e8vk
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): October 9, 2008
LAYNE CHRISTENSEN COMPANY
(Exact Name of Registrant as Specified in Charter)
|
|
|
|
|
Delaware
|
|
0-20578
|
|
48-0920712 |
|
|
|
|
|
(State or Other Jurisdiction of
|
|
(Commission
|
|
(I.R.S. Employer |
Incorporation)
|
|
File Number)
|
|
Identification No.) |
1900 Shawnee Mission Parkway
Mission Woods, Kansas 66205
(Address of Principal Executive Offices)
(913) 362-0510
(Registrants 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):
|
|
|
o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
|
o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CF $240.14a-12)
|
|
|
|
o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
|
o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
|
|
|
|
Item 1.01 |
|
Entry Into a Material Definitive Agreement |
Amended and Restated Rights Plan
On October 14, 2008, Layne Christensen Company (the Company) entered into an Amended and
Restated Rights Agreement (the Amended Rights Plan) with National City Bank (the Rights Agent), which amends the
terms of the Rights Agreement dated as of October 12, 1998, between the Company and the Rights
Agent, that would have expired at the close of business on October 14, 2008.
A description of the provisions of the Amended Rights Plan is contained in Exhibit C to the
Amended Rights Plan, a copy of which is filed herewith as Exhibit 4.1 and incorporated herein by
reference.
The Amended Rights Plan is intended to comply with the voting guidelines of ISS Governance
Services (ISS), including (i) a 20% ownership threshold which must be surpassed before the
exercisability of the rights is triggered, (ii) a three year term which will expire at the close of
business on October 14, 2011, (iii) a Qualified Offer exemption (as defined in the Amended Rights
Plan) which permits a tender offer to be made directly to the stockholders if the criteria in that
exemption are satisfied, and (iv) the right of stockholders owning at least 10% of the outstanding
shares to request that a special stockholders meeting be held for the purpose of voting upon a
resolution to redeem the rights, which request may be made not earlier than 90 business days after
commencement of a Qualified Offer that has not been approved by the Companys Board of Directors
(the Board). The Company plans to seek stockholder ratification of the Amended Rights Plan at
the 2009 Annual Meeting of Stockholders but will reserve the right to maintain the Amended Rights
Plan or adopt a new rights plan if the Board determines, in good faith, that its fiduciary duties
require such action. In addition, the Amended Rights Plan calls for a review to be conducted at
least annually by the Nominating and Corporate Governance Committee, which is composed solely of
independent directors, for the purpose of communicating to the Board its recommendation as to
whether the Amended Rights Plan continues to be in the best interests of the stockholders or should
be modified or the rights redeemed.
The Board approved the Companys entry into the Amended Rights Plan because the Companys
currently depressed stock price and the concentration of approximately 60% of its outstanding
common stock in the hands of 15 institutional stockholders make it vulnerable to a hostile takeover
that could be coercively structured and either unfairly or inadequately priced. In determining
whether to adopt the Amended Rights Plan, the Board also took into account numerous economic
studies which have shown that rights plans do not prevent takeovers, but do result in higher
takeover premiums being paid. The Board believes that it can best fulfill its fiduciary duties to
the Company and to its stockholders with the additional time, flexibility and negotiating leverage
provided by the Amended Rights Plan which encourages potential acquirors to negotiate with the
Board and gives the Board the opportunity to identify and pursue the best strategic alternative
available to the Company. The Amended Rights Plan also helps to ensure equal treatment so that all
stockholders will have the opportunity to receive a control premium and can avoid the risk of being
relegated to a minority position.
The Boards ability to implement a rights plan to achieve the foregoing benefits after an
actual takeover threat emerges is doubtful due to the Companys concentrated stock ownership and
the inability of the filing requirements under Section 13(d) of the Securities Exchange Act of
1934, as amended, and the Hart-Scott-Rodino Antitrust Improvement Act (HSR) to provide sufficient
advance warning of an impending transfer of control of the Company. In the former regard, a
hostile acquiror is permitted to acquire additional shares during the ten day period between the
date it first acquires beneficial ownership of more than five percent of the outstanding shares and
the due date for filing a Schedule 13D to report such ownership and its control intentions. In the
latter regard, an HSR notice is required before consummating the acquisition of stock with a value
of more than $63.1 million, but is not triggered by an
option or conditional right to purchase, so that control could be locked up, subject to HSR
clearance of the closing of the stock transfer, before the Company becomes aware of it.
Indemnification Agreements
On October 9, 2008, the Board of the Company approved a form of indemnification agreement (the
Indemnification Agreement) to be entered into with each of the Companys directors and the
following executive officers: Andrew B. Schmitt, President, Chief Executive Officer and Director;
Gregory F. Aluce, Senior Vice President and Division President Water Resources; Eric R. Despain,
Senior Vice President and Division President Mineral Exploration; Steven F. Crooke, Senior Vice
President, Secretary and General Counsel; Jeff Reynolds Senior Vice President and Director; and
Jerry W. Fanska, Senior Vice President Finance and Treasurer. The Companys Board further
authorized the Company to enter into the Indemnification Agreement with future directors and
executive officers of the Company and other persons or categories of persons that may be designated
from time to time by the Board.
The Indemnification Agreement supplements and clarifies existing indemnification provisions of
the Companys Certificate of Incorporation and Bylaws and, in general, provides for indemnification
to the fullest extent permitted by law, subject to the terms and conditions provided in the
Indemnification Agreement. The Indemnification Agreement also establishes processes and procedures
for indemnification claims, advancement of expenses and costs and other determinations with respect
to indemnification.
The foregoing description of the Indemnification Agreement does not purport to be complete and
is qualified in its entirety by reference to the form of Indemnification Agreement, a copy of which
is filed herewith as Exhibit 10.1 and incorporated herein by reference.
|
|
|
Item 3.03. |
|
Material Modification to Rights of Security Holders. |
Please see the disclosure set forth under Item 1.01 regarding the Companys Amended Rights
Plan and the disclosure as set forth under Item 5.03 regarding the amendments and restatement of
the Companys Bylaws, which are incorporated by reference into this Item 3.03.
|
|
|
Item 5.03 |
|
Amendments to Articles of Incorporation or Bylaws: Change in Fiscal Year |
On October 9, 2008, the Board approved an amendment and restatement of the Companys Bylaws,
effective immediately.
A description of the provisions amended (other than certain immaterial technical changes) and,
if applicable, the previous provisions is provided below. This description is a summary of the
amendments to the Bylaws and is qualified in its entirety by reference to the Amended and Restated
Bylaws (with amendments marked) filed herewith as Exhibit 3.1 and incorporated herein by reference.
A clean copy of the Amended and Restated Bylaws is filed herewith as Exhibit 3.2.
Article II
Section 6. This section was amended to provide that, in the event the Company
receives a Qualified Offer, as defined in the Amended Rights Plan, holders of record of at least
10% of the Companys common stock may, to the extent permitted by, and pursuant to and in
compliance with Section 23.2 of the Amended Rights Plan, demand that a special meeting of
stockholders be called in accordance with Section 23.2 of the Amended Rights Plan for the sole
purpose of voting on whether to
redeem all of the outstanding Rights under the Amended Rights Plan in connection with a
Qualified Offer.
Sections 7, 8 and 9. These sections were amended and restated to clarify and add new
requirements to the advance notice requirements that stockholders must follow in order to make
either a director nomination or bring any other business at an annual or a special meeting of the
stockholders. The amendments explicitly provide that the provisions of Sections 7(a)(iii) and
8(a)(ii) of these Bylaws are the exclusive means for a stockholder to make nominations or submit
other business, other than proposals governed by Rule 14a-8 of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (which provides its own procedural requirements).
Sections 7 and 8 set forth the requirements, timing and information required to be provided to the
Company about the stockholder proposing business or making a nomination, respectively, as well as
the information required to be provided to the Company about any nominee for the Companys Board
made by such stockholder. In addition, Section 8(g) requires, among other things, that each person
nominated by a stockholder for election or reelection as a director of the Company to submit a
written questionnaire with respect to the background and qualification of such person and of the
person on whose behalf such person is being nominated.
Under the Companys Amended and Restated Bylaws, no director nominations or any other business
may be brought before an annual meeting unless it is specified in the notice of the meeting or is
otherwise brought before the meeting by or at the direction of the Board or by a stockholder
entitled to vote who has delivered written notice to the Companys Secretary not less than 90 days
or more than 120 days prior to the first anniversary of the preceding years annual meetingthat
is, with respect to the 2009 Annual Meeting, between February 5 and March 7, 2009. Such notice
must comply with the requirements of Sections 7 or 8 of the Bylaws and stockholders of the Company
desiring to submit a proposal or director nomination should carefully review the Bylaws to ensure
compliance with the applicable provisions.
Any notice received after March 7, 2009 will be untimely. The Company reserves the right to
reject, rule out of order, or take other appropriate action with respect to any nomination or
proposal that does not comply with these and other applicable requirements.
Former Section 13. This section was moved to Article VII and amended and restated, as
described below.
Article VII
The indemnification and advancement provisions were set forth in Article III, Section 13 of
the prior bylaws and specified that the Company shall provide indemnification to its directors and
officers to the fullest extent permitted by law. That section was amended and restated in its
entirety, as set forth in Article VII, to (i) clarify when indemnification and advancement of
expenses are permitted or required and (ii) specify certain procedural aspects of any claim for
indemnification or advancement. The sections added by the amendments are summarized below.
Section 1. This section provides that the Company will indemnify and advance expenses
to each person who is or was a director or officer of the Company or is or was serving at the
Companys request as a director or officer of any other corporation, partnership, joint venture,
trust or employee benefit plan (in each case, an Indemnitee), to the fullest extent permitted
under Delaware law.
Section 2. This section provides that the Company will indemnify an Indemnitee
against actions by third parties in accordance with Section 145(a) of the Delaware General
Corporation Law (DGCL).
Section 3. This section provides that the Company will indemnify an Indemnitee
against derivative actions in accordance with Section 145(b) of the DGCL.
Section 4. This section provides that the Company will indemnify an Indemnitee
against expenses reasonably incurred in connection with actions covered by Sections 2 and 3 above,
to the extent such Indemnitee is successful on the merits or otherwise, in accordance with Section
145(c) of the DGCL.
Section 5. This section sets forth the procedure for determining an Indemnitees
eligibility for indemnification in accordance with Section 145(d) of the DGCL.
Section 6. This section provides that the Company will advance expenses to an
Indemnitee in advance of the final disposition of an action covered by Sections 2 and 3 above, in
accordance with Section 145(e) of the DGCL.
Section 7. This section provides that the indemnification and advancement rights
provided an Indemnitee under Article VII are not exclusive and do not limit any rights the Company
has to provide additional indemnification protections.
Section 8. This section provides that the Company may obtain liability insurance on
behalf of an Indemnitee and specifies the procedures for the Company to obtain such insurance.
Section 9. This section provides that the rights conferred under Article VII (i) are
contract rights, (ii) are intended to be retroactive to cover acts or omissions that occurred prior
to the adoption of Article VII, (iii) continue as to an Indemnitee who has ceased to serve in his
or her capacity, and (iv) fully vest at the time the Indemnitee first assumes his or her position.
This section further provides that that no amendment, alteration or repeal of Article VII will
adversely affect any right of an Indemnitee or limit or eliminate any such right for actions or
omissions that took place prior to such amendment, alteration or repeal.
Section 10. This section provides definitions for terms used in Article VII.
Section 11. This section sets forth provisions relating to partial indemnification.
Article VIII (former Article VII).
Section 2. This section was added to provide that if any provision of the bylaws is
determined to be invalid or unenforceable, such determination will not affect the validity or
enforceability of any other provision of the bylaws.
|
|
|
Item 9.01. |
|
Financial Statements and Exhibits |
|
3.1 |
|
Amended and Restated Bylaws of Layne Christensen Company (as adopted October 9,
2008), marked to show the changes resulting from the amendment and restatement reported
in this Current Report on Form 8-K. |
|
|
3.2 |
|
Amended and Restated Bylaws of Layne Christensen Company (as adopted October 9,
2008). |
|
|
4.1 |
|
Rights Agreement dated as of October 14, 2008, between Layne Christensen
Company and National City Bank as Rights Agent, which includes as Exhibit C, the
Summary of Rights to Purchase Preferred Shares. |
|
|
10.1 |
|
Form of Indemnification Agreement. |
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 hereunto duly authorized.
|
|
|
|
|
|
LAYNE CHRISTENSEN COMPANY
|
|
Date: October 14, 2008 |
By: |
/s/ Andrew B. Schmitt
|
|
|
|
Name: |
Andrew B. Schmitt |
|
|
|
Title: |
President and Chief Executive Officer |
|
|
Exhibit Index:
|
3.1 |
|
Amended and Restated Bylaws of Layne Christensen Company (as adopted
October 9, 2008), marked to show the changes resulting from the amendment and
restatement reported in this Current Report on Form 8-K. |
|
|
3.2 |
|
Amended and Restated Bylaws of Layne Christensen Company (as adopted
October 9, 2008). |
|
|
4.1 |
|
Rights Agreement dated as of October 14, 2008, between Layne Christensen
Company and National City Bank as Rights Agent, which includes as Exhibit C, the
Summary of Rights to Purchase Preferred Shares. |
|
|
10.1 |
|
Form of Indemnification Agreement. |