Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities
Act.
¨
CALCULATION OF REGISTRATION FEE
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Title of Securities
to be Registered
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Amount
to be
Registered
(2)
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|
Proposed
Maximum
Offering Price
Per Share
(4)
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|
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Proposed
Maximum
Aggregate
Offering Price
(4)
|
|
|
Amount of
Registration Fee
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|
|
Common Stock, par value $0.001 per share
(1)
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|
2,233,333
(3)
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|
$
|
20.00
|
|
|
$
|
44,666,660
|
|
|
$
|
5,561.00
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|
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(1)
|
Represents shares of common stock, par value $0.001 per share (the “Common Stock”) of Vanguard Natural Resources, Inc. (the “Registrant”) reserved for issuance under the Vanguard Natural Resources, Inc. 2017 Management Incentive Plan (the “Plan”).
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(2)
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Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without receipt of consideration that increases the number of outstanding shares of the Registrant’s Common Stock.
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|
(3)
|
Represents 2,233,333 shares of Common Stock reserved for issuance under the Plan.
|
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(4)
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Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(h) under the Securities Act and based on the value attributed to the Common Stock in connection with Vanguard Natural Resources, Inc.’s emergence from bankruptcy pursuant to the
Modified Second Amended Joint Plan of Reorganization of Vanguard Natural Resources, LLC, et al.
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INTRODUCTION
On February 1, 2017, our Predecessor (as
defined below) and certain of its subsidiaries (the “Debtors”) filed voluntary petitions for relief (the cases commenced
thereby, the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code, as amended (the
“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy
Court”).
On July 18, 2017, the Bankruptcy Court entered
the
Order Confirming Debtors’ Modified Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code
(the “Confirmation Order”), which approved and confirmed the Debtors’ Modified Second Amended Joint
Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Plan of Reorganization”).
On August 1, 2017 (the “Effective Date”),
the Debtors substantially consummated the Plan of Reorganization and emerged from their Chapter 11 Cases. As part of the transactions
undertaken pursuant to the Plan of Reorganization, (i) our Predecessor’s (as defined below) equity was canceled, (ii) our
Predecessor transferred all of its membership interests in VNG (as defined below) to us, and (iii) we became a successor issuer
to our Predecessor for purposes of and pursuant to Rule 15d-5 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). VNG directly or indirectly owned all of the other subsidiaries of our Predecessor. As a result of
the foregoing and certain other transactions, we are no longer a subsidiary of our Predecessor and now own all of the former subsidiaries
of our Predecessor. Following the end of the current fiscal year, we expect that our Predecessor will be dissolved. On August 9,
2017, following the issuance of certain warrants in connection with the Plan of Reorganization, the warrants were deemed to be
registered under Section 12(g) under the Exchange Act pursuant to Rule 12g-3(a) thereof.
Prior to the consummation of the transactions
undertaken pursuant to the Plan of Reorganization, we (as VNR Finance Corp.) were the co-issuer of our Predecessor’s secured
notes, which were exchanged pursuant to the Plan of Reorganization, and our senior unsecured notes, which were cancelled pursuant
to the Plan of Reorganization. Other than the notes, however, we did not have any independent assets or operations. Accordingly,
we are a new holding company for our Predecessor’s business, assets and operations going forward.
Additional information, including our Predecessor’s
financial statements and the notes thereto, is incorporated in this prospectus by reference to our Predecessor’s and our
reports filed with the SEC. Please read “Where You Can Find More Information.”
You are urged to read this prospectus carefully,
including “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements,” and the documents
incorporated by reference in their entirety before investing in our securities.
Unless the context requires otherwise or unless
otherwise noted, all references in this prospectus to:
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·
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“the Company” refer to Vanguard Natural Resources, Inc.,
a Delaware corporation (formerly known as VNR Finance Corp.) and its subsidiaries;
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·
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our “Predecessor” refer to Vanguard Natural Resources,
LLC, a Delaware limited liability company;
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|
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·
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“we,” “our,” “us,” “Vanguard”
or like terms refer, after the consummation of the Plan of Reorganization, to the Company and, prior to the consummation of the
Plan of Reorganization, to our Predecessor and the entirety of its business, assets and operations that were contributed to us
in connection with the consummation of the Plan of Reorganization; and
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|
|
·
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“VNG” refers to Vanguard Natural Gas, LLC, a Kentucky
limited liability company and our wholly owned subsidiary, through which we hold the assets of our Predecessor.
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This Registration Statement on Form S-8 (“Registration Statement”)
is being filed by the Registrant, for the purpose of registering 2,233,333 shares of its common stock, par value $0.001 per share
(the “Common Stock”), for issuance under the terms of the Vanguard Natural Resources, Inc. 2017 Management Incentive
Plan (the “Plan”). The shares of Common Stock being registered pursuant to this Registration Statement have been reserved
and authorized for issuance from the Company’s authorized and unissued capital stock.
Authorized Capitalization
Our Certificate of Incorporation provides that
we are authorized to issue 60,000,000 shares of capital stock, divided into two classes consisting of (a) 50,000,000 shares
of Common Stock and (b) 10,000,000 shares of preferred stock, par value $0.001 per share.
Common Stock
Dividends
Subject to the rights granted to any holders
of preferred stock, our Certificate of Incorporation provides that holders of the shares of Common Stock will be entitled to dividends
in the amounts and at the times declared by the Board in its discretion out of any assets or our funds legally available for the
payment of dividends. At this time, any future dividend payment will be restricted by the terms of the agreement governing our
revolving credit facility.
Voting Rights
Each holder of Common Stock is entitled to one
vote for each share on all matters submitted to a vote of the stockholders, including the election or removal of directors. Until
public listing of the Common Stock on a national exchange or the consummation of an initial public offering, any action to be taken
by the affirmative vote of the stockholders at any annual or special meeting of the stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing, setting forth the action taken is signed by the holders
of outstanding stock of the Corporation having not less than the minimum number of votes that would be necessary to take such action
at a meeting of stockholders at which all shares entitled to vote thereon were present and voted. After the date in which a public
listing of the Common Stock on a national exchange or the consummation of an initial public offering is completed, any action to
be taken by the affirmative vote of the stockholders at any annual or special meeting of the stockholders may be taken without
prior notice and without a vote, if a consent or consents in writing, setting forth the action taken is signed by all of the holders
of outstanding stock entitled to vote thereon.
Our Certificate of Incorporation provides that
the Whole Board (as defined in the Certificate of Incorporation) will initially be comprised of six directors and our Bylaws provide
that, subject to the rights, if any, of the holders of shares of any class or series of preferred stock then outstanding to remove
directors as set forth in the instrument of designation of such preferred stock applicable thereto, any director or the entire
Board may be removed from office, with or without cause, upon the affirmative vote of the holders of at least a majority of the
total voting power of all the shares entitled to vote generally in the election of our directors, voting together as a single class.
The number of directors that comprise the Whole Board may be changed from time to time by a resolution adopted by a majority of
the Board. The Board is currently comprised of seven directors.
Our Bylaws provide that all elections of our
directors will be determined by a plurality of the votes cast, and except as otherwise required by law or the rules of any stock
exchange upon which our securities are listed or as otherwise provided in the Bylaws or the Certificate of Incorporation, all other
matters will be determined by a majority of the votes cast affirmatively or negatively, on such matter.
Other Rights
The shares of Common Stock are not convertible,
redeemable, assessable or entitled to the benefits of any sinking or repurchase fund. The rights, preferences and privileges of
holders of the shares of Common Stock will be subject to those of the holders of any shares of preferred stock that we may issue
in the future. Upon liquidation, dissolution or winding up of the affairs of the Company, the holders of the shares of Common Stock
will share equally, on a per share basis, in the assets thereof that may be available for distribution after satisfaction of creditors
and of the preferences of shares of preferred stock.
Under the terms of our Certificate of Incorporation
and our Bylaws, we are prohibited from issuing any non-voting equity securities to the extent required under Section 1123(a)(6)
of the Bankruptcy Code and only for so long as Section 1123 of the Bankruptcy Code is in effect and applicable to us.
Limitation on Voting
Notwithstanding anything contained in the Certificate
of Incorporation to the contrary, J.P. Morgan Securities LLC (“JPMS”) and its affiliates, collectively, shall not be
entitled to vote, directly or indirectly, equity securities of the Company representing, in aggregate, greater than 4.99% of the
total combined voting power of any class of equity securities of the Company entitled to vote on any matter (any equity securities
held by JPMS and its affiliates, collectively, in excess of such 4.99% limitation, the “Excess Voting Stock”). For
the avoidance of doubt, if JPMS or any of its affiliates shall transfer any Excess Voting Stock to any other person that is not
an affiliate of JPMS, the limitation set forth above shall no longer apply to such Excess Voting Stock. Excess Voting Stock may
only be transferred by JPMS or any of its affiliates: (i) among or between JPMS and its affiliates; (ii) in a widespread public
distribution; (iii) in transfers in which no transferee (or group of associated transferees) would receive from JPMS and its affiliates
in such sale or transfer two percent (2%) or more of any class of voting securities of the Company; (iv) to an underwriter for
the purpose of conducting a widespread public distribution of the voting securities of the Company; (v) to the Company; or (vi)
to a transferee that would control more than fifty percent (50%) of the voting securities of the Company without any transfer of
Excess Voting Stock from JPMS or its affiliates.
Directors
The Board shall consist of not less than one
nor more than fifteen directors, and is currently comprised of seven directors. The number of directors may be changed from time
to time by a resolution adopted by a majority of the Board. Each director to be elected by stockholders shall be determined
by a plurality of the votes cast. There is no cumulative voting in the election of directors. Directors may be removed, with or
without cause, by an affirmative vote of the holders of a majority of the total voting power of all the shares entitled to vote
generally in the election of our directors, voting together as a single class, as described in “—Common Stock—Voting
Rights.”
All directors will be in one class and serve
for a term ending at the annual meeting following the annual meeting at which the director was elected. Our current class of directors
will be subject to reelection at our 2018 annual meeting.
Limitation of Liability of Directors
The Certificate of Incorporation provides that
no director shall be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as
a director to the fullest extent permitted by the Delaware General Corporation Law (“DGCL”). The effect of this provision
is to eliminate our and our stockholders’ rights, through stockholders’ derivative suits on our behalf, to recover
monetary damages against a director for a breach of fiduciary duty as a director.
We may purchase insurance on behalf of any officer,
director, employee or other agent for any liability arising out of that person’s actions as our officer, director, employee
or agent, regardless of whether Delaware law would permit indemnification.
Section 102 of the DGCL allows a corporation
to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for
a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith,
engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase
in violation of the DGCL or obtained an improper personal benefit.
Section 145 of the DGCL provides, among
other things, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact
that the person is or was a director, officer, agent or employee of the corporation or is or was serving at the corporation’s
request as a director, officer, agent, or employee of another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred
by the person in connection with such action, suit or proceeding. The power to indemnify applies (a) if such person is successful
on the merits or otherwise in defense of any action, suit or proceeding, or (b) if such person acted in good faith and in
a manner he or she reasonably believed to be in the best interest, or not opposed to the best interest, of the corporation, and
with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The power
to indemnify applies to actions brought by or in the right of the corporation as well, but only to the extent of defense expenses
(including attorneys’ fees but excluding amounts paid in settlement) actually and reasonably incurred and not to any satisfaction
of judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be
made in the event of any adjudication of negligence or misconduct in the performance of his or her duties to the corporation, unless
the court believes that in the light of all the circumstances indemnification should apply.
Section 174 of the DGCL provides, among
other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase
or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved or
dissented at the time may avoid liability by causing his or her dissent to such actions to be entered in the books containing the
minutes of the meetings of the Board at the time such action occurred or immediately after such absent director receives notice
of the unlawful acts.
Anti-Takeover Provisions of the Certificate of Incorporation,
the Bylaws and the DGCL
Our Certificate of Incorporation, our Bylaws
and the DGCL contain provisions that may have some anti-takeover effects and may delay, defer or prevent a takeover attempt or
a removal of the incumbent officers or directors that a stockholder might consider in his, her or its best interest, including
those attempts that might result in a premium over the market price for shares held by the stockholders.
Preferred Stock
The Board is empowered, without further vote
or action by the stockholders (except as may otherwise be provided by the terms of any class or series of then-outstanding preferred
stock), to (i) authorize the issuance of preferred stock in one or more classes or series, (ii) establish from time to
time the number of shares to be included in each such series, which the Board may thereafter increase or decrease (but not below
the number of shares thereof then-outstanding), and (iii) fix the designations, powers, preferences, rights, qualifications,
limitations and restrictions thereof.
The issuance of preferred stock may have the
effect of delaying, deferring or preventing a change in control of the Company without further action by the stockholders and may
adversely affect the voting and other rights of the holders of the shares of Common Stock.
Calling of Special Meeting of Stockholders
Stockholders are only permitted to call a special
meeting upon a written request of holders of record of at least the majority of the total voting power of all of our outstanding
shares entitled to vote generally in the election of directors.
Amendment of the Bylaws
Under the DGCL, the power to adopt, amend or
repeal bylaws is conferred upon the stockholders. A corporation may, however, in its certificate of incorporation also confer upon
the board of directors the power to adopt, amend or repeal its bylaws. Our Certificate of Incorporation and our Bylaws grant to
the Board the power to adopt, amend, restate or repeal the Bylaws, provided that until the earlier of a public listing of the Common
Stock on a national exchange or the consummation of an initial public offering, no provision inconsistent with the terms of the
vacancies of our Board or newly created directorships may be altered, amended or repealed, unless such repeal or amendment shall
have been approved by 66 2/3% of the total voting power of our shares entitled to vote generally in the election of directors.
Other Limitations on Stockholder Actions
Advance notice is required for stockholders
to nominate directors or to submit proposals for consideration at meetings of stockholders.
Newly Created Directorships and Vacancies on the Board
Under the Bylaws, prior to the date we complete
a public listing of the Common Stock on a national exchange or consummate an initial public offering, any vacancy on the Board
shall be filled only by the affirmative vote of the holders of a majority in voting power of the stock entitled to vote thereon.
From and after the date we complete a public listing or an initial public offering, subject to the rights, if any, of the holders
of shares of any class or series of preferred stock then outstanding to designate a director to fill a vacancy as set forth in
the instrument of designation of such preferred stock applicable thereto, any vacancy on the Board resulting from any death, resignation,
retirement, disqualification, removal from office, or newly created directorship resulting from any increase in the authorized
number of directors or otherwise may be filled by the Board, acting by a majority of the remaining directors then in office, even
if less than a quorum, or by a sole remaining director. A director elected to fill a vacancy shall hold office for a term expiring
at the annual meeting of stockholders and until such director’s successor shall have been duly elected and qualified or until
such director’s earlier death, resignation or removal.
No Cumulative Voting
Our stockholders do not have the right to cumulate
votes, as discussed in “—Common Stock—Voting.”
Section 203 of the DGCL
Before the Effective Date, the limited liability
company agreement of the Company’s predecessor provided that the predecessor was subject to Section 203 of the DGCL.
As of the Effective Date, we elected in our Certificate of Incorporation to not be subject to Section 203, which election
will become effective 12 months after the Effective Date and would not apply to a “business combination”
(as defined below) with a person who became an “interested stockholder” (as defined below) prior to the Effective Date.
In general, Section 203 prohibits a publicly
held Delaware corporation from engaging in a “business combination” (as defined below) with an “interested stockholder”
(as defined below) for a three-year period following the time that such stockholder becomes an interested stockholder, unless the
business combination is approved in a prescribed manner. A “business combination” includes, among other things, a merger,
asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An “interested
stockholder” is a person who, together with affiliates and associates, owns, or did own within three years prior to the determination
of interested stockholder status, 15% or more of the corporation’s outstanding voting stock. Under Section 203, a business
combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:
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before the stockholder became interested, the Board approved either
the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding
at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons
who are directors and also officers, and employee stock plans, in some instances; or
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at or after the time the stockholder became interested, the business
combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of the stockholders
by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
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Exclusive Forum
Our Certificate of Incorporation provides that,
unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the
Court of Chancery shall not have jurisdiction, another state court located within the state of Delaware, or if no such state court
shall have jurisdiction, the federal district court for the District of Delaware) will be, to the fullest extent permitted by law,
the exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim
of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any
action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our
Certificate of Incorporation or our Bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees
governed by the internal affairs doctrine. Any person or entity purchasing or otherwise holding any interest in our shares of capital
stock will be deemed to have notice of and consented to the foregoing forum selection provisions.