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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): DECEMBER 28, 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 December 28, 2000, Newpark Resources, Inc., a Delaware corporation
("Newpark"), completed the sale to Fletcher International, Ltd., a Bermuda
company affiliated with Fletcher Asset Management, Inc. ( "Purchaser"), of
120,000 shares of Series C Convertible Preferred Stock, $0.01 par value per
share (the "Series C Preferred Stock"). The aggregate purchase price for the
Series C Preferred Stock 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 C Preferred Stock is qualified
in its entirety by reference to the Certificate of Rights and Preferences
relating to the Series C Preferred Stock (the "Certificate"), which is attached
as an exhibit hereto.
Cumulative dividends are payable on the Series C Preferred Stock
quarterly in arrears. The dividend rate is 4.5% per annum, based on the stated
value of $250 per share of Series C Preferred Stock. Subject to certain
conditions specified in the Certificate, dividends payable on the Series C
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 of 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, those dividends will accumulate and accrue
additional dividends at the then existing dividend rate. The dividend rights of
the Series C Preferred Stock are junior to the dividend rights of the 150,000
shares of Newpark's Series A Cumulative Perpetual Preferred Stock (the "Series A
Preferred Stock") and pari passu with the 120,000 shares of Newpark's Series B
Convertible Preferred Stock (the "Series B Preferred Stock"). The Series B
Preferred Stock is also owned by a company affiliated with Fletcher Asset
Management, Inc., which acquired these shares from Newpark on June 1, 2000.
So long as shares of the Series C Preferred Stock are outstanding, no
dividends may be paid on the Common Stock or any other securities of Newpark
ranking junior to the Series C 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
C 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 C Preferred Stock have been paid in full.
Upon a liquidation of Newpark, the holders of the Series C Preferred
Stock will be entitled to receive $250 per share of Series C Preferred Stock
plus accrued dividends before the holders of any Junior Securities receive any
payment. The liquidation rights of the Series C 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 C Preferred Stock or Common Stock receive
any payment, and pari passu with the liquidation rights of the holders of the
Series B Preferred Stock, who also are 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 holders of Common Stock will receive all
liquidating distributions after
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the holders of the Series A Preferred Stock, the Series B Preferred Stock and
the Series C Preferred Stock have received their stated amounts, unless Newpark
later issues additional shares of preferred stock having priority over the
Common Stock with respect to liquidating distributions.
The holders of the Series C Preferred Stock will have the right to
convert all or any part of the Series C 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, but the
conversion rate shall not be less than $4.3125 nor more than $11.2125, although
these minimum and maximum conversion prices are subject to adjustment upon the
occurrence of certain events. For purposes of any conversion, each share of
Series C 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 C
Preferred Stock in an aggregate amount equal to more than two quarterly
dividends, the holders of the Series C 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 C Preferred Stock then own
or are deemed to own assuming that all unconverted shares of Series C Preferred
Stock were converted into Common Stock.
The Series C 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 C Preferred Stock will be required before
Newpark can effect any changes to the rights of the Series C Preferred Stock or
issue any additional shares of capital stock having a priority equal or senior
to the Series C Preferred Stock with respect to dividends or distributions upon
liquidation. The holders of the Series C Preferred Stock also will vote
separately as a class and the approval of a majority of the Series C 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 C 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 C Preferred Stock into Common Stock immediately
before the transaction (without regard to the minimum conversion price described
above), (b) shares of common stock of the acquiring person or its parent
company, as elected by the holders, according to formulas contained in the
Certificate, which take into account various factors, including the acquisition
price for Newpark's Common Stock, the conversion price for the Series C
Preferred Stock (without regard to the minimum conversion price described
above), the market price of the common stock of the acquiring person or its
parent and the stated value of the Series C Preferred Stock, or (c) cash in an
amount equal to 133% of the stated value of the Series C Preferred Stock. This
cash payment is to be paid by the acquiring person and not Newpark. The
acquiring
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person also will be required to assume, in writing, the obligations of Newpark
under the Certificate. The rights of the holders of the Series C Preferred Stock
in any Business Combination may delay, deter or prevent a change in control of
Newpark.
The agreement pursuant to which the Series C Preferred Stock was issued
(the "Agreement") requires Newpark to use its best efforts to register under the
Act 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 C Preferred
Stock or as dividends on the Series C Preferred Stock within the year following
that date. 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 with respect to the Series C Preferred Stock (including
shares issued or issuable as dividends within one year following the measurement
date) exceeds 80% of the number of shares then registered. Newpark currently
estimates that the registration statement will initially cover approximately
5,750,000 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 C Preferred Stock would exceed 13,905,718
(19.99% of the number of shares outstanding on December 27, 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 convert the number of shares of Common Stock exceeding
13,905,718 into an "Excess Right". This Excess Right will have a value equal to
the market price of the Common Stock on the notice date times the number of
shares of Common Stock converted into the Excess Right. For one year after its
issuance, Purchaser may convert the Excess Right into shares of Series C
Preferred Stock at the ratio of $250 of stated value of Excess Right into one
share of Series C 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 the Series C Preferred Stock, and upon the exercise of the
warrant issued to the holder of the Series B Preferred Stock, may not exceed
6,782,337, plus 9.75% of the increase in the number of outstanding shares of
Common Stock of Newpark since December 27, 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 C Preferred Stock, with a ten
trading day right of first refusal with respect to the issuance of any shares of
Newpark's capital stock or any securities convertible into or exchangeable for
any shares of Newpark's capital stock. However, this right of first refusal will
only become effective at such time as the right of first refusal under the
agreement relating to the Series B Preferred Stock is of no further force or
effect. 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 pursuant to
the Agreement and the agreement relating to the Series B Preferred Stock is less
than 3,478,169, as that number may be adjusted for stock splits, stock
dividends, recapitalizations or other similar adjustments.
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The sale of the Series C Preferred Stock 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 C Convertible Preferred
Stock of Newpark, dated December 27, 2000.
4.2 Agreement, dated December 27, 2000, between Newpark and Purchaser.
99.1 Press Release issued by Newpark on January 3, 2001.
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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: January 4, 2001 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
NUMBER DESCRIPTION
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<S> <C>
4.1 Certificate of Rights and Preferences of Series C
Convertible Preferred Stock of Newpark, dated
December 27, 2000.
4.2 Agreement, dated December 27, 2000, between Newpark
and Purchaser.
99.1 Press Release issued by Newpark on January 3, 2001.
</TABLE>
