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 Act of 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
SEPTEMBER 14, 2006 (SEPTEMBER 8, 2006)
ZAPATA CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 001-4219 C-74-1339132
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
100 MERIDIAN CENTRE, SUITE 350 14618
ROCHESTER, NEW YORK (Zip Code)
(Address of principal executive offices)
(585) 242-2000
(Registrant's telephone number, including area code)
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 240.14-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CRF 240.133-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On September 8, 2006, Zapata Corporation, a Nevada corporation ("Zapata"
or "the Company"), the 58% stockholder of Omega Protein Corporation, a Nevada
corporation ("Omega"), entered into a Stock Purchase Agreement (the "Purchase
Agreement"), pursuant to which (i) Omega agreed to acquire from Zapata 9,268,292
shares (the "Shares") of the common stock, par value $.01 per share (the "Common
Stock"), of Omega held by Zapata at a purchase price of $5.125 per share for an
aggregate purchase price of $47,500,000 (the "Purchase Price") and (ii) Zapata
granted to Omega an option (the "Option") to acquire all of the shares of Common
Stock held by Zapata on the date of the exercise of such option (the "Option
Shares") at a purchase price of $4.50 per Option Share (the "Option Purchase
Price"). Subject to certain conditions, the Option will be exercisable during
the period beginning 270 days after the closing (the "Closing") of the Purchase
Agreement and ending 390 days after the Closing (the "Option Exercise Period").
The Shares and Option Shares, if any, purchased by Omega from Zapata will be
retired, restoring them to the status of authorized but unissued shares of
Common Stock.
Concurrent with the execution and delivery of the Purchase Agreement,
Omega and Ableco Finance LLC, an affiliate of Cerberus Capital Management, L.P.
(the "Lender"), entered into a commitment letter (the "Commitment Letter"),
pursuant to which the Lender agreed to provide Omega with a senior secured
financing facility (the "Facility") in the maximum aggregate amount of
$65,000,000 to (i) acquire the Shares (exclusive of the fees and expenses
related to such financing), (ii) to fund the Company's ongoing working capital
requirements, including, establishing a letter of credit sub-facility and (iii)
to pay the fees and expenses related to such financing. The Facility will
consist of (a) a revolving credit facility of up to $30,000,000 outstanding at
any time, including a $5,000,000 subfacility for the issuance of letters of
credit, and (b) a term loan facility of $35,000,000. Such revolving credit
facility will replace Omega's existing $20 million credit facility with Bank of
America, N.A., under which, at June 30, 2006, Omega had no borrowings
outstanding but had letters of credit outstanding of approximately $3.1 million
issued in support of worker's compensation insurance programs. Pursuant to the
terms of the Commitment Letter, Omega paid to the Lender $150,000 as an expense
deposit (the "Deposit") to fund expenses incurred by or on behalf of the Lender.
The unused portion of the Deposit is refundable by the Lender to Omega in
certain instances. In addition, Omega has agreed to pay the Lender an additional
expense deposit if the amount of expenses incurred or to be incurred by the
Lender in connection with the Facility exceeds or will exceed the amount of the
Deposit. Also pursuant to the terms of the Commitment Letter, Omega paid the
Lender a commitment fee (the "Commitment Fee") of $487,500. The Commitment Fee
or a portion thereof maybe refunded by the Lender to Omega in certain
circumstances. A discussion of the material terms of the Facility is set forth
below.
The terms of the Purchase Agreement and the Commitment Letter and the
transactions contemplated therein were approved by an independent special
committee (the "Committee") of Omega's Board of Directors. In addition, Omega's
Board of Directors and the Committee received the opinions of TM Capital Corp.,
an independent financial advisor to the Committee, regarding the fairness, from
a financial point of view, of the Purchase Price to Omega's stockholders (except
for Zapata), and the solvency of Omega following the consummation of the
transactions contemplated by the Purchase Agreement and the Commitment Letter.
TM Capital provided Zapata with a reliance letter allowing it to rely on the
solvency opinion.
The terms of the Purchase Agreement were approved by Zapata's Board of
Directors and by the written consent of the holder of a majority of the
outstanding shares of Zapata's common
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stock (the "Majority Stockholder"). Zapata's Board of Directors received the
opinion of Empire Valuation Consultants, LLC., an independent financial advisor,
regarding the fairness, from a financial point of view, to Zapata's stockholders
of the Purchase Price, the Option Purchase Price and the transaction
contemplated by the Purchase Agreement, taken as a whole, as well as any
subsequent public or private sales of the Omega shares by Zapata at a price
equal to or in excess of $4.50 per share during the period from the initial
closing under the Purchase Agreement until the expiration of Omega's call
option, The sale of Zapata's remaining Omega shares at a price equal to or in
excess of $4.50 per share together with the sale by Zapata of its Shares in any
"superior transaction" (as defined in the Purchase Agreement) as an alternative
to the sale of the Shares as contemplated by the Purchase Agreement, as
determined and approved by Zapata's Board of Directors, was also approved by the
written consent of the Majority Stockholder
Pursuant to the Purchase Agreement, Zapata has agreed to file a
preliminary information statement with the Securities and Exchange Commission
(the "SEC") regarding such written consent within 10 business days of the date
of the Purchase Agreement, and to cause the definitive Information Statement
(the "Information Statement") to be mailed to its stockholders at the earliest
practicable date following the clearance of the Information Statement by the
SEC.
Concurrent with the execution and delivery of the Purchase Agreement,
Omega, Zapata and Manufacturers and Traders Trust Company (the "Escrow Agent")
entered into an Escrow Agreement (the "Escrow Agreement"), pursuant to which,
within 45 days following the date of the Escrow Agreement, Omega agreed to
deposit the Purchase Price, and Zapata agreed to deposit the original stock
certificates representing the Shares, with the Escrow Agent, in each case to be
held in accordance with and, pending the Closing or the termination of, the
Purchase Agreement or the Escrow Agreement in accordance with their respective
terms.
Omega and Zapata have made customary representations and warranties and
covenants in the Purchase Agreement, including among others,(i) subject to
certain exceptions and the exercise of the fiduciary duty of Zapata's Board of
Directors to its stockholders, Zapata has agreed not to (a) solicit proposals
relating to alternative acquisition proposals regarding the Shares or (b) enter
into discussions concerning or provide information in connection with
alternative acquisition proposals regarding the Shares, (ii) Zapata has agreed
not to acquire any additional shares of Common Stock until the end of the Option
Exercise Period, (iii) Omega has agreed to use its reasonable best efforts to
arrange and obtain as promptly as practicable (and in any event within 45 days
of the date of the Purchase Agreement) the proceeds of the financing on the
terms and conditions described in the Commitment Letter, (iv) Omega has agreed
to file a shelf registration statement on Form S-3 for the resale of the Option
Shares and to use its reasonable best efforts to cause the registration
statement to become effective and to keep the Registration Statement effective
for a period (the "Registration Period") of 390 days after the Closing or, if
shorter, until the earlier of (a) the date when all the Option Shares have been
sold pursuant to such registration statement, (b) the first date on which Zapata
may sell all of the Option Shares held by it without registration pursuant to
Rule 144 within a three-month period or (c) the date of the closing of the
Option, (v) Omega has agreed, subject to certain exceptions, not to sell, make
any short sale of, loan, grant any option for the purchase of (other than
pursuant to employee benefit plans), effect any public sale or distribution of
or otherwise dispose of any of its equity securities in public sales during the
Registration Period, except as required under the amended and restated
Registration Rights Agreement (discussed below) or pursuant to registrations on
Form S-8 or solely with respect to the offering of securities in connection with
a transaction that requires the use of a Form S-4 that is not an offering of
securities for cash; and to (vi) Omega has agreed to cooperate in Zapata's
efforts to sell its remaining Omega shares and to
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exclude Zapata and any transferee who acquires Zapata's remaining Omega shares
from any rights, plan, charter or bylaw amendment or board resolution or similar
action that would prohibit, frustrate or adversely affect Zapata's ability to
sell or distribute to its stockholders such shares. Omega and Zapata have also
agreed to indemnify each other and their related parties on specified terms and
conditions.
In addition, subject to certain conditions, during the period from the
Closing to the Voting Agreement Termination Event (as defined below), Zapata has
agreed that in the event that any action is submitted to the holders of Common
Stock for their approval, whether at a meeting or by written consent, it will
cause to be voted all shares of Common Stock as to which Zapata has the right to
vote or direct the vote (the "Voting Securities") in favor of the directors
nominated by Omega's Board of Directors or a committee thereof and in favor of
all actions approved and recommended by the Omega's Board of Directors. Zapata
has also granted an irrevocable proxy to Omega to vote all Voting Securities at
any such meeting (and at any adjournment or adjournments thereof) or with
respect to any such written consent in the manner described in the preceding
sentence. Under the Purchase Agreement, "Voting Agreement Termination Event"
means the earlier to occur of the following dates (a) the last day of any 12
calendar month period in which Omega's trailing 12-month EBITDA (as defined in
the Purchase Agreement) is less than $15,000,000, (b) the continuation of an
uncured or unwaived event of default or default for more than 30 days on one or
more of Omega's outstanding indebtedness for borrowed money in excess of
$1,000,000 or (c) the first day following the Option Exercise Period that the
average closing price of the Common Stock for 10 consecutive trading days is
less than the Option Purchase Price. The Purchase Agreement also contains
provisions whereby Zapata has the right to assert the occurrence of a Voting
Agreement Termination Event.
The closing of the transactions contemplated by the Purchase Agreement and
the Commitment Letter are expected to take place in the fourth quarter of 2006,
subject to the satisfaction of the closing conditions detailed below.
Consummation of the transactions contemplated by the Purchase Agreement is
subject to the satisfaction of customary closing conditions and, among other
things, (i) the consummation of the Financing, (ii) the expiration of the
applicable time period referred to in Regulation 14C after the mailing of the
Information Statement to Zapata's stockholders, (iii) the receipt of any
approval required by the National Marine Fisheries Services ("NMFS") with
respect to Omega's existing vessel and shoreside improvement Title XI financing
under the NMFS Finance Program ("NMFFP"), (iv) the absence of any order or
injunction prohibiting the consummation of the Purchase Agreement, (v) the
accuracy of representations and warranties made by Omega and Zapata in all
material respects, (vi) the receipt of customary legal opinions, (vii) the
receipt of a bring down certificate with respect to the opinion of TM Capital
Corp. regarding the solvency of Omega following the consummation of the
transactions contemplated by the Purchase Agreement and the Commitment Letter;
provided, however, that if TM Capital Corp. is unwilling or unavailable to
deliver such certificate, Omega will use its reasonable best efforts to engage
another investment banking firm and provide it with the necessary background
materials for the purposes of delivering such certificate; and (viii) the
receipt of the resignations of Avram A. Glazer and Leonard DiSalvo from Omega's
Board of Directors and any committee thereof. Consummation of the Option is also
subject to the satisfaction of customary closing conditions and certain of the
conditions detailed above.
The Purchase Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing, subject to certain
conditions: (i) by mutual
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written consent of Omega and Zapata; (ii) by Omega or Zapata, if an order has
been entered by a governmental authority restraining, enjoining or otherwise
prohibiting the consummation of the sale of the Shares and such order is final
and non-appealable; (iii) by Omega or Zapata if the Closing does not occur on or
before the 90th day after the date of the Purchase Agreement (which 90-day
period shall automatically be extended for up to an additional 45 days if Zapata
has not received clearance of the Information Statement by the SEC), (iv) by
Omega, if (a) Zapata's Board of Directors has withdrawn or modified or changed
in a manner adverse to Omega, its approval of the Purchase Agreement or the sale
of the Shares, or has approved an alternative acquisition proposal of the
Shares, (b) Zapata accepts an offer or otherwise enters into an agreement to
consummate or consummates an alternative acquisition proposal of the Shares; (v)
by Omega or Zapata, as applicable, if there has been a material violation or
breach by Zapata or Omega, as applicable, of any covenant, representation or
warranty contained in the Purchase Agreement which has prevented the
satisfaction of any condition to the obligations of the Omega or Zapata, as
applicable, at the Closing; (vi) by Zapata, if within 45 days of the date of
the Purchase Agreement, (a) the Financing has not been consummated, (b) the
Purchase Price has not been deposited by Omega with the Escrow Agent or (c) the
NMFS consent has not been obtained, or (vii) by Zapata if Zapata's Board of
Directors determines that an alternative acquisition proposal of the Shares is
a Superior Proposal. If Omega terminates the Purchase Agreement pursuant to
clauses (iv) or (v) above or Zapata terminates the Purchase Agreement pursuant
to clause (vii) above, Zapata will be required to reimburse Omega for its
actual out-of-pocket expenses incurred in connection with the Purchase
Agreement and Commitment Letter up to maximum amount of $1,300,000. If Zapata
terminates the Purchase Agreement pursuant to clauses (v) or (vi) above, Omega
will be required to reimburse Zapata for its actual out-of-pocket expenses
incurred in connection with the Purchase Agreement up to maximum amount of
$1,000,000. These rights of reimbursement are in addition to any other right or
remedy that Omega or Zapata, as applicable, may have available at law or
equity.
Pursuant to the terms of the Purchase Agreement, Omega has also agreed to
amend and restate the Registration Rights Agreement, dated April 12, 1998 (the
"Original Agreement") between Omega and Zapata to change certain terms of the
Original Agreement. Material changes to the Original Agreement, include, among
other things, that (i) Omega is not obligated to file a registration statement
relating to a demand registration request if such registration request is for a
number of registrable securities having a fair market value of less than
$3,500,000, (ii) Zapata or permitted transferees of more than 30% of the
registrable securities are only entitled to two demand registration requests
pursuant to such agreement (not including the registration on Form S-3 required
by the Purchase Agreement) and permitted transferees of 30% or less and 10% or
more of the registrable securities are only entitled to one demand registration
request pursuant to such agreement, (iii) registration statements filed pursuant
to such agreement will be prepared and filed by Omega with the SEC as soon as
practicable, but in no event later than 30 days (60 days if the applicable
registration form is other than Form S-3) after the date notice is given, and
that Omega will use its best efforts to cause the same to become effective as
soon as possible after the date notice is given, (iv) subject to certain
conditions, transfers of registration rights pursuant to such agreement will be
effective when Omega has received written notice at the time of or within a
reasonable time after said transfer and (v) such agreement may be amended only
by a written instrument duly executed by Omega and the holders of more than 50%
of the registrable securities.
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ITEM 5.01 CHANGE IN CONTROL OF REGISTRANT
The Malcolm I. Glazer Family Limited Partnership ("MGFLP") owns
beneficially 9,813,112 shares of common stock of Zapata which represents
approximately 51.156% of the total outstanding common stock of Zapata. On
September 8, 2006, Malcolm Glazer's wife, Linda Glazer, replaced him as
President and sole director of MIGFLP's corporate general partner, Malcolm I.
Glazer G.P., Inc. ("MIG GP"). By virtue of her position as President and sole
director of MIGFLP's corporate general partner, Mrs. Glazer may be deemed to
control the Zapata common stock held by MIGFLP. No funds or other consideration
were paid in connection with this transaction. There were no arrangements known
to Zapata, the operation of which may at a subsequent date result in a change of
control of Zapata or which relate to the election of directors or other matters.
The Malcolm Glazer Revocable Trust U/A/D dated February 24, 1997, as amended
(the "MIG Trust"), is the owner of 100% of the common stock of MIG GP. The MIG
Trust is the sole limited partner of the MGFLP.
Linda Glazer, Avram Glazer, Joel Glazer, Bryan Glazer, Kevin Glazer,
Edward Glazer and Darcie Glazer, serve as co-trustees of the MIG Trust. Malcolm
Glazer remains the sole beneficiary of the MIG Trust. A majority of the
co-trustees is required to authorize action on behalf of the MIG Trust.
FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve risks and uncertainty that could cause actual
results to differ materially from those in the forward-looking statements. These
risks include, without limitation, the possibility that the closing of the
transaction may not occur or be delayed or that the call option may not be
exercised and that Zapata may not be able to otherwise sell its remaining Omega
shares. More information about potential factors that could affect Zapata's
business and financial results is included under the heading "Significant
Factors That Could Affect Future Performance and Forward-Looking Statements"
contained in Zapata's Annual Report on Form 10-K for the fiscal year ended
December 31, 2005 filed with the Securities and Exchange Commission (the "SEC"),
which is available at the SEC's website at http://www.sec.gov, all of which are
incorporated herein by reference. All forward-looking statements included in
this press release are based on information available at the time of the
release, and Zapata assumes no obligation to update any forward-looking
statement.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of business acquired
None.
(b) Pro Forma Financial Information
None.
(c) Shell Company Transactions
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None.
(d) Exhibits
99.1 Press release dated September 8, 2006.
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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.
ZAPATA CORPORATION
Dated: September 14, 2006 By: /s/ Leonard DiSalvo
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Name: Leonard DiSalvo
Title: VP-Finance and Chief Financial Officer
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