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 25, 2006 |
United America Indemnity, Ltd.
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(Exact name of registrant as specified in its charter)
| Cayman Islands | 000-50511 | 98-0417107 |
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(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
| of incorporation) | File Number) | Identification No.) |
| Walker House, 87 Mary Street, P.O. Box 908GT, Cayman Islands, Cayman Islands | None | |
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(Address of principal executive offices) |
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(Zip Code) |
| Registrant’s telephone number, including area code: | (345) 949-0100 |
Not Applicable
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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:
[ ] 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 1.01 Entry into a Material Definitive Agreement.
1) Amendment No. 3 to the United America Indemnity, Ltd. Share Incentive Plan
On May 25, 2006, the Company’s shareholders approved Amendment No. 3 ("Amendment No. 3") to the United America Indemnity, Ltd. Share Incentive Plan (the "Share Plan"), effective as of March 31, 2006. The following description of Amendment No. 3 is qualified in its entirety by reference to the terms of such Amendment No. 3 and the Share Plan (as previously amended), which are incorporated by reference to Exhibit 10.1 of this Form 8-K, Appendix A of the Company's Proxy Statement filed with the Securities and Exchange Commission ("SEC") on April 4, 2005 ("2005 Proxy Statement"), and Appendix C of the Company’s Proxy Statement filed with the SEC on April 12, 2004, respectively.
Amendment No. 3 adds to the performance criteria pursuant to which equity awards may be granted, become vested, or otherwise are awarded, a new performance criterion regarding the achievement of certain targets with respect to book value, assets or liabilities. Amendment No. 3 also makes certain technical changes.
2) Amendment No. 1 to the Amended and Restated United America Indemnity, Ltd. Annual Incentive Awards Program
On May 25, 2006, the Company's shareholders approved Amendment No. 1 ("Amendment No. 1") to the Amended and Restated United America Indemnity, Ltd. Annual Incentive Awards Program (the "Program"), effective March 31, 2006. The following description of Amendment No. 1 is qualified in its entirety by reference to the terms of such Amendment No. 1 and the Program, which are incorporated by reference to Exhibit 10.2 of this Form 8-K and Appendix B of Company’s 2005 Proxy Statement, respectively.
Amendment No. 1 adds to the performance criteria pursuant to which cash awards under the Program may be made, a new performance criterion regarding the achievement of certain targets with respect to book value, assets or liabilities.
3) Amendment No. 1 to the Management Agreement
On May 25, 2006, the Company, Fox Paine & Company, LLC ("Fox Paine") and Wind River Holdings, L.P, formerly The AMC Group, L.P. ("Wind River"), entered into Amendment No. 1 (the "Amendment") to the Management Agreement (the "Agreement"). The following description of the Amendment is qualified in its entirety by reference to the terms of such Amendment and the Agreement, which are incorporated by reference to Exhibit 10.3 of this Form 8-K and Exhibit 10.3 of Amendment No. 1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-108857) filed on October 28, 2003, respectively.
The Amendment terminates Wind River’s services as of May 25, 2006, and provides that Wind River shall refund to the Company the sum of $35,134, as a net repayment of the Annual Service Fee paid by the Company to Wind River on November 2, 2005. Furthermore, the Amendment modifies the Agreement to reflect the Company’s new 6.22% Guaranteed Senior Notes, as opposed the previously referenced Wind River 5% Senior Notes, which were paid off by the Company in 2005.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
10.1 Amendment No. 3 to United America Indemnity, Ltd. Share Incentive Plan
10.2 Amendment No. 1 to United America Indemnity, Ltd. Annual Incentive Awards Program
10.3 Amendment No. 1 to Management Agreement
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.
| United America Indemnity, Ltd. | ||||
| June 1, 2006 | By: |
Garland Pezzuolo
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| Name: Garland Pezzuolo | ||||
| Title: General Counsel | ||||
Exhibit Index
Exhibit No.
Description
Amendment No. 3 to United America Indemnity, Ltd. Share Incentive Plan
Amendment No. 1 to United America Indemnity, Ltd. Annual Incentive Awards Program
Amendment No. 1 to Management Agreement
AMENDMENT NO. 3
UNITED AMERICA INDEMNITY, LTD. SHARE INCENTIVE PLAN
This AMENDMENT No. 3 (the “Amendment”) dated 31 March 2006 amends the terms and conditions of the United America Indemnity, Ltd. Share Incentive Plan dated 5 September 2003, as amended (the “Plan”).
WHEREAS, the Directors of United America Indemnity, Ltd., an exempted company incorporated with limited liability under the law of the Cayman Islands, desire to effect the revisions to the Plan set forth herein effective the date hereof.
NOW THEREFORE, the Plan is amended as follows:
1. As defined in Section 1 of the Plan, the “Plan” shall mean the United America Indemnity, Ltd. Share Incentive Plan.
2. The first sentence of the second paragraph of Section 3 of the Plan is hereby amended by deleting the word “cancelled” and inserting in its place the phrase “forfeited to the Company.”
3. The following shall be added to the various “Performance Criteria” listed in Appendix A of the Plan as a new subclause (xii):
“achievement of certain targets with respect to the Company’s book value, assets or liabilities”
AMENDMENT NO. 1
2005 UNITED AMERICA INDEMNITY, LTD. ANNUAL INCENTIVE AWARDS PROGRAM
This AMENDMENT No. 1 (the “Amendment”) dated 31 March 2006 amends the terms and conditions of the United America Indemnity, Ltd. Annual Incentive Awards Program (the “Program”).
WHEREAS, the Directors of United America Indemnity, Ltd., an exempted company incorporated with limited liability under the law of the Cayman Islands, desire to effect the revisions to the Program set forth herein effective the date hereof.
NOW THEREFORE, the Program is amended as follows:
1. The following shall be added to the “Performance Criteria” listed in Appendix A of the Program as a new subclause (xiii):
“achievement of certain targets with respect to the Company’s book value, assets or liabilities”
FOX PAINE & COMPANY, LLC
950 Tower Lane
Suite 1150
Foster City, California 94404
WIND RIVER HOLDINGS, L.P.
555 Croton Road, Suite 300
King of Prussia, Pennsylvania 19406
May 25, 2006
United America Indemnity, Ltd
c/o United America Indemnity Group, Inc.
Three Bala Plaza, East
Suite 605
Bala Cynwyd, Pennsylvania 19004
Re: Amendment No. 1 to Management Agreement
Ladies and Gentlemen:
We refer to the Management Agreement, dated as of September 5, 2003, by and among United America Indemnity, Ltd., formerly Vigilant International, Ltd., an exempted company formed with limited liability under the laws of the Cayman Island (the “Company”), Fox Paine & Company, LLC, a Delaware limited liability company (“Fox Paine”) and Wind River Holdings, L.P., formerly The AMC Group, L.P., a Pennsylvania limited partnership (“Wind River”), whereby the Company contracted for certain services from each of Fox Paine and Wind River (the “Agreement”). Whereas the Company, Fox Paine and Wind River have agreed to amend the Agreement as set forth herein. Capitalized terms used herein, but not otherwise defined shall have the meanings ascribed to them in the Agreement.
The Company and Wind River hereby agree to terminate Wind River’s services as of the date hereof. Wind River agrees to refund to the Company, within seven days of the date hereof, $35,134, as a net repayment of the Annual Service Fee paid to it by the Company on November 2, 2005. Such repayment represents the pro rata repayment of the current year’s Annual Service Fee, which has not been earned as of this date by Wind River.
In connection with the ongoing operations of the Company, the Company agrees to pay Fox Paine, an annual fee equal to $1,500,000 (the “Annual Service Fee”), as compensation for Fox Paine’s ongoing provision of certain financial and strategic consulting, advisory and other services to the Company and its affiliates (collectively, the “Services”).
The Annual Service Fee with respect to each twelve month period beginning on September 5 of each year shall continue to be billed to the Company by Fox Paine and continue to be payable on or before November 1 of such year (each, a “Payment Date”). Such Annual Service Fee shall continue and be payable until the earlier of (i) such time as the Funds no longer hold an indirect equity investment in the Company and (2) such time Fox Paine and the Company agree in writing to modify or terminate the arrangements contemplated hereby. Notwithstanding the foregoing, no Annual Service Fee payable in respect of any year shall be paid on an applicable Payment Date if United America Indemnity Group, Inc. (“UAIG”) and the Company, as guarantor, fails to make payment in full on any amounts due on the 6.22% Guaranteed Senior Notes due 2015 (the “Senior Notes”). Any Annual Services Fees not paid as a result of the preceding sentence, together with interest thereon accruing from the applicable Payment Date at the Prime Rate from time to time announced by Citibank, N.A., shall be deferred and shall be payable from time to time in accordance with the following sentence. Such deferred Annual Services Fee shall be paid at such times as UAIG and/or the Company makes payment in full, inclusive of any late payment charges and/or fees on the Senior Notes.
The parties hereto continue to agree that the indemnification letter, dated as September 5, 2003 (the “Indemnification Letter”), shall continue to survive this Amendment with respect to Wind River, and otherwise shall continue to survive the termination, expiration or assignment of the Agreement.
Except as expressly amended, modified and supplement herein, all other provisions of the Agreement shall remain in full force and effect.
Please confirm that the foregoing is in accordance with your understanding and agreement with Fox Paine and Wind River by signing a copy of this letter agreement in the space provided below.
Very truly yours,
FOX PAINE & COMPANY, LLC
By:
/s/ Troy W. Thacker
Name: Troy W. Thacker
Title: Managing Director
WIND RIVER HOLDINGS, L.P.
By: The AMC Group, LLC, its general partner
By:
/s/ Barry S. Swirsky
Name: Barry S. Swirsky
Title: General Counsel
ACCEPTED AND AGREED AS OF
THE DATE FIRST ABOVE WRITTEN:
UNITED AMERICA INDEMNITY, LTD.
By:
/s/ Joseph F. Morris
Name: Joseph F. Morris
Title: President