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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): DECEMBER 20, 2000
PALWEB CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 000-26331 75-1984048
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
1607 WEST COMMERCE STREET, DALLAS, TEXAS 75208
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 698-8330
Former name or former address, if changed since last report: NOT APPLICABLE
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ITEM 5. OTHER EVENTS
On December 20, 2000, Paceco Financial Services, Inc. ("PFS"), an
indirect wholly owned subsidiary of PalWeb Corporation ("PalWeb"), sent a Second
Supplemental Notice to Investment Certificate Holders of Paceco Financial
Services, Inc. dated December 20, 2000, (the "Second Supplemental Notice"),
stating that PFS had amended its plan for redeeming PFS's outstanding passbook
savings and time certificates (the "Certificates") as described in the Notice to
Depositors of Paceco Financial Services, Inc. dated October 10, 2000, which was
attached as Exhibit 99.1 to PalWeb's Form 10-QSB filed on October 16, 2000 (the
"Initial Notice"), and the Supplemental Notice to Investment Certificate Holders
of Paceco Financial Services, Inc. dated November 3, 2000, which was attached as
Exhibit 99.1 to PalWeb's Form 8-K filed on November 3, 2000 (the "First
Supplemental Notice"). The Initial Notice, the First Supplemental Notice and the
Second Supplemental Notice constitute the plan for redeeming the Certificates
and are referred to herein as the "Plan."
In general, the Plan provides a method for redeeming the Certificates
through the transfer of 43,500,000 shares of PalWeb common stock owned by PFS
("PFS Shares") to an independent trustee and the sale of the PalWeb Shares by
the trustee on or before December 31, 2004 either through open market or private
sales or by exercise of an option to put the shares to Paul Kruger, the
Company's chairman, Chief Executive Officer and principal shareholder, with the
net sales proceeds being used to redeem the Certificates. The PFS Shares
constitute 17.94% of PalWeb's 242,528,244 shares of outstanding common stock,
including the PFS Shares. Because PFS had sufficient other assets to meet its
obligations under the terms of the Plan in December 2000, no sales of PFS Shares
or exercise of the put was necessary in 2000. The next required payment to
holders of Certificates under the terms of the Plan is in December 2001.
Reference is made to the Second Supplemental Notice filed as Exhibit
99.1 hereto for a complete description of the modifications and terms of the
Plan.
As a result of implementation of the Plan, the independent trustee has
the power to sell and to vote the PFS Shares to the extent provided in the Plan.
The Plan provides that the trustee is obligated to sell the PFS Shares in the
market or in private transactions to the extent the net sales price will provide
sufficient funds to pay PFS depositors the amounts required under the Plan.
PalWeb estimates that the net sales price must be at least $0.12 per share for
the trustee to be obligated to sell PFS Shares rather than to exercise the put
to Paul Kruger. If the market price of the PalWeb common stock reaches this
level, it is possible that sales by the trustee would occur and these sales may
have an adverse effect on the market price of PalWeb common stock.
Prior to the implementation of the Plan, the PFS Shares could not be
voted because they were beneficially owned by an indirect wholly owned
subsidiary of PalWeb. As a result of the transfer of the PFS Shares to the
independent trustee, the PFS Shares are eligible to be voted in all matters
submitted to the PalWeb shareholders for a vote and reduce the percentage
beneficial ownership of all other PalWeb shareholders proportionately. After
considering such
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dilution, Mr. Kruger's beneficial ownership based on a Schedule 13D filed
with the Securities and Exchange Commission is 31.7%. Based on Mr. Kruger's
ownership as of December 20, 2000 and assuming no other changes in shares
outstanding or ownership of PalWeb common stock by Paul Kruger, if the put
option is exercised in full, Mr. Kruger would acquire all of the PFS Shares
and his beneficial ownership of PalWeb common stock would increase to 49.67%
of the shares outstanding.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION
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99.1 Second Supplemental Notice to Investment Certificate Holders
of Paceco Financial Services, Inc.
99.2 Put Agreement by and among Paul A. Kruger, Bill J. English as
Trustee and Paceco Financial Services, Inc. dated December 20,
2000
99.3 Trust Agreement between Paceco Financial Services, Inc. and
Bill J. English dated December 20, 2000
99.4 Letter from the State of Oklahoma Department of Securities dated
December 15, 2000 re: Paceco Financial Services, Inc.
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 thereunto duly authorized.
PALWEB CORPORATION
By: /s/ Paul A. Kruger
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Date: January 2, 2001 Paul A. Kruger
Chairman of the Board and President
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