x
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Bermuda
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98-0570192
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(State
or Other Jurisdiction of
Incorporation
or Organization)
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(I.R.S.
Employer
Identification
No.)
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Title
of Each Class
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Name
of Each Exchange on Which Registered
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Common
Shares, par value $0.01 per share
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The
NASDAQ Stock Market, LLC
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Large Accelerated Filer
¨
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Accelerated Filer x
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Non-Accelerated
Filer ¨
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Smaller Reporting Company
¨
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||||
(Do
not check if a smaller reporting company)
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PART
III
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||||
Item
11. Executive Compensation
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3 | |||
PART
VI
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||||
Item
15. Exhibits, Financial Statement Schedules
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16 | |||
Signatures
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17 | |||
Exhibits
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||||
Ex-31.1:
Section 302 Certification of CEO
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||||
Ex-31.2:
Section 302 Certification of CFO
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·
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GMAC
RE LLC (“GMAC RE”), a reinsurance managing general agent writing business
on behalf of Motors Insurance Corporation (“Motors”) and the renewal
rights for the business written through GMAC RE (which was subsequently
renamed Maiden Re Insurance Services, LLC (“Maiden
Re”));
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·
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GMAC
Direct Insurance Company (which closed on December 23, 2008 and was
subsequently renamed “Maiden Reinsurance Company”);
and
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·
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Integon
Specialty Insurance Company (which closed on September 1, 2009 and was
subsequently renamed “Maiden Specialty Insurance
Company”).
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·
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targeted
return on equity
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·
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achievement
of combined ratio objectives
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·
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growth
in written premium, and
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·
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controlling
expenses.
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Business Performance
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2009
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2009
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2009 AIP Payout
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|||||||||||||
Metric
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Weight
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Target
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Actual
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%
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||||||||||||
Return
On Equity*
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40 | % | 15 | % | 11.4 | %* | 20.8 | % | ||||||||
Combined
Ratio
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30 | % | 96 | % | 96 | % | 30 | % | ||||||||
Revenue
Growth**
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20 | % | 10 | % | 44.2 | % | 40 | % | ||||||||
Operating
Expenses
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10 | % |
$
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48
million
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$
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48
million
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10 | % | ||||||||
Total
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100 | % |
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·
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benchmarking
of similarly situated officers in the peer group described
above;
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·
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strategic
support of business objectives, such as the GMAC RE
integration;
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·
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building
the Sarbanes-Oxley and GAAP compliance
activities;
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·
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maintaining
active client interaction and
support;
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·
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progress
in expanding the underwriting portfolio and maintaining strong
underwriting performance;
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·
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accelerating
the transition of clients from the GMAC RE platform to Maiden Re, and
re-underwriting the Maiden Specialty business by successfully reducing
catastrophe aggregates;
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·
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efforts
to strengthen the Company’s finance and accounting capabilities,
procedures and processes;
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·
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leading
the enterprise risk management effort and Sarbanes-Oxley certification;
and
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·
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significant
progress in SEC reporting.
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Steven
H. Nigro, Chairman
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Simcha
Lyons
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Raymond
M. Neff
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Name and Principal Position
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Year
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Salary
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Bonus(2)
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Option
Awards(1)
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All Other
Compensation
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Total
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||||||||||||||||
Arturo
M. Raschbaum, President and
Chief
Executive Officer
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2009
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$ | 1,000,000 | $ | 1,000,000 | 95,075 | 136,887 | (3) | 2,231,962 | |||||||||||||
2008
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$ | 134,615 | $ | — | 9,167 | 1,008,450 | (4) | 1,152,232 | ||||||||||||||
John
Marshaleck,
Chief
Financial Officer
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2009
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$ | 600,000 | $ | 600,000 | 18,108 | $ | 127,537 | (3) | $ | 1,345,645 | |||||||||||
2008
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92,308 | $ | 52,360 | 688 | $ | 3,443 | (5) | 148,799 | ||||||||||||||
Karen
Schmitt, President of Major
Subsidiaries
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2009
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$ | 550,000 | $ | 433,125 | 18,108 | $ | 13,620 | (5) | $ | 1,014,853 | |||||||||||
Patrick
J. Haveron,
Executive
Vice President
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2009
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$ | 79,500 | $ | 50,000 | — | $ | 4,905 | (6) | $ | 134,405 | |||||||||||
Michael
J. Tait, former Chief Financial
Officer
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2009
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$ | 230,000 | $ | 120,000 | 45,538 | $ | 98,400 | (7) | $ | 493,938 | |||||||||||
2008
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200,000 | $ | 80,000 | 44,297 | — | 324,297 | ||||||||||||||||
2007
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30,365 | 37,500 | 6,626 | — | 74,491 |
(1)
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Represents
the aggregate grant date fair value of option awards held by the named
executive officer determined in accordance with Accounting Standards
Codification Topic No. 718, “Compensation — Stock Compensation”
(“ASC 718”), using the assumptions described in Note 15 to the Financial
Statements included in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission for the respective
year.
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(2)
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Amount
shown reflects bonus payments accrued for in the relevant year and
actually paid in March of the following
year.
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(3)
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Amount
shown reflects payments related to the costs of commuting to our office in
Bermuda and associated lodging expenses, as well as medical, dental and
life insurance.
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(4)
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Amount
shown reflects payments intended to compensate Mr. Raschbaum for the loss
of certain forfeited variable compensation and benefit payments resulting
from the GMAC Acquisition, as well as medical and life insurance and car
payments.
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(5)
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Amount
shown reflects payments related to life insurance and a car
allowance.
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(6)
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Mr.
Haveron joined the Company in September 2009. Amount shown reflects
payments related to life insurance and a car
allowance.
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(7)
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Mr.
Tait served as Chief Financial Officer of Maiden Holdings through August
2009 and now serves as Chief Financial Officer of Maiden Insurance. Amount
shown reflects payments related to housing allowance and employer pension
contributions.
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Name
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Grant Date
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Number of Securities
Underlying Options
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Exercise or Base
Price of Option
Awards (per Share)
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Grant Date Fair Value of
Stock and Option Awards (1)
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|||||||||||
Arturo
M. Raschbaum
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November
12, 2009
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333,333 | $ | 7.25 | $ | 796,665 | |||||||||
John
Marshaleck
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February
24, 2009
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75,000 | $ | 4.45 | $ | 61,500 | |||||||||
Karen
Schmitt
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February
24, 2009
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75,000 | $ | 4.45 | $ | 61,500 | |||||||||
Patrick
J. Haveron
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—
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— | — | — | |||||||||||
Michael
J. Tait
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—
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— | — | — |
(1)
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These
awards were made under the 2007 Share Incentive Plan. The values of the
stock options granted on February 24, 2009 and November 12, 2009 were
based on a projected Black-Scholes value of $0.82 per share and $2.39 per
share, respectively.
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Option Awards(1)
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||||||||||||||||||||
Name
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Number of Securities
Underlying
Unexercised Options
(#) Exercisable
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Number of Securities
Underlying
Unexercised Options
(#) Unexercisable
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Equity Incentive Plan
Awards: Number of
Securities Underlying
Unexercised Unearned
Options (#)
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Option
Exercise Price
($)
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Option
Expiration
Date
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|||||||||||||||
Arturo
M. Raschbaum
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83,333 | 250,001 | — | $ | 3.28 |
11/12/2018
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||||||||||||||
— | 333,333 | $ | 7.25 |
11/12/2019
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||||||||||||||||
John
Marshaleck
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6,250 | 18,750 | — | $ | 3.28 |
11/12/2018
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||||||||||||||
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— | 75,000 | — | $ | 4.45 |
2/24/2019
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||||||||||||||
Karen
Schmitt
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6,250 | 18,750 | — | $ | 3.28 |
11/12/2018
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||||||||||||||
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— | 75,000 | — | $ | 4.45 |
2/24/2019
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||||||||||||||
Patrick
J. Haveron
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— | — | — | — |
—
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|||||||||||||||
Michael
J. Tait
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25,000 | 25,000 | — | $ | 10.00 |
11/6/2017
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||||||||||||||
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1,875 | 5,625 | — | $ | 3.28 |
11/12/2018
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(1)
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Under
the 2007 Share Incentive Plan, 25% of the options will become exercisable
on the first anniversary of the grant, with an additional 6.25% of the
options vesting each quarter thereafter based on the executive’s continued
employment over a four-year period.
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Fees Earned or Paid
in Cash ($) (1)
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Option Awards ($)
(2)(4)
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Total ($)
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||||||||||
Barry
D. Zyskind
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— | — | — | |||||||||
Raymond
M. Neff
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86,000 | 6,720 | 92,720 | |||||||||
Simcha
Lyons
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74,079 | 6,720 | 80,799 | |||||||||
Yehuda
L. Neuberger
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62,000 | 6,720 | 68,720 | |||||||||
Steven
H. Nigro
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84,000 | 6,720 | 90,720 | |||||||||
Max
Caviet(3)
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22,917 | — | 22,917 |
(1)
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The
amounts represent annual cash retainer for board service and, as
applicable, retainers for board committee service or service as chairman
of a board committee and fees for attendance at board meetings and, as
applicable, committee meetings.
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(2)
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Represents
the aggregate grant date fair value of option awards held by the director
determined in accordance with ASC 718, using the assumptions described in
Note 15 to the Financial Statements included in our Annual Report on Form
10-K filed with the Securities and Exchange Commission for the respective
year.
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(3)
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Mr.
Caviet was not nominated for reelection in 2009, thus was a director only
through April 30, 2009.
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(4)
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The
following table represents options awarded in 2009 and outstanding at
December 31, 2009 for each
director:
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Options Awarded
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Options Outstanding at
December 31, 2009
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|||||||
Barry
D. Zyskind
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0 | 0 | ||||||
Raymond
M. Neff
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6,000 | 24,000 | ||||||
Simcha
Lyons
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6,000 | 24,000 | ||||||
Yehuda
L. Neuberger
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6,000 | 24,000 | ||||||
Steven
H. Nigro
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6,000 | 24,000 |
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·
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None
of our executive officers served as a member of the compensation committee
of another entity, one of whose executive officers served on our
Compensation Committee;
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·
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None
of our executive officers served as a director of another entity, one of
whose executive offices served on our Compensation Committee;
and
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·
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None
of our executive officers served as a member of the compensation committee
of another entity, one of whose executive officers served as a director of
Maiden Holdings.
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MAIDEN
HOLDINGS, LTD
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||
/s/ ARTURO M.
RASCHBAUM
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||
Name:
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Arturo
M. Raschbaum
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Title:
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President
and Chief Executive Officer
(Principal
Executive Officer)
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Exhibit
No.
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Description
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Reference
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||
2.1
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Stock
Purchase Agreement by and between Maiden Holdings North America, Ltd. and
GMAC Insurance Management Corporation, dated as of October 31,
2008
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(1)
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2.2
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Stock
Purchase Agreement by and between Maiden Holdings North America, Ltd. and
Motors Insurance Corporation, dated as of October 31, 2008
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(1)
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2.3
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Securities
Purchase Agreement by and between Maiden Holdings, Ltd., Maiden Holdings
North America, Ltd. and GMACI Holdings LLC, dated as of October 31,
2008
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(1)
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2.4
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Portfolio
Transfer and Quota Share Reinsurance Agreement by and between Maiden
Insurance Company, Ltd. and Motors Insurance Corporation, dated as of
October 31, 2008
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(1)
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3.1
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Memorandum
of Association
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(2)
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3.2
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Bye-Laws
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(2)
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4.1
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Form
of Common Share Certificate
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(2)
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4.2
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Warrant
granted by Maiden Holdings, Ltd. to George Karfunkel, effective June 7,
2007
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(2)
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4.3
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Warrant
granted by Maiden Holdings, Ltd. to Michael Karfunkel, effective June 7,
2007
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(2)
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||
4.4
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Warrant
granted by Maiden Holdings, Ltd. to Barry D. Zyskind, effective June 7,
2007
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(2)
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||
4.5
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Registration
Rights Agreement by and between Maiden Holdings, Ltd. and Friedman,
Billings, Ramsey & Co., Inc., dated as of July 3, 2007
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(2)
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||
4.6
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Registration
Rights Agreement by and between Maiden Holdings, Ltd. and George
Karfunkel, Michael Karfunkel and Barry D. Zyskind, dated as of July 3,
2007
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(2)
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||
4.7
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Amended
and Restated Declaration of Trust by and among Wilmington Trust Company,
as Institutional Trustee and as Delaware Trustee, Maiden Holdings North
America, Ltd., as Sponsor, and the Administrators (as named therein),
dated as of January 20, 2009
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(3)
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||
4.8
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Indenture
by and between Maiden Holdings North America, Ltd. and Wilmington Trust
Company, as Trustee, relating to Fixed Rate Subordinated Deferrable
Interest Debentures Due 2039 (including the form of debenture), dated
January 20, 2009
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(3)
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||
4.9
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Guarantee
Agreement by and between Maiden Holdings, Ltd., as Guarantor, and
Wilmington Trust Company, as Trustee, dated as of January 20,
2009
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(3)
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4.10
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Guarantee
Agreement by and between Maiden Holdings North America, Ltd., as
Guarantor, and Wilmington Trust Company, as Trustee, dated as of January
20, 2009
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(3)
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||
10.1*
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2007
Share Incentive Plan
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(2)
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||
10.2*
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Form
of Share Option Agreement for Employee Recipients of Options under 2007
Share Incentive Plan
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(2)
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||
10.3*
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Form
of Share Option Agreement for Non-Employee Recipients of Options under
2007 Share Incentive Plan
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(2)
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||
10.4*
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Employment
Agreement by and between Maiden Holdings, Ltd. and Max G. Caviet, dated as
of July 3, 2007
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(2)
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||
10.5*
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Employment
Agreement by and between Maiden Re and Karen Schmitt, dated as of October
31, 2008
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(5)
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||
10.6*
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Employment
Agreement by and between Maiden Re. and John Marshaleck, dated as of
October 31, 2008
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(5)
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||
10.7*
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Employment
Agreement by and between Maiden Holdings, Ltd. and Arturo Raschbaum, dated
as of October 31, 2008
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(5)
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||
10.8*
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Employment
Agreement by and between Maiden Insurance Company Ltd. and James A. Bolz,
dated as of October 23, 2007
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(6)
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||
10.9*
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Employment
Agreement by and between Maiden Holdings, Ltd. and Michael J. Tait, dated
as of November 6, 2007
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(6)
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||
10.10*
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Master
Agreement by and between Maiden Holdings, Ltd. and AmTrust Financial
Services, Inc., dated as of July 3, 2007
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(2)
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||
10.11
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Amendment
No. 1 to the Master Agreement by and between Maiden Holdings, Ltd. and
AmTrust Financial Services, Inc., dated as of September 17,
2007
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(2)
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||
10.12
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Quota
Share Reinsurance Agreement by and between Maiden Insurance Company, Ltd.
and AmTrust International Insurance, Ltd., entered into as of September
17, 2007 and effective as of July 1, 2007
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(2)
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||
10.13
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Addendum
No. 1 to the Quota Share Reinsurance Agreement by and between Maiden
Insurance Company, Ltd. and AmTrust International Insurance, Ltd., dated
as of January 15, 2008
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(4)
|
||
10.14
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Addendum
No. 2 to Quota Share Reinsurance Agreement by and between Maiden Insurance
Company, Ltd. and AmTrust International Insurance, Ltd. and dated as of
June 1, 2008
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(7)
|
||
10.15
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Amended
and Restated Quota Share Reinsurance Agreement by and between Maiden
Insurance Company, Ltd. and AmTrust International Insurance, Ltd. and
dated as of June 1, 2008
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(9)
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10.16
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Loan
Agreement by and between AmTrust International Insurance, Ltd. and Maiden
Insurance Company, Ltd., dated as of November 16, 2007
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(4)
|
||
10.17
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Amendment
No. 1 to the Loan Agreement by and between AmTrust International
Insurance, Ltd. and Maiden Insurance Company, Ltd., dated as of February
15, 2008
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(4)
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||
10.18
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Asset
Management Agreement by and between AII Insurance Management Limited and
Maiden Insurance Company, Ltd., dated as of July 3, 2007
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(2)
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||
10.19
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Reinsurance
Brokerage Agreement by and between Maiden Insurance Company, Ltd. and AII
Reinsurance Broker Ltd., dated as of July 3, 2007
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(2)
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||
10.20
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Brokerage
Services Agreement between Maiden Insurance Company, Ltd. and IGI
Intermediaries Limited, dated as of January 1, 2008
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(4)
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||
10.21
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Reinsurance
Brokerage Services Agreement between Maiden Insurance Company, Ltd. and
IGI Intermediaries, Inc., dated as of April 3, 2008
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(8)
|
||
10.22
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Form
of Indemnification Agreement between Maiden Holdings, Ltd. and its
officers and directors
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(4)
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||
10.23*
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Form
of Purchase Agreement by and among Maiden Holdings, Ltd., Maiden Capital
Financing Trust, Maiden Holdings North America, Ltd. and various
institutional investors, dated as of January 14, 2009
|
(3)
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||
21.1
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Subsidiaries
of the registrant
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††
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||
23.1
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Consent
of BDO Seidman, LLP
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††
|
||
31.1
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Section
302 Certification of CEO
|
†
|
||
31.2
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Section
302 Certification of CFO
|
†
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||
32.1
|
Section
906 Certification of CEO
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††
|
||
32.2
|
Section
906 Certification of CFO
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††
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(1)
|
Incorporated
by reference to the filing of such exhibit with the registrant’s Current
Report on Form 8-K filed with the SEC on November 7, 2008 (File No.
001-34042).
|
(2)
|
Incorporated
by reference to the filing of such exhibit with the registrant’s S-1, as
initially filed with the SEC on September 17, 2007, subsequently amended
and declared effective May 6, 2008 (File No.
333-146137).
|
(3)
|
Incorporated
by reference to the filing of such exhibit with the registrant’s Current
Report on Form 8-K filed with the SEC on January 26, 2009 (File No.
001-34042).
|
(4)
|
Incorporated
by reference to the filing of such exhibit with Amendment No. 2 to the
registrant’s S-1 filed with the SEC on March 28, 2008 (No.
333-146137).
|
(5)
|
Incorporated
by reference to the filing of such exhibit with the registrant’s Current
Report on Form 8-K filed with the SEC on November 14, 2008 (File No.
001-34042).
|
(6)
|
Incorporated
by reference to the filing of such exhibit with Amendment No. 1 to the
registrant’s S-1 filed with the SEC on November 7, 2007 (No.
333-146137).
|
(7)
|
Incorporated
by reference to the filing of such exhibit with the registrant’s Current
Report on Form 8-K filed with the SEC on June 13, 2008 (File No.
001-34042).
|
(8)
|
Incorporated
by reference to the filing of such exhibit with Amendment No. 3 to the
registrant’s S-1 filed with the SEC on April 24, 2008 (No.
333-146137).
|
(9)
|
Incorporated
by reference to the filing of such exhibit with the registrant’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2008 filed with
the SEC on March 31, 2009 (File No.
001-34042).
|
†
|
Filed
herewith.
|
††
|
Filed
with the original Annual Report on Form 10-K for the fiscal year ended
December 31, 2009, filed on March 16,
2010.
|
*
|
Management
contract or compensatory plan or
arrangement.
|
1.
|
I
have reviewed this Annual Report on Form 10-K/A of Maiden Holdings,
Ltd.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report.
|
Dated: October
15, 2010
|
/S/ ARTURO M.
RASCHBAUM
|
|
Name:
|
Arturo
M. Raschbaum
|
|
Title:
|
President
and Chief Executive Officer
(Principal
Executive Officer)
|
1.
|
I
have reviewed this Annual Report on Form 10-K/A of Maiden Holdings,
Ltd.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
Dated: October
15, 2010
|
/s/ JOHN
MARSHALECK
|
|
Name:
|
John
Marshaleck
|
|
Title:
|
Chief
Financial Officer
(Principal
Financial Officer)
|