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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 1934
Date of Report (Date of earliest
event reported):
November 18, 1997
VARIFLEX, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-24338 95-3164466
(Commissioner File Number) (IRS Employer Identification Number
5152 N. Commerce Avenue
MOORPARK, CA 93021
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 523-0322
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Item 5. Other Events.
On November 18, 1997, Remy Capital Partners IV, L.P., a private investment
partnership ("Remy"), acquired approximately 28 percent of the common stock of
Variflex, Inc. (the "Company"). Remy purchased stock from entities controlled by
Raymond H. Losi, a co-founder of the Company, and other members of the Losi
family, for $9.2 million, or $5.50 per share (the "Transaction"). The Losi
family interests continue to hold approximately 32 percent of the Company's
outstanding shares.
In connection with the Transaction, Mark S. Siegel and Randall L. Bishop
of Remy have been appointed to the Company's Board of Directors. Mr. Siegel will
assume the position of Chairman of the Board, succeeding Raymond H. Losi who
will continue to serve as a director. Raymond H. Losi, II, who was not among the
selling shareholders and continues to beneficially own 22 percent of the
Company's outstanding stock, was elected Chief Executive Officer, and retains
the titles and responsibilities of President and Chief Operating Officer. As
part of the Transaction, Gerald I. Boyce, Barbara Losi and Marvin G. Murphy
resigned as directors.
In accordance with the terms of the Transaction, the Company entered into
consulting agreements with each of Raymond H. Losi and Remy (the "Consulting
Agreements"), pursuant to which Raymond H. Losi and Remy will each act as
independent consultants for a period of two years. As compensation under the
Consulting Agreements, Remy is to receive warrants to purchase 400,000 shares of
the Company's Common Stock at a price of $5.10 per share (the "Warrant Share
Price") and Raymond H. Losi is to receive a fee of $100,000 per year, other
perquisites and warrants to purchase 200,000 shares of the Company's Common
Stock at the Warrant Share Price. The warrants issued to Raymond H. Losi, as
well as warrants to purchase 100,000 shares of the Company's Common Stock at the
Warrant Share Price that were issued to Raymond H. Losi, II in accordance with
the Transaction (together, the "Warrants"), were issued by the Company in
accordance with Rule 16b-3 of the Securities Exchange Act of 1934, as amended.
In accordance with the terms of the Transaction, the Company also granted
certain registration rights to each of Remy and Raymond H. Losi, II.
Also in connection with the Transaction, a Voting Rights Agreement was
entered into among entities controlled by the Losi Family that hold Common Stock
of the Company (the "Losi Entities") and Remy (the "Voting Rights Agreement")
pursuant to which the parties agreed to the procedures the parties would follow
in nominating and voting for directors of the Company. Subject to certain
adjustments in the event that the holdings of Common Stock of Remy, on one hand,
or the Losi Entities, on the other hand, decline to certain levels, the Voting
Rights Agreement stipulates that, beginning in 1998, at each annual meeting of
the Company, the parties will vote the shares of Common Stock of the Company
owned by them for six directors, of which two directors shall be nominated by
Remy, two directors shall be nominated by the Losi Entities and two independent
directors shall be agreed to by the Losi Entities and Remy.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) EXHIBITS. The following exhibits accompany this Report:
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
10.1 Stock Purchase Agreement dated November 18, 1997, by and
between Remy Capital Partners IV, L.P., The RHL Limited
Partnership, EML Enterprises, L.P. and The BL 1995 Limited
Partnership.
10.2 Registration Rights Agreement dated November 18, 1997, by
and among Variflex, Inc., Remy Capital Partners IV, L.P. and
Raymond H. Losi, II.
10.3 Voting Agreement dated November 18, 1997, by and among
Raymond H. Losi, Raymond H. Losi, II, Raymond H. Losi, as
Trustee of the 1989 Raymond H. Losi Revocable Trust under
Declaration of Trust dated January 23, 1989, Losi
Enterprises Limited Partnership, Raymond H. Losi, II and
Kathy Losi, as Co-Trustees of the Jay and Kathy Losi
Revocable Trust dated January 1, 1989, EML Enterprises,
L.P., Eileen Losi, as Trustee of the Eileen Losi Revocable
Trust under Declaration of Trust dated October 13, 1993,
Barbara Losi, as Trustee of the 1989 Barbara Losi Revocable
Trust under Declaration of Trust dated January 31, 1989, The
BL 1995 Limited Partnership, Raymond H. Losi, as Trustee of
the Diane K. Losi Trust and Remy Capital Partners IV, L.P.
10.4 Warrant to purchase Variflex, Inc. Common Stock issued to
Remy Capital Partners IV, L.P.
10.5 Warrant to purchase Variflex, Inc. Common Stock issued to
Raymond H.
Losi.
10.6 Warrant to purchase Variflex, Inc. Common Stock issued to
Raymond H. Losi, II.
10.7 Consulting Agreement dated November 18, 1997, by and between
Variflex, Inc. and Remy Capital Partners IV, L.P.
10.8 Consulting Agreement dated November 18, 1997, by and between
Variflex, Inc. and Raymond H. Losi.
99.1 News Release dated November 19, 1997, announcing that Remy
Capital Partners IV, L.P., acquired approximately 28 percent
of the Company's common stock through a purchase from
Raymond H. Losi and other members of the Losi family, and
that Mark S. Siegal and Randall L. Bishop had been appointed
to the Company's Board of Directors and that Gerald I.
Boyce, Barbara Losi and Marvin G. Murphy resigned as
directors.
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.
VARIFLEX, INC.
By: /S/ RAYMOND H. LOSI II
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Raymond H. Losi II
President (Principal Executive
Officer)
Date: November 26, 1997
INDEX TO EXHIBITS
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION OF EXHIBIT NUMBERED PAGE
10.1 Stock Purchase Agreement dated November 18,
1997, by and between Remy Capital Partners IV,
L.P., The RHL Limited Partnership, EML
Enterprises, L.P. and The BL 1995 Limited
Partnership.
10.2 Registration Rights Agreement dated
November 18, 1997, by and among Variflex,
Inc., Remy Capital Partners IV, L.P. and
Raymond H. Losi, II.
10.3 Voting Agreement dated November 18, 1997, by
and among Raymond H. Losi, Raymond H. Losi,
II, Raymond H. Losi, as Trustee of the
1989 Raymond H. Losi Revocable Trust under
Declaration of Trust dated January 23, 1989,
Losi Enterprises Limited Partnership,
Raymond H. Losi, II and Kathy Losi, as Co-
Trustees of the Jay and Kathy Losi Revocable
Trust dated January 1, 1989, EML Enterprises,
L.P., Eileen Losi, as Trustee of the Eileen
Losi Revocable Trust under Declaration of
Trust dated October 13, 1993, Barbara Losi,
as Trustee of the 1989 Barbara Losi Revocable
Trust under Declaration of Trust dated January
31, 1989, The BL 1995 Limited Partnership,
Raymond H. Losi, as Trustee of the Diane K.
Losi Trust and Remy Capital Partners IV, L.P.
10.4 Warrant to purchase Variflex, Inc. Common
Stock issued to Remy Capital Partners IV, L.P.
10.5 Warrant to purchase Variflex, Inc. Common
Stock issued to Raymond H. Losi.
10.6 Warrant to purchase Variflex, Inc. Common
Stock issued to Raymond H. Losi, II.
10.7 Consulting Agreement dated November 18,
1997, by and between Variflex, Inc. and
Remy Capital Partners IV, L.P.
10.8 Consulting Agreement dated November 18,
1997, by and between Variflex, Inc. and
Raymond H. Losi.
99.1 News Release dated November 19, 1997,
announcing that Remy Capital Partners IV,
L.P., acquired approximately 28 percent of
the Company's common stock through a
purchase from Raymond H. Losi and other
members of the Losi family, and that Mark S.
Siegal and Randall L. Bishop had been
appointed to the Company's Board of
Directors and that Gerald I. Boyce, Barbara
Losi and Marvin G. Murphy resigned as directors.