Advanced Drainage Systems, Inc 8-K, filed Jul 24, 2020
Advanced Drainage Systems, Inc. (WMS)
About this 8-K
Advanced Drainage Systems, Inc filed this 8-K on July 24, 2020, reporting on events of July 23, 2020.
Items reported
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 5.07: Shareholder vote results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of Registrant as Specified in Its Charter)
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Registrant’s Telephone Number, Including Area Code:
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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 Instructions A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
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 13(a) of the Exchange Act. ☐
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Item 5.03 |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On July 23, 2020, Advanced Drainage Systems, Inc. (the “Company”) held its 2020 Annual Meeting of Stockholders, as further described in Item 5.07 below, at which the Company’s stockholders approved amendments to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) (1) to declassify the Board of Directors over a three-year period and provide that directors elected on or after the 2021 annual meeting serve for one-year terms and (2) to eliminate provisions requiring supermajority stockholder approval to amend certain provisions of the Certificate of Incorporation and to amend the Company’s Second Amended and Restated Bylaws (the “Bylaws”). These amendments to the Certificate of Incorporation became effective upon the Company’s filing of the Certificate of Amendment to Certificate of Incorporation with the Secretary of State of Delaware on July 24, 2020. A copy of the Certificate of Amendment to Certificate of Incorporation is attached hereto as Exhibit 3.1 and is incorporated herein by reference.
Effective July 24, 2020, the Board of Directors of the Company amended the Company’s Bylaws (1) to implement a majority voting standard for uncontested director elections, (2) to declassify the Board of Directors, and (3) to eliminate the provision requiring supermajority stockholder approval to amend the Bylaws. A copy of the First Amendment to Bylaws is attached hereto as Exhibit 3.2 and is incorporated herein by reference.
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Item 5.07 |
Submission of Matters to a Vote of Security Holders. |
The 2020 Annual Meeting of Stockholders (the “Annual Meeting”) of the Company was held via webcast on July 23, 2020, at 10:00 a.m. Eastern Time. Stockholders were able to participate in the Annual Meeting and vote via live webcast. Stockholders considered five proposals at the meeting, each of which is described in more detail in the Company’s Definitive Proxy Statement on Schedule 14A, which was filed with the Securities and Exchange Commission (“SEC”) on June 11, 2020. The final voting results are reported below.
Proposal One: Election of four directors, including D. Scott Barbour, Michael B. Coleman, Tanya Fratto and Carl A. Nelson, Jr., to serve for a three-year term until the 2023 annual meeting of stockholders and election of one director, Anesa T. Chaibi, to serve for a one-year term until the 2021 annual meeting of stockholders.
The Company’s stockholders elected each of the five nominees for director, and the voting results are set forth below:
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Name |
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For |
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Against |
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Abstentions |
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Broker |
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D. Scott Barbour |
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83,323,548 |
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202,888 |
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45,428 |
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2,506,407 |
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Anesa T. Chaibi |
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83,412,144 |
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58,952 |
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100,768 |
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2,506,407 |
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Michael B. Coleman |
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76,746,716 |
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6,731,225 |
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93,923 |
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2,506,407 |
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Tanya Fratto |
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77,078,640 |
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6,420,711 |
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72,513 |
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2,506,407 |
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Carl A. Nelson, Jr. |
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83,187,833 |
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327,343 |
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56,688 |
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2,506,407 |
Proposal Two: Advisory vote to approve the compensation of the Company’s executive officers as disclosed in the Company’s Proxy Statement.
The Company’s stockholders gave advisory approval of the compensation of the Company’s executive officers as disclosed in the Proxy Statement, and the voting results are set forth below:
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For |
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Against |
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Abstentions |
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Broker Non-Votes |
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82,405,555 |
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966,930 |
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199,379 |
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2,506,407 |
Proposal Three:. Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for fiscal year 2020.
The Company’s stockholders ratified the selection of Deloitte & Touche LLP, and the voting results are set forth below:
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For |
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Against |
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Abstentions |
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Broker Non-Votes |
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85,242,314 |
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795,789 |
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40,168 |
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– |
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Proposal Four: Approval of amendments to the Company’s Certificate of Incorporation to declassify the Board of Directors over a three-year period and provide that directors are elected on or after the 2021 annual meeting serve for one-year terms.
The Company’s stockholders approved amendments to the Company’s Certificate of Incorporation to declassify the Board of Directors over a three-year period, and the voting results are set forth below:
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For |
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Against |
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Abstentions |
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Broker Non-Votes |
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83,460,229 |
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88,913 |
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22,722 |
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2,506,407 |
Proposal Five: Approval of amendments to the Company’s Certificate of Incorporation to eliminate provisions requiring supermajority stockholder approval to amend certain provisions of the Certificate of Incorporation and to amend the Company’s Bylaws.
The Company’s stockholders approved amendments to the Company’s Certificate of Incorporation to eliminate provisions requiring supermajority approval to amend certain provisions of the Certificate of Incorporation and to amend the Bylaws, and the voting results are set forth below:
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For |
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Against |
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Abstentions |
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Broker Non-Votes |
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83,436,755 |
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91,066 |
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44,043 |
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2,506,407 |
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Item 7.01 |
Regulation FD Disclosure. |
On July 24, 2020, the Company issued a press release regarding the election of Anesa Chaibi as a director. A copy of the Company’s press release is being furnished as Exhibit 99.1 and hereby incorporated by reference.
The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
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Item 9.01 |
Financial Statements and Exhibits. |
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(d) |
Exhibits |
The following exhibit is being furnished as part of this report:
3.1Certificate of Amendment to Certificate of Incorporation
99.1 Press release, dated July 24, 2020, issued by Advanced Drainage Systems, Inc.
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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 on its behalf by the undersigned hereunto duly authorized.
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ADVANCED DRAINAGE SYSTEMS, INC. |
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Date: July 24, 2020 |
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By: |
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/s/ Scott A. Cottrill |
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Name: |
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Scott A. Cottrill |
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Title: |
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EVP, CFO & Secretary |
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Exhibit 3.1
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ADVANCED DRAINAGE SYSTEMS, INC.
ADVANCED DRAINAGE SYSTEMS, INC. (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
FIRST: That the Board of Directors of the Corporation, at a meeting duly convened and held, adopted the following resolutions proposing and declaring advisable the following amendments to the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”):
1.RESOLVED, that, pursuant to the authority vested in the Board of Directors of the Corporation, subject to approval of the stockholders of the Corporation, Article FIFTH Section (b) of the Certificate of Incorporation is hereby amended and restated in its entirety and replaced with the following:
(b) The directors of the Corporation, subject to any rights of the holders of shares of any class or series of Preferred Stock to elect directors, shall hold office until their successors are duly elected and qualified, provided that the term of each director shall continue until the election and qualification of his or her successor or until such director’s earlier death, resignation or removal. At each annual meeting of stockholders of the Corporation beginning with the first annual meeting of stockholders held following the fiscal year ended March 31, 2021, subject to any rights of the holders of shares of any class or series of Preferred Stock, the successors of the directors whose term expires at that meeting shall be elected to hold office for a term expiring at the next annual meeting of stockholders. No decrease in the number of directors shall shorten the term of any incumbent director.
2.RESOLVED, that, pursuant to the authority vested in the Board of Directors of the Corporation, subject to the approval of the stockholders of the Corporation, Article FIFTH Section (d) of the Certificate of Incorporation is hereby amended and restated in its entirety and replaced with the following:
(d) Subject to any rights of the holders of shares of any class or series of Preferred Stock, if any, to elect additional directors under specified circumstances, a director may be removed from office only by the affirmative vote of holders of a majority of the votes to which all the stockholders of the Corporation would be entitled to cast in any election of directors.
3.RESOLVED, that, pursuant to the authority vested in the Board of Directors of the Corporation, subject to the approval of the stockholders of the Corporation, Article TENTH of the
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Certificate of Incorporation is hereby amended and restated in its entirety and replaced with the following:
TENTH: Amendment of Certificate of Incorporation. The Corporation reserves the right to amend, alter or repeal any provision contained in this Amended and Restated Certificate of Incorporation in the manner now or hereafter prescribed by the DGCL, and all rights herein conferred upon stockholders or directors are granted subject to this reservation, provided, however, that any amendment, alteration or repeal of Article FIFTH, Section (g) or Section (h) shall not adversely affect any right or protection existing under this Amended and Restated Certificate of Incorporation immediately prior to such amendment, alteration or repeal, including any right or protection of a director thereunder in respect of any act or omission occurring prior to the time of such amendment, alteration or repeal. Notwithstanding anything to the contrary contained in this Amended and Restated Certificate of Incorporation, and notwithstanding that a lesser percentage may be permitted from time to time by applicable law, no provision of Article NINTH or this sentence of Article TENTH may be amended, altered or repealed in any respect, nor may any provision or bylaw inconsistent therewith be adopted, unless, in addition to any other vote required by this Amended and Restated Certificate of Incorporation or otherwise required by law, such amendment, alteration or repeal is approved at a meeting of the stockholders called for that purpose by, in addition to any other vote otherwise required by law, the affirmative vote of the holders of at least three-fourths (75%) of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
4.RESOLVED, that, pursuant to the authority vested in the Board of Directors of the Corporation, subject to the approval of the stockholders of the Corporation, Article ELEVENTH of the Certificate of Incorporation is hereby amended and restated in its entirety and replaced with the following:
ELEVENTH: Amendment of Bylaws. In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized to amend, alter or repeal the bylaws of the Corporation subject to the power of the stockholders of the Corporation entitled to vote with respect thereto to amend, alter or repeal the bylaws. Any amendment, alteration or repeal of the bylaws of the Corporation by the Board of Directors shall require the approval of three-fourths (75%) of the total number of Directors then in office. In addition to any other vote otherwise required by law, the stockholders of the Corporation may amend, alter or repeal the bylaws of the Corporation, provided that any such action will require the affirmative vote of the holders of a majority of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote with respect thereto, voting together as a single class.
SECOND: That, by the affirmative vote of the holders of at least three-fourths (75%) of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote
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generally in the election of directors, at the annual meeting of the stockholders of the Corporation duly called for that purpose and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, the stockholders of the Corporation adopted and approved the aforesaid amendments to the Certificate of Incorporation.
THIRD: That the aforesaid amendments to the Certificate of Incorporation were duly adopted in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, ADVANCED DRAINAGE SYSTEMS, INC. has caused this Certificate of Amendment to be executed by D. Scott Barbour, President and Chief Executive Officer of the Corporation, this 23rd day of July, 2020.
ADVANCED DRAINAGE SYSTEMS, INC.
By: /s/ D. Scott Barbour
D. Scott Barbour, President and
Chief Executive Officer
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Exhibit 3.2
FIRST AMENDMENT
TO
SECOND AMENDED AND RESTATED BYLAWS
OF
ADVANCED DRAINAGE SYSTEMS, INC.
This First Amendment (this “Amendment”) to Second Amended and Restated Bylaws (the “Bylaws”) of Advanced Drainage Systems, Inc., a Delaware corporation (the “Corporation”), is made effective as of the 23rd day of July, 2020, in accordance with the applicable provisions of Article IX of the Bylaws.
1.Section 2.02 of the Bylaws is hereby amended and restated in its entirety and replaced with the following:
Section 2.02. Election of Directors. Except as provided in Section 2.14 of these Bylaws, at each annual meeting of the stockholders the successors of the Directors whose term expires at that meeting shall be elected. Except as otherwise provided in this Section 2.02, at each meeting of the stockholders for the election of Directors, provided a quorum is present, the nominees who are standing for election as Directors shall be elected by a majority of the votes cast in such election. A majority of the votes cast means that the number of votes cast “for” a nominee’s election must exceed the number of votes cast “against” such nominee’s election. If a nominee who is not an incumbent Director does not receive a majority of the votes cast, the nominee shall not be elected. If an incumbent Director who is standing for re-election does not receive a majority of the votes cast, such Director shall promptly tender his or her resignation to the Board of Directors. The Board of Directors will determine whether to accept or reject the tendered resignation and shall publicly disclose its decision within 90 days from the date of the election. The Director who failed to receive a majority of the votes cast will not participate in such decision of the Board of Directors. If the number of nominees for election as Directors exceeds the number of Directors to be elected, the nominees receiving a plurality of the votes cast in such election shall be elected.
2.Section 9.01(c) of the Bylaws is hereby amended and restated in its entirety and replaced with the following:
(c) at any regular or special meeting of the stockholders upon the affirmative vote of the holders of a majority of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote with respect thereto, voting together as a single class, if, in the case of such special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting.
3.All other terms and conditions of the Bylaws shall remain unmodified and of full force and effect. The Bylaws, as modified by this Amendment, constitute the entire Bylaws of the Corporation.
ADVANCED DRAINAGE SYSTEMS ELECTS ANESA T. CHAIBI TO BOARD OF DIRECTORS
HILLIARD, Ohio – (July 24, 2020) – Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS” or the “Company”), a leading global manufacturer of stormwater and onsite septic wastewater management products and solutions for commercial, residential, infrastructure and agricultural applications, today announced that Anesa T. Chaibi has been elected to its Board of Directors at the Company’s Annual Meeting of Stockholders (“Annual Meeting”), effective immediately. The addition of Ms. Chaibi increases the size of the Board from 10 to 11 directors.
“We are delighted to welcome Anesa to our Board of Directors,” said Robert Kidder, Chairman of the Board of Directors. “Anesa brings an extraordinary breadth of leadership experience in industrial distribution, manufacturing, and services. She has a proven track record of successfully leading some of the world’s largest distribution and industrial companies through periods of transformation, change and growth. I am confident that Anesa's deep knowledge set, relevant experience and broad expertise will complement and enhance an already strong Board.”
Ms. Chaibi has over 30 years of leadership experience across a variety of business functions including manufacturing, operations, sales and marketing, strategy, global sourcing, and Six Sigma Quality. Ms. Chaibi currently serves as an industry advisor in the Industrial and Business Services Group at Warburg Pincus, a leading global private equity firm focused on growth investing. From 2016 until 2019, she served as the CEO of Optimas Solutions, a private equity-backed, global provider of integrated supply chain solutions and engineering support focused on delivering highly engineered custom fasteners and other "C" Class components to various industries. Prior to Optimas Solutions, Ms. Chaibi served as President and CEO of the Facilities Maintenance segment of HD Supply Holdings, Inc. (NASDAQ: HDS), one of the largest industrial distributors in North America. During her decade-long tenure there, Ms. Chaibi transformed the business through a number of acquisitions, integrations, divestitures and a major ERP deployment while at the same time growing the business profitability. Prior to HD Supply, Ms. Chaibi spent 16 years serving as a business leader within several segments of General Electric (NYSE:GE), including Silicones, Plastics, Power Systems, Industrial Systems, Water & Process Technologies and Infrastructure. Additionally, Ms. Chaibi serves on the Board of Directors for Regal Beloit Corporation (NYSE:RBC), a global manufacturer of electric motors, mechanical and electrical motion controls, as
Director and Chair of the Compensation & Human Resources Committee and served as a Member of the Corporate Governance & Director Affairs.
Ms. Chaibi holds a B.S. in Chemical Engineering from West Virginia University and a Master of Business Administration from the Fuqua School of Business at Duke University.
About the Company
Advanced Drainage Systems is the leading manufacturer of high performance thermoplastic corrugated pipe, providing a comprehensive suite of water management products and superior drainage solutions for use in the construction and infrastructure marketplace. Its innovative products are used across a broad range of end markets and applications, including non-residential, residential, agriculture and infrastructure applications. The Company has established a leading position in many of these end markets by leveraging its national sales and distribution platform, overall product breadth and scale and manufacturing excellence. Founded in 1966, the Company operates a global network of approximately 55 manufacturing plants and over 30 distribution centers. To learn more about ADS, please visit the Company’s website at www.ads-pipe.com.
Forward Looking Statements
Certain statements in this press release may be deemed to be forward-looking statements. These statements are not historical facts but rather are based on the Company’s current expectations, estimates and projections regarding the Company’s business, operations and other factors relating thereto. Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “confident” and similar expressions are used to identify these forward-looking statements. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include: fluctuations in the price and availability of resins and other raw materials and our ability to pass any increased costs of raw materials on to our customers in a timely manner; volatility in general business and economic conditions in the markets in which we operate, including the adverse impact on the U.S. and global economy of the COVID-19 global pandemic, and the impact of COVID-19 in the near, medium and long-term on our business, results of operations, financial position, liquidity or cash flows, and other factors relating to availability of credit, interest rates, fluctuations in capital and business and consumer confidence; cyclicality and seasonality of the non-residential and residential construction markets and infrastructure spending; the risks of increasing competition in our existing and future markets, including competition from both manufacturers of high performance thermoplastic corrugated pipe and manufacturers of products using alternative materials; uncertainties surrounding the integration of acquisitions and similar transactions, including the acquisition of Infiltrator Water Technologies and the integration of Infiltrator Water Technologies; our ability to realize the anticipated benefits from the acquisition of Infiltrator Water Technologies; risks that the acquisition of Infiltrator Water Technologies and related transactions may involve unexpected costs, liabilities or delays; our ability to continue to convert current demand for concrete, steel and polyvinyl chloride (“PVC”) pipe products into demand for our high performance thermoplastic corrugated pipe and Allied Products; the effect of any claims, litigation, investigations or proceedings; the effect of weather or seasonality; the loss of any of our significant customers; the risks of doing business internationally; our ability to remediate the material weakness in our internal control over financial reporting, including remediation of the control environment for our joint venture affiliate ADS Mexicana, S.A. de C.V.; the risks of conducting a portion of our operations through joint ventures; our ability to expand into new geographic or product markets, including risks associated with new markets and products associated with our recent acquisition of Infiltrator Water Technologies; our ability to achieve the acquisition component of our growth strategy; the risk associated with manufacturing processes; our ability to manage our assets; the risks associated with our product warranties; our ability to manage our supply purchasing and customer credit policies; the risks associated with our self-insured
programs; our ability to control labor costs and to attract, train and retain highly-qualified employees and key personnel; our ability to protect our intellectual property rights; changes in laws and regulations, including environmental laws and regulations; our ability to project product mix; the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; fluctuations in our effective tax rate; our ability to meet future capital requirements and fund our liquidity needs; the risk that additional information may arise that would require the Company to make additional adjustments or revisions or to restate the financial statements and other financial data for certain prior periods and any future periods; any delay in the filing of any filings with the Securities and Exchange Commission (“SEC”); the review of potential weaknesses or deficiencies in the Company’s disclosure controls and procedures, and discovering weaknesses of which we are not currently aware or which have not been detected; additional uncertainties related to accounting issues generally; and the other risks and uncertainties described in the Company’s filings with the SEC. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company’s expectations, objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the Company’s forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Investor / Media Contact
Advanced Drainage Systems
Michael Higgins, 614-658-0050
Mike.Higgins@ads-pipe.com