Item 1.01 Entry into a Material Definitive Agreement.
OnFebruary 26, 2021 (the "Effective Time"), pursuant to the Agreement and Plan of Merger (the "Merger Agreement"), by and amongThird Point Reinsurance Ltd. ("TPRE"), aBermuda exempted company limited by shares, Sirius International Insurance Group, Ltd. ("Sirius"), aBermuda exempted company limited by shares, andYoga Merger Sub Limited ("Merger Sub"), aBermuda exempted company limited by shares and wholly owned subsidiary of TPRE, Merger Sub was merged with and into Sirius (the "Merger"), with Sirius continuing as the surviving company in the Merger, as a wholly owned subsidiary of TPRE. TPRE was renamedSiriusPoint Ltd. following the Merger and is continuing as the parent company (the "Company" or "SiriusPoint"). SiriusPoint trades on theNew York Stock Exchange ("NYSE") under the ticker symbol "SPNT". At the Effective Time, pursuant to the terms of the Merger Agreement, each common share, par value$0.01 per share, of Sirius (each, a "Sirius Share") that was issued and outstanding immediately prior to the Effective Time was canceled and converted into the right to receive one of the following three consideration options at the shareholder's election: •$9.50 in cash; •a combination of common shares, par value$0.10 per share, of the Company ("Company Shares"), and CVR consideration (a "Share & CVR Election") comprising (1) 0.743 of a Company Share and (2) one contractual contingent value right (each, a "CVR"), which represents the right to receive a contingent cash payment, which, taken together with the fraction of the Company Share received, guarantee that on the second anniversary of the Effective Time, the electing shareholder will have received equity and cash valued at least$13.73 per Sirius Share (together, the "Share & CVR Consideration"); or •a combination of cash, Company Shares, Series A Preference Shares, Warrants and Upside Rights (a "Mixed Election") comprising (1)$0.905 in cash, (2) 0.496 Company Shares, (3) 0.106 Series A preference shares, par value$0.10 per share, of the Company (the "Series A Preference Shares"), (4) 0.190 of a warrant (each, a "Warrant") and (5)$0.905 aggregate principal amount of an "upside right" issued by the Company (collectively, the "Upside Rights"). Based on the preliminary report provided at the Effective Time by the election and exchange agent retained by the Company in connection with the Merger, the election results with respect to the merger consideration were as follows: •Holders of approximately 32,257 Sirius Shares outstanding (or approximately 0.03%) immediately prior to the Effective Time elected to receive cash. •Holders of approximately 4,691,699 Sirius Shares outstanding (or approximately 4.07%) immediately prior to the Effective Time made the Share & CVR Election or did not make an election and received the Share & CVR Consideration. •Holders of approximately 110,575,385 Sirius Shares outstanding (or approximately 95.9%) immediately prior to the Effective Time made the Mixed Election. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Company's Current Report on Form 8-K filed onAugust 10, 2020 and is incorporated herein by reference. Warrant Agreement OnFebruary 26, 2021 , the Company entered into a warrant agreement (the "Warrant Agreement"). Pursuant to the Warrant Agreement, each Warrant permits the holder thereof to purchase one Company Share for$11.00 per share, subject to adjustment as set forth in the Warrant Agreement. The Warrants are exercisable at any time after the Effective Time through the fifth anniversary of the Effective Time. If the Warrants are not exercised prior to the fifth anniversary of the Effective Time, the Warrants will expire without value. The foregoing summary of the Warrant Agreement does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Warrant Agreement, which is filed as Exhibit 4.1 to this Current Report on Form 8-K, and incorporated by reference herein.
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Contingent Value Rights Agreement At the Effective Time, the Company entered into a contingent value rights agreement (the "CVR Agreement"). Pursuant to the CVR Agreement, the Company issued CVRs representing the right to receive a contingent cash payment of (1) in the case of acceleration upon certain breaches of the CVR Agreement,$13.73 minus the volume weighted average price of the Company Shares measured over the 14 consecutive trading day period beginning on the date a breach is declared, multiplied by 0.743, (2) on the second anniversary (the "Maturity Date") of the Effective Time,$13.73 minus the volume weighted average price of the Company Shares measured over the 14 consecutive trading day period prior to the Maturity Date multiplied by 0.743 and (3) in the case of redemption by the Company prior to the Maturity Date, the discounted present value of$13.73 , discounted from the Maturity Date to the last day of the 14 consecutive trading day period beginning on the date of the redemption notice ("Redemption Valuation Period"), minus the volume weighted average price of the Company Shares measured over the Redemption Valuation Period multiplied by 0.743. The foregoing summary of the CVR Agreement does not purport to be a complete description and is qualified in its entirety by reference to the full text of the CVR Agreement, which is filed as Exhibit 4.2 to this Current Report on Form 8-K, and is incorporated by reference herein. Upside Rights At the Effective Time, the Company issued Upside Rights. Pursuant to the Upside Rights, if (i) the last reported sales price of the Company Shares for each of 30 consecutive trading days exceeds the target price of$20.00 (the "Target Price"), subject to adjustment, prior to the first anniversary of the Effective Time, or (ii) the Company enters into a definitive agreement to consummate a change of control transaction and the per share consideration in such transaction exceeds the Target Price, the principal amount of the Upside Rights will become immediately due and payable. Settlement of the Upside Rights will be in a number of Company Shares equal to$100,070,726 divided by the Company's average share price determined using a 30-day volume weighted average price ("VWAP"), or in the case of a change of control transaction, the lesser of the per share consideration being offered in such change of control transaction and the Company's average share price determined using a 30-day VWAP. The foregoing summary of the Upside Rights does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Upside Rights, which is filed as Exhibit 4.3 to this Current Report on Form 8-K, and is incorporated by reference herein. Registration Rights Agreement At the Effective Time, the Company andCM Bermuda Limited ("CM Bermuda") entered into a Registration Rights Agreement (the "Registration Rights Agreement"), pursuant to which CM Bermuda is able to require the Company, beginning after the lock-up period described below, to file one or more registration statements with theSecurities and Exchange Commission covering the public resale of Company Shares beneficially owned by CM Bermuda. The rights of CM Bermuda and its permitted transferees under the Registration Rights Agreement will remain in effect with respect to all Company Shares covered by such agreement until such securities (a) are sold in a private transaction in which the transferor's rights under the Registration Rights Agreement are not assigned to the transferee, (b) are sold pursuant to an effective registration statement, (c) are sold pursuant to Rule 144 or Rule 145 (or any similar provision then in force under the Securities Act), (d) may be sold pursuant to Rule 144 without any conditions, (e) with respect to any particular holder, such holder beneficially owns less than 2% of the Company Shares or (f) shall have ceased to be outstanding. Demand Registration. CMBermuda is able to request an unlimited number of registrations under the Securities Act of all or any portion of the Company Shares covered by the Registration Rights Agreement, and the Company is obligated, subject to limited exceptions, to register such shares as requested by CM Bermuda. Subject to certain exceptions, the Company may defer the filing of a registration statement after a demand request has been made if, at the time of such request, the Company's board of directors (the "Board") determines that any pending or imminent event would require disclosure of material, non-public information in the registration statement for such registration statement not to be materially misleading and would not otherwise be required to be publicly disclosed by the Company. The Company is not obligated to effect more than one demand registration in any 60-day period or a demand registration that would reasonably be expected to result in gross cash proceeds of less than$50 million . Shelf Registration. At any time after expiration of the applicable lock-up period, the Company is obligated, upon request by CM Bermuda, to file a shelf registration statement to register all or any portion of the Company Shares covered by the Registration
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Rights Agreement. CMBermuda may, at any time and from time to time, request that the Company complete an unlimited number of shelf take-downs, subject to certain limited exceptions. Piggy-Back Registration. If at any time the Company intends to file on its behalf or on behalf of any of its other security holders a registration statement in connection with a public offering of any of the Company's securities on a form and in a manner that would permit the registration for offer and sale of the Company Shares held by CM Bermuda, CM Bermuda has the right to include its Company Shares in that offering. CMBermuda's ability to participate in any such offering will be subject to market "cut-back" exceptions. Registration Procedures; Expenses. The Company is responsible for all registration expenses, including expenses incurred by the Company, in connection with the registration, offer and sale of securities under the Registration Rights Agreement by CM Bermuda, except for selling commissions and transfer taxes applicable to such sale. The Registration Rights Agreement sets forth customary registration procedures, including an agreement by the Company to make its management reasonably available to participate in road show presentations in connection with any underwritten offerings. The Company also agrees to indemnify CM Bermuda and its permitted transferees with respect to liabilities resulting from untrue statements or omissions in any registration statement used in any such registration, other than untrue statements or omissions resulting from information furnished to the Company for use in a registration statement by CMBermuda or any permitted transferee. The Registration Rights Agreement also includes a lock-up agreement, pursuant to which CM Bermuda agrees not to sell, transfer, hedge or otherwise dispose of its Company Shares during the period from the Effective Time through and including (i) the 225th day following the Effective Time with respect to one-third of its Company Shares (assuming the Series A Preference Shares, Warrants and the Upside Right were fully converted, exercised or exchanged to or into Common Shares on the date hereof), (ii) the 365th day following the Effective Time with respect to one-third of its Company Shares (assuming the Series A Preference Shares, Warrants and the Upside Right were fully converted, exercised or exchanged to or into Common Shares on the date hereof) and (iii) the 450th day following the Effective Time with respect to one-third of its Company Shares (assuming the Series A Preference Shares, Warrants and the Upside Right were fully converted, exercised or exchanged to or into Common Shares on the date hereof). The foregoing description of the Registration Rights Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Registration Rights Agreement, which is filed as Exhibit 4.4 to this Current Report on Form 8-K, and is incorporated by reference herein. CM Bermuda Investor Rights Agreement At the Effective Time, the Company and CM Bermuda entered into an Investor Rights Agreement (the "Investor Rights Agreement"), pursuant to which CMBermuda's and its affiliates' voting power in the Company will be capped at 9.9%, in accordance with the terms described in the Investor Rights Agreement and the Bye-laws, and, for so long as CM Bermuda and its affiliates beneficially own at least 9.9% of the Company Shares, they shall have the right to designate an observer to the Board. The foregoing description of the Investor Rights Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Investor Rights Agreement, which is filed as Exhibit 4.5 to this Current Report on Form 8-K, and is incorporated by reference herein. Loeb Investor Rights Agreement At the Effective Time, the Company and Daniel S. Loeb entered into an Investor Rights Agreement (the "Loeb Investor Rights Agreement"), pursuant to whichMr. Loeb has consent rights over transactions between the Company, its affiliates and certain related investors, as well as consent rights over amendments to the Memorandum ofAssociation of the Company which would have a material adverse effect on his investor rights. The rights reflected in the Loeb Investor Rights Agreement were previously contained in TPRE's Amended and Restated Bye-laws and removed as part of the amendments described below. These consent rights only apply for so long asMr. Loeb holds a number of Company Shares equal to at least 25% of the total number of Company Shares he held onDecember 22, 2011 .Mr. Loeb also has the right to designate an observer to the Board. The foregoing description of the Loeb Investor Rights Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Loeb Investor Rights Agreement, which is filed as Exhibit 4.6 to this Current Report on Form 8-K, and is incorporated by reference herein.
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Assumption Agreement At the Effective Time, the Company entered into an assumption agreement (the "Assumption Agreement") by and among (i) the Company, (ii)Bain Capital Special Situations Asia, L.P. , aCayman Islands limited partnership ("Bain"), (iii)CCOF Master, L.P. , aDelaware limited partnership ("Carlyle"), (iv)Centerbridge Credit Partners Master, LP , aDelaware limited partnership, andCenterbridge Special Credit Partners III, LP , aDelaware limited partnership (collectively, "Centerbridge"), and (v)GPC Partners Investments (Canis) LP , aDelaware limited partnership ("Gallatin" and, together with Bain,Carlyle and Centerbridge, collectively, the "Sirius Warrant Holders"). Pursuant to the terms of the Assumption Agreement, the Company agreed to assume all of the warrants issued onNovember 5, 2018 andNovember 28, 2018 (the "Sirius Warrants") by Sirius to the Sirius Warrant Holders. Prior to the Effective Time, the Sirius Warrants were exercisable for an aggregate of 5,418,434 Sirius Shares. At the Effective Time, each Sirius Warrant ceased to represent the right to purchase Sirius Shares and each Sirius Warrant Holder was instead granted the right to receive, upon exercise of a Sirius Warrant, solely the Share & CVR Consideration receivable in respect of the number of Sirius Shares for which such Sirius Warrant was exercisable immediately prior to the Effective Time. The exercise price was also adjusted in accordance with the terms of the Merger Agreement and the Sirius Warrants to$13.00 . The foregoing description of the Assumption Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Assumption Agreement, which is filed as Exhibit 4.7 to this Current Report on Form 8-K, and is incorporated by reference herein. At the Effective Time, the Company issued a press release announcing the closing of the Merger described above. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Following the Effective Time, the Company will no longer provide estimated net returns on net investments managed byThird Point LLC for the current monthly and year-to-date periods on its website. Item 2.01 Completion of Acquisition or Disposition of Assets.
The information contained in Item 1.01 concerning the Merger is hereby 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.
As previously disclosed, on
All borrowings under the Facility bear interest at a rate per annum equal to, at the option of the Company, (i) adjusted LIBOR plus an applicable margin ranging from 1.25% to 2.25%, or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 1.25%, in each case with the applicable margin determined based upon the Company's credit rating. The Facility is subject to an unused line fee on or after the Closing Date on the average daily undrawn commitments under the Facility, payable quarterly in arrears, of 0.20% to 0.40% per annum based upon the Company's credit rating.
The Facility is subject to customary representations and warranties, affirmative and negative covenants and events of default (including a change of control provision) that the Company considers customary for similar facilities. The Facility also includes financial covenants, including a minimum consolidated tangible net worth test, a maximum consolidated indebtedness to total consolidated capitalization ratio and a financial strength rating test.
The foregoing description of the Facility does not purport to be complete and is
subject to, and qualified in its entirety by, the full text of the Facility, a
copy of which is attached hereto as Exhibit 10.1, and is incorporated by
reference herein.
Item 3.02 Unregistered Sales of
Sale of Common Shares to
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At the Effective Time, pursuant to the equity commitment letter by and among the
Company,
The information contained in Item 1.01 of this Current Report on Form 8-K, under the captions "CM Bermuda Investor Rights Agreement" and "Loeb Investor Rights Agreement" and the information contained in Item 5.03 of this Current Report on Form 8-K are hereby incorporated into this Item 3.03. Item 4.01 Changes in Registrant's Certifying Accountant.
(a) Resignation of Independent Registered Public Accounting Firm OnFebruary 26, 2021 , the Company received notification from its independent registered public accounting firm,Ernst & Young Ltd. ("EY"), that it is resigning as the Company's independent registered public accounting firm, with effect upon the closing of the Merger. EY's report on the Company's financial statements as of and for the year endedDecember 31, 2020 and 2019, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During the years endedDecember 31, 2020 and 2019, there were no: (i) disagreements with EY on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference to the subject matter of the disagreement in connection with its report or (ii) reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. The Company provided EY with a copy of this Current Report on Form 8-K prior to its filing with theSecurities and Exchange Commission ("SEC") and requested that EY furnish the Company with a letter addressed to theSEC stating whether or not EY agrees with the above statements. The letter from EY is filed with this Current Report on Form 8-K as Exhibit 16.1. (b) Appointment of New Independent Registered Public Accounting Firm OnFebruary 26, 2021 , following the resignation of EY, the board of directors of the Company filled the vacancy created by the resignation of EY with the appointment ofPricewaterhouseCoopers LLP ("PwC") to serve as the Company's independent registered public accounting firm until the Company's Annual General Meeting to be held later this year (the "2021 AGM"). The appointment of PwC for the ensuing fiscal year for a term that will expire at the Company's Annual General Meeting in 2022 will be subject to approval by the Company's shareholders at the 2021 AGM.
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During the years ended
of Certain Officers; Compensatory Arrangements of Certain Officers. Director Appointments At the Effective Time, the Company announced the appointment ofRachelle C. Keller ,Sharon M. Ludlow , Franklin (Tad) Montross IV andPeter W.H. Tan to the Board.Ms. Keller previously served as a Managing Director forCitibank, NA ("Citi"), the institutional division of the financial services multinational Citigroup, from 2011 to her retirement in 2018, as Global Chief Operating Officer for Prime,Futures and Securities services from 2014 to 2018, and as Global Head of Costing and Analytics, from 2011 to 2013. From 2008 to 2011,Ms. Keller served as Chief Financial Officer for theInstitutional Product Group , the brokerage division ofFidelity Investment LLC . Prior to that,Ms. Keller was Managing Director atJP Morgan Chase & Co. and served in a variety of roles, including Chief Financial Officer ofTreasury & Securities services. Prior to joiningJP Morgan Chase & Co. ,Ms. Keller was a Certified Public Accountant at various public accounting firms. She is a member ofArkansas State University's Founder's Circle , where she graduated with a bachelor's degree in accounting.Ms. Ludlow has more than 25 years of experience in the life & health and property & casualty re-insurance industries. During the course of her career,Ms. Ludlow served as President & CEO of the Canadian operations of Swiss Re and as President ofAviva Insurance Company of Canada .Ms. Ludlow also advised OMERS, one of Canada's largest defined benefit pension plans, on its global investment strategy in the insurance sector. During her tenure in the life insurance industry, Sharon played a key role in the demutualization and IPO ofCanada Life Financial (now owned by Great West Life). In addition,Ms. Ludlow , along with her co-founders, launchedKanetix , Canada's first online insurance marketplace.Ms. Ludlow served the insurance industry as a director on the boards ofInsurance Bureau of Canada ,Canadian Life & Health Association ,Institute for Catastrophic Loss Reduction and as Chair of the board of theReinsurance Research Council .Ms. Ludlow currently serves on the boards ofGreen Shield Canada andEIS Group .Ms. Ludlow joined the Lombard International Board of Directors inJanuary 2019 and chairs theAudit and Risk Committee .Ms. Ludlow is a Chartered Professional Accountant/Chartered Accountant (CPA, CA Canada) and holds a Bachelor of Commerce degree from theUniversity of Toronto . She is also a graduate of the Corporate Directors program atRotman School of Management ,University of Toronto and holds anInstitute of Corporate Directors designation (ICD.D).Mr. Montross is the former Chairman and Chief Executive Officer ofGeneral Reinsurance ("Gen Re"), a Berkshire Hathaway owned company, and held responsibility until 2016 for global underwriting policies, practices and protocols, as well as its Actuarial and Risk Management areas. He began his career with Gen Re in 1978 as a Casualty Facultative underwriter.Mr. Montross held a number of positions of increasing responsibility, both inthe United States and internationally. In 1992 he was promoted to Chief Underwriter for the Treaty business. In 2001, he became a member of Gen Re's Executive Committee and the group's President and Chief Underwriting Officer, with management responsibilities including Treaty underwriting, Actuarial and Claims. He was promoted to Chief Executive Officer in early 2008.Mr. Montross graduated fromHarvard College , with a degree in Business Administration. . . .
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