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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 1034
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): June 13, 2000
Southwestern Life Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-11422 13-3543540
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation Identification No.)
717 North Harwood Street
c/o Southwestern Financial Services Corporation,
Dallas, Texas 75201
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (214) 954-7111
PennCorp Financial Group, Inc.
(Former name or former address, if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF THE REGISTRANT
In connection with the consummation the Plan of Reorganization of the
Registrant described in Item 3 hereof, the following individuals and entities
acquired the percentage of beneficial ownership of the Registrant's outstanding
Common Stock set forth below, which may constitute a change of control of the
Registrant:
Holder Percentage Ownership
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Bernard Rapoport 17.7%
Inverness/Phoenix Capital LLC and affiliates 30.9%
Vicuna Advisors LLC and affiliates 12.1%
John Sharpe 2.6%
Each of the foregoing parties utilized internal funds to acquire such
beneficial ownership.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On June 13, 2000, the Registrant (f/k/a PennCorp Financial Group, Inc.)
consummated the Plan of Reorganization under chapter 11 of the Bankruptcy Code
proposed by PennCorp Financial Group, Inc. and the Unofficial Committee of
Preferred Shareholders (the "Plan"). The Plan was confirmed by the Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") on June 5, 2000.
The following recapitalization of the Registrant's equity securities was
effected under the Plan:
(i) Holders of the Registrant's $3.375 Convertible Preferred Stock and
$3.50 Series II Preferred Stock (collectively, the "Preferred Stock") received
one share of the Registrant's new Common Stock, par value $.01 per share (the
"Common Stock"), in exchange for each share of Preferred Stock. The Registrant
issued 5,175,000 shares of Common Stock as a result of the exchange, which
represents 57.3% of the outstanding Common Stock following the recapitalization.
(ii) The Registrant issued 1,960,000 shares of Common Stock, representing
21.6% of the outstanding Common Stock following the recapitalization, to holders
of Preferred Stock upon exercise of rights to acquire such Common Stock for an
aggregate purchase price of $24,500,000. Of these shares, Inverness/Phoenix
Capital and its affiliates purchased 1,227,563 shares of Common Stock and
affiliates of Vicuna Advisors, LLC purchased 301,670 shares of Common Stock,
respectively.
(iii) The Registrant issued 1,600,000 shares of Common Stock to Mr. Bernard
Rapoport, the Registrant's new Chairman and Chief Executive Officer, for an
aggregate purchase price of $20,000,000 and 240,000 shares of Common Stock to
certain family partnerships controlled by John T. Sharpe, the Registrant's new
Vice-Chairman, for an aggregate purchase price of $3,000,000. These shares
represent 20.3% of the shares issued in the recapitalization.
(iv) The Registrant awarded 60,000 shares of Common Stock to executive
officers pursuant to their employment agreements, awarded 24,000 shares of
Common Stock to William McCormick, a consultant, and granted options to purchase
585,000 shares at $12.50 per share to certain officers, directors and employees
of the Registrant, including options to acquire 170,000 shares granted to John
Sharpe.
In total, the Company issued 9,059,000 shares of Common Stock in the
recapitalization, and all outstanding shares of the Preferred Stock and shares
of the Registrant's existing common stock were cancelled pursuant to the Plan.
In addition, under the Plan, the Registrant entered into a new senior
secured revolving credit agreement with ING (U.S.) Capital, LLC and the other
lenders party thereto pursuant to which the Registrant may borrow up to
$95,000,000. The Registrant used $81,000,000 of loan proceeds from this
facility and approximately $100,000,000 of cash to repay all outstanding amounts
owing under its existing senior credit agreement and its 9.25% senior
subordinated notes due 2003. As part of the recapitalization, the Registrant
received extraordinary dividends of $55 million from its insurance subsidiaries.
In connection with the Plan, the Registrant has changed its name to
"Southwestern Life Holdings, Inc." and amended and restated its Certificate of
Incorporation and its Bylaws. The new
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board of directors of the Registrant appointed under the Plan consists of the
following individuals: Mr. Bernard Rapoport, Mr. John T. Sharpe, Mr. Steve R.
Johnson, Mr. James C. Comis III, Mr. Robert N. Sheehy and Mr. Larry Jaynes.
The pro forma assets and liabilities of the Registrant, giving effect to
the terms of the Plan, are included as Exhibit F to the Disclosure Statement
pursuant to section 1125 of the Bankruptcy Code filed with the Bankruptcy Court
on April 25, 2000. The Disclosure Statement is included as Exhibit 2.2 to this
Form 8-K and Exhibit F is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c)
Exhibit
Number Exhibit
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2.1 Plan of Reorganization under chapter 11 of the Bankruptcy Code of the
Registrant
2.2 Disclosure Statement under Section 1125 of the Bankruptcy Code of the
Registrant
* 3.1 Amended and Restated Certificate of Incorporation
* 3.2 Amended and Restated Bylaws
10.1 Subscription Agreement dated as of June 13, 2000, among the
Registrant, Bernard Rapoport, SLM Investment, LP, Sharpe Taylor
Investments, Ltd, and JTS Family Limited Partnership #14
10.2 Registration Agreement dated as of June 13, 2000, among the
Registrant, Inverness/Phoenix Capital LLC, Bernard Rapoport, SLM
Investment, LP, Sharpe Taylor Investments, Ltd, JTS Family Limited
Partnership #14, John Sharpe and Steve Johnson
10.3 Executive Stock and Employment Agreement dated as of June 13, 2000,
between the Registrant and Bernard Rapoport
10.4 Employment Agreement dated as of June 13, 2000, between the Registrant
and Steve Johnson
10.5 Employment Agreement dated as of June 13, 2000, between the Registrant
and David Little
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10.6 Employment Agreement dated as of June 13, 2000, between the Registrant
and Ron Archer
10.7 Employment Agreement dated as of June 13, 2000, between the Registrant
and David Commons
10.8 Consulting Agreement dated as of June 13, 2000, between the Registrant
and John Sharpe
10.9 Option Agreement dated June 13, 2000, between the Registrant and John
Sharpe.
10.10 Consulting Agreement dated as of June 13, 2000, between the Registrant
and William McCormick
10.11 $95,000 Senior Credit Agreement among the Registrant, as Borrower, the
lenders party thereto and ING (U.S.) Capital, LLC as Administrative
Agent
* Incorporated by reference from the Registrant's Form 8-A (filed on
June 13, 2000).
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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.
Date: June 20, 2000
SOUTHWESTERN LIFE HOLDINGS, INC.
By: /s/ Steve R. Johnson
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Steve R. Johnson
President and Chief Operating Officer
