Attached files
file | filename |
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EX-4.8 - EX-4.8 - Tower Group International, Ltd. | y86653exv4w8.htm |
EX-4.3 - EX-4.3 - Tower Group International, Ltd. | y86653exv4w3.htm |
EX-4.6 - EX-4.6 - Tower Group International, Ltd. | y86653exv4w6.htm |
EX-4.2 - EX-4.2 - Tower Group International, Ltd. | y86653exv4w2.htm |
EX-4.7 - EX-4.7 - Tower Group International, Ltd. | y86653exv4w7.htm |
EX-4.1 - EX-4.1 - Tower Group International, Ltd. | y86653exv4w1.htm |
EX-4.5 - EX-4.5 - Tower Group International, Ltd. | y86653exv4w5.htm |
EX-4.9 - EX-4.9 - Tower Group International, Ltd. | y86653exv4w9.htm |
EX-4.4 - EX-4.4 - Tower Group International, Ltd. | y86653exv4w4.htm |
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
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): September 14, 2010
Tower Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 000-50990 | 13-3894120 | ||
(State or other jurisdiction | (Commission File Number) | (I.R.S. Employer | ||
of incorporation) | Identification No.) |
120 Broadway, 31st Floor
New York, NY 10271
New York, NY 10271
(Address of principal executive offices)
(212) 655-2000
(Registrants telephone number, including area code)
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):
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.
Indenture
On
September 20, 2010, Tower Group, Inc. (Tower) entered into an Indenture (the
Indenture) with U.S. Bank National Association, as trustee, in connection with the issuance of
$150 million principal amount of its 5.00% Convertible Senior
Notes due 2014 (the notes). Tower will be required to pay interest on the notes each March 15 and September 15 of each year,
beginning on March 15, 2011. The notes will mature on September 15, 2014.
Holders may convert their notes prior to the close of business on the business day immediately
preceding March 15, 2014, in integral multiples of $1,000 principal amount, at the option of the
holder, only under the following circumstances:
(1) during any calendar quarter commencing after December 31, 2010 (and only during such
calendar quarter), if the last reported sale price of Towers common stock for at least 20
trading days (whether or not consecutive) during the period of 30 consecutive trading days ending
on the last trading day of the preceding calendar quarter is greater than or equal to 130% of the
applicable conversion price on each applicable trading day;
(2) during the five business day period after any five consecutive trading day period (the
measurement period) in which the trading price per $1,000 principal amount of notes for each
trading day of such measurement period was less than 98% of the product of the last reported sale
price of Towers common stock and the applicable conversion rate on such trading day; or
(3) upon the occurrence of specified corporate transactions.
On or after March 15, 2014 until the close of business on the second scheduled trading day
immediately preceding the maturity date of the notes, holders may convert their notes, in integral
multiples of $1,000 principal amount, at the option of the holder regardless of whether any of the
foregoing conditions has been met. Upon conversion, Tower will pay or deliver, as the case
may be, shares of its common stock, cash or any combination of cash and shares of its common stock,
at its election.
Tower
may not redeem the notes. If Tower undergoes a fundamental change (as
defined in the Indenture), holders may require it to purchase all or any portion of the notes that
is equal to $1,000 in principal amount or an integral multiple thereof for cash. The fundamental
change purchase price will be 100% of the principal amount of the notes to be purchased, plus any
accrued and unpaid interest to, but excluding, the fundamental change purchase date.
The
notes and shares of Towers common stock, par value $0.01 per share, issuable in
certain circumstances upon the conversion of the notes have not been registered under the
Securities Act of 1933, as amended (the Securities Act).
Tower sold the notes to Merrill
Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and FBR Capital Markets &
Co. (the initial purchasers) in reliance on the exemption from registration provided by Section
4(2) of the Securities Act. The initial purchasers then sold the notes to qualified institutional
buyers pursuant to the exemption provided by Rule 144A under the Securities Act.
The preceding description of the Indenture is a summary and is qualified in its entirety by
the Indenture, which is filed as Exhibit 4.1 hereto and incorporated herein by reference.
Convertible Note Hedge and Warrant Transactions
In
connection with the offering of the notes, on September 14 and
September 15, 2010, Tower entered into convertible note hedge transactions with respect
to Towers common stock
(the call options) with Bank of America, N.A. and JPMorgan
Chase Bank, National Association (the
hedge counterparties). Tower paid an aggregate amount of
$15.3 million to
the hedge counterparties for the call options, which will expire upon the maturity of the notes.
The call options have a strike price that corresponds to the initial conversion price of the notes
and are exercisable upon conversion of the notes.
The
convertible note hedge transactions are intended to reduce potential
dilution to Towers common stock and to offset potential cash payments in excess of the principal amount of
converted notes, as the case may be, upon any conversion of the notes.
The preceding description of the agreements relating to the call options is a summary and is
qualified in its entirety by the agreements relating to the call options, which are filed as
Exhibits 4.2, 4.3, 4.4 and 4.5 hereto and incorporated herein by reference.
On
September 14 and September 15, 2010, Tower also entered into separate warrant
transactions with the hedge counterparties. The hedge counterparties purchased warrants to acquire
5,456,730 shares of Towers
common stock at a strike price of $33.4180 per
share of common stock. Tower received aggregate proceeds of
$3.8 million
from the sale of the warrants.
If the market price per share of Towers common stock, as measured under the terms of
the warrants, exceeds the strike price of the warrants, Tower will owe the hedge
counterparties shares of its common stock, having a value equal to such excess, as measured under
the terms of the warrants. The warrant transactions will separately
have a dilutive effect on Towers common stock to the extent that the market value per share of its common stock exceeds
the strike price of the warrants.
The preceding description of the agreements relating to the warrants is a summary and is
qualified in its entirety by the agreements relating to the warrants, which are filed as Exhibits
4.6, 4.7, 4.8 and 4.9 hereto and incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Number | Description | |
4.1
|
Indenture, dated as of September 20, 2010, between Tower Group, Inc. and U.S. Bank National Association | |
4.2
|
Base Call Option Confirmation, dated as of September 14, 2010, between Bank of America, N.A. and Tower Group, Inc. | |
4.3
|
Base Call Option Confirmation, dated as of September 14, 2010, between JPMorgan Chase Bank, National Association, London Branch and Tower Group, Inc. | |
4.4
|
Additional Call Option Confirmation, dated as of September 15, 2010, between Bank of America, N.A. and Tower Group, Inc. | |
4.5
|
Additional Call Option Confirmation, dated as of September 15, 2010, between JPMorgan Chase Bank, National Association, London Branch and Tower Group, Inc. | |
4.6
|
Base Warrant Confirmation, dated as of September 14, 2010, between Bank of America, N.A. and Tower Group, Inc. | |
4.7
|
Base Warrant Confirmation, dated as of September 14, 2010, between JPMorgan Chase Bank, National Association, London Branch and Tower Group, Inc. | |
4.8
|
Additional Warrant Confirmation, dated as of September 15, 2010, between Bank of America, N.A. and Tower Group, Inc. | |
4.9
|
Additional Warrant Confirmation, dated as of September 15, 2010, between JPMorgan Chase Bank, National Association, London Branch and Tower Group, Inc. |
SIGNATURES
Pursuant to the requirement 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.
Tower Group, Inc. | ||||
Registrant |
||||
Date: September 20, 2010 | /s/ William E. Hitselberger | |||
WILLIAM E. HITSELBERGER | ||||
Senior Vice President & Chief Financial Officer |
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