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UNITED STATES
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): JUNE 1, 2000
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NEWPARK RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-2960 72-1123385
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3850 NORTH CAUSEWAY, SUITE 1770
METAIRIE, LOUISIANA 70002
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 838-8222
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ITEM 5. OTHER EVENTS.
On June 1, 2000, Newpark Resources, Inc., a Delaware corporation
("Newpark"), completed the sale to Fletcher International Limited, a Cayman
Islands company affiliated with Fletcher Asset Management, Inc. ("Purchaser"),
of 120,000 shares of Series B Convertible Preferred Stock, $0.01 par value per
share (the "Series B Preferred Stock"), and a warrant (the "Warrant") to
purchase up to 1,900,000 shares of the Common Stock of Newpark at an exercise
price of $10.075 per share, subject to anti-dilution adjustments. The aggregate
purchase price for the Series B Preferred Stock and the Warrant was $30.0
million, and the net proceeds from the sale have been used to repay
indebtedness. No underwriting discounts or commissions were paid in connection
with the sale of the securities.
The following description of the Series B Preferred Stock and the
Warrant are qualified in their entirety by reference to the Certificate of
Rights and Preferences relating to the Series B Preferred Stock (the
"Certificate") and to the Warrant Certificate relating to the Warrant, which
are attached as exhibits hereto.
Cumulative dividends are payable on the Series B Preferred Stock
quarterly in arrears. The dividend rate is 4.5% per annum, based on the stated
value of $250 per share of Series B Preferred Stock. Subject to certain
conditions specified in the Certificate, dividends payable on the Series B
Preferred Stock may be paid at the option of Newpark either in cash or by
issuing shares of Newpark's Common Stock that have been registered under the
Securities Act of 1933, as amended (the "Act"). The number shares of Common
Stock of Newpark to be issued as dividends is determined by dividing the cash
amount of the dividend otherwise payable by the market value of the Common Stock
determined in accordance with the provisions of the Certificate. If Newpark
fails to pay any dividends when due, such dividends shall accumulate and accrue
additional dividends at the then existing dividend rate. The dividend rights of
the Series B Preferred Stock are junior to the dividend rights of the holders of
the 150,000 shares of Newpark's Series A Cumulative Perpetual Preferred Stock
(the "Series A Preferred Stock").
So long as shares of the Series B Preferred Stock are outstanding, no
dividends may be paid on the Common Stock or any other securities of Newpark
ranking junior to the Series B Preferred Stock with respect to dividends and
distributions on liquidation ("Junior Securities"), except for dividends payable
solely in shares of Common Stock. Subject to certain exceptions, no shares of
Junior Securities or securities of Newpark having a priority equal to the Series
B Preferred Stock with respect to dividends and distributions on liquidation may
be purchased or otherwise redeemed by Newpark unless all accumulated dividends
on the Series B Preferred Stock have been paid in full.
Upon a liquidation of Newpark, the holders of the Series B Preferred
Stock will be entitled to receive $250 per share of Series B Preferred Stock
plus accrued dividends before the holders of any Junior Securities receive any
payment. The liquidation rights of the Series B Preferred Stock are junior to
the liquidation rights of the holders of the Series A Preferred Stock, who are
entitled to receive $100 per share of Series A Preferred Stock plus accrued
dividends before holders of the Series B Preferred Stock or Common Stock receive
any payment. The holders of Common Stock will receive all liquidating
distributions after the holders of the Series A Preferred Stock and the Series B
Preferred Stock have received their stated amounts, unless Newpark later issues
additional
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shares of preferred stock having priority over the Common Stock with respect to
liquidating distributions.
The holders of the Series B Preferred Stock will have the right to
convert all or any part of the Series B Preferred Stock into Common Stock at a
conversion rate based on the then current market value of the Common Stock, as
determined in accordance with the provisions of the Certificate, or $10.075 per
share of Common Stock, whichever is less. For purposes of any conversion, each
share of Series B Preferred Stock will have a value equal to its liquidation
preference, plus any accrued and unpaid dividends.
If Newpark is in arrears in the payment of dividends on the Series B
Preferred Stock in an aggregate amount equal to more than two quarterly
dividends, the holders of the Series B Preferred Stock, voting as a separate
class, will be entitled to elect a specified percentage of the members of
Newpark's Board of Directors. This percentage will be equal to the percentage of
the total number of outstanding shares of Common Stock (including the shares
issuable to the holders) that the holders of Series B Preferred Stock then own
or are deemed to own assuming that (a) all unconverted shares of Series B
Preferred Stock were converted into Common Stock, and (b) the unexercised
portion of the Warrant was exercised.
The Series B Preferred Stock will not otherwise have voting rights on
ordinary corporate matters, except as required by Delaware law. However,
approval of a majority of the Series B Preferred Stock will be required before
Newpark can effect any changes to the rights of the Series B Preferred Stock or
issue any additional shares of capital stock having a priority equal or senior
to the Series B Preferred Stock with respect to dividends or distributions upon
liquidation. The holders of the Series B Preferred Stock also will vote
separately as a class and the approval of a majority of the Series B Preferred
Stock will be required to (a) permit any subsidiary of Newpark to issue or sell
any securities of any Newpark subsidiary or to sell all or substantially all of
the assets of any Newpark subsidiary to anyone other than Newpark or another
subsidiary of Newpark, (b) increase or decrease, other than by redemption or
conversion, the total number of authorized shares of preferred stock of Newpark
or (c) amend any provisions of any capital stock of Newpark so as to make such
capital stock redeemable by Newpark.
The Certificate provides the holders of Series B Preferred Stock with
certain rights if Newpark is involved in a "Business Combination". These rights
include the right to elect to receive either or a combination of (a) the stock
and other securities, cash and property which the holder would have received had
the holder converted the Series B Preferred Stock into Common Stock immediately
before the transaction, (b) shares of common stock of the acquiring person or
its parent company, as elected by the holders, according to a formula contained
in the Certificate, which takes into account various factors, including the
acquisition price for Newpark's Common Stock, the conversion price for the
Series B Preferred Stock, the market price of the common stock of the acquiring
person or its parent and the stated value of the Series B Preferred Stock, or
(c) cash in an amount equal to 133% of the stated value of the Series B
Preferred Stock. This cash payment is to be paid by the acquiring person and not
Newpark. The acquiring person also will be required to assume, in writing, the
obligations of Newpark under the Certificate. The rights of the holders of
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the Series B Preferred Stock in any Business Combination may delay, deter or
prevent a change in control of Newpark.
The Warrant has a term of seven years, expiring June 1, 2007. The
exercise price of the Warrant and the number of shares issuable upon exercise of
the Warrant will be adjusted for stock splits, stock dividends, or, subject to
certain exceptions, issuances or sales of Common Stock, including options and
other securities convertible into Common Stock, without consideration or for a
per share price less than the current market price of the Common Stock or the
then current exercise price under the Warrant. For issuances of options and
other securities convertible into Common Stock, the per share price will be
deemed to include the amounts received upon issuance of the option or
convertible security and the amount to be received upon exercise or conversion.
As with the Series B Preferred Stock, the Warrant provides that the
holders of the Warrant will have certain rights if Newpark is involved in a
"Business Combination". These rights include the right to elect to receive
either or a combination of (a) the stock and other securities, cash and property
which the holder would have received had the holder exercised the Warrant
immediately before the transaction, (b) shares of common stock of the acquiring
person or its parent company, as elected by the holders, according to a formula
contained in the Warrant, which takes into account various factors, including
the acquisition price for Newpark's Common Stock, the exercise price under the
Warrant and the market price of the common stock of the acquiring person or its
parent or (c) cash in an amount equal to 33% of then total Warrant exercise
price on the unexercised portion of the Warrant. Again, this cash payment is to
be paid by the acquiring person and not Newpark, and the acquiring person also
will be required to assume, in writing, the obligations of Newpark under the
Warrant. The rights of the holders of the Warrant in any Business Combination
may delay, deter or prevent a change in control of Newpark.
The agreement pursuant to which the Series B Preferred Stock and the
Warrant were issued (the "Agreement") requires Newpark to use its best efforts
to register under the Act all of the shares of Common Stock issuable upon
exercise of the Warrant and 1.5 times the number of shares of Common Stock
issuable as of the effective date of the registration statement upon conversion
of the Series B Preferred Stock or as dividends on the Series B Preferred Stock.
Newpark will be required to increase the number of shares registered under the
registration statement if the total number of shares of Common Stock issued and
issuable under the Warrant and with respect to the Series B Preferred Stock
exceeds 80% of the number of shares then registered. Newpark currently estimates
that the registration statement will initially cover 8,000,000 shares of Common
Stock. Newpark also is required to obtain stockholder consent if the total
number of shares of Common Stock issued or issuable to Purchaser with respect to
the Series B Preferred Stock and the Warrant would exceed 13,825,034 (19.99% of
the number of shares outstanding on May 25, 2000) and the listing requirements
or rules of the New York Stock Exchange would require stockholder approval to
issue in excess of this amount. If this stockholder consent is not received
within 60 days after notice is sent to Newpark by Purchaser, Purchaser may elect
to do either or a combination of (a) a cashless exercise of the Warrant for up
to that number of shares of Common Stock that would require stockholder consent
or (b) convert the number of shares of Common Stock exceeding 13,825,034 into an
"Excess Right". This Excess Right will have a value equal to the market price of
the Common Stock on the notice date (in the case of the Series B Preferred
Stock), and the spread
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between the market price of the Common Stock over the exercise price of the
Warrant on the notice date (in the case of the Warrant), times the number of
shares of Common Stock converted into such Excess Right. For one year after its
issuance, Purchaser may apply this Excess Right, on a dollar-for-dollar basis,
in lieu of payment of the exercise price under the Warrant or convert the Excess
Right into shares of Series B Preferred Stock at the ratio of $250 of stated
value of Excess Right into one share of Series B Preferred Stock.
The Agreement also provides that, unless otherwise specified by
Purchaser, the number of shares that may be issued upon conversion of the Series
B Preferred Stock and exercise of the Warrant may not exceed 6,743,075, plus
9.75% of the increase in the number of outstanding shares of Common Stock of
Newpark since May 25, 2000, unless Purchaser delivers an increase notice and 65
days passes after that notice is delivered. Newpark is required to give
Purchaser a monthly notice of the increase in the number of outstanding shares
of Common Stock.
With certain exceptions, the Agreement requires Newpark to provide
Purchaser, its affiliates and its designees who together with Purchaser and its
affiliates hold at least 60,000 shares of Series B Preferred Stock, with a right
of first refusal with respect any shares of Newpark's capital stock or any
securities convertible into or exchangeable for any shares of Newpark's capital
stock. This right of first refusal will be exercisable for ten trading days
after delivery of the required notice from Newpark to Purchaser. The right of
first refusal will terminate at such time as the number of shares of Common
Stock Newpark is required to register under the Act is less than 3,457,988, as
that number may be adjusted for stock splits, stock dividends, recapitalizations
or other similar adjustments.
The sale of the Series B Preferred Stock and the Warrant was made in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The
sale was made without general solicitation or advertising, Purchaser is a
sophisticated investor with access to all relevant information necessary to
evaluate an investment in the securities, and Purchaser represented to Newpark
that the securities were being acquired for investment purposes.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
4.1 Certificate of Rights and Preferences of Series B Convertible Preferred
Stock of Newpark, dated May 30, 2000.
4.2 Agreement, dated May 30, 2000, between Newpark and Purchaser.
4.3 Warrant Certificate, dated June 1, 2000, to purchase 1,900,000 shares of
Common Stock, par value $.01 per share, of Newpark.
99.1 Press Release issued by Newpark on June 1, 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 by the undersigned
hereunto duly authorized.
NEWPARK RESOURCES, INC.
Dated: June 6, 2000 By /s/ Matthew W. Hardey
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Matthew W. Hardey, Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
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<S> <C>
4.1 Certificate of Rights and Preferences of Series B Convertible
Preferred Stock of Newpark, dated May 30, 2000.
4.2 Agreement, dated May 30, 2000, between Newpark and Purchaser.
4.3 Warrant Certificate, dated June 1, 2000, to purchase 1,900,000
shares of Common Stock, par value $.01 per share, of Newpark.
99.1 Press Release issued by Newpark on June 1, 2000.
</TABLE>
