Specialty Underwriters Alliance, Inc. - Current report filing (8-K)
October 02 2007 - 1:52PM
Edgar (US Regulatory)
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
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Date of Report (Date of Earliest Event Reported):
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October 1, 2007
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Specialty Underwriters' Alliance, Inc.
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(Exact name of registrant as specified in its charter)
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Delaware
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000-50891
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20-0432760
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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222 South Riverside Plaza, Chicago, Illinois
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60606
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code:
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(888) 782-4672
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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.
On October 1, 2007, Specialty Underwriters’ Alliance, Inc. (the "Company") entered into a new partner agent contract (the "Partner Agent Agreement") with First Light Program Managers, Inc. ("First Light") to provide commercial general liability, commercial automobile and physical damage to selected classes within the trucking industry in the southeastern region.
Pursuant to the terms of the Partner Agent Agreement, the Company has appointed First Light as its exclusive partner agent for the next five years with respect to the type of insurance described in the preceding paragraph. Generally, First Light may only offer other companies’ products if the Company declines to offer coverage to a prospective insured. The Company has no obligation to accept business that does not meet its guidelines. First Light will have the right to terminate its relationship with the Company on 180 days’ notice, and the Company has the right to terminate its relationship with First Light for material breach of the Partner Agent Agreement, insolvency, or failure to maintain appropriate licenses. The Company also may terminate First Light if it is acquired by a third party, but cannot restrict the acquisition of First Light. In addition, the Company can terminate its relationship with First Light if First Light does not meet certain profitability and production guidelines under the Partner Agent Agreement. Upon termination, at Company’s discretion, First Light must service its existing business until it is terminated. At such point, First Light is allowed to place such business with other insurers. In the event, in the first five years of the Partner Agent Agreement, that the program and contract are terminated, for any reason, the Company will perform a final calculation to project future payout loss patterns and make a final payment of the outstanding profit commissions. If, after five years, the Partner Agent Agreement is terminated, for any reason, the profit sharing calculations will be performed annually until all payout periods and earned profit sharing periods are satisfied.
Under a separate agreement (the "Purchase Agreement"), First Light will purchase shares of the Company’s non-voting Class B common stock (the "Class B Shares"). The Class B Shares will become exchangeable, one-for-one with the Company’s common stock, five years after the effective date of the Partner Agent Agreement, as long as the Partner Agent Agreement is still in force. These Class B Shares will be subject to substantial restrictions on transferability during such period. If the Partner Agent Agreement is terminated prior to five years after the effective date of the Partner Agent Agreement, the Company may repurchase at the lower of cost or fair market value First Light’s Class B Shares. If the Partner Agent Agreement is terminated after five years, the Company may repurchase First Light’s Class B Shares at fair market value. After five years, First Light will be required to hold Class B Shares worth at least 50% of its aggregate investment commitment in the Company’s Class B Shares.
Item 3.02 Unregistered Sales of Equity Securities.
Pursuant to the Purchase Agreement, First Light will purchase $1 million of the Company’s Class B Shares. The aggregate purchase price will be paid in installments over a maximum of 9 months from the date of the Purchase Agreement, with the number of Class B Shares to be delivered at each installment determined by the market price of the Company’s common stock as of the date of payment. The sale of the Class B Shares pursuant to the Purchase Agreement was made in reliance on the exemption from the registration requirements of the Securities Act of 1933 (the \"Act") under Section 4(2) of the Act.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits:
Exhibit No. Description
99.1 Press release dated October 1, 2007
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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Specialty Underwriters' Alliance, Inc.
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October 2, 2007
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By:
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/s/ Peter E. Jokiel
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Name: Peter E. Jokiel
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Title: Chief Financial Officer
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Exhibit Index
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Exhibit No.
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Description
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99.1
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Press release dated October 1, 2007
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