
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Description
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10.1
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Employment
Agreement dated March 1, 2010 – Ronald E. Piploy, Jr.
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10.2
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Employment
Agreement dated March 1, 2010 – Michael J. Saxon
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10.3
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Employment
Agreement dated March 1, 2010 – Christopher M.
Longo
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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.
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AMTRUST FINANCIAL SERVICES,
INC.
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(Registrant)
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| Date |
March
3, 2010
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/s/ Stephen B. Ungar
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Stephen
B. Ungar
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Secretary
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