UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
NATIONAL FUEL GAS COMPANY
-------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $1 PER SHARE
-------------------------------------------------------------------
(Title of Class of Securities)
636180101
---------------------------------------------------------
(CUSIP Number)
STEVEN B. KLINSKY
NEW MOUNTAIN VANTAGE, L.P.
787 SEVENTH AVENUE, 49TH FLOOR
NEW YORK, NY 10019
(212) 720-0300
Copies to:
PAUL REINSTEIN
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP
ONE NEW YORK PLAZA
NEW YORK, NY 10004-1980
(212) 859-8000
---------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
OCTOBER 19, 2006
---------------------------------------------------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box: [ ]
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
SCHEDULE 13D
CUSIP NO. 636180101 Page 2 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
NEW MOUNTAIN VANTAGE GP, L.L.C.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
3,727,900
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
3,727,900
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,727,900
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.5%
14 TYPE OF REPORTING PERSON
OO
SCHEDULE 13D
CUSIP NO. 636180101 Page 3 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
NEW MOUNTAIN VANTAGE, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
869,100
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
869,100
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
869,100
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.0%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 636180101 Page 4 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
NEW MOUNTAIN VANTAGE (CALIFORNIA), L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
866,700
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
866,700
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
866,700
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.0%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 636180101 Page 5 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
NEW MOUNTAIN VANTAGE (TEXAS), L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
632,100
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
632,100
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
632,100
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.8%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 636180101 Page 6 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
NEW MOUNTAIN VANTAGE ADVISERS, L.L.C.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
3,828,200
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
3,828,200
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,828,200
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.6%
14 TYPE OF REPORTING PERSON
OO
SCHEDULE 13D
CUSIP NO. 636180101 Page 7 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
NEW MOUNTAIN VANTAGE (CAYMAN) LTD.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
1,460,300
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
1,460,300
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,460,300
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.8%
14 TYPE OF REPORTING PERSON
CO
SCHEDULE 13D
CUSIP NO. 636180101 Page 8 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
NEW MOUNTAIN VANTAGE HOLDCO LTD.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
1,460,300
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
1,460,300
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,460,300
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.8%
14 TYPE OF REPORTING PERSON
CO
SCHEDULE 13D
CUSIP NO. 636180101 Page 9 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
STEVEN B. KLINSKY
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF, PF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
5,188,200
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
5,188,200
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,188,200
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
14 TYPE OF REPORTING PERSON
IN
SCHEDULE 13D
CUSIP NO. 636180101 Page 10 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
NMV SPECIAL HOLDINGS, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
1,360,000
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
1,360,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,360,000
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.6%
14 TYPE OF REPORTING PERSON
00
SCHEDULE 13D
CUSIP NO. 636180101 Page 11 of 26 Pages
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
7 SOLE VOTING POWER
NUMBER OF
723,690
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
1,360,000
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
642,640
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
1,441,050
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,083,690
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5%
14 TYPE OF REPORTING PERSON
EP
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D ("Statement") relates to the
common stock, par value $1 per share ("Common Stock"), of National Fuel Gas
Company, a New Jersey corporation (the "Issuer"). The principal executive
offices of the Issuer are located at 6363 Main Street, Williamsville, New
York 14221.
ITEM 2. IDENTITY AND BACKGROUND
(A) - (C) AND (F). This Statement is filed by New Mountain
Vantage GP, L.L.C., a Delaware limited liability company ("Vantage GP"),
New Mountain Vantage, L.P., a Delaware limited partnership ("NMV"), New
Mountain Vantage (California), L.P., a Delaware limited partnership
("NMVC"), New Mountain Vantage (Texas), L.P., a Delaware limited
partnership ("NMVT"), New Mountain Vantage Advisers, L.L.C., a Delaware
limited liability company ("NMV Advisers"), New Mountain Vantage (Cayman)
Ltd., a Cayman Islands exempt limited company ("NMV Offshore"), New
Mountain Vantage HoldCo Ltd., a Cayman Islands exempt limited company ("NMV
Offshore HoldCo"), Mr. Steven B. Klinsky (collectively, the "NMV
Entities"), NMV Special Holdings, LLC, a Delaware limited liability company
("NMVSH"), and the California Public Employees' Retirement System, a unit
of the California State and Consumer Services Agency charged with oversight
of the Public Employees' Retirement Fund ("CalPERS"), (NMV Entities, NMVSH
and CalPERS, collectively, the "Reporting Persons"). NMV, NMVC, NMVT, NMV
Offshore HoldCo, NMVSH and CalPERS are referred to together as the
"Purchasers."(1)
---------------------
(1) Neither the present filing nor anything contained herein shall be
construed as an admission that any Reporting Person constitutes a
"person" for any purposes other than Section 13(d) of the Securities
Exchange Act of 1934, as amended.
Vantage GP is the general partner of NMV, NMVC and NMVT and the
managing member of NMVSH, and is principally engaged in the business of
serving as NMV's, NMVC's and NMVT's general partner and NMVSH's managing
member. NMV Offshore is the sole member of NMV Offshore HoldCo and NMV
Offshore HoldCo was formed to hold securities on behalf of NMV Offshore.
NMV Advisers serves as the investment advisor and manager of each of NMV,
NMVC, NMVT and NMV Offshore and is principally engaged in the business of
managing NMV, NMVC, NMVT and NMV Offshore.
Each of NMV, NMVC, NMVT and NMV Offshore was formed to seek
long-term capital appreciation primarily through investments in publicly
traded equity securities of companies whose equity securities are listed
primarily on a U.S. securities exchange.
Mr. Klinsky is the sole managing member of Vantage GP and the
sole member of NMV Advisers. Mr. Klinsky is engaged principally in the
business of serving as the sole managing member of Vantage GP and the sole
member of NMV Advisers and as the Chief Executive Officer and sole member
of New Mountain Capital, L.L.C., a Delaware limited liability company ("New
Mountain") which is principally engaged in managing private equity funds.
Mr. Klinsky is a citizen of the United States of America.
NMVSH's sole members are Vantage GP and CalPERS. NMVSH was formed
for the purpose of investing in shares of Common Stock and carrying out its
investment strategy as further described in Item 6.
CalPERS provides retirement and health benefits to more than 1.4
million public employees, retirees, and their families and more than 2,500
employers. CalPERS is the nation's largest public pension fund with assets
totaling more than $213 billion.
The principal business address of each of the Reporting Persons
(other than NMV Offshore, NMV Offshore HoldCo and CalPERS) is 787 Seventh
Avenue, 49th Floor, New York, NY 10019. The principal business address of
each of NMV Offshore and NMV Offshore HoldCo is c/o Walkers SPV Limited, PO
Box 908GT, Walker House, Mary Street, George Town, Grand Cayman, Cayman
Islands. The principal business address of CalPERS is Lincoln Plaza, 400 Q
Street, Sacramento, CA 95814.
The Reporting Persons have entered into a joint filing agreement,
dated as of October 30, 2006, a copy of which is attached to this Statement
as Exhibit 99.1. Each of the Reporting Persons is responsible for the
completeness and accuracy of the information concerning him or it contained
herein, but is not responsible for the completeness and accuracy of the
information concerning the others, except to the extent that he or it knows
or has reason to believe that such information is inaccurate.
(D - (E). None of the Reporting Persons during the last five
years has been convicted in a criminal proceeding (excluding traffic
violations and similar misdemeanors) or was party to a civil proceeding of
a judicial or administrative body of competent jurisdiction as a result of
which any such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The aggregate purchase price of the 5,911,890 shares of Common
Stock owned by the Purchasers is $202,759,529.36, including brokerage
commissions. The shares of Common Stock owned by the Purchasers were
acquired with working capital.
ITEM 4. PURPOSE OF TRANSACTION
The Reporting Persons purchased the shares of Common Stock based on
the Reporting Persons' belief that the shares of Common Stock, when
purchased, were undervalued and represented an attractive investment
opportunity. Most importantly, based on work done on behalf of the
Reporting Persons by Schlumberger Data & Consulting Services and others,
the Reporting Persons believe that the shallow conventional oil and gas
assets of the Issuer in the Appalachian basin have not been fully analyzed
or developed and that such actions can be accomplished in a cost effective
manner, which would generate value for the Issuer and its stockholders. The
Reporting Persons have communicated a summary of their research findings to
the Issuer's management. In addition, the Reporting Persons believe that
the Issuer's Appalachian acreage may contain exploration and development
opportunities in deeper formations and in the Devonian shale formation. The
Reporting Persons intend to communicate with the Issuer's management, its
stockholders and others regarding the Appalachian oil and gas assets and to
recommend that the value of the assets be fully analyzed and reported to
the Issuer's stockholders, and that these assets be more fully utilized by
the Issuer in an expeditious manner.
Except as set forth in this Statement, the Reporting Persons have
no present plans or proposals that relate to or would result in any
transaction, event or action described in paragraphs (a) through (j) of
Item 4 of the form of Schedule 13D promulgated under the Act. In pursuing
their investment businesses, the Reporting Persons analyze the operations,
capital structure and markets of companies, including the Issuer, on a
continuous basis through analysis of documentation and discussions with
knowledgeable industry and market observers and with representatives of
such companies. From time to time, one or more of the Reporting Persons may
hold discussions with third parties, the management of such companies or
the board of directors of such companies in which the Reporting Person may
suggest or take a position with respect to potential changes in the
operations, management or capital structure of such companies as a means of
enhancing stockholder value.
Each of the Reporting Persons reserves the right, in light of its
continuing analysis and discussions as described above and its ongoing
evaluation of the market price of the Common Stock, conditions in the
securities markets generally, general economic and industry conditions, its
business objectives and other relevant factors, to change its plans and
intentions at any time, as it deems appropriate. In particular, and without
limiting the generality of the foregoing, any one or more of the Reporting
Persons (and their respective affiliates) may purchase additional shares of
Common Stock or other securities of the Issuer or may sell or transfer
shares of Common Stock or other securities of the Issuer in public or
private transactions, may distribute Common Stock or other securities of
the Issuer in-kind to their partners or member, as applicable, may seek
board representation, may make proposals concerning changes to the
operations, management or capital structure of the Issuer, may enter into
privately negotiated derivative transactions with institutional
counterparties to hedge the market risk of some or all of their positions
in the Common Stock or other securities, and/or may take any other action
that might result in any transaction, event or action described in
paragraphs (a) through (j) of Item 4 of the form of Schedule 13D
promulgated under the Act. Any such transactions may be effected at any
time or from time to time, subject to any applicable limitations imposed on
the transactions by the Securities Act or other applicable law.
Except as described in this Statement and except for arrangements
between and among the Reporting Persons, none of the Reporting Persons has
any contracts, agreements, arrangements, understandings or relationships
with any other person or entity for the purpose of acquiring, holding,
voting or disposing of any shares of Common Stock.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(A). The aggregate percentage of shares of Common Stock reported
owned by each person named herein is based upon 83,400,866 shares of Common
Stock outstanding, which is the total number of shares of Common Stock
outstanding as of July 31, 2006 as reported in the Issuer's Amended
Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, as filed
with the Securities and Exchange Commission on September 14, 2006.
As of the close of business on October 27, 2006, as described
below, the Reporting Persons may be deemed to beneficially own an aggregate
of 5,911,890 shares of Common Stock representing, in the aggregate,
approximately 7.1% of the issued and outstanding shares of Common Stock.
As of the close of business on October 27, 2006, Mr. Klinsky may
be deemed to beneficially own an aggregate of 5,188,200 shares of Common
Stock that may be deemed to be beneficially owned by NMV, NMVC, NMVT, NMV
Offshore and NMVSH representing, in the aggregate, approximately 6.2% of
the issued and outstanding shares of Common Stock. Mr. Klinsky disclaims
beneficial ownership of the shares of Common Stock beneficially owned by
NMV, NMVC, NMVT, NMV Offshore and NMVSH, to the extent that partnership
interests or limited liability company interests in NMV, NMVC, NMVT, NMV
Offshore and NMVSH are held by persons other than Mr. Klinsky.
As of the close of business on October 27, 2006, NMV Advisers may
be deemed to beneficially own an aggregate of 3,828,200 shares of Common
Stock that may be deemed to be beneficially owned by NMV, NMVC, NMVT and
NMV Offshore representing, in the aggregate, approximately 4.6% of the
issued and outstanding shares of Common Stock. NMV Advisers disclaims
beneficial ownership of the shares of Common Stock beneficially owned by
NMV, NMVC, NMVT and NMV Offshore, to the extent that partnership interests
in NMV, NMVC, NMVT and NMV Offshore are held by persons other than NMV
Advisers.
As of the close of business on October 27, 2006, Vantage GP may
be deemed to beneficially own an aggregate of 3,727,900 shares of Common
Stock that may be deemed to be beneficially owned by NMV, NMVC, NMVT and
NMVSH representing, in the aggregate, approximately 4.5% of the issued and
outstanding shares of Common Stock. Vantage GP disclaims beneficial
ownership of the shares of Common Stock beneficially owned by NMV, NMVC,
NMVT and NMVSH to the extent that partnership interests or limited
liability company interests in NMV, NMVC, NMVT and NMVSH are held by
persons other than Vantage GP.
As of the close of business on October 27, 2006, NMV Offshore may
be deemed to beneficially own an aggregate of 1,460,300 shares of Common
Stock that may be deemed to be beneficially owned by NMV Offshore HoldCo,
representing approximately 1.8% of the issued and outstanding shares of
Common Stock.
As of the close of business on October 27, 2006, (i) NMV may be
deemed to beneficially own an aggregate of 869,100 shares of Common Stock,
representing approximately 1.0% of the issued and outstanding shares of
Common Stock, (ii) NMVC may be deemed to beneficially own an aggregate of
866,700 shares of Common Stock, representing approximately 1.0% of the
issued and outstanding shares of Common Stock, (iii) NMVT may be deemed to
beneficially own an aggregate of 632,100 shares of Common Stock,
representing approximately 0.8% of the issued and outstanding shares of
Common Stock and (iv) NMV Offshore HoldCo may be deemed to beneficially own
an aggregate of 1,460,300 shares of Common Stock, representing
approximately 1.8% of the issued and outstanding shares of Common Stock.
As of the close of business on October 27, 2006, NMVSH may be
deemed to beneficially own an aggregate of 1,360,000 shares of Common Stock,
representing approximately 1.6% of the issued and outstanding shares of
Common Stock.
As of the close of business on October 27, 2006, CalPERS may be
deemed to beneficially own an aggregate of 2,083,690 shares of Common Stock
that may be deemed to be beneficially owned by NMVSH and by CalPERS,
representing approximately 2.5% of the issued and outstanding shares of
Common Stock. CalPERS disclaims beneficial ownership of the shares of
Common Stock beneficially owned by NMVSH to the extent that membership
interests in NMVSH are held by persons other than CalPERS.
In addition to the foregoing, Mr. F. Fox Benton III, who has
entered into a consulting agreement with New Mountain as discussed in Item
6, is the President, director and a shareholder of Moreno Energy, Inc., a
Texas Corporation ("Moreno Energy"). Mr. Benton has advised the Reporting
Persons that Moreno Energy may be deemed to beneficially own, as of October
27, 2006, an aggregate of 5,000 shares of Common Stock, representing less
than .01% of the issued and outstanding shares of Common Stock and that Mr.
Benton may be deemed to beneficially own all of the shares of Common Stock
that may be deemed to be beneficially owned by Moreno Energy. Moreno Energy
is an energy investment company engaged principally in the business of
owning direct interests in oil and gas properties and both private and
public securities of energy companies. The principal business address of
Moreno Energy is 8818 Stable Crest Blvd., Houston, TX 77024. No agreement
or understanding exists between Mr. Benton or Moreno Energy, on the one
hand, and any of the Reporting Persons, on the other hand, with respect to
the disposition or the power to vote any of the shares of Common Stock that
may be deemed to be beneficially owned by Moreno Energy or Mr. Benton or
with respect to the acquisition by Mr. Benton or Moreno Energy of any
additional shares of Common Stock.
(B). Except as set forth below, each Reporting Person may be
deemed to share the power to vote or direct the vote and to dispose or to
direct the disposition of the shares of Common Stock that the Reporting
Person may be deemed to beneficially own as described above. CalPERS may be
deemed to have the sole power to vote or direct the vote and to dispose or
to direct the disposition of the 642,640 shares of Common Stock that
CalPERS owns directly. CalPERS may be deemed to share the power to dispose
or to direct the disposition of the 81,050 shares of Common Stock that
CalPERS beneficially owns through managers who manage stock portfolios on
behalf of CalPERS and may be deemed to have the sole power to vote or
direct the vote of such shares of Common Stock.
(C). Schedule A annexed hereto lists all transactions in the
shares of Common Stock during the past sixty days by the Reporting Persons.
All of such transactions were effected in the open market.
(D). No person is known by any Reporting Person to have the right
to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, any shares of Common Stock that may be deemed to
be beneficially owned by any Reporting Person.
(E). Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
Other than as described herein, there are no contracts,
arrangements, understandings or relationships among the Reporting Persons,
or between the Reporting Persons and any other person, with respect to the
securities of the Issuer.
On October 18, 2006, NMVSH was formed as a Delaware limited
liability company for the purpose of carrying out its investment strategy
which is the achievement of capital appreciation by investing in the Issuer
through open market purchases of Common Stock and related securities and
working together with NMV for the purpose of demonstrating to the Issuer's
management values that can be achieved for the Issuer and its shareholders
by exploiting more fully the Issuer's existing assets or otherwise.
Pursuant to the Limited Liability Company Agreement of NMVSH, dated as of
October 19, 2006 (the "LLC Agreement"), a copy of which is attached hereto
as Exhibit 99.2, Vantage GP is the Class A Member and Managing Member of
NMVSH (the "Class A Member" or "Managing Member") and CalPERS is the Class
B Member of NMVSH (the "Class B Member"). NMVSH has no other members.
The LLC Agreement provides that the Managing Member, subject to
the provisions of the LLC Agreement, will have the sole and exclusive right
and authority to manage and control the business and affairs of NMVSH.
Subject to limited exceptions, the Class B Member will make all
determinations with respect to all acquisitions and dispositions of the
Issuer's securities by NMVSH and exercise all shareholder rights, including
voting rights, relating to such securities. The Class B Member is required
to consult with the Class A Member prior to making any such acquisitions or
dispositions and in the exercise of such rights and to make a good faith
effort to coordinate any acquisitions, dispositions or exercise of rights
with acquisitions and dispositions of securities of the Issuer and exercise
of rights relating to such securities by affiliates of the Class A Member.
The LLC Agreement also provides that the Managing Member will, after
consultation with the Class B Member, cause NMVSH to prepare and make all
regulatory filings and public statements concerning NMVSH's investment in
Common Stock, and have such discussions and correspondence with the
Issuer's management, board of directors and stockholders as the Managing
Member will determine in furtherance of the investment strategy of NMVSH.
The Class B Member has also agreed to certain restrictions on the
acquisition of securities of the Issuer by the Class B Member and its
affiliates other than NMVSH. In addition, the Class B Member may not take
any action that would require a regulatory filing by NMVSH, except for the
disposition of securities of the Issuer.
The LLC Agreement further provides that the Class A Member is
entitled to an annual incentive allocation of a portion of the appreciation
in the value of the Common Stock held by NMVSH equal to 20% of the amount
by which the value of such Common Stock exceeds a specified index. To the
extent that performance of Common Stock held by NMVSH in any year does not
generally exceed the specified index, the performance in a subsequent
period must first exceed the amount of any underperformance before the
Class A Member is entitled to an incentive allocation.
The foregoing summary of the LLC Agreement does not purport to be
complete and is subject to, and qualified in its entirety by, the full text
of the LLC Agreement attached as Exhibit 99.2 and incorporated herein by
reference.
New Mountain has entered into a consulting agreement with Mr. F.
Fox Benton III (the "Consulting Agreement"), a copy of which is attached
hereto as Exhibit 99.3, pursuant to which Mr. Benton will advise and assist
the NMV Entities with respect to their investment strategy regarding the
Issuer. The Consulting Agreement provides that, as part of the compensation
for Mr. Fox's services, Mr. Fox will be paid a success fee based upon the
performance of the NMV Entities' investment in shares of Common Stock. The
foregoing summary of the Consulting Agreement does not purport to be
complete and is subject to, and qualified in its entirety by, the full text
of the Consulting Agreement attached as Exhibit 99.3 and incorporated
herein by reference.
From time to time, each of the NMV Entities may lend portfolio
securities to brokers, banks or other financial institutions. These loans
typically obligate the borrower to return the securities, or an equal
amount of securities of the same class, to the lender on demand and
typically the borrower is entitled to exercise voting rights and to retain
dividends during the term of the loan. From time to time, to the extent
permitted by applicable law, each of the NMV Entities may borrow
securities, including shares of Common Stock, for the purpose of effecting,
and may effect, short sale transactions, and may purchase securities for
the purpose of closing out short sale positions in such securities.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
99.1 Joint Filing Agreement, dated October 30, 2006.
99.2 Limited Liability Company Agreement of NMVSH, dated October 19,
2006, among Vantage GP and CalPERS.
99.3 Amended and Restated Letter agreement, dated October 25, 2006, by and
between New Mountain and Mr. Benton.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: October 30, 2006
NEW MOUNTAIN VANTAGE GP, L.L.C.
By: /s/ Steven B. Klinsky
-----------------------
Steven B. Klinsky
Managing Member
NEW MOUNTAIN VANTAGE, L.P.
By: New Mountain Vantage GP, L.L.C.,
its general partner
By: /s/ Steven B. Klinsky
-----------------------
Steven B. Klinsky
Managing Member
NEW MOUNTAIN VANTAGE
(CALIFORNIA), L.P.
By: New Mountain Vantage GP, L.L.C.,
its general partner
By: /s/ Steven B. Klinsky
-----------------------
Steven B. Klinsky
Managing Member
NEW MOUNTAIN VANTAGE (TEXAS), L.P.
By: New Mountain Vantage GP, L.L.C.,
its general partner
By: /s/ Steven B. Klinsky
-----------------------
Steven B. Klinsky
Managing Member
/s/ Steven B. Klinsky
-----------------------
Steven B. Klinsky
NEW MOUNTAIN VANTAGE ADVISERS, L.L.C.
By: /s/ Steven B. Klinsky
-----------------------
Steven B. Klinsky
Managing Member
NEW MOUNTAIN VANTAGE (CAYMAN) LTD.
By: /s/ Steven B. Klinsky
-----------------------
Steven B. Klinsky
Director
NEW MOUNTAIN VANTAGE HOLDCO LTD.
By: /s/ Steven B. Klinsky
-----------------------
Steven B. Klinsky
Director
NMV SPECIAL HOLDINGS, LLC
By: New Mountain Vantage GP, L.L.C.,
its managing member
By: /s/ Steven B. Klinsky
-----------------------
Steven B. Klinsky
Managing Member
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
By: /s/ Christianna Wood
-----------------------
Senior Investment Officer
SCHEDULE A
TRANSACTIONS IN THE PAST SIXTY DAYS BY THE PURCHASERS
NMV
------------------ ------------------------- ------------------------------
Date Shares of Common Stock Approximate Price per Share
Purchased (inclusive of commissions)
------------------ ------------------------- ------------------------------
9/14/2006 60,200 37.11
------------------ ------------------------- ------------------------------
10/6/2006 49,200 35.45
------------------ ------------------------- ------------------------------
10/9/2006 200 35.53
------------------ ------------------------- ------------------------------
10/10/2006 44,200 35.80
------------------ ------------------------- ------------------------------
10/12/2006 3,400 36.04
------------------ ------------------------- -----------------------------
10/16/2006 1,800 35.98
------------------ ------------------------- ------------------------------
10/17/2006 37,500 36.04
------------------ ------------------------- ------------------------------
10/17/2006 29,700 36.01
------------------ ------------------------- ------------------------------
10/18/2006 59,400 36.12
------------------ ------------------------- ------------------------------
10/19/2006 22,800 36.08
------------------ ------------------------- ------------------------------
NMVC
------------------ ------------------------- ------------------------------
Date Shares of Common Stock Approximate Price per Share
Purchased (inclusive of commissions)
------------------ ------------------------- ------------------------------
9/14/2006 61,100 37.11
------------------ ------------------------- ------------------------------
10/6/2006 18,800 35.45
------------------ ------------------------- ------------------------------
10/9/2006 100 35.53
------------------ ------------------------- ------------------------------
10/10/2006 40,100 35.80
------------------ ------------------------- ------------------------------
10/12/2006 3,500 36.04
------------------ ------------------------- ------------------------------
10/16/2006 1,800 35.98
------------------ ------------------------- ------------------------------
10/17/2006 38,300 36.04
------------------ ------------------------- ------------------------------
10/17/2006 30,200 36.01
------------------ ------------------------- ------------------------------
10/18/2006 59,100 36.12
------------------ ------------------------- ------------------------------
10/19/2006 22,800 36.08
------------------- ------------------------- ------------------------------
NMVT
------------------ ------------------------- ------------------------------
Date Shares of Common Stock Approximate Price per Share
Purchased (inclusive of commissions)
------------------ ------------------------- ------------------------------
9/21/2006 41,200 36.73
------------------ ------------------------- ------------------------------
9/25/2006 41,200 35.98
------------------ ------------------------- ------------------------------
9/26/2006 40,000 36.43
------------------ ------------------------- ------------------------------
9/27/2006 25,400 36.30
------------------ ------------------------- ------------------------------
9/29/2006 18,500 36.38
------------------ ------------------------- ------------------------------
9/29/2006 26,100 36.38
------------------ ------------------------- ------------------------------
10/2/2006 10,300 36.37
------------------ ------------------------- ------------------------------
10/3/2006 5,600 36.34
------------------ ------------------------- ------------------------------
10/3/2006 106,100 35.99
------------------ ------------------------- ------------------------------
10/4/2006 127,300 35.72
------------------ ------------------------- ------------------------------
10/6/2006 42,100 35.45
------------------ ------------------------- ------------------------------
10/9/2006 200 35.53
------------------ ------------------------- ------------------------------
10/10/2006 34,700 35.80
------------------ ------------------------- ------------------------------
10/12/2006 2,500 36.04
------------------ ------------------------- ------------------------------
10/16/2006 1,400 35.98
------------------ ------------------------- ------------------------------
10/17/2006 27,800 36.04
------------------ ------------------------- ------------------------------
10/17/2006 21,100 36.01
------------------ ------------------------- ------------------------------
10/18/2006 43,700 36.12
------------------ ------------------------- ------------------------------
10/19/2006 16,900 36.08
NMV Offshore HoldCo
------------------ ------------------------- ------------------------------
Date Shares of Common Stock Approximate Price per Share
Purchased (inclusive of commissions)
------------------ ------------------------- ------------------------------
9/8/2006 152,900 37.47
------------------ ------------------------- ------------------------------
9/11/2006 116,600 36.92
------------------- ------------------------- -----------------------------
9/12/2006 12,900 37.10
------------------ ------------------------- ------------------------------
9/14/2006 41,800 37.11
------------------ ------------------------- ------------------------------
NMVSH
----------------- ------------------------- ------------------------------
Date Shares of Common Stock Approximate Price per Share
Purchased (inclusive of commissions)
------------------ ------------------------- ------------------------------
10/23/2006 478,100 36.80
------------------- ------------------------- ------------------------------
10/24/2006 203,000 37.05
------------------ ------------------------- ------------------------------
10/24/2006 57,900 37.00
------------------- ------------------------- ------------------------------
10/26/2006 328,300 37.69
------------------- ------------------------- ------------------------------
10/27/2006 292,700 37.73
------------------- ------------------------- ------------------------------
CalPERS
----------------- ------------------------- ------------------------------
Date Shares of Common Stock Approximate Price per Share
Purchased/(Sold) (inclusive of commissions)
------------------ ------------------------- ------------------------------
8/31/2006 (1,300) 38.05
------------------ ------------------------- ------------------------------
8/31/2006 2,044 38.09
------------------ ------------------------- ------------------------------
8/31/2006 6,131 38.09
------------------- ------------------------- ------------------------------
8/31/2006 100 38.18
------------------ ------------------------- ------------------------------
9/1/2006 2,900 38.37
------------------ ------------------------- ------------------------------
9/5/2006 (800) 38.52
------------------ ------------------------- ------------------------------
9/6/2006 (3,400) 38.01
------------------ ------------------------- ------------------------------
9/7/2006 (27,300) 37.63
------------------ ------------------------- ------------------------------
9/8/2006 (13,600) 37.48
------------------ ------------------------- ------------------------------
9/11/2006 (7,400) 36.92
------------------ ------------------------- ------------------------------
9/12/2006 (2,800) 37.10
------------------ ------------------------- ------------------------------
9/13/2006 (6,600) 37.21
------------------ ------------------------- ------------------------------
9/14/2006 (4,700) 37.10
------------------ ------------------------- ------------------------------
9/15/2006 (8,800) 36.82
------------------ ------------------------- ------------------------------
9/18/2006 (2,700) 36.86
------------------ ------------------------- ------------------------------
9/19/2006 (2,800) 36.91
------------------ ------------------------- ------------------------------
9/20/2006 (5,500) 37.07
------------------ ------------------------- ------------------------------
9/21/2006 (3,100) 36.73
------------------ ------------------------- ------------------------------
9/22/2006 (2,900) 36.41
------------------ ------------------------- ------------------------------
9/28/2006 300 36.74
------------------ ------------------------- ------------------------------
9/29/2006 (500) 36.36
------------------ ------------------------- ------------------------------
10/10/2006 (5,600) 35.77
------------------ ------------------------- ------------------------------
10/11/2006 (6,600) 35.96
------------------ ------------------------- ------------------------------
10/12/2006 (8,700) 36.10
------------------ ------------------------- ------------------------------
10/16/2006 (8,000) 36.36
------------------ ------------------------- ------------------------------
10/18/2006 (5,200) 36.10
------------------ ------------------------- ------------------------------
10/20/2006 (1,400) 36.43
------------------ ------------------------- ------------------------------
10/23/2006 (68,800) 36.88
------------------ ------------------------- ------------------------------
10/23/2006 (13,700) 36.82
------------------ ------------------------- ------------------------------
10/25/2006 (1,000) 37.63
------------------ ------------------------- ------------------------------
10/25/2006 (8,500) 37.63
------------------ ------------------------- ------------------------------
10/26/2006 (1,650) 37.88
------------------- ------------------------- ------------------------------
10/27/2006 (10,800) 37.77
------------------- ------------------------- ------------------------------