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Water Asset Management LLC – ‘DEFN14A’ for 5/19/08 re: Aegion Corp

On:  Tuesday, 4/22/08, at 7:34am ET   ·   Effective:  4/22/08   ·   For:  5/19/08   ·   Accession #:  1193125-8-86226   ·   File #:  0-10786

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/22/08  Water Asset Management LLC        DEFN14A     5/19/08    1:300K Aegion Corp                       RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFN14A     Definitive Notice & Proxy Statement                 HTML    171K 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No. 2)

Filed by the Registrant ¨                            Filed by a Party other than the Registrant x

Check the appropriate box:

Insituform Technologies, Inc.

(Name of Registrant as Specified In Its Charter)

Water Asset Management LLC

Water Investment Advisors (Cayman), Ltd.

TRF Master Fund (Cayman) LP

Alfonse M. D’Amato

Matthew J. Diserio

Disque D. Deane Jr.

Richard Onses

Nickolas W. Vande Steeg

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

INSITUFORM TECHNOLOGIES, INC.

MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 19, 2008

PROXY STATEMENT OF WATER ASSET MANAGEMENT LLC, WATER INVESTMENT ADVISORS (CAYMAN), LTD., TRF MASTER FUND (CAYMAN) LP, ALFONSE M. D’AMATO, MATTHEW J. DISERIO, DISQUE D. DEANE JR., RICHARD ONSES AND NICKOLAS W. VANDE STEEG

April 22, 2008

To Our Fellow Insituform Stockholders:

We are furnishing this Proxy Statement to holders of the common stock, par value $0.01 per share (“Common Stock”), of Insituform Technologies, Inc., a Delaware corporation (the “Company”), in connection with our solicitation of proxies for use at the 2008 Annual Meeting of Stockholders of the Company and at any and all adjournments or postponements thereof (the “Annual Meeting”). The Company has stated that the Annual Meeting will be held at TPC Southwind, 3225 Club at Southwind, Memphis, Tennessee 38125 on May 19, 2008, at 8:00 a.m. local time, and the board of directors of the Company (the “Board of Directors” or “Board”) has fixed April 9, 2008, as the record date (the “Record Date”) for determining the stockholders entitled to receive notice of and to vote at the Annual Meeting. This Proxy Statement is first being sent or given to stockholders on or about April 22, 2008.

This solicitation is being conducted by Water Asset Management LLC (“Water Asset Management”), Water Investment Advisors (Cayman), Ltd. (“Water Investment Advisors”), TRF Master Fund (Cayman) LP (the “Stockholder”), Senator Alfonse M. D’Amato (“Senator D’Amato”), Matthew J. Diserio (“Mr. Diserio”), Disque D. Deane Jr. (“Mr. Deane” and, together with Mr. Diserio, the “Managers”), Richard Onses (“Mr. Onses”) and Nickolas W. Vande Steeg (“Mr. Vande Steeg” and, together with Senator D’Amato, Mr. Onses, the Managers, Water Asset Management, Water Investment Advisors and the Stockholder, the “Soliciting Persons”). The Soliciting Persons beneficially own approximately 5.3% of the Common Stock outstanding. As more fully discussed below, we are soliciting proxies to be used at the Annual Meeting for the following actions:

You may have read the Company’s recent announcements to the effect that the incumbent Board has “reviewed the Company’s strategic options and has unanimously concluded that execution of the Company’s business plan and hiring a new Chief Executive Officer are the best ways to enhance stockholder value.” Although this may sound good on the surface, Company directors have told us directly that neither the Company nor Merrill Lynch, the Company’s investment banking firm, sought any indications of interest from third parties for a sale of the Company. We believe the Board’s “review” is therefore inadequate and fatally flawed and was not designed to determine the best way to enhance stockholder value. Despite our months of urging the Board to undertake a process that could result in a sale of the Company, the Board has instead opted for “more of the same” – only this time under the Company’s fourth CEO in five years.

We urge you to vote in favor of our Board Size Proposal and the election of our Stockholder Nominees. As discussed below, we believe that the incumbent Board has done a poor job managing the Company. If elected, the Stockholder Nominees would constitute a majority of the Board and would promptly explore any reasonable strategic alternatives that the current Board has failed to consider, including, most importantly, by conducting an

active process to consider a sale of the Company beyond just an internal review. While we do not believe that a sale of the Company is the only possible option, we fail to see how the Board could fail to fully and actively explore such a significant possibility. The Stockholder Nominees see great promise in the Company’s prospects and, if elected, also intend to explore independent turnaround strategies that would result in the Company remaining independent and publicly traded. If adopted, the Board Size Proposal will establish the size of the Board at six commencing at the Annual Meeting without any requirement for the Board to take any further action to implement such proposal.

We urge you to sign and date the BLUE proxy card supplied by the Soliciting Persons and return it in the enclosed postage-paid envelope whether or not you plan to attend the meeting in order to vote:

(1) FOR the adoption of the Board Size Proposal,

(2) FOR the election of the Stockholder Nominees, and

(3) FOR the ratification of PricewaterhouseCoopers LLP as the Company’s independent auditors for the year ending December 31, 2008.

If your shares are held in the name of a brokerage firm, bank or nominee, only that entity can vote such shares and then only upon receipt of your specific instruction. Accordingly, we urge you to contact the person responsible for your account and instruct that person to execute the BLUE proxy card on your behalf.

YOUR VOTE IS IMPORTANT. If you agree with the reasons for the Soliciting Persons’ solicitation set forth in this Proxy Statement and believe that adoption of the Board Size Proposal and the election of the Stockholder Nominees to the Board of Directors can make a difference, please vote for the Board Size Proposal and the election of the Stockholder Nominees, no matter how many or how few shares you own.

THE SOLICITING PERSONS URGE YOU NOT TO SIGN THE WHITE PROXY CARD THAT IS SENT TO YOU BY THE COMPANY, EVEN AS A FORM OF PROTEST. By executing the BLUE proxy card, you will authorize us to vote FOR the adoption of the Board Size Proposal and FOR the election of the Stockholder Nominees. If you have already signed a proxy card sent to you by the Company, you may revoke that proxy at any time prior to the time a vote is taken by (i) submitting a duly executed proxy bearing a later date to the Secretary of the Company, (ii) filing with the Secretary of the Company a later dated written revocation or (iii) attending and voting at the Stockholder Meeting in person.

Thank you for your support,
On behalf of the Soliciting Persons,
Sincerely,
Matthew J. Diserio		Disque D. Deane Jr.

IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING THE BLUE PROXY CARD

OR NEED ADDITIONAL COPIES OF OUR PROXY MATERIALS, PLEASE CALL:

105 Madison Avenue

New York, New York 10016 (212) 929-5500 (Call Collect)

or

Call Toll-Free (800) 322-2855

Email: proxy@mackenziepartners.com

GENERAL

We are seeking your proxy in favor of an amendment to the Company’s Amended and Restated By-laws and for the election to the Board of Directors of our five Stockholder Nominees – Senator Alfonse M. D’Amato, Mr. Disque D. Deane Jr., Mr. Matthew J. Diserio, Mr. Richard Onses and Mr. Nickolas W. Vande Steeg. Unless otherwise indicated thereon, we will use the authority granted to us by the BLUE proxy card to vote FOR the adoption of the Board Size Proposal, FOR the election of the Stockholder Nominees as directors and FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent auditors for the year ending December 31, 2008.

For information concerning voting procedures at the Annual Meeting, see “Voting and Proxy Procedures.”

BACKGROUND OF THIS SOLICITATION

In early December 2007, the Managers met with Mr. Alfred L. Woods, Chairman of the Board and Interim Chief Executive Officer of the Company, to better understand the Company’s latest business strategy. Although seeking to hear a coherent plan to reverse the Company’s admittedly poor performance, that meeting heightened rather than allayed the Managers’ concerns. As a result of that meeting, on December 7, 2007, the Managers sent a letter (the “December 7^th Letter”) to Mr. Woods, with copies to each of other six members of the Board, identifying various failures of the Board of Directors and of the Company’s management and concluding that, under the current Board, the Company’s stockholders would best be served by the Company’s immediately hiring an investment banking firm and undertaking a process to explore its strategic alternatives, including, most likely, a sale of the Company. The Managers noted in the December 7^th Letter their belief that there are a number of logical strategic buyers who could pay a significant premium to the market price of the Common Stock and that there would be operating cost savings available to an acquiror from eliminating the Company’s corporate expenses, optimizing the efficiency installation crews and rationalizing wet out and manufacturing facilities.

The December 7^th Letter also noted that the Company currently is in the process of looking for its third Chief Executive Officer (“CEO”) in four years and that the recently departed CEO received a lucrative severance package despite having failed to create any sustainable value for the benefit of the Company’s stockholders. Accordingly, the Managers called on the Board to suspend its search for a yet another new CEO, because they believed that the hiring of a new CEO by the current Board would only compound the Company’s problems by adding unnecessary expenses and distracting from the process of exploring what they believed to be the best means to maximize value for the Company’s stockholders – an orderly sale of the Company at a premium, preferably for shares, to a larger, better managed company with proven water industry experience, significant field mobilization skills and a proven track record of success in making sales to the international governmental market.

By letter dated December 13, 2007, the Company confirmed receipt by Mr. Woods of the December 7th Letter and distribution of the letter to the other six members of the Board. The Company’s letter advised the Managers that the issues raised in the December 7^th Letter would be discussed by the Board in January and that

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following such discussion the Company would respond to the concerns set forth in the December 7^th Letter. On December 26, 2007, the Managers replied to the Company, reiterating their demand that the Company immediately and actively pursue strategic alternatives, including the possibility of a sale, and immediately end its search for a permanent CEO.

The Managers awaited the Company’s promised detailed response to the December 7th Letter but such response never came. Based on discussions with the Company, the Managers anticipated that the January meeting of the Board referenced in the Company’s response to the December 7^th letter was to be held on January 18, and that the concerns and issues the Managers raised in the December 7^th Letter would be discussed by the Board at that meeting. After January 18, the Managers made several attempts to contact the Company. Receiving no response, on January 24, 2008, the Stockholder submitted to the Company a notice (the “Stockholder Notice”) pursuant to the Company’s By-laws for the purpose of permitting the Stockholder to present the Board Size Proposal and to nominate the Stockholder Nominees at the Annual Meeting.

On January 29, 2008, the Company issued a press release acknowledging that it had received the Stockholder Notice and stating that the Board would review the proposals in light of the best interests of all of the stockholders of the Company. Also on January 29, 2008, the Stockholder submitted to the Company a demand for inspection of the list of the stockholders of the Company pursuant to Section 220 of the General Corporation Law of the State of Delaware (the “Stocklist Request”). On February 2, 2008, the Company acknowledged receipt of the Stocklist Request and agreed to provide an opportunity for the Stockholder and its representatives to examine the list of stockholders of the Company.

On February 6, 2008, the Company sent a letter to the Stockholder requesting that the Corporate Governance and Nominating Committee of the Board be permitted to conduct in-person interviews with each of the Stockholder Nominees. The Managers responded to this request by letter dated February 8, 2008, stating that while they appreciated the opportunity for the Stockholder Nominees to meet with the Governance and Nominating Committee of the Board, they would nonetheless respectfully decline the invitation because they strongly believed that the relative merits of the Stockholder Nominees would be better evaluated by the Company’s stockholders than by the very directors the Stockholder Nominees were seeking to replace. The Managers’ letter instead offered to meet with the Board at a mutually convenient time to discuss the Company’s business plan, its strategic alternatives and its future, but received no response.

Finally, in response to a call by the Managers to Mr. Woods, on February 15, 2008, the Company sent a letter to the Managers stating the Company’s belief that immediately pursuing strategic alternatives may be one way, but not necessarily the only or best way, to maximize stockholder value. The Company also stated that the Board was prepared to meet with the Managers to share the Board’s views and discuss the future of the Company.

On February 28, Mr. Diserio met with three of the Company’s independent directors and the Company’s general counsel to discuss the Stockholder Nominees’ and the Managers’ concerns about the Company. At that meeting and in subsequent discussions between counsel, the Company requested meetings with some or all of the other Stockholder Nominees, apparently with a view to possibly inviting one of them to join management’s slate of nominees.

On March 12, 2008, the Managers released an open letter to the Company’s stockholders noting that the Company’s suggestion that some or all of the Stockholder Nominees audition for what is likely to be a single Board seat is “too little, too late” and that what the Board really needs is “a new majority, not just one new member.” The letter expressed opposition to the incumbent Board’s delay of the Annual Meeting, and its announced plan to hire its fourth CEO in less than five years before the annual meeting takes place. The March 12 letter further explained the Managers’ views on the Company’s immediate future:

With the current board in place, Insituform should consider its strategic alternatives, with the most likely outcome a sale of the company. … Given our lack of confidence in the current Board, we believe

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that now is not the time to hire a new “permanent” CEO, whose severance in a sale of the company would be an unwelcome cost that in all likelihood will be borne by Insituform’s stockholders.

On the other hand, if our five nominees are elected, they will support an independent turnaround strategy should a strategic review of available alternatives demonstrate that this is the best way to maximize value for stockholders. At that point and only that point – if it becomes clear that the company should not be sold – would the new board begin a search for and hire a new, permanent CEO capable of executing a turnaround strategy.

On March 20, 2008, the Company proposed a meeting in Chicago between the Managers and two of the Company’s independent directors to explore the possibility of settling their differences in advance of the Annual Meeting. On March 26, 2008, the Managers declined the Company’s offer to discuss a possible settlement of the proxy contest on the terms proposed, rejecting the Company’s notion that “water operating experience” is a mandatory criterion for all new directors, particularly because not a single incumbent director had a resume that even hinted at “water operating experience” or even “water investment experience.” In contrast, the Managers devote their full working efforts exclusively to investing in water-related enterprises on a global basis, occupations that provide substantial insight into, and perspective on, the businesses of the Company, its customers and its competitors. On March 27, the Company wrote to one of the Managers renewing its invitation to meet “to engage in a constructive dialog” and as “an opportunity to meet in person one or more of the other candidates proposed by TRF.” We accepted this invitation and scheduled the meeting for the morning of April 8, 2008.

On April 7, 2008, the Company announced that it had named a new CEO, J. Joseph Burgess, and that its Board had unanimously concluded that “the execution of the company’s business plan and the hiring of a new chief executive were the best ways to enhance shareholder value.” The Company also disclosed publicly for the first time that it had engaged Merrill Lynch & Co. as its “independent” financial advisor to review its business plan and a number of alternative scenarios, evaluate a variety of potential financial and strategic alternatives, and make a detailed presentation and recommendations to the Board. As we later learned in our meeting on April 8 with two Company directors, Merrill Lynch’s mandate as the Company’s “independent” advisor did not include authorization for Merrill Lynch to speak to any potentially interested buyers of the Company, but was limited to performing an internal study for a flat fee, plus a 3-year exclusive M&A advisory engagement.

At the April 8 meeting, Company Directors Dubinsky and Cordinovis met with the Managers in New York. Although the topic was raised by the Managers, no progress was made towards settlement of the proxy contest. During that meeting, the Managers came to the understanding that the business plan contains nothing new and focuses on modest cost-cutting measures.

REASONS FOR THIS SOLICITATION

We are soliciting your proxy because we believe that the Company desperately needs new oversight and control of its strategic direction at the Board level. The current Board’s recent determination that “execution of the Company’s business plan” is the best way to enhance shareholder value indicates to us that the changes we hope to see are unlikely to receive prompt or serious consideration by the current Board. Although the Company was careful to add in its announcement that it “remained open to evaluating new strategic opportunities, including new acquisitions and divestitures,” it is clear that no alternative but staying the course is currently being pursued despite the fact that the Board failed to fully explore the possibility of a sale to a strategic buyer, which we believe to be one of the Company’s most promising options under the current Board.

THE COMPANY’S INCUMBENT BOARD HAS OPTED FOR A “BUSINESS AS USUAL” APPROACH TO TURNING THE COMPANY AROUND. WE STRONGLY BELIEVE THAT THE COMPANY’S STOCKHOLDERS DESERVE BETTER THAN “MORE OF THE SAME.”

Over the past five years, the Common Stock has performed extraordinarily poorly, both in absolute terms and in relation to the three indices the Company itself uses for comparison – the S&P 500 and two

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peer groups handpicked by the Company. The peer group chosen by the Company until this year (the “Old Peer Group”) consisted of INEI Corporation (formerly known as Insituform East, Incorporated), Michael Baker Corporation, Granite Construction, Inc., Fluor Corporation, Jacobs Engineering Group, Inc. and Foster Wheeler Corporation. In its 2007 Annual Report on Form 10-K, the Company picked a new peer group (the “New Peer Group”) consisting of Michael Baker Corporation, Layne Christensen Company, Chicago Bridge & Iron Company N.V., Granite Construction, Inc., Perini Corporation, Vectren Corporation, MasTec, Inc., ENGlobal Corporation, Sterling Construction Company, Inc., Quanta Services, Inc., Foster Wheeler, Ltd., Dycom Industries, Inc., American States Water Company, Preformed Line Products Company and Kennametal, Inc.

In the five years ended December 31, 2007, the Company’s total return was a negative 13.2% (a cumulative annual decrease of 2.5%), while the total return of the S&P 500 was a positive 66.9% (a cumulative annual increase of 10.8%) and the Old Peer Group showed a positive total return of 491.74% (a cumulative annual increase of 42.7%). Even the recently-selected new Peer Group showed a positive total return of 323.99% (a cumulative annual increase of 33.5%). According to the Company, $100 invested in the Common Stock on December 31, 2002 would have been worth just $86.80 five years later. In comparison, $100 invested on that date in the S&P 500, the Old Peer Group or the New Peer Group would today be worth $182.81, $591.74 and $423.99, respectively.

Here are the data as presented by the Company. The graph and chart below assume that $100 was invested in the Company’s common stock and each index on December 31, 2002 and that all dividends were reinvested. For the sake of clarity, we have added the 2002 column to the numerical chart below.

Comparison of Five-Year Cumulative Return

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The Company’s market underperformance reflects not only stagnating growth and poor operating results, but also a number of fundamental problems that reflect badly on the Board. With the exception of the recently added CEO, four of the Company’s other six current directors have continuously served on the Board over this five-year period, and the average tenure on the Board of those six directors is ten years. During or shortly prior to this five-year period, the Company’s stockholders have witnessed:

We should note that the CEO spot is not the only high level executive position the Board has left vacant in recent memory. Until August 2007, the Company’s CFO position remained vacant for 19 months.

“[Y]ou also know that our business growth has stagnated. … Through many discussions in recent months, our [B]oard has been unable to agree with Tom’s plan to restore growth to our business, and when a board cannot come together and support the CEO’s business plan, changes must be made. … So now the question becomes, what do we do to get back on a growth track and do it sooner rather than later? I am not ready today to give you a comprehensive list of steps we plan to take. This is what our management team needs to work through. And it is a subject upon which our new CEO ultimately will have some say.”

According to Mr. Woods, the new CEO was to “have some say” on the plan to get the company “back on a growth track,” but it now appears that the Board actually completed its determination of the business plan to be executed before Mr. Burgess was even hired.

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Given this history, we’re more than a little concerned about this Board’s plans, announced by Mr. Woods on August 15, 2007 while discussing Mr. Rooney’s departure, to undertake “an acquisition strategy.” The Company’s press release of April 7 stated that it “remains open to evaluating” possible acquisitions and divestitures, but pointedly failed to state that a sale of the Company is under consideration as an alternative at this time.

We hold the current Board of Directors responsible for the Company’s admittedly poor performance and believe that any improvement must begin with a substantial changeover on the Board itself. If elected, the Stockholder Nominees have pledged to undertake a comprehensive and genuine strategic review of the Company’s global operations that will include – unlike the current Board’s recently completed review process – an active outreach to potentially interested financial and strategic buyers of the Company, to determine whether stockholders will be better served through a continuation of the Company as an independent enterprise or through the pursuit of another strategic alternative, including a possible sale. We will also undertake a comprehensive, bottoms-up lean business practices review of the Company’s operations, from financial reporting, corporate and litigation through purchasing, manufacturing, distribution, wet-out and crew-based installation.

We believe that our nominees – Senator Alfonse M. D’Amato, Disque D. Deane Jr, Matthew J. Diserio, Richard Onses and Nickolas W. Vande Steeg – offer a wealth of relevant experience to the Board. Our slate includes significant shareholders experienced in water industry operations and finance, a distinguished political leader with a deep understanding of government spending programs, and an internationally recognized former Fortune 500 CEO with personal experience in implementing “lean” business practices in a large global enterprise.

The Stockholder Nominees do not anticipate that they will have any conflicts of interest with respect to the Company, if elected, and recognize their fiduciary duty obligations to all stockholders. None of the Stockholder Nominees has any contract, arrangement or understanding with the Company, and no other direct financial interest concerning the Company, other than through the beneficial ownership of stock of the Company by the Soliciting Persons and the Stockholder Nominees disclosed in this Proxy Statement.

THE SOLICITING PERSONS RECOMMEND A VOTE FOR THE ELECTION OF THE STOCKHOLDER NOMINEES.

MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

Proposal No. 1 – Amendment of the By-laws to Fix the Number of Directors at Six

Pursuant to Article XII of the By-laws, the Soliciting Persons propose to amend the first paragraph of Section 3.02 of Article III of the By-laws to set the size of the Board of Directors at six. The Board Size Proposal provides for the adoption of the following resolution:

RESOLVED, that the first paragraph of Section 3.02 of Article III of the By-laws of the Company be amended and restated as follows:

“The Board shall consist of six (6) directors. The exact number of directors within the minimum and maximum limitations specified in the Restated Certificate of Incorporation of the Corporation may be changed by amendment of these By-laws, either by the shareholders or the Board, in accordance with Article XII of these By-laws”

Currently, the Board’s size is set at seven directors. The purpose of the Board Size Proposal is to amend the by-laws to reduce the size of the Board effective at the Annual Meeting so that only six directors of the Company will be elected at the Annual Meeting. The Board Size Proposal will not affect the Board’s existing power to amend the By-laws to increase or reduce the size of the Board within the limits set by the Company’s Certificate of Incorporation.

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A reduction of the size of the Board to six directors will allow the Stockholder Nominees, if elected, to constitute five of the six directors of the Company. If all five Stockholder Nominees are elected to the Board and the Board is reduced to six members, the nominee of the current Board who receives the greatest number of affirmative votes will also be elected to the Board. If the Company’s recently appointed CEO, Mr. J. Joseph Burgess, is not elected to the Board at the Annual Meeting, the Stockholder Nominees will support adding Mr. Burgess to the Board if they constitute a majority of the Board and if he is willing to serve, unless his appointment would deadlock the Board as between the Stockholder Nominees, on the one hand, and the other Company directors, on the other hand. A vote for the Stockholder Nominees will not constitute a vote for Mr. Burgess at the Annual Meeting.

Proposal No. 2 – Election of The Stockholder Nominees as Directors of the Company

The Company’s Board of Directors currently consists of seven directors who are elected annually for one-year terms. Directors hold office until the next annual meeting following their election and until their successors are elected and qualified, unless prior to that time they have resigned, retired or otherwise left office. On January 24, 2008, the Stockholder gave notice to the Company of its intention to nominate the Stockholder Nominees to serve as directors of the Company.

We are seeking your proxy for the election to the Board of Directors of five individuals – Senator Alfonse M. D’Amato, Mr. Disque D. Deane Jr., Mr. Matthew J. Diserio, Mr. Richard Onses and Mr. Nickolas W. Vande Steeg.

Each of the Stockholder Nominees has consented to being named as a nominee in this Proxy Statement. The Soliciting Persons do not expect that any of the Stockholder Nominees will be unable to stand for election, but in the event that a vacancy in the slate of Stockholder Nominees should occur unexpectedly, the shares of Common Stock represented by the BLUE proxy card will be voted for a substitute candidate selected by the Managers. If the Soliciting Persons determine to add nominees, whether because the Company expands the size of the Board of Directors subsequent to the date of this Proxy Statement or for any other reason, the Soliciting Persons will supplement this Proxy Statement. If, however, the Company does not leave reasonable time before the Stockholder Meeting to supplement this Proxy Statement, the Soliciting Persons reserve the right to nominate additional nominees and to use the discretionary authority granted by the proxies it is soliciting to vote for such additional nominees or to seek judicial relief.

Biographical Information Regarding the Stockholder Nominees

The following information concerning age, principal occupation and business experience during the last five years, and current directorships has been furnished to the Soliciting Persons by the Stockholder Nominees, each of whom has consented to serve on the Board of Directors if elected. For information regarding the nominees designated by the Company, please refer to the Company’s definitive proxy statement, which we expect will be filed with the SEC prior to the Stockholder Meeting.

Alfonse M. D’Amato, age 70, has been the Managing Director of Park Strategies LLC, a prominent public policy and business development firm that provides strategic advice and consulting services to a wide array of municipal and private sector clients throughout the United States and internationally, since January 1999. Senator D’Amato was a United States Senator from January 1981 until January 1999. During his tenure in the Senate, he served as Chairman of the Senate Committee on Banking, Housing and Urban Affairs, and Chairman of the Commission on Security and Cooperation in Europe. Senator D’Amato has been a member of the board of directors of CA, Inc., one of the world’s largest independent providers of information technology management software, since 1999. He has also served on the board of directors of Signature Bank since July 2005 and serves on Signature Bank’s compensation committee. Senator D’Amato is an investor in the Stockholder and is a citizen of the United States of America.

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Disque D. Deane Jr., age 48, has been the Chief Investment Officer and Co-Portfolio Manager of Water Asset Management LLC (“Water Asset Management”), the investment manager of the Stockholder, since 2006. Water Asset Management is the adviser to a group of funds that invest exclusively in companies that source, store, transport, treat, meter and distribute water. Prior to serving as the Chief Investment Officer of Water Asset Management, Mr. Deane served as the Chairman of Water Property Investors LLC in 2005, the President of Layne Water Development and Storage, LLC from 2003 through 2004 and the Senior Vice President for Water Resource Development at the Vidler Water Company from 1996 through 1999. He is a citizen of the United States of America.

Matthew J. Diserio, age 48, has been the President and Co-Portfolio Manager of Water Asset Management since 2005, the investment manager of the Stockholder. Water Asset Management is the adviser to a group of funds that invest exclusively in companies that source, store, transport, treat, meter and distribute water. Prior to serving as the President of Water Asset Management, Mr. Diserio served as the Managing Member of Diserio Capital Management from 1996 to 2004. Mr. Diserio has more than 25 years of experience in securities analysis and investment fund management. He is a citizen of the United States of America.

Richard Onses, age 45, has been the President of Triason Systems SL, a consulting firm specializing in utilities and infrastructure projects, headquartered in Barcelona, Spain since 2004. Mr. Onses served as the Business Development Manager of the Agbar Group, a holding company dedicated to investments in water-related enterprises, from 2001 through 2004. Mr. Onses is an investor in the Stockholder and serves as a member of the advisory board of Water Asset Management. Mr. Onses is also a consultant to Water Asset Management and is compensated by Water Asset Management for services provided in connection with identifying and researching potential investment opportunities in the water industry in Europe. Mr. Onses is a citizen of the Republic of France.

Nickolas W. Vande Steeg, age 65, served as President of Parker-Hannifin Corp., a leading worldwide full-line diversified manufacturer of motion control products, including fluid power, fluid purification and fluid control products from October 27, 2004 until December 31, 2006 and served as its Chief Operating Officer from October 1, 2003 until December 31, 2006. Mr. Vande Steeg was employed with Parker Hannifin Corporation in a variety of different roles since 1971 and held various executive and operating management positions. Mr. Vande Steeg began his career at John Deere Corporation serving as an Industrial Engineer and Industrial Relations Manager from 1965 to 1970. He has been Director of Trimble Navigation Ltd. since July 2003 and Westinghouse Air Brake Technologies Corp. since February 23, 2007. He served as Director of Parker-Hannifin Corp. from August 13, 2004 until December 31, 2006, and currently serves on the board of trustees of Azusa Pacific University. He received his B.S. in Industrial Engineering from the University of California, Irvine in 1968, and an M.B.A. from Pepperdine University in Malibu, California in 1985. Mr. Vande Steeg is a citizen of the United States of America.

If elected, each Nominee would receive such directors’ fees as may be payable by the Company in accordance with its practice at the time. Except as described below, there are no understandings or arrangements between the Soliciting Persons and any Nominee relating to the matters contemplated by this Proxy Statement. Water Asset Management intends to enter into agreements with each of the Stockholder Nominees pursuant to which Water Asset Management and the Stockholder will indemnify and hold harmless each such Nominee from any and all damages, judgments, settlements, losses, fees, costs and expenses incurred by such Nominee resulting from any claim, action or demand that arises out of or in any way relates to certain actions, including running for election to the Board or serving on the Board, to the extent not otherwise indemnified by the Company or any other source of Company-related indemnification or insurance. This indemnification will only apply, however, so long as the action or failure to act by such Nominee does not constitute fraud, bad faith, willful misconduct or gross negligence as found by a court of competent jurisdiction.

Additional information concerning the Stockholder Nominees is set forth in Appendix A to this Proxy Statement.

8

Proposal No. 3 – Ratification of The Appointment of Independent Auditors

According to the Company’s definitive proxy statement filed on April 21, 2008, the Company is soliciting proxies for the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent auditors for the year ending December 31, 2008. Please refer to the Company’s definitive proxy statement for a detailed discussion of this proposal, including various arguments in favor of and against such proposal. We urge you to vote on the BLUE proxy card FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent auditors for the year ending December 31, 2008. If you do not indicate any voting instruction, we will vote the BLUE proxy card FOR this proposal.

INFORMATION ABOUT THE SOLICITING PERSONS

Water Asset Management LLC is a limited liability company organized under the laws of the State of Delaware, and its principal business is to serve as investment manager or adviser to the Stockholder and a number of other hedge funds and managed accounts and to control the investing and trading in securities of the Stockholder and such other funds and accounts. Water Investments Advisors (Cayman), Ltd. is an exempted company organized under the laws of the Cayman Islands, and its principal business is to serve as the general partner of the Stockholder. TRF Master Fund (Cayman) LP is a limited partnership organized under the laws of the Cayman Islands, and its principal business is invest and trade in securities. Matthew J. Diserio is the President of Water Asset Management and controls its business activities. Disque D. Deane Jr. is the Chief Investment Officer of Water Asset Management and controls its investing activities.

The address of the principal business and principal office of TRF Master Fund (Cayman), LP is c/o Turner and Roulstone Management Ltd., PO Box 2636, Strathvale House, 90 North Church Street, Grand Cayman KY1-1102, Cayman Islands. The address of the principal business and principal office of the other Soliciting Persons is 25 Park Avenue, 27th Floor, New York, NY 10022.

The Company reported in its definitive proxy statement filed with the Securities and Exchange Commission on April 21, 2008 that, as of April 9, 2008, the Company’s outstanding voting securities consisted of 27,470,623 shares of Common Stock. The Soliciting Persons beneficially own 1,466,008 shares of Common Stock, representing approximately 5.3% of the shares of Common Stock reported to be outstanding as of April 9, 2008.

Additional information concerning transactions in securities of the Company effected during the past two years by the Soliciting Persons and the Stockholder Nominees is set forth in Appendix B to this Proxy Statement.

SOLICITATION; EXPENSES

Proxies may be solicited by mail, advertisement, telephone, facsimile, telegraph and personal solicitation by the Managers and by the Stockholder Nominees. No additional compensation will be paid to the Managers or to the Stockholder Nominees for the solicitation of proxies. Banks, brokerage houses and other custodians, nominees and fiduciaries will be requested to forward the Soliciting Persons’ solicitation materials to their customers for whom they hold shares, and the Stockholder will reimburse them for their reasonable out-of-pocket expenses.

The Stockholder has retained MacKenzie Partners, Inc. (“MacKenzie”) to assist in the solicitation of proxies and for related services. In connection with its retention of the Soliciting Agent, the Stockholder has agreed to pay MacKenzie a retainer of $25,000 plus a fee to be mutually agreed to between the Stockholder and MacKenzie, which fee will be paid upon completion of the engagement. In addition, the Stockholder has agreed that it will reimburse MacKenzie for its reasonable out-of-pocket expenses and indemnify it in respect of certain claims in connection with its retention. The Soliciting Persons expect that approximately 25 persons will be used by MacKenzie in its solicitation efforts.

9

The entire expense of preparing, assembling, printing and mailing this Proxy Statement and related materials and the cost of soliciting proxies will be borne by the Stockholder.

The Soliciting Persons estimate that the total expenditures relating to this proxy solicitation incurred by the Soliciting Persons will be approximately $500,000, approximately $350,000 of which has been incurred to date. The Stockholder intends to seek reimbursement from the Company for those expenses incurred by the Stockholder if the Stockholder Nominees are elected to the Board of Directors. The Soliciting Persons do not intend to propose to the Board of Directors that the question of such reimbursement be put to a vote of the Company’s stockholders.

VOTING AND PROXY PROCEDURES

The Soliciting Persons believe that it is in the best interest of the Company’s stockholders to adopt the Board Size Proposal and to elect the Stockholder Nominees at the Annual Meeting because the Stockholder Nominees are committed to actively exploring strategic alternatives for the Company, including a sale of the Company or any other alternative that might provide greater shareholder value than a sale. There can be no assurance that the election of the Stockholder Nominees or a sale of the Company will maximize shareholder value.

THE SOLICITING PERSONS RECOMMEND A VOTE FOR THE ADOPTION OF THE BOARD SIZE PROPOSAL AND FOR THE ELECTION OF THE NOMINEES BECAUSE THE SOLICITING PERSONS BELIEVE THAT THE NOMINEES WOULD CONTRIBUTE TO THE CREATION OF SHAREHOLDER VALUE.

How do I vote by proxy?

For the proxy solicited hereby to be voted, the BLUE proxy card to be supplied by the Soliciting Persons must be signed, dated and returned to the Stockholder Nominees, c/o MacKenzie in the enclosed envelope in time to be voted at the Annual Meeting. If you wish to vote for the Stockholder Nominees, you must submit the BLUE proxy card supplied by the Soliciting Persons and must NOT submit the Company’s proxy card.

What if I am not the record holder of my shares?

If your shares are held in the name of a brokerage firm, bank or nominee, only that entity can vote such shares and only upon receipt of your specific instruction. Accordingly, we urge you to contact the person responsible for your account and instruct that person to execute on your behalf the BLUE proxy card.

If I plan to attend the Annual Meeting, should I still submit a BLUE proxy?

Whether or not you plan to attend the Annual Meeting, we urge you to submit a BLUE proxy. Returning the enclosed proxy card will not affect your right to attend and vote at the Annual Meeting.

What if I want to revoke my proxy?

Any proxy may be revoked as to all matters covered thereby at any time prior to the time a vote is taken by (i) submitting a duly executed proxy bearing a later date to the Secretary of the Company, (ii) filing with the Secretary of the Company a later dated written revocation or (iii) attending and voting at the Annual Meeting in person. Attendance at the Annual Meeting will not in and of itself constitute a revocation.

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What should I do if I receive a proxy card solicited by the Company?

If you submit a proxy to us by signing and returning the enclosed BLUE proxy card, do not sign or return the proxy card solicited by the Company or follow any voting instructions provided by the Company unless you intend to change your vote, because only your latest dated proxy will be counted.

If you have already sent a proxy card to the Company, you may revoke it and provide your support to the Stockholder Nominees by signing, dating and returning the enclosed BLUE proxy card.

Who can vote?

Only holders of record of Common Stock on the Record Date will be entitled to vote at the Annual Meeting. If you are a stockholder of record on the Record Date, you will retain the voting rights in connection with the Annual Meeting even if you sell such shares after the Record Date. Accordingly, it is important that you vote the shares of Common Stock held by you on the Record Date, or grant a proxy to vote such shares on the BLUE proxy card, even if you sell such shares after such date.

What is the required quorum?

According to the By-laws, the holders of a majority of shares of Common Stock entitled to vote at the Annual Meeting, present in person or represented by proxy, constitute a quorum.

What vote is required to elect the Stockholder Nominees?

According to the By-laws, directors are elected by a plurality vote. That means that either the six nominees who receive the most votes (if the Board Size Proposal is approved) or the seven nominees who receive the most votes (if the Board Size Proposal is not approved) will be elected at the Annual Meeting. A majority vote is not required.

How will my shares be voted?

Shares of Common Stock represented by a valid, unrevoked BLUE proxy card will be voted in accordance with the recommendations made in this Proxy Statement. Except for the proposals set forth in this Proxy Statement, the Soliciting Persons are not aware of any other matter to be considered at the Annual Meeting. However, if the Soliciting Persons learn of any other proposals made at a reasonable time before the Annual Meeting, the Soliciting Persons will either supplement this Proxy Statement and provide an opportunity to stockholders to vote by proxy directly on such matter or will not exercise discretionary authority with respect thereto. If other proposals are made thereafter, the persons named as proxies on the BLUE proxy card to be supplied by the Soliciting Persons will vote proxies solicited hereby in their discretion.

INFORMATION ABOUT THE COMPANY

Based upon documents publicly filed by the Company, the mailing address of the principal executive offices of the Company is 17988 Edison Avenue, Chesterfield, Missouri, 63005.

Appendix C to this Proxy Statement sets forth information obtained from the Company’s public filings related to the beneficial ownership of shares of Common Stock.

Except as otherwise noted herein, the information in this Proxy Statement concerning the Company has been taken from or is based upon documents and records on file with the SEC and other publicly available information. Although the Soliciting Persons do not have any knowledge indicating that any statement contained

11

herein is untrue, we do not take any responsibility, except to the extent imposed by law, for the accuracy or completeness of statements taken from public documents and records that were not prepared by or on behalf of the Soliciting Persons, or for any failure by the Company to disclose events that may affect the significance or accuracy of such information.

OTHER MATTERS

Except for the proposals set forth in this Proxy Statement, the Soliciting Persons are not aware of any other matter to be considered at the Annual Meeting. However, if the Soliciting Persons learn of any other proposals made at a reasonable time before the Annual Meeting, the Soliciting Persons will either supplement this Proxy Statement and provide an opportunity to stockholders to vote by proxy directly on such matter or will not exercise discretionary authority with respect thereto. If other proposals are made thereafter, the persons named as proxies on the BLUE proxy card to be supplied by the Soliciting Persons will vote proxies solicited hereby in their discretion.

Water Asset Management LLC

Water Investment Advisors (Cayman), Ltd.

TRF Master Fund (Cayman) LP

Alfonse M. D’Amato

Matthew J. Diserio

Disque D. Deane Jr.

Richard Onses

Nickolas W. Vande Steeg

April 22, 2008

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Appendix A

INFORMATION CONCERNING PARTICIPANTS IN THE PROXY SOLICITATION

Set forth below is (i) the name and business address of each of the Soliciting Persons and the Stockholder Nominees and (ii) the number of shares of Common Stock owned beneficially (as determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) by each of the Soliciting Persons and the Stockholder Nominees as of April 22, 2008. Mr. Diserio, Mr. Deane, Water Asset Management LLC and Water Investment Advisors (Cayman), Ltd. own their shares of Common Stock indirectly pursuant to the arrangements described in the Proxy Statement; the Stockholder owns its shares directly. As of the date hereof, none of the Soliciting Persons or Stockholder Nominees owns shares of any class of stock of the Company other than Common Stock.

A-1

Other than as set forth in the accompanying Proxy Statement, in the Appendices hereto or filings of the Soliciting Persons pursuant to Section 13 of the Exchange Act, to the best knowledge of the Soliciting Persons, none of the Stockholder Nominees, nor any associate or affiliate of any Nominee, nor any of their respective family members is either a party to any transaction or series of transactions since the beginning of the Company’s last fiscal year or has knowledge of any currently proposed transaction or series of proposed transactions, (i) to which the Company or any of its affiliates was or is to be a party, (ii) in which the amount involved exceeds $120,000, and (iii) in which any Participant or any member of his or her immediate family has, or will have, a direct or indirect material interest.

None of the Soliciting Persons has any family relationship with any director or officer, or person nominated to become a director or officer, of the Company or any of its subsidiaries.

No Nominee has failed to file reports related to the Company that are required by Section 16(a) of the Exchange Act.

A-2

Appendix B

TRANSACTIONS IN SHARES OF INSITUFORM TECHNOLOGIES, INC.

The following table sets forth information with respect to all purchases and sales of securities of the Company by the Stockholder during the past two years. As of the date of this Notice, no other Participant has purchased or sold securities of the Company within such time period.

Transactions in Common Stock

B-1

Appendix C

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth, to the knowledge of the Soliciting Persons based on a review of publicly available information filed with the SEC, each person (other than directors, whose beneficial ownership is in the table on the following page, and the Soliciting Persons, whose beneficial ownership is in the table in Appendix A) reported to own beneficially more than 5% of the outstanding Common Stock:

C–1

C-2

C-3

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, to the knowledge of the Soliciting Persons based on a review of the Company’s definitive proxy statement filed with the SEC on April 21, 2008, information with respect to the beneficial ownership of shares of Common Stock by each of the Company’s directors and executive officers and all directors and executive officers as a group:

C-4

C-5

INSITUFORM TECHNOLOGIES, INC.

THIS PROXY IS SOLICITED ON BEHALF OF WATER ASSET MANAGEMENT LLC, WATER

INVESTMENT ADVISORS (CAYMAN), LTD., TRF MASTER FUND (CAYMAN) LP, ALFONSE M. D’AMATO, MATTHEW J. DISERIO, DISQUE D. DEANE JR., RICHARD ONSES AND NICKOLAS W. VANDE STEEG.

The undersigned stockholder of Insituform Technologies, Inc. (the “Company”) hereby appoints Mr. Matthew J. Diserio and Mr. Disque D. Deane Jr., and each of them, with several powers of substitution, as proxies to cast all votes which the undersigned stockholder is entitled to cast at the Annual Meeting of Stockholders scheduled to be held on May 19, 2008 (the “Stockholder Meeting”), and at any adjournments or postponements thereof. The undersigned stockholder hereby revokes any proxy or proxies heretofore given.

This proxy will be voted as directed by the undersigned stockholder. UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED “FOR” THE ADOPTION OF PROPOSAL 1, “FOR” THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 2, “FOR” THE ADOPTION OF PROPOSAL 3 AND IN ACCORDANCE WITH THE DETERMINATION OF THE PROXY HOLDERS AS TO OTHER MATTERS. The undersigned stockholder hereby acknowledges receipt of the Soliciting Persons Proxy Statement.

The undersigned stockholder may revoke this proxy at any time prior to its exercise by filing a written notice of revocation with, or by delivering a duly executed proxy bearing a later date to, the Secretary of the Company or by attending the Stockholder Meeting.

PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

Please sign exactly as your name(s) appear(s) on the books of the Company. Joint owners should each sign personally. Trustees and other fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation, this signature should be that of an authorized officer who should state his or her title.

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘DEFN14A’ Filing		Date		Other Filings
		1/11/10
		12/31/08		10-K
For Period End:		5/19/08
Filed on / Effective on:		4/22/08		DEFA14A
		4/21/08		DEFA14A,  DEFC14A
		4/14/08		3,  4,  8-K/A
		4/9/08		PREC14A
		4/8/08		PREC14A
		4/7/08
		3/26/08
		3/20/08		PREM14A
		3/12/08
		3/1/08
		2/15/08		8-K
		2/13/08		SC 13G,  SC 13G/A
		2/9/08
		2/8/08
		2/6/08
		2/5/08		SC 13G
		2/2/08
		1/29/08		4
		1/24/08
		1/11/08		SC 13G/A
		12/31/07
		12/26/07
		12/13/07
		12/7/07
		8/28/07		8-K/A,  SC 13G
		8/23/07		4
		8/15/07
		8/13/07		8-K,  8-K/A
		2/23/07		10-K
		1/11/07		4,  8-K
		12/31/06		10-K
		10/27/04		4
		8/13/04
		10/1/03
		12/31/02		10-K
				List all Filings

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Filing Submission 0001193125-08-086226   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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