UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): January 14, 2010 (January
12, 2010)
GASTAR
EXPLORATION LTD.
(Exact
Name of Registrant as Specified in its Charter)
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ALBERTA,
CANADA
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001-32714
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38-3324634
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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1331
LAMAR STREET, SUITE 1080
HOUSTON,
TEXAS 77010
(Address
of principal executive offices)
(713)
739-1800
(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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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SECTION
1 – REGISTRANT’S BUSINESS AND OPERATIONS
Item
1.01 – Entry into a Material Definitive Agreement
On
January 12, 2010, Gastar Exploration Ltd. (the “Company”) entered into an
agreement (the “Agreement”) with Palo Alto Investors, LLC and certain of its
affiliates (collectively, “Palo Alto”) with respect to certain governance
matters of the Company. Palo Alto is an investment advisory firm that
currently owns or exercises control or direction over 4,674,744 common shares of
the Company, which represents approximately 9.3% of the Company’s outstanding
common shares.
Pursuant
to the Agreement, the Company has agreed that no later than January 15, 2010 its
board of directors (the “Board”) will appoint a new independent director to the
Board and to the nominating committee of the Board (the “Nominating
Committee”). The Company also agreed that its Board will authorize an
increase in the size of the Board to six directors at its 2010 annual meeting of
shareholders scheduled to be held in June 2010 (the “2010 Annual Meeting”) and
take all actions necessary to cause one additional new independent director to
be recommended by the Nominating Committee to the Company’s shareholders for
election at the 2010 Annual Meeting. Pursuant to the Agreement, the
2010 Annual Meeting will be held no later than June 15, 2010. The
Company further agreed that no later than January 15, 2010 the Board and the
Company’s management will cause the positions of chief executive officer and
chairman of the Board to be held by different individuals and will amend the
Company’s bylaws to prohibit any one person from holding both positions
concurrently.
The
Company’s and Palo Alto’s rights and obligations under the Agreement will
terminate upon the earlier to occur of: (i) December 31, 2010; (ii) the date 90
days following the date on which Palo Alto and its affiliates own shares of any
class of capital stock of the Company that are then entitled to vote generally
in the election of directors (“Voting Securities”) that represent, in the
aggregate, 5% or less of the Company’s then-outstanding common shares, provided
that such ownership has remained at or below 5% for the entire 90-day period;
(iii) the date that the Board publicly announces its intention to solicit a
proposal for (a) the merger, consolidation, amalgamation, arrangement, share
exchange, business combination, liquidation, dissolution, recapitalization,
reorganization or other similar transaction involving the Company, (other than
any such transaction where the Company is the surviving person or immediately
after such transaction the former shareholders of the Company own a majority of
the equity interest of the surviving person), (b) the sale or issuance of more
than 50% of the capital stock of the Company or its subsidiaries, (c) the sale
of more than 50% of the assets or businesses of the Company and its subsidiaries
(each a “Sale Proposal”), or (d) publicly approves or recommends to the
Company's shareholders their approval of, or their conveyance of any Voting
Securities pursuant to, any Sale Proposal; (iv) the date that the Company
has entered into a letter of intent, agreement in principle, definitive
agreement, or any similar agreement with any party (other than a customary
confidentiality agreement) with respect to a Sale Proposal; or (v) the date
that any person or group shall have acquired or announced its intention to
acquire, including by commencement of a tender offer or exchange offer,
beneficial ownership of more than 50% of the Voting Securities
A copy of
the Agreement is filed herewith as Exhibit 10.1 hereto, and is incorporated
herein by reference.
SECTION
5 – CORPORATE GOVERNANCE AND MANAGEMENT
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Item
5.02 –
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers
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On
January 13, 2010, pursuant to the Agreement described above in Item 1.01, the
Board appointed Randolph C. Coley as a director and a member of each of the
Audit, Nominating and Corporate Governance Committees of the
Board. The appointment of Mr. Coley brings the total number of
directors to five, four of whom are independent. Mr. Coley will stand
for election to the Board at the 2010 Annual Meeting. Prior to his retirement in
2008, Mr. Coley was a partner in the Houston, Texas office of the law firm, King
& Spalding LLP, where his practice, which began with King & Spalding LLP
in 1996, was concentrated in the areas of corporate and securities
law. Currently retired, he serves as a director of Deltic Timber
Corporation, a publicly-traded natural resources company focused on the
ownership and management of timberland, a position he has held since 1999, and
is a member of its audit committee. Mr. Coley earned his
undergraduate degree from Vanderbilt University and graduated with a law degree
from Vanderbilt School of law.
Item
5.03 – Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
On
January 13, 2010, pursuant to the Agreement described above in Item 1.01, the
Board approved a resolution to amend the Company’s bylaws so that (i) the
positions of chief executive officer and chairman of the Board are to be held by
different individuals and (ii) any one person is prohibited from holding both
position concurrently. The Board further resolved that such amendment
to the bylaws be presented to the shareholders at the 2010 Annual Meeting for
ratification and adoption, and until such shareholder vote ratifies or reverses
such amendment, the foregoing amendment to the bylaws will be effective and
valid from the date of the approved resolution.
Item
7.01 – Regulation FD Disclosure
On
January 13, 2010, the Company issued a press announcing the execution of the
Agreement described in Item 1.01 above and the undertakings required
thereby. A copy of the press release is furnished herewith as Exhibit
99.1 and is incorporated by reference herein.
In
accordance with General Instruction B.2 of Form 8-K, the information presented
herein under Item 7.01 and set forth in the attached Exhibit 99.1 is deemed to
be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall such information and Exhibit be deemed
incorporated by reference into any filing under the Securities Act of 1933 or
the Securities Exchange Act of 1934, each as amended.
ITEM
9.01 – FINANCIAL STATEMENTS AND EXHIBITS
(d)
Exhibits
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Exhibit
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No.
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Description of Document
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10.1
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Agreement
dated January 12, 1010, by and among Gastar Exploration Ltd., Palo Alto
Investors, LLC and certain of its affiliates.
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99.1
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Press
Release dated January 13,
1010.
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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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GASTAR
EXPLORATION LTD.
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Date: January
14, 2010
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/s/ J. RUSSELL PORTER
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J.
Russell Porter
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Chairman,
President and Chief Executive
Officer
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EXHIBIT
INDEX
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Exhibit
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No.
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Description of Document
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10.1
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Agreement
dated January 12, 1010, among Gastar Exploration Ltd., Palo Alto
Investors, LLC and certain of its affiliates.
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99.1
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Press
release dated January 13,
1010.
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