Form 8-K
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
July 27, 2007
Date of Report (Date of earliest event reported)
NOVASTAR FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Maryland 001-13533 74-2830661
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
8140 Ward Parkway, Suite 300, Kansas City, MO 64114
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(Address of principal executive offices)
(Zip Code)
(816) 237-7000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)
Item 3.03 Material Modification to Rights of Security Holders
The disclosure under "Item 5.03 Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year" is incorporated herein by reference.
Item 5.02 Departures of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements for Certain Officers
The disclosure under "Item 5.03 Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year" with respect NFI's equity awards and plans is
incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On July 27, 2007, NovaStar Financial, Inc. ("NFI") amended its charter to effect
a reverse stock split of its outstanding shares of common stock by filing
Articles of Amendment with the State Department of Assessments and Taxation of
Maryland (the "SDAT"), which became effective upon filing ("Amendment No. 1").
Pursuant to Amendment No. 1, every four shares of common stock, par value $.01
per share, of NFI, which were issued and outstanding immediately prior to the
filing of Amendment No. 1, were combined into one issued and outstanding share
of common stock, par value $.04 per share. No fractional shares of common stock
of NFI were issued upon the effectiveness of Amendment No. 1. Instead, each
stockholder otherwise entitled to a fractional share is entitled to receive in
lieu thereof cash in an amount equal to the product of the fraction of a share
multiplied by the closing price of NFI's common stock as reported by the New
York Stock Exchange on July 27, 2007. No changes were made to the number of
outstanding shares of NFI's 8.90% Series C Cumulative Redeemable Preferred Stock
or NFI's 9.00% Series D1 Mandatory Convertible Preferred Stock.
On July 27, 2007, immediately after the filing of Amendment No. 1, NFI amended
its charter by filing Articles of Amendment with the SDAT, which became
effective upon filing ("Amendment No. 2"). Pursuant to Amendment No. 2, the par
value of the shares of common stock of NFI issued and outstanding immediately
prior to the filing of Amendment No. 2 was decreased from $0.04 per share to
$0.01 per share. Immediately after the filing of Amendment No. 1 and Amendment
No. 2, NFI had 50,000,000 shares of common stock, par value $0.01 per share,
authorized, approximately 9,469,910 shares of common stock, par value $0.01 per
share, outstanding, and approximately 40,530,090 shares of common stock, par
value $0.01 per share, authorized but unissued.
As of July 30, 2007, NFI's common stock began trading on a split-adjusted basis
under a new CUSIP number - 669947889.
Under Maryland law, no stockholder approval of the filing of Amendment No. 1 or
Amendment No. 2 was required. The reverse stock split will not change the
proportionate ownership interest of the stockholders of NFI, nor will the voting
rights or
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other rights of stockholders be changed (except for the rights of stockholders
to receive cash in lieu of fractional shares).
The conversion price, and the number of shares issuable upon the conversion of
NFI's 9.00% Series D1 Mandatory Convertible Preferred Stock, were appropriately
adjusted to reflect the 4-for-1 reverse split. In addition, the exercise price,
and the number of shares issuable, under NFI's outstanding equity awards will be
adjusted to reflect the 4-for-1 reverse split. The number of shares authorized
under NFI's equity compensation plans will also be proportionately reduced to
reflect the reverse stock split.
On July 27, 2007, NFI also filed Articles Supplementary with the Maryland SDAT,
which became effective upon filing, creating the 9.00% Series D-2 Mandatory
Convertible Preferred Stock par value $0.01 per share and initial liquidation
preference of $25.00 per share (the "Series D-2 Preferred Stock"). The number of
shares of Series D-2 Preferred Stock authorized for issuance is 6,147,000, none
of which were, as of July 27, 2007, issued and outstanding.
On July 16, 2007, NFI filed Articles Supplementary with the Maryland SDAT, which
became effective upon filing, to reflect the designation of certain shares of
NFI's preferred stock and capital stock that had been authorized but unissued as
authorized but unissued shares of NFI's common stock.
A copy of Amendment No. 1, Amendment No. 2, the Articles Supplementary for the
Series D-2 Preferred Stock and the Articles Supplementary filed regarding the
designation of authorized but unissued preferred stock and capital stock as
common stock are attached hereto as Exhibit 3.1, Exhibit 3.2, Exhibit 4.1 and
Exhibit 4.2 respectively, and are incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
On July 27, 2007, NFI issued a press release announcing the effectiveness of the
reverse stock split. The press release is attached to this Current Report on
Form 8-K as Exhibit 99.1.
Item 8.01 Other Events
NFI is undertaking to meet the requirements of Rule 416(b) under the Securities
Act of 1933, as amended, regarding the Registration Statements of NFI on Forms
S-8 (File No. 333-139000 (NovaStar Mortgage, Inc. Deferred Compensation Plan),
File No. 333-138998 (NovaStar Financial, Inc. 401(k) Plan), File No. 333-116998
(NovaStar Financial, Inc. 2004 Incentive Stock Plan); and File No. 333-44977
(NovaStar Financial, Inc. Amended and Restated 1996 Executive and Non-Employee
Director Stock Option Plan (Last Amended December 6, 1996)) (collectively, the
"Registration Statements")). Under Rule 416(b), if prior to the completion of
the distribution of securities covered by a registration statement, the
securities are combined by a reverse split into a lesser amount of securities of
the same class, then the lesser amount of securities are covered by the
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registration statement, provided that the registration statement is amended. As
discussed, NFI has effected a four for one reverse stock split. Pursuant to Rule
416(b), by virtue of this Form 8-K filing, the Registration Statements are
deemed to cover such lesser number of shares of common stock that may be sold as
a result of the reverse sock split; namely the Form S-8 Registration Statement,
File No. 333-139000 (NovaStar Mortgage, Inc. Deferred Compensation Plan), shall
be deemed to cover 125,000 shares of common stock, par value $0.01 per share,
the Form S-8 Registration Statement, File No. 333-138998 (NovaStar Financial,
Inc. 401(k) Plan), shall be deemed to cover 68,750 shares of common stock, par
value $0.01 per share, the Form S-8 Registration Statement, File No. 333-116998
(NovaStar Financial, Inc. 2004 Incentive Stock Plan), shall be deemed to cover
625,000 shares of common stock, par value $0.01 per share; and Form S-8
Registration Statement. File No. 333-44977 (NovaStar Financial, Inc. Amended and
Restated 1996 Executive and Non-Employee Director Stock Option Plan (Last
Amended December 6, 1996), shall be deemed to cover 195,655 shares of common
stock par value $0.01 per share. The amount of deferred compensation obligations
registered on Form S-8 Registration Statement, File No. 333-139000 (NovaStar
Mortgage, Inc. Deferred Compensation Plan), shall not be affected by this Form
8-K filing.
Item 9.01 Financial Statement and Exhibits
(d) Exhibits.
Exhibit No. Document
3.1 Articles of Amendment to the Articles of Amendment and
Restatement of NovaStar Financial, Inc.
3.2 Articles of Amendment to the Articles of Amendment and
Restatement of NovaStar Financial, Inc.
4.1 Articles Supplementary 9.00% Series D-2 Mandatory
Convertible Preferred Stock (par value $0.01 per share)
4.2 Articles Supplementary regarding the designation of certain
authorized but unissued shares of stock
99.1 Press Release of NovaStar Financial, Inc, dated July 27,
2007.
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SIGNATURE
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.
NOVASTAR FINANCIAL, INC.
DATE: July 30, 2007 /s/ Gregory S. Metz
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Gregory S. Metz
Chief Financial Officer
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Index to Exhibits
Exhibit No. Document
3.1 Articles of Amendment to the Articles of Amendment and
Restatement of NovaStar Financial, Inc.
3.2 Articles of Amendment to the Articles of Amendment and
Restatement of NovaStar Financial, Inc.
4.1 Articles Supplementary 9.00% Series D-2 Mandatory
Convertible Preferred Stock (par value $0.01 per share)
4.2 Articles Supplementary regarding the designation of certain
authorized but unissued shares of stock
99.1 Press Release of NovaStar Financial, Inc, dated July 27,
2007.
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