Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. During the period covered by this report, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act).
We describe in the Company's Form 10, Note 2—Restatement of Previously Issued Financial Statements to our audited financial statements, the background to the restatement of our previously-issued audited financial statements for the year ended December 31, 2020. Our management has concluded that the restatement resulted from a material weakness in our internal control over financial reporting as of December 31, 2020. Due to this material weakness in our disclosure controls and procedures and internal control over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2021.
Although the Company has taken significant steps in our remediation plan, the Company continues to implement, document, and communicate policies, procedures, and internal controls. As a result of the material weakness, our management has identified the need for stronger controls when assessing the accounting for significant and unusual transactions that involve a high degree of judgment and complexity, along with the need for additional technical U.S. GAAP accounting expertise. Our management has implemented and enhanced controls when assessing the accounting for significant and unusual transactions in the third quarter of 2021 as well as made some key hires for additional technical U.S. GAAP accounting expertise. The Company believes that these actions will remediate the material weakness. However, the material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of this material weakness will be completed in the second quarter of 2022.
Changes in Internal Control Over Financial Reporting
As described above, the Company has taken steps to remediate the material weakness in its internal control over financial reporting and is implementing additional controls to remediate the material weakness. Other than these additional controls, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
The Annual Report on Form 10-K does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by the rules of the SEC for newly public companies.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
211
Part III
Item 10. Directors, Executive Officers and Corporate Governance
All information required by Items 10, 11, 12, 13 and 14 of this Form 10-K is incorporated by reference from the definitive proxy statement for the Company's 2022 Annual Meeting of Shareholders, which will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A. Information about our Executive Officers is also located in Item 1. Business of this Form 10-K.
Item 11. Executive Compensation
See Item 10 herein above.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
See Item 10 herein above.
Item 13. Certain Relationships and Related Transactions, and Director Independence
See Item 10 herein above.
Item 14. Principal Accountant Fees and Services
See Item 10 herein above.
212
Part IV
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as exhibits hereto:
Number Description
2.1 Demerger Agreement, between Prudential plc and Jackson Financial Inc., dated as of August 6, 2021, incorporated by reference to exhibit 2.1 to Jackson Financial, Inc.’s Form 8-K, dated August 6, 2021.
3.1 Second Amended and Restated Certificate of Incorporation of Jackson Financial Inc., incorporated by reference to exhibit 3.1 to Jackson Financial, Inc.’s Form 8-K, dated September 10, 2021.
3.2 Second Amended and Restated By -L aws of Jackson Financial Inc., incorporated by reference to exhibit 3.2 to Jackson Financial, Inc.’s Form 8-K, dated September 10, 2021.
4.1 Form of Class A Common Stock Certificate, incorporated by reference to exhibit 4.1 to Jackson Financial Inc.’s Amendment No. 1 to Form 10, dated April 16, 2021.
4.2 Indenture date d as of November 23, 2021 , between Jackson Financial Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, incorporated by reference to exhibit 4.1 to Form 8-K, dated November 23, 2021.
4.3 First Supplemental Indenture dated as of November 23, 2021 , between Jackson Financial Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 2023 Notes, incorporated by reference to exhibit 4.2 to Jackson Financial Inc.’s Form 8-K, dated November 23, 2021 .
4.4 Second Supplemental Indenture dated as of November 23, 2021 , between Jackson Financial Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 2031 Notes, incorporated by reference to exhibit 4.3 to Jackson Financial Inc.’s Form 8-K, dated November 23, 2021.
4.5 Third Supplemental Indenture dated as of November 23, 2021 , between Jackson Financial Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 2051 Notes, incorporated by reference to exhibit 4.4 to Jackson Financial Inc.’s Form 8-K, dated November 23, 2021.
4.6* Description of Registrant’s Securities Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.
10.1 Registration Rights Agreement, among Jackson Financial Inc., Prudential plc and Athene Co-Invest Reinsurance Affiliate 1A Ltd., dated as of August 6, 2021, incorporated by reference to exhibit 10.1 to Jackson Financial Inc.’s Form 8-K, dated August 6, 2021.
10.2 Letter Agreement by and among Prudential plc, Jackson Financial Inc. and Athene Co-Invest Reinsurance Affiliate 1A Ltd., dated as of August 6, 2021, incorporated by reference to exhibit 10.2 to Jackson Financial Inc.’s Form 8-K, dated August 6, 2021.
10.3 Coinsurance Agreement, dated as of June 18, 2020, by and between Jackson National Life Insurance Company and Athene Life Re Ltd. incorporated by reference to exhibit 10.2 to Jackson Financial Inc.’s Form 10, dated March 22, 2021 .
10.4 Amendment No. 1 to Coinsurance Agreement, dated as of September 30, 2020, by and between Jackson National Life Insurance Company and Athene Life Re Ltd. incorporated by reference to exhibit 10.2.1 to Jackson Financial Inc.’s Form 10, dated March 22, 2021.
213
10.5 Investment Agreement, dated as of June 18, 2020, by and between Athene Life Re Ltd. and Brooke (Holdco1) Inc. incorporated by reference to exhibit 10.3 to Jackson Financial Inc.’s Form 10, dated March 22, 2021.
10.6 S tockholders Agreement, dated as of July 17, 2020, among Jackson Financial Inc., Prudential (US Holdco 1) Limited, Athene Life Re Ltd. and any Person who becomes a party thereto pursuant to Section 3.1(c) thereof incorporated by reference to exhibit 10.4 to Jackson Financial Inc.’s Form 10, dated March 22, 2021.
10.7 Jackson Financial Inc. 2021 Omnibus Incentive Plan, incorporated by reference to exhibit 10.6. to Jackson Financial Inc.’s Amendment No. 1 to Form 10 , dated April 16, 2021.
10.8 Form of Director Indemnification Agreement incorporated by reference to exhibit 10.7 to Jackson Financial, Inc.’s Amendment No. 1 to Form 10, dated April 16, 2021.
10.9 Revolving Credit Agreement, dated as of February 22, 2021, by and among Jackson Financial Inc., the banks party thereto and Citigroup Global Markets Inc., as Administrative Agent , incorporated by reference to exhibit 10.10 to Jackson Financial Inc.’s Amendment No. 1 to Form 10, dated April 16, 2021.
10.10 Amendment No. 1, dated as of July 19, 2021, to the Revolving Credit Agreement, dated as of February 22, 2021, among Jackson Financial Inc., the banks party thereto and Citibank, N.A., as Administrative Agent, incorporated by reference to exhibit 10.8.1 to Jackson Financial Inc.’s Amendment No. 4 to Form 10, dated July 29, 2021.
10.11 Term Loan Agreement, dated as of February 22, 2021, by and among Jackson Financial Inc., the banks party thereto and Citigroup Global Markets Inc., as Administrative Agent, incorporated by reference to exhibit 10.11 to Jackson Financial Inc.’s Form 10, dated March 22, 2021.
10.12 Amendment No. 1, dated as of July 19, 2021, to the Term Loan Credit Agreement, dated as of February 22, 2021, among Jackson Financial Inc., the banks party thereto and Citibank, N.A., as Administrative Agent, incorporated by reference to exhibit 10.9.1 to Jackson Financial Inc.’s Amendment No. 4 to Jackson Financial Inc.’s Form 10, dated July 29, 2021.
10.13†
Separation Letter, dated as of October 19, 2020, from PPM America, Inc. to Mark Mandich, incorporated by reference to exhibit 10.12 to Jackson Financial Inc.’s Form 10, dated March 22, 2021.
10.14†
Offer Letter Agreement, by and between Axel André and Jackson National Life Insurance Company, dated as of December 12, 2019, incorporated by reference to exhibit 10.15 to Jackson Financial Inc.’s Form 10, dated March 22, 2021.
10.15†
Offer Letter Agreement, by and between Chad Myers and Jackson National Life Insurance Company, dated as of January 8, 2020, incorporated by reference to exhibit 10.16 to Jackson Financial Inc.’s Form 10, dated March 22, 2021.
10.16†
Executive Contract of Employment, by and between Michael Falcon, Jackson National Life Insurance Company and Prudential PLC, dated as of October 11, 2018, incorporated by reference to exhibit 10.17 to Jackson Financial, Inc.’s Form 10, dated March 22, 2021.
10.17†
Offer Letter Agreement, by and between Michael Falcon and Prudential PLC, dated as of October 11, 2018 , incorporated by reference to exhibit 10.18 to Jackson Financial, Inc.’s Form 10, dated March 22, 2021.
10.18†
Letter Agreement, by and between Michael Falcon and Prudential PLC, dated as of April 5, 2020 , incorporated by reference to exhibit 10.19 to Jackson Financial, Inc.’s Form 10, dated March 22, 2021.
10.19†
Separation Agreement, by and between Axel Andre and Jackson National Life Insurance Company, dated as of March 26, 2021 incorporated by reference to exhibit 10.18 to Jackson Financial, Inc.’s Form 10, dated March 22, 2021.
214
10.20†
Separation Agreement, by and between Michael Falcon and Jackson National Life Insurance Company, dated as of April 5, 2021 , incorporated by reference to exhibit 10.19 to Jackson Financial, Inc.’s Form 10, dated March 22, 2021.
10.21†
Separation Agreement, by and between Mark Mandich and PPM America, Inc., dated as of May 1, 2021 , incorporated by reference to exhibit 10.20 to Jackson Financial, Inc.’s Amendment No. 3 to Form 10, dated July 14, 2021.
10.22 Registration Rights Agreement dated November 23, 2021 between Jackson Financial Inc. and Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC, as representatives of the initial purchasers named therein, incorporated by reference to exhibit 10.1 to Jackson Financial Inc.’s Form 8-K, dated November 23, 2021.
10.23 Class A Common Stock Repurchase Agreement, dated December 11, 2021 , between Jackson Financial Inc. and Prudential plc, incorporated by reference to exhibit 10.1 to Jackson Financial Inc.’s Form 8-K, dated December 13, 2021.
10.24 Class A Common Stock Repurchase Agreement, dated December 11, 2021 , between Jackson Financial Inc. and Athene Co-Invest Reinsurance Affiliate 1A Ltd., incorporated by reference to exhibit 10.2 to Jackson Financial Inc.’s Form 8-K, dated December 13, 2021.
10.25*†
Form of Notice and the 2021 Performance Unit Award Agreement between Jackson Financial Inc. and P. Chad Myers, Laura L. Prieskorn, Craig D. Smith, and Marcia L. Wadsten, with a grant date of October 4, 2021.
10.26*†
Form of Notice and the 2 021 Restricted Share Unit Award Agreement between Jackson Financial Inc. and P. Chad Myers, Laura L. Prieskorn, Craig D. Smith, and Marcia L. Wadsten, with a grant date of October 4, 2021.
10.27*†
Form of Notice and the 20 21 Celebration Award Restricted Share Unit Award Agreement between Jackson Financial Inc. and P. Chad Myers, Laura L. Prieskorn, Craig D. Smith, and Marcia L. Wadsten, with a grant date of October 4, 2021.
10.28*†
Form of Notice and the 2021 Founder’s Award Restricted Share Unit Award Agreement between Jackson Financial Inc. and Laura L. Prieskorn and Marcia L. Wadsten, with a grant date of October 4, 2021.
10.29*†
Form of the 2021 Director Restricted Share Unit Agreement and notice of grant (annual equity in lieu of cash retainer) between Jackson Financial Inc. and Lily Fu Claffee, Martin J. Lippert and Esta E. Stecher, with a grant date of October 4, 2021.
10.30*†
Form o f the 20 21 Director Restricted Share Unit Agreement and notice of grant (annual equity retainer) between Jackson Financial Inc. and Lily Fu Claffee, Gregory T. Durant, Steven A. Kandarian, Derek G. Kirkland, Drew E. Lawton, Martin J. Lippert, Russell G. Noles, and Esta E. Stecher, with a grant date of October 4, 2021
10.31*†
Form of the 2 021 Director Restricted Share s Award Agreement and notice of grant (annual equity retainer October 1, 2021-May 31, 2022) between Jackson Financial Inc. and Derek G. Kirkland and Russell G. Noles, with a grant date of October 4, 2021
10.32*†
Form of the 2021 Converted C a sh Retainer Director Restricted Share s Award Agreement and notice of grant (annual equity in lieu of cash retainer October 1, 2021 -May 31, 2022) between Jackson Financial Inc. and Russell G. Noles and Derek G. Kirkland, with a grant date of October 4, 2021.
10.33*†
Form of t he 2 021 Director Restricted Share s Award Agreement - Founde r s Award and notice of grant between Jackson Financial Inc. and Derek G. Kirkland and Russell G. Noles, with a grant date of October 4, 2021.
215
10.34*†
Form of the 2021 Director Restricted Share Unit Agreement - Founder s Award and notice of grant between Jackson Financial Inc. and Lily Fu Claffee, Gregory T. Durant, Drew E . Lawton, Martin J . Lippert, and Esta E. Stecher, with a grant date of October 4, 2021.
10.35*†
Form of Equity Award Exchange Notic e and th e PRUDENTIAL PLC Restricted Stock Plan 2015 U.S. Award Certificate (Project Scott) ( converted to restricted share units ) betwe en Jackson Fi nancial Inc. and P. Chad Myers, Laura L. Prieskorn, and Ma rcia L. Wadsten, with a grant date of October 4, 202 1.
10.36*†
Form of Equity Award Exchange Noti c e and the 2019 PRUDENTIAL PLC LONG TERM INCENTIVE PLAN AWARD CERTIFICATE (converted to performance share units ) between Jackson Financial Inc. and P. Chad Myers, Laura L. Prieskorn, and Craig D. Smith , with a grant date of October 4, 2021.
10.37*†
Equity Award Exchange Notice and the 2019 PRUDENTIAL PLC LONG TERM INCENTIVE PLAN AWARD CERTIFICATE (converted to performance share units ) between Jackson Financial Inc. and Marcia Wadste n, dated November 16, 2021 .
10.38*†
Form of Equity Award Exchange Noti ce and the 20 20 PRUDENTIAL PLC LONG TERM INCENTIVE PLAN AWARD CERTIFICATE (converted to performance share units ) between Jackson Financial Inc. and P. Chad Myers, Laura L. Prieskorn , and Craig D. Smith , with a grant date of October 4, 2021.
10.39*† Equity Award Exchange Notice and the 2020 PRUDENTIAL PLC LONG TERM INCENTIVE PLAN AWARD CERTIFICATE (converted to performance share units) between Jackson Financial Inc. and Marcia Wadsten, dated November 16, 2021 .
10.40*†
2021 Director Restricted Share Unit Agreement - F ounder s Award and notice of grant between Jackson Financial Inc. and Steven A Kandarian , dated December 24, 2021.
21.1*
List of subsidiaries of Jackson Financial Inc.
23.1* Consent of KPMG LLP, dated March 7 , 2022.
31.1* Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1* Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2* Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1 Information Statement Distr ibution of Class A Com mon Stock of Jackson Financial Inc., dated August 6, 2021, incorporated by reference to exhibit 99.1 to Jackson Financial Inc.’s Form 8-K, dated August 6, 2021.
101.INS* Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH* Inline XBRL Taxonomy Extension Schema Document
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document
216
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed herewith.
*† Identifies each management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary
None.
217
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
JACKSON FINANCIAL INC.
(Registrant)
Date: March 7, 2022 By: /s/ Laura L. Prieskorn
Laura L. Prieskorn
President and Chi ef Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Laura L. Prieskorn and Marcia Wadsten, and each of them severally, his or her true and lawful attorney-in-fact, with full power of substitution and resubstitution, to sign in his or her name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with this Annual Report on Form 10-K and any and all amendments hereto, as fully for all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on the 7th of March, 2022.
218
Signature Title
/s/ Steven A. Kandarian Chairman of the Board; Director
Steven A. Kandarian
/s/ Laura L. Prieskorn President and Chief Executive Officer; Director
Laura L. Prieskorn
/s/ Marcia Wadsten Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Marcia Wadsten
/s/ Don W. Cummings Senior Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)
Don W. Cummings
/s/ Gregory T. Durant Director
Gregory T. Durant
/s/ Lily Fu Claffe Director
Lily Fu Claffee
/s/ Derek G. Kirkland Director
Derek G. Kirkland
/s/ Drew Lawton Director
Drew Lawton
/s/ Martin J. Lippert Director
Martin J. Lippert
/s/ Russell G. Noles Director
Russell G. Noles
/s/ Esta E. Stecher Director
Esta E. Stecher
219