Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure set forth above under “Introductory
Note” is incorporated by reference herein. The material provisions of the Merger Agreement are described in the Proxy Statement
in the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement,” which
is incorporated by reference herein.
As previously disclosed, the Business Combination
was approved by CF Corp.’s shareholders at the Shareholders Meeting. Although CF Corp.’s public shareholders had the
opportunity, in connection with the Business Combination, to redeem shares of CF Corp.’s Class A ordinary shares, no shares
were redeemed.
Upon the Closing, the Company paid $31.10, in
cash, without interest, for each outstanding share of common stock of FGL (subject to certain exceptions), plus additional specified
amounts in cash for outstanding equity incentives, for an aggregate purchase price of approximately $1.84 billion, plus approximately
$405 million of existing FGL debt which was assumed.
In addition, on the Closing Date, Parent completed
its purchase of all of the issued and outstanding shares of (i) Front Street Re (Cayman) Ltd., an exempted company incorporated
in the Cayman Islands with limited liability and (ii) Front Street Re Ltd., an exempted company incorporated in Bermuda with limited
liability (together, the “Acquired Companies”), from Front Street Re (Delaware) Ltd. (“FSRD”), a Delaware
corporation and a wholly owned indirect subsidiary of HRG Group Inc. (“HRG”), pursuant to the Share Purchase Agreement,
dated as of May 24, 2017, by and among CF Corp., Parent, FSRD and the Acquired Companies, for cash consideration of $65 million,
subject to certain adjustments. Prior to the Business Combination, approximately 80% of the outstanding shares of FGL’s common
stock was owned indirectly by HRG.
In addition, HRG, FS Holdco II Ltd. (“FS
Holdco”), FGL’s majority stockholder prior to the Business Combination and a wholly owned subsidiary of HRG, CF Corp.
and Parent agreed that FS Holdco may, at its option, cause Parent and FS Holdco to make a joint election under Section 338(h)(10)
of the Internal Revenue Code of 1986, as amended, with respect to the Business Combination and the deemed share purchases of FGL’s
subsidiaries. If FS Holdco opts to make such an election, it will be required to pay Parent $30 million, plus additional specified
amounts determined by reference to FGL’s incremental current tax costs attributable to the election, if any, and Parent will
be required to pay FS Holdco additional specified amounts determined by reference to FGL’s incremental current tax savings
attributable to the election, if any.
The Business Combination and related
transactions (including the acquisition of the Acquired Companies) were funded by a portion of the funds held in the trust
account that holds a portion of the net proceeds of CF Corp.’s initial public offering and a concurrent private
placement of warrants to the Sponsor, plus the proceeds from equity issuances to (i) the BTO Purchaser, FNF Purchasers and
the GSO Purchasers pursuant to the Equity Purchase Agreements as described above in Item 1.01, (ii) certain anchor investors
pursuant to forward purchase agreements (both as defined below) as described below in Item 3.02 and (iii) certain ROFO
Investors (as defined below) pursuant to additional Equity Purchase Agreements (as defined below) as described below in Item
3.02.
Prior to the Closing, CF Corp. was a shell company
with no operations, formed as a vehicle to effect a Business Combination with one or more operating businesses. After the Closing,
the Company became a holding company whose assets primarily consist of FGL and the Acquired Companies.
As of the Closing Date and following the completion
of the Business Combination and related transactions, the Company’s outstanding securities were as follows: (a) 214,370,000
ordinary shares, (b) 275,000 Series A Preferred Shares, (c) 100,000 Series B Preferred Shares and (d) 70,883,335 warrants.
As of the Closing Date and following the completion
of the Business Combination and related transactions, the ownership of the Company by the Company’s public shareholders,
BTO, FNF, GSO, the investors under the forward purchase agreements and the ROFO Equity Purchase Agreements (the “Anchor Investors’)
and the Company’s officers and directors was as follows:
Shareholder
|
|
Number of Ordinary
Shares
|
|
|
Percentage of Total
Outstanding Shares
|
|
Public Shareholders (other than FNF)
|
|
|
66,000,000
|
|
|
|
30.9
|
%
|
Anchor Investors (other than BTO, our directors and entities controlled by our directors)
|
|
|
57,778,118
|
|
|
|
27.0
|
%
|
BTO
|
|
|
37,128,906
|
|
|
|
17.4
|
%
|
Our Officers and Directors (and entities controlled by them)
|
|
|
30,592,976
|
|
|
|
14.3
|
%
|
FNF
|
|
|
16,732,000
|
|
|
|
7.8
|
%
|
GSO
|
|
|
6,138,000
|
|
|
|
2.9
|
%
|
TOTAL
|
|
|
214,370,000
|
|
|
|
100
|
%
|
The ownership percentages set forth above do
not take into account (i) an aggregate of 375,000 of preferred shares that will be owned by GSO and FNF or (ii) the public
warrants, private placement warrants, forward purchase warrants (as defined below) and note warrants that became outstanding upon
the Closing and may be exercised thereafter, but do include the ordinary shares converted from Class B ordinary shares, par value
$0.0001 per share, upon completion of the Business Combination even though such shares are subject to transfer restrictions.
The public warrants, private placement warrants,
forward purchase warrants and note warrants will become exercisable 30 days after the completion of the Business Combination and
will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
The Company makes and incorporates by reference
forward-looking statements in this Current Report on Form 8-K. These forward-looking statements relate to expectations for future
financial performance, business strategies or expectations for our business. Specifically, forward-looking statements may include
statements relating to:
|
·
|
the benefits of the Business Combination;
|
|
·
|
the future financial performance of the post-combination company following
the Business Combination;
|
|
·
|
expansion plans and opportunities; and
|
|
·
|
other statements preceded by, followed by or that include the words
“may,” “can,” “should,” “will,” “estimate,” “plan,” “project,”
“forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,”
“target” or similar expressions.
|
These forward-looking statements are based on
information available as of the date of this Current Report on Form 8-K and the Company’s management’s current expectations,
forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements
should not be relied upon as representing the Company’s views as of any subsequent date. The Company does not undertake any
obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a
result of new information, future events or otherwise, except as may be required under applicable securities laws.
As a result of a number of known and unknown
risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or
implied by these forward-looking statements. Some factors that could cause actual results to differ include:
|
·
|
the inability to maintain the listing of the Company’s ordinary
shares and warrants on the NYSE following the Business Combination;
|
|
·
|
the risk that the Business Combination disrupts current plans and
operations as a result of the announcement and consummation of the transactions described herein;
|
|
·
|
the ability to recognize the anticipated benefits of the Business
Combination, which may be affected by, among other things, competition and the ability of the combined business to grow and manage
growth profitably;
|
|
·
|
costs related to the Business Combination;
|
|
·
|
changes in applicable laws or regulations;
|
|
·
|
the possibility that we may be adversely affected by other economic,
business, and/or competitive factors; and
|
|
·
|
other risks and uncertainties indicated or incorporated by reference
in this Current Report on Form 8-K, including those set forth in the “Risk Factors” section in the Proxy Statement
and Part I, Item 1A of the FGL Annual Report, which are incorporated herein by reference.
|
Business
The business of CF Corp. prior to the Business
Combination is described in Part I, Item 1 of CF Corp.’s Annual Report on Form 10-K for the year ended December 31, 2016,
filed with the SEC on March 17, 2017 (the “CF Corp. Annual Report”), which is incorporated by reference herein. The
business of FGL prior to the Business Combination is described in Part I, Item 1 of FGL’s Annual Report on Form 10-K for
the year ended September 30, 2017, filed with the SEC on November 16, 2017 (the “FGL Annual Report”), which is incorporated
by reference herein.
Risk Factors
The risk factors related to the Company’s
business and operations are described in Part I, Item 1A of the FGL Annual Report and in Part II, Item 1A of CF Corp.’s Quarterly
Report on Form 10-Q for the period ended September 30, 2017, which is incorporated by reference herein. The risk factors related
to the Business Combination are described in the section entitled “Risk Factors” in the Proxy Statement, which is incorporated
by reference.
Properties
The properties of the Company are described
in Part I, Item 2 of the FGL Annual Report, which is incorporated by reference herein.
Selected Historical Financial Information
The selected historical financial information
of FGL is provided set forth in Part II, Item 6 of the FGL Annual Report, which is incorporated by reference herein.
Unaudited Pro Forma Condensed Combined Financial Information
The information set forth in Exhibit 99.2 to
this Current Report on Form 8-K is incorporated by reference herein.
Management’s Discussion and Analysis of Financial Condition
and Results of Operation
Management’s discussion and analysis of
financial condition and results of operations of FGL prior to the Business Combination is described in Part II, Item 7 of the FGL
Annual Report, which is incorporated by reference herein.
Quantitative and Qualitative Disclosures about Market Risk
Quantitative and qualitative disclosures about
market risk for FGL prior to the Business Combination is described in Part II, Item 7A of the FGL Annual Report, which is incorporated
by reference herein.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information known
to the Company regarding beneficial ownership of ordinary shares of the Company as of November 30, 2017 by:
|
·
|
each person known by the Company to be the beneficial owner of more
than 5% of the Company’s outstanding ordinary shares;
|
|
·
|
each of the Company’s executive officers and directors; and
|
|
·
|
all executive officers and directors of the Company as a group.
|
Beneficial ownership is determined according
to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses
sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or
exercisable within 60 days. Ordinary shares issuable upon exercise of options or warrants currently exercisable or exercisable
within 60 days are deemed outstanding solely for purposes of calculating the percentage of class and percentage of total voting
power of the beneficial owner thereof.
The beneficial ownership of ordinary shares
of the Company is based on 214,370,000 ordinary shares issued and outstanding as of November 30, 2017.
Unless otherwise indicated, the Company believes
that each person named in the table below has sole voting and investment power with respect to all ordinary shares beneficially
owned by him.
Directors and Officers
(1)
|
|
Number of Shares
Beneficially Owned
|
|
|
Percentage of Outstanding
Ordinary Shares
|
|
Chinh E. Chu
(2) (3)
|
|
|
23,407,057
|
|
|
|
6.5
|
|
William P. Foley, II
(4) (3)
|
|
|
23,407,057
|
|
|
|
6.5
|
|
Christopher J. Littlefield
|
|
|
-
|
|
|
|
-
|
|
Dennis R. Vigneau
|
|
|
-
|
|
|
|
-
|
|
Eric L. Marhoun
|
|
|
-
|
|
|
|
-
|
|
Keith W. Abell
(5)
|
|
|
220,970
|
|
|
|
*
|
|
Patrick S. Baird
|
|
|
-
|
|
|
|
-
|
|
Menes O. Chee
|
|
|
-
|
|
|
|
-
|
|
Richard N. Massey
(6)
|
|
|
2,139,706
|
|
|
|
*
|
|
James A. Quella
(7)
|
|
|
1,084,853
|
|
|
|
*
|
|
Timothy M. Walsh
|
|
|
-
|
|
|
|
-
|
|
All Executive Officers and Directors as a Group
|
|
|
50,259,641
|
|
|
|
14.27
|
|
Greater than 5% Shareholders
|
|
|
|
|
|
|
|
|
Blackstone
(8)(3)
|
|
|
49,516,906
|
|
|
|
20.2
|
|
Fidelity National Financial, Inc.
(9)
|
|
|
18,232,000
|
|
|
|
7.8
|
|
Coral Blue Investment Pte. Ltd.
|
|
|
14,767,945
|
|
|
|
5.8
|
|
* Less than 1%.
(1)
|
Except as described in the footnotes below and subject to applicable community property laws and similar laws, the Company believes that each person listed above has sole voting and investment power with respect to all ordinary shares beneficially owned by them. Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is Sterling House, 16 Wesley Street, Hamilton HM CX, Bermuda.
|
(2)
|
Includes 13,840,390 shares and 9,566,667 warrants, each exercisable for one ordinary share, held by CC Capital Management LLC (“CCCM”). Mr. Chu is the managing member of CCCM and as such may be deemed to beneficially own all of the securities held directly by CCCM.
|
(3)
|
Pursuant to the Nominating and Voting Agreement, Mr. Chu, Mr. Foley and BTO have the right to designate one director nominee for election at each general meeting of the Company, which nominee will be selected by the vote of any two of Mr. Chu, Mr. Foley and BTO. Mr. Chu, Mr. Foley and BTO have agreed to vote all of their shares in favor of such nominee. As such, each of Mr. Chu, Mr. Foley and BTO may be deemed to be members of a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and each of the members may be deemed to beneficially own the shares of the other members.
|
(4)
|
Includes 13,840,390 shares and 9,566,667 warrants, each exercisable for one ordinary share, held by BilCar, LLC (“BilCar”). Mr. Foley is a manager of BilCar and as such may be deemed to beneficially own all of the securities held directly by BilCar.
|
(5)
|
Includes 187,637 ordinary shares and 33,333 warrants, each exercisable for one ordinary share.
|
(6)
|
Includes 30,000 ordinary shares held by Mr. Massey and 1,806,373 ordinary shares and 333,333 warrants, each exercisable for one ordinary share, held by CFC 2016-A, LLC (“CFC”). Mr. Massey is the managing member of CFC and as such may be deemed to beneficially own all of the securities held by CFC.
|
(7)
|
Includes 918,186 ordinary shares and 166,667 warrants, each exercisable for one ordinary share.
|
(8)
|
Includes 14,628,906 ordinary shares and 6,250,000 warrants,
each exercisable for one ordinary share, held by CFS Holdings (Cayman), L.P. (“CFS 1”) and 22,500,000 ordinary shares
held by CFS Holdings II (Cayman), L.P. (“CFS 2”). CFS Holdings (Cayman) Manager L.L.C. is the general partner of CFS
1 and CFS 2. The Managing Member of CFS Holdings (Cayman) Manager L.L.C. is Blackstone Technical Opportunities LR Associates-B
(Cayman) Ltd. The controlling shareholder of Blackstone Technical Opportunities LR Associates-B (Cayman) Ltd. is Blackstone Holdings
III L.P. The general partner of Blackstone Holdings III L.P. is Blackstone Holding III GP L.P. The general partner of Blackstone
Holdings III GP L.P. is Blackstone Holding III GP Management L.L.C. The sole member of Blackstone Holdings III GP Management L.L.C.
is The Blackstone Group L.P. The general partner of The Blackstone Group L.P. is Blackstone Group Management L.L.C. Blackstone
Group Management L.L.C. is wholly owned by Blackstone’s senior managing directors and controlled by its founder, Stephen
A. Schwarzman. Each of such Blackstone entities and Mr. Schwarzman may be deemed to beneficially own the shares beneficially owned
by CFS Holdings II (Cayman), L.P., but each (other than CFS 1 and CFS 2) disclaims beneficial ownership of such shares.
Also includes 142,111 ordinary shares held by GSO Aiguille des
Grands Montets Fund II LP, 4,147,302 ordinary shares held by GSO COF III AIV-5 LP, 1,442,118 ordinary shares held by GSO COF III
Co-Investment AIV-5 LP, 50,912 ordinary shares held by GSO Co-Investment Fund-D LP, 165,079 ordinary shares held by GSO Credit
Alpha Fund LP, 52,541 ordinary shares held by GSO Churchill Partners LP, 113,921 ordinary shares held by GSO Credit-A Partners
LP, and 24,016 ordinary shares held by GSO Harrington Credit Alpha Fund (Cayman) L.P. (collectively, with the other direct holders
described in this paragraph, the “GSO Funds”).
GSO Capital Partners LP is the investment manager of GSO Aiguille
des Grands Montets Fund II LP. GSO Advisor Holdings L.L.C. is the special limited partner of GSO Capital Partners LP with the investment
and voting power over the securities beneficially owned by GSO Capital Partners LP. Blackstone Holdings I L.P. is the sole member
of GSO Advisor Holdings L.L.C.
GSO Capital Opportunities Associates III LLC is the general
partner of GSO COF III AIV-5 LP. GSO COF III Co-Investment Associates LLC is the general partner of GSO COF III Co-Investment AIV-5
LP. GSO Co-Investment Fund-D Associates LLC is the general partner of GSO Co-Investment Fund-D LP. GSO Credit Alpha Associates
LLC is the general partner of GSO Credit Alpha Fund LP. GSO Churchill Associates LLC is the general partner of GSO Churchill Partners
LP. GSO Credit-A Associates LLC is the general partner of GSO Credit-A Partners LP. GSO Harrington Credit Alpha Associates L.L.C.
is the general partner of GSO Harrington Credit Alpha Fund (Cayman) L.P. GSO Holdings I L.L.C. is the managing member of each of
GSO Capital Opportunities Associates III LLC, GSO COF III Co-Investment Associates LLC, GSO Co-Investment Fund-D Associates LLC,
GSO Credit Alpha Associates LLC, GSO Churchill Associates LLC, GSO Credit-A Associates LLC and GSO Harrington Credit Alpha Associates
L.L.C. Blackstone Holdings II L.P. is the managing member of GSO Holdings I L.L.C. with respect to securities beneficially owned
by the GSO Funds.
Blackstone Holdings I/II GP Inc. is the general partner of each
of Blackstone Holdings I L.P. and Blackstone Holdings II L.P. The Blackstone Group L.P. is the controlling shareholder of Blackstone
Holdings I/II GP Inc. Blackstone Group Management L.L.C. is the general partner of The Blackstone Group L.P. Blackstone Group Management
L.L.C. is wholly-owned by Blackstone's senior managing directors and controlled by its founder, Stephen A. Schwarzman. In addition,
each of Bennett J. Goodman and J. Albert Smith III may be deemed to have shared voting power and/or investment power with respect
to the securities held by the GSO Funds. Each of the foregoing entities and individuals disclaims beneficial ownership of the securities
held directly by the GSO Funds (other than the GSO Funds to the extent of their direct holdings).
The address for the GSO Funds, each entity listed in the third
paragraph of this footnote (other than Blackstone Holdings I L.P.), each entity listed in the fourth paragraph of this footnote
(other than Blackstone Holding II L.P.), Mr. Goodman and Mr. Smith is c/o GSO Capital Partners LP, 345 Park Avenue. The address
for each other entity and person listed in this footnote is c/o The Blackstone Group L.P., 345 Park Avenue, New York, NY 10154.
|
(9)
|
Includes 3,125,000 ordinary shares and 1,500,000 warrants, each exercisable for one ordinary share, held by Fidelity National Financial, Inc. and 1,170,680 ordinary shares held by Fidelity National Title Insurance Company, 9,163,920 ordinary shares held by Chicago Title Insurance Company and 3,272,400 ordinary shares held by Commonwealth Land Title Insurance Company, each a wholly owned subsidiary of FNF. The address for FNF is 601 Riverside Ave., Jacksonville, FL 32204.
|
(10)
|
Includes 12,434,612 ordinary shares and 2,333,333 warrants, each exercisable for one ordinary share.
|
Directors and Executive Officers
Biographical information with respect to the
Company’s directors and executive officers immediately after the Closing is set forth in the Proxy Statement in the sections
entitled “Officers and Directors of CF Corp. After the Business Combination” and “Proposal No. 12–The Director
Election Proposal,” which are incorporated by reference herein.
In connection with and effective upon
the consummation of the Business Combination, Douglas B. Newton resigned as Chief Financial Officer of the Company and
David Ducommun resigned as Secretary of the Company, and on November 29, 2017 the Company’s board of directors (the
“Board”) appointed Christopher J. Littlefield to serve as President, Chief Executive Officer and a Class C
director of the Company, Dennis R. Vigneau to serve as Chief Financial Officer and Eric Marhoun to service as General Counsel
and Secretary.
The size of the Board was increased to nine
members effective upon the Closing. At the Shareholders Meeting, each of Mr. Foley, Co-Chairman of the Company, and Messrs. Abell
and Massey were elected by the Company’s shareholders to serve as Class A directors effective upon the Closing with terms
expiring at the Company’s 2020 annual general meeting of shareholders.
In connection with and effective upon the consummation
of the Business Combination, on July 24, 2017, the Board appointed Mr. Chu, Co-Chairman of the Company, and Messrs. Quella and
Baird to serve as Class B directors with terms expiring at the Company’s 2018 annual general meeting of shareholders and
Messrs. Littlefield, Chee and Walsh to serve as Class C directors with terms expiring at the Company’s 2019 annual general
meeting of shareholders.
Director Independence
The Board has determined that Messrs. Abell,
Baird, Massey, Quella and Walsh are independent directors under the rules of the New York Stock Exchange (“NYSE Rules”).
Under NYSE Rules, no director qualifies as independent unless the Board affirmatively determines that the director has no material
relationship with the Company. Based upon information requested from and provided by each director concerning their background,
employment and affiliations, including commercial, industrial, banking, consulting, legal, accounting, charitable and familial
relationships, the Board has determined that each of the independent directors named above has no material relationship with the
Company, nor has any such person entered into any material transactions or arrangements with the Company or its subsidiaries, either
directly or as a partner, stockholder or officer of an organization that has a relationship with the Company, and is therefore
independent under NYSE Rules.
Committees of the Board of Directors
Following the Closing, the
standing committees of the Board consist of an audit committee (the “Audit Committee”), a compensation committee
(the “Compensation Committee”), and a nominating and corporate governance committee (the
“Nominating and Corporate Governance Committee”). Each of the committees reports to Board.
The composition, duties and responsibilities
of these committees are set forth below.
Audit Committee
The Audit Committee is responsible for, among
other things, assisting the Board in overseeing and reviewing the Company’s accounting and financial reporting and other
internal control processes, the audits of the Company’s financial statements, the qualifications and independence of the
Company’s independent registered public accounting firm, the effectiveness of the Company’s internal control over financial
reporting, and the performance of the Company’s internal audit function and independent registered public accounting firm.
The Audit Committee reviews and assesses the qualitative aspects of the Company’s financial reporting, the Company’s
processes to manage business and financial risks, and the Company’s compliance with significant applicable legal and regulatory
requirements. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the Company’s
independent registered public accounting firm.
On November 29, 2017, effective upon the Closing,
the Board appointed Messrs. Walsh (Chair), Abell and Baird as members of the Audit Committee. All members of the Audit Committee
are independent within the meaning of the federal securities laws and the meaning of the NYSE Rules. Each member of the Audit Committee
meets the requirements for financial literacy under the applicable rules and regulations of the SEC and the New York Stock Exchange
(the “NYSE”), and the Board has determined that Mr. Walsh is an “audit committee financial expert,” as
that term is defined by the applicable rules of the SEC. The Board has approved a written charter under which the Audit Committee
operates. A copy of the charter is available without charge on the Company’s website.
Compensation Committee
The Compensation Committee is responsible for,
among other things, reviewing and approving the compensation and benefits of the Chief Executive Officer, other executive officers
and directors, administering the Company’s employee benefit plans, authorizing and ratifying stock option grants and other
incentive arrangements, and authorizing employment and related agreements.
On November 29, 2017, effective upon the Closing,
the Board appointed Messrs. Abell (Chair), Massey and Quella as members of the Compensation Committee. The Board has approved a
written charter under which the Compensation Committee operates. A copy of the charter is available without charge on the Company’s
website.
The Compensation Committee has the authority
to delegate any of its responsibilities to sub-committees as the Compensation Committee may deem appropriate, provided that the
sub-committees are composed entirely of directors satisfying the independence standards then applicable to the Compensation Committee
generally.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee
is responsible for, among other things, identifying and recommending candidates to the Board for election to the Board, reviewing
the composition of the Board and its committees, developing and recommending to the Board the criteria for evaluating director
candidates, overseeing Board evaluations and recommending director compensation to the Compensation Committee.
On November 29, 2017, effective upon the
Closing, the Board appointed Messrs. Quella (Chair), Massey and Baird as members of the Nominating and Corporate Governance
Committee. The Board has approved a written charter under which the Nominating and Corporate Governance Committee operates.
A copy of the charter is available without charge on the Company’s website.
Executive Compensation
The compensation of CF Corp.’s executive
officers and directors before the consummation of the Business Combination is set forth in Part III, Item 11 of the CF Corp. Annual
Report, which is incorporated by reference herein. The compensation of FGL’s name executive officers as defined under Item
402 of Regulation S-K (the “NEOs”) and directors before the consummation of the Business Combination is set forth in
Part III, Item 11 of the FGL Annual Report, which is incorporated by reference herein.
As of the date of this Current Report on Form
8-K, the compensation of the Company’s executive officers and directors following the Closing has not been finally determined.
Any such compensation to be provided to the Company’s officers and directors will be reviewed and approved by the Board or
the Compensation Committee and will be publicly disclosed in accordance with the rules and regulations of the United States Securities
and Exchange Commission.
At the Shareholders Meeting, the
shareholders of the Company approved the Company’s 2017 Omnibus Incentive Plan (the “Incentive Plan”). The
description of the Incentive Plan set forth in the Proxy Statement section entitled “Proposal No. 13–The
Incentive Plan Proposal” is incorporated by reference herein. A copy of the full text of the Incentive Plan is filed as
Exhibit 10.46 to this Current Report on Form 8-K and is incorporated by reference herein. Following the consummation of the
Business Combination, the Company expects that the Board or the Compensation Committee will make grants of awards under the
Incentive Plan to key management employees.
Certain Relationships and Related Transactions
The description of certain relationships and
related transactions is included in the Proxy Statement in the section entitled “Certain Relationships and Related Party
Transactions” and in Part III, Item 13 of the CF Corp. Annual Report, which are incorporated by reference herein.
The disclosure set forth above in Item 1.01
regarding the Equity Purchase Agreements, the Investment Management, the BTO Letter Agreement and the BTO/FNF Letter Agreement
are incorporated by reference herein.
In addition, on October
18, 2017, CFS Holdings (Cayman), L.P., an investment vehicle owned by certain investment funds (including BTO) managed by
certain indirect subsidiaries of Blackstone issued a promissory note in favor of CF Corp. in the amount of $271,197 (the
“Promissory Note”) for purposes of capitalizing Bermuda Re. Interest on the Promissory Note accrued from October
18, 2017 at a base rate of 1.27% per annum and had a maturity date of October 18, 2018. The Promissory Note was repaid in
full prior to the Closing.
As described above, on
November 29, 2017, CF Corp. issued the Convertible Note to the Sponsor in the amount of $1,500,000 in respect of advances made
by the Sponsor from time for CF Corp.’s ongoing expenses. The Convertible Note was non-interest bearing and became payable
upon the completion of the Business Combination.
Under the terms of the
Convertible Note, the Sponsor had the option to convert any amounts outstanding under the Convertible Note into warrants to purchase
ordinary shares of the Company at a conversion price of $1.00 per warrant. As of November 29, 2017, CF Corp. had drawn $1,500,000
from the Convertible Note, and the Sponsor elected to convert the full amount outstanding into warrants. Each warrant will entitle
the Sponsor to purchase one ordinary share at an exercise price of $11.50 per share, commencing 30 days after the completion of
the Business Combination. Each warrant will contain such other terms identical to the warrants purchased by the Sponsor in connection
with CF Corp.’s initial public offering.
Legal Proceedings
Information about legal proceedings is set forth
in Part I, Item 3 of the FGL Annual Report, which is incorporated by reference herein.
Market Price of and Dividends on the Registrant’s Common
Equity and Related Shareholder Matters
CF Corp.
CF Corp.’s units, ordinary shares and
warrants were historically quoted on the Nasdaq Capital Market (“Nasdaq”) under the symbols “CFCOU,” “CFCO”
and “CFCOW,” respectively. CF Corp.’s units commenced public trading on May 20, 2016, and the ordinary shares
and warrants each commenced separate trading on July 8, 2016.
On December 1, 2017, the Company’s ordinary
shares and warrants began trading on the NYSE under the symbols “FG” and “FG WS,” respectively. In connection
with the Closing, all of the units of the Company separated into their component securities of one ordinary share and one-half
of one warrant to purchase one ordinary share, and the units ceased trading as a separate security.
The following table sets forth, for the calendar
quarter indicated, the high and low sales prices per unit and Class A ordinary share as reported on Nasdaq for the periods presented.
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|
Units
(CFCOU)
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|
Class A Ordinary Shares
(CFCO)
|
|
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Warrants
(CFCOW)
|
|
|
|
High
|
|
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Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
Fiscal Year 2017:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
(1)
|
|
|
12.55
|
|
|
|
9.44
|
|
|
|
11.94
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|
|
|
9.50
|
|
|
|
2.20
|
|
|
|
0.97
|
|
Third Quarter
|
|
|
12.90
|
|
|
|
11.30
|
|
|
|
11.75
|
|
|
|
10.52
|
|
|
|
2.30
|
|
|
|
1.63
|
|
Second Quarter
|
|
|
13.80
|
|
|
|
10.69
|
|
|
|
12.25
|
|
|
|
10.00
|
|
|
|
2.52
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|
|
|
1.36
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|
First Quarter
|
|
|
11.24
|
|
|
|
10.35
|
|
|
|
10.25
|
|
|
|
9.89
|
|
|
|
1.70
|
|
|
|
1.20
|
|
Fiscal Year 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
|
10.97
|
|
|
|
10.13
|
|
|
|
9.98
|
|
|
|
9.78
|
|
|
|
1.19
|
|
|
|
0.81
|
|
Third Quarter
(2)
|
|
|
12.05
|
|
|
|
9.15
|
|
|
|
10.02
|
|
|
|
9.50
|
|
|
|
1.17
|
|
|
|
0.53
|
|
Second Quarter
(3)
|
|
|
10.10
|
|
|
|
9.76
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
(1)
|
Through November 30, 2017.
|
|
(2)
|
Beginning July 8, 2016 with respect to CFCO and CFCOW.
|
|
(3)
|
Beginning May 20, 2016 with respect to CFCOU.
|
Dividends on Ordinary Shares
CF Corp. has not paid any cash
dividends on ordinary shares to date. The payment of cash dividends on ordinary shares in the future will be dependent upon
the Company’s revenues and earnings, if any, capital requirements and general financial condition. The payment of
any dividends on ordinary shares will be within the discretion of the Company’s board of directors at such time. In
addition, the terms of the preferred shares and agreements governing the indebtedness of the Company and its
subsidiaries contain restrictions on the Company’s ability to declare and pay dividends.
Dividends on Preferred Shares
Dividends payable on the
preferred shares may be paid in cash or, at the option of the Company, in lieu of paying such cash dividends, the Company may
instead effect a share capitalization by issuing new duly authorized and fully paid and nonassessable preferred shares.
If the Company elects to effect a share capitalization
by issuing preferred shares, the number of preferred shares to be issued will be calculated by dividing the portion of such dividend
not paid in cash by the original liquidation preference of such preferred shares. Such preferred shares will be entitled to receive
cumulative dividends at the same rates as the other preferred shares.
As described above, dividends will be payable
quarterly in arrears in cash or additional preferred shares of the Company, at a rate of 7.5% per annum for the first ten years.
After year ten, the dividend rate will reset quarterly to the greater of 7.5% and a rate equal to the then-current three-month
LIBOR plus 5.5% (provided, however, that in the event the three-month LIBOR is less than zero, the three-month LIBOR will be deemed
to be zero).
As of the Closing Date, there were 60
holders of record of the Company’s ordinary shares. The number of record holders does not include DTC participants
or beneficial owners who hold securities through nominees.
FGL
Information about the market price, number of
stockholders and dividends for FGL’s securities prior to the Closing Date is set forth in Part II, Item 5 of the FGL Annual
Report, which is incorporated by reference herein.
Recent Sales of Unregistered Securities
Information about unregistered sales of and the Company’s equity securities is set forth in Part II, Item 2 of CF Corp.’s Quarterly Report on Form 10-Q for
the quarter ended September 30, 2017, filed with the SEC on November 14, 2017, and under Item 3.02 of this Current Report on Form
8-K, respectively, which are incorporated by reference herein.
Description of Securities
A description of the Company’s ordinary
shares, preferred shares and warrants is included in the Company’s Form 8-A filed with the SEC on November 30, 2017, which
is incorporated by reference herein.
Indemnification of Directors and Officers
Information about the indemnification of the
Company’s officers and directors is set forth in section entitled “Limitation on Liability and Indemnification of Officers
and Directors” under Part III, Item 10 of the CF Corp. Annual Report, which is incorporated by reference herein.