SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 61)*
VALHI, INC.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
918905100
(CUSIP Number)
STEVEN L. WATSON
THREE LINCOLN CENTRE
SUITE 1700
5430 LBJ FREEWAY
DALLAS, TEXAS 75240-2694
(972) 233-1700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 12, 1998
(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 which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), 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).
(Continued on following pages)
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Valhi Group, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 85,644,496
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
85,644,496
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
85,644,496
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.8%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
National City Lines, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
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
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 96,535,505
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
96,535,505
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
96,535,505
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
84.3%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NOA, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 96,535,505
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
96,535,505
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
96,535,505
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
84.3%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dixie Holding Company
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
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
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 85,644,496
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
85,644,496
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
85,644,496
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.8%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dixie Rice Agricultural Corporation, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Louisiana
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 85,644,496
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
85,644,496
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
85,644,496
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.8%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Southwest Louisiana Land Company, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Louisiana
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 96,535,505
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
96,535,505
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
96,535,505
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
84.3%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Contran Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
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
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 105,419,963
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
105,419,963
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
105,419,963
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
92.1%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Harold C. Simmons
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS(SEE INSTRUCTIONS)
Not applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 106,215,346
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
106,215,346
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,383
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ X ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
IN
AMENDMENT NO. 61
TO SCHEDULE 13D
This amended statement on Schedule 13D (collectively, this "Statement")
relates to the common stock, $0.01 par value per share (the "Shares"), of Valhi,
Inc., a Delaware corporation (the "Company"). Items 2, 4, 5, 6 and 7 of this
Statement are hereby amended as set forth below.
Item 2. Identity and Background
No change except for the addition of the following:
(a) This Statement is filed by (i) Valhi Group, Inc. ("VGI"), National
City Lines, Inc. ("National") and Contran Corporation ("Contran") as the direct
holders of Shares, (ii) by virtue of the direct and indirect ownership of
securities of VGI and National (as described below in this Statement), NOA, Inc.
("NOA"), Dixie Holding Company ("Dixie Holding"), Dixie Rice Agricultural
Corporation, Inc. ("Dixie Rice") and Southwest Louisiana Land Company, Inc.
("Southwest") and (iii) by virtue of his positions with Contran and certain of
the other entities (as reported on this Statement), Harold C. Simmons
(collectively, the "Reporting Persons"). By signing this Statement, each
Reporting Person agrees that this Statement is filed on its or his behalf.
VGI, National and Contran are the direct holders of approximately 74.8%,
9.5% and 7.6%, respectively, of the 114,503,514 Shares outstanding as of March
17, 1998 according to information furnished by the Company (the "Outstanding
Shares"). Together, VGI, National and Contran may be deemed to control the
Company. National, NOA and Dixie Holding are the direct holders of
approximately 73.3%, 11.4% and 15.3%, respectively, of the outstanding common
stock of VGI. Together, National, NOA and Dixie Holding may be deemed to
control VGI. Contran and NOA are the direct holders of approximately 85.7% and
14.3%, respectively, of the outstanding common stock of National and together
may be deemed to control National. Contran and Southwest are the direct holders
of approximately 49.9% and 50.1%, respectively, of the outstanding common stock
of NOA and together may be deemed to control NOA. Dixie Rice is the holder of
100% of the outstanding common stock of Dixie Holding and may be deemed to
control Dixie Holding. Contran is the holder of approximately 88.8% and 54.3%
of the outstanding common stock of Southwest and Dixie Rice, respectively, and
may be deemed to control Southwest and Dixie Rice.
Mr. Harold C. Simmons is chairman of the board, president and chief
executive officer of VGI, National, NOA, Dixie Holding and Contran. Mr. Simmons
is also chairman of the board and chief executive officer of Dixie Rice and
Southwest.
Substantially all of Contran's outstanding voting stock is held by trusts
established for the benefit of certain of Mr. Simmons' children and
grandchildren (the "Trusts"), of which Mr. Simmons is the sole trustee. As the
sole trustee of the Trusts, Mr. Simmons has the power to vote and direct the
disposition of the shares of Contran stock held by each of the Trusts. Mr.
Simmons, however, disclaims beneficial ownership of such shares.
The Contran Deferred Compensation Trust No. 2 (the "CDCT No. 2") directly
holds approximately 0.2% of the Outstanding Shares. Boston Safe Deposit and
Trust Company serves as the trustee of the CDCT No. 2. Contran established the
CDCT No. 2 as an irrevocable "rabbi trust" to assist Contran in meeting certain
deferred compensation obligations that it owes to Harold C. Simmons. If the
CDCT No. 2 assets are insufficient to satisfy such obligations, Contran is
obligated to satisfy the balance of such obligations as they come due. Due to
the terms of the CDCT No. 2, Contran (i) retains the power to vote the Shares
held directly by the CDCT No. 2, (ii) retains dispositive power over such shares
and (iii) may be deemed the indirect beneficial owner of such shares.
The Combined Master Retirement Trust (the "CMRT") directly holds
approximately 0.1% of the Outstanding Shares. The CMRT is a trust formed by the
Company to permit the collective investment by trusts that maintain the assets
of certain employee benefit plans adopted by the Company and related companies.
Mr. Simmons is the sole trustee of the CMRT and the sole member of the trust
investment committee for the CMRT. Mr. Simmons is a participant in one or more
of the employee benefit plans that invest through the CMRT.
By virtue of the holding of the offices, the stock ownership and his
service as trustee, all as described above, (a) Mr. Simmons may be deemed to
control such entities and (b) Mr. Simmons and certain of such entities may be
deemed to possess indirect beneficial ownership of Shares directly held by
certain of such other entities. However, Mr. Simmons disclaims such beneficial
ownership of the Shares beneficially owned, directly or indirectly, by any of
such entities, except to the extent of his vested beneficial interest in the
Shares held by the CMRT and his interest as a beneficiary of the CDCT No. 2.
On March 5, 1998, National donated 600,000 Shares (0.5% of the Outstanding
Shares) to the Harold Simmons Foundation, Inc. (the "Foundation"), which Shares
comprise all of the Shares owned by the Foundation. The Foundation is a tax-
exempt foundation organized for charitable purposes. Harold C. Simmons is the
chairman of the board and chief executive officer of the Foundation and may be
deemed to control the Foundation. Mr. Simmons, however, disclaims beneficial
ownership of any Shares held by the Foundation.
Harold C. Simmons' spouse is the direct beneficial owner of 77,000 Shares,
or approximately 0.1% of the Outstanding Shares. Mr. Simmons may be deemed to
share indirect beneficial ownership of such Shares. Mr. Simmons disclaims all
such beneficial ownership.
The Reporting Persons understand that NL Industries, Inc. ("NL") and
Valmont Insurance Company ("Valmont") directly held 1,186,200 Shares and
1,000,000 Shares, respectively. The Reporting Persons further understand that,
pursuant to Delaware law, the Company treats the Shares that Valmont and NL hold
directly as treasury stock for voting purposes. For the purposes of this
Statement, the Shares that Valmont and NL hold directly are not deemed
outstanding.
The Company and Tremont Corporation ("Tremont") are the direct holders of
approximately 58.3% and 17.7%, respectively, of the outstanding common stock of
NL and together may be deemed to control NL. VGI, National, the Foundation, the
CDCT No. 2, the Company, NL and Valmont Insurance Company ("Valmont") are the
direct holders of approximately 35.1%, 5.2%, 3.7%, 3.5%, 1.5%, 0.5% and 0.5%,
respectively, of the outstanding common stock of Tremont. Together, VGI and
National may be deemed to control Tremont. The Company is the holder of 100% of
the outstanding common stock of Valmont and may be deemed to control Valmont.
Mr. Harold C. Simmons is chairman of the board of NL and is a director of
Tremont.
Pursuant to two stipulations of settlement among the parties to Kahn v.
Tremont Corporation, et al. and Seinfeld v. Simmons, et al., respectively, the
Company has agreed to transfer, at its option, shares of NL common stock or cash
in the respective settlements. The stipulations of settlement revise certain
provisions of the agreements in principal that the Company had previously
announced.
Seinfeld v. Simmons, et al. arose out of the 1991 Dutch auction tender
offer by NL for its shares of common stock. Under the stipulation of settlement
dated February 26, 1998 relating to Seinfeld, the Company has agreed to transfer
to NL 750,000 shares of NL common stock (1.5% of the outstanding NL common
stock), subject to adjustment depending on the average sales price of the shares
of NL common stock during a fifteen trading day period ending five trading days
prior to the transfer, up to a maximum of 825,000 million shares of NL common
stock (1.6% of the outstanding NL common stock) and down to a minimum of 675,000
shares of NL common stock (1.3% of the outstanding NL common stock). The
Company has the option, in lieu of transferring such shares of NL common stock,
to transfer cash or cash equivalents equal to the product of such average sales
price and the number of shares of NL common stock that would otherwise have been
transferred to NL. The Reporting Persons understand that the Company has not
yet decided whether it will transfer shares of NL common stock or cash pursuant
to the terms of this stipulation of settlement.
Kahn v. Tremont Corporation, et al. arose out of the 1991 sale by the
Company of approximately 15% of the then outstanding shares of NL common stock
to Tremont. Under the stipulation of settlement dated March 5, 1998 relating to
Kahn, the Company has agreed to transfer to Tremont 1.2 million shares of NL
common stock (2.3% of the outstanding NL common stock), subject to adjustment
depending on the average sales price of the shares of NL common stock during a
fifteen trading day period ending five trading days prior to the transfer, up to
a maximum of 1.4 million shares of NL common stock (2.7% of the outstanding NL
common stock) and down to a minimum of 1.0 million shares of NL common stock
(2.0% of the outstanding NL common stock). The Company has the option, in lieu
of transferring such shares of NL common stock, to transfer cash or cash
equivalents equal to the product of such average sales price and the number of
shares of NL common stock that would otherwise have been transferred to Tremont.
The Reporting Persons understand that the Company has not yet decided whether it
will transfer shares of NL common stock or cash pursuant to the terms of this
stipulation of settlement.
The Company previously stated that it had reached the settlements in order
to avoid the burden and expense of further litigation and that it continued to
believe it had engaged in no wrongdoing associated with the transactions in
question.
The stipulations of settlement are subject to the approval of the
respective courts in which the cases are pending and the completion of court
proceedings. If so approved, the transfer of shares of NL common stock or cash
is expected to occur in the second or third quarter of 1998.
If the Company elects to transfer shares of NL common stock in complete
satisfaction of both settlements, the transfers will result in the Company
holding approximately 55% of the outstanding NL common stock.
Item 4. Purpose of Transaction
No change except for the addition of the following:
By virtue of the relationships and positions held by Harold C. Simmons as
reported in Item 2, Mr. Simmons, directly and indirectly through Contran, may be
deemed to control the Company.
Depending upon their evaluation of the Company's business and prospects,
and upon future developments (including, but not limited to, performance of the
Shares in the market, availability of funds, alternative uses of funds, and
money, stock market and general economic conditions), any of the Reporting
Persons or other entities that may be deemed to be affiliated with Contran may
from time to time purchase Shares, and any of the Reporting Persons or other
entities that may be deemed to be affiliated with Contran may from time to time
dispose of all or a portion of the Shares held by such person, or cease buying
or selling Shares. Any such additional purchases or sales of the Shares may be
in open market or privately negotiated transactions or otherwise.
As previously disclosed, on February 6, 1998, the Company as lender,
entered into a $120 million revolving credit agreement with Contran, as borrower
(the "Credit Agreement"). On February 11, 1998, the Credit Agreement became
effective upon the termination of the credit agreement dated as of November 5,
1997 among Contran, National and VGI, as borrowers, and U.S. Bank National
Association ("U.S. Bank") and Societe Generale, Southwest Agency, as lenders, as
such agreement had been amended to that date (the "U.S. Bank/SoGen Facility").
In addition, on February 11, 1998, the Harold C. Simmons Family Trust No. 1
dated January 1, 1964 and the Harold C. Simmons Family Trust No. 2 dated January
1, 1964 (together, the "Family Trusts") entered into a settlement agreement
arising from that certain civil action styled In re: The Harold C. Simmons
Family Trust No. 1 (No. 96-306-P) pending in the Probate Court of Dallas County,
Texas (the "Settlement Agreement"). The Settlement Agreement contemplates a
dismissal with prejudice of all claims among the parties to the related
litigation and no change to Harold C. Simmons' positions as trustee of the
Family Trusts or as a director or officer of the various businesses owned
directly and indirectly by the Family Trusts, including Contran and the Company.
The Probate Court had approved the Settlement Agreement on February 10, 1998.
The closing under the Settlement Agreement occurred on February 11, 1998.
Pursuant to the Settlement Agreement, one of the Family Trusts, the Harold C.
Simmons Family Trust No. 2 dated January 1, 1964, distributed shares of
Contran's Class A Common Stock, par value $0.01 per share (the "Contran Class A
Common Stock"), to or on behalf of certain parties to the Settlement Agreement
and certain trusts created for the benefit of certain parties to the Settlement
Agreement and/or their descendants. Such distributions included the right to
cause Contran to redeem such distributed shares of Contran Class A Common Stock
for consideration including cash, promissory notes and real estate. All of such
redemption rights with respect to the Contran Class A Common Stock were
exercised in full.
In conjunction with the closing of the Settlement Agreement and the
subsequent exercise in full of the redemption of the Contran Class A Common
Stock, the Company advanced to Contran an aggregate of $77,175,000 under the
Credit Agreement. Contran used such advance to fund the cash portion of the
redemption and certain other payments contemplated by the Settlement Agreement.
Additionally, Contran converted an aggregate of $25,000,000 of prior
intercompany borrowings from the Company to Contran into an advance under the
Credit Agreement. Contran intends to use any additional advances under the
Credit Agreement for general corporate purposes, including the payment of
interest on Contran's outstanding indebtedness.
Borrowings under the Credit Agreement bear interest at the prime rate in
effect from time to time The maturity date under the Credit Agreement is August
10, 1998. Currently, the outstanding principal amount under the Credit
Agreement is approximately $100.0 million.
Contran's obligations under the Credit Agreement are secured by a pledge to
the Company of:
(1) all of Contran's stock ownership in:
(A) Southwest, or 88.6% of Southwest's voting stock;
(B) Dixie Rice, or 53.8% of Dixie Rice's voting stock;
(C) NOA, or 49.99% of NOA's voting stock, the other 50.01% of
which is directly owned by Southwest; and
(D) National, or 85.7% of National's voting stock, the other
14.3% of which is directly owned by NOA;
all of which corporations in the aggregate may be deemed to control,
directly or indirectly, 84.3% of the Outstanding Shares; and
(2) 7,958,958 Shares directly held by Contran, or 7.0% of the
Outstanding Shares.
The Credit Agreement requires Contran to pay to the Company a commitment
fee in the amount of 1/2% per annum on the average daily unused and available
revolving credit commitment. Contran may prepay borrowings under the Credit
Agreement at any time upon Contran's election. In addition, Contran may at any
time upon notice to the Company terminate or reduce the unused amount of the
revolving credit commitment; provided, however, that any such termination or
reduction shall be permanent.
The foregoing summary of the Credit Agreement is qualified in its entirety
by reference to Exhibit 6 to Amendment No. 60 to this Statement, which is
incorporated herein by this reference.
On February 12, 1998, the Company's board of directors expanded the
responsibilities of the Company's audit committee, comprised of two non-
management directors, to include the review of, and action upon, any proposals
presented by Contran or any of its affiliates during the period the Credit
Agreement remains effective regarding the sale of assets from Contran or one or
more of its affiliates to the Company.
On March 12, 1998, Contran presented the Company's audit committee with a
proposal whereby Contran, VGI and National would offer to sell to the Company
236,371 shares, 2,361,300 shares and 350,360 shares of Tremont common stock,
respectively. The 236,371 shares of Tremont common stock that Contran proposes
to sell to the Company directly are currently held by the CDCT No. 2, and would
be transferred to Contran prior to their proposed sale to the Company. The
total number of shares of Tremont common stock proposed to be sold to the
Company represent 43.8% of the outstanding shares of Tremont common stock.
Contran has informed the Company that Contran intends first to utilize proceeds
resulting from the proposed sale of shares of Tremont common stock to the
Company, if consummated, to repay Contran's outstanding balance under the Credit
Agreement. No assurance can be given that the transaction will occur or as to
the timing and terms of the transaction. This description of such proposal is
qualified in its entirety by reference to Exhibit 5 to this Statement, which is
incorporated into this Statement by reference.
Item 5. Interest in Securities of the Issuer.
No change except for the addition of the following:
(a) VGI is the direct beneficial owner of 85,644,496 Shares, or
approximately 74.8% Outstanding Shares. By virtue of the relationships reported
under Item 2 of this Statement, National, NOA, Southwest, Dixie Holding, Dixie
Rice, Contran and Harold C. Simmons may be deemed to share indirect beneficial
ownership of the Shares directly held by VGI.
National is the direct beneficial owner of 10,891,009 Shares or
approximately 9.5% of the Outstanding Shares. VGI is the direct beneficial
owner of 85,644,496 Shares. By virtue of the relationships reported under Item
2 of this Statement, National may be deemed to be the beneficial owner of the
96,535,505 Shares (approximately 84.3% of the Outstanding Shares) directly held
by VGI and itself. By virtue of the relationships reported under Item 2 of this
Statement, NOA, Southwest, Contran and Harold C. Simmons may be deemed to share
indirect beneficial ownership of the Shares directly and indirectly held by
National.
Contran is the direct beneficial owner of 8,695,058 Shares, or
approximately 7.6% of the Outstanding Shares. VGI, National and the CDCT No. 2
are the direct beneficial owners of 85,644,496, 10,891,009 and 189,400 Shares,
respectively. By virtue of the relationships described under Item 2 of this
Statement, Contran may be deemed to be the beneficial owner of the 105,419,963
Shares (approximately 92.1% of the Outstanding Shares) directly held by VGI,
National, the CDCT No. 2 and itself. By virtue of the relationships reported
under Item 2 of this Statement, Harold C. Simmons may be deemed to share
indirect beneficial ownership of the Shares directly and indirectly held by
Contran.
Harold C. Simmons directly owns 3,383 Shares, or less than 0.1% of the
Outstanding Shares. VGI, National, Contran, the Foundation, the CDCT No. 2, the
CMRT and Mr. Simmons' spouse are the direct beneficial owners of 85,644,496,
10,891,009, 8,695,058, 600,000, 189,400, 115,000 and 77,000 of the Shares,
respectively. By virtue of the relationships described under Item 2 of this
Statement, Harold C. Simmons may be deemed to share indirect beneficial
ownership of the 106,215,346 Shares (approximately 92.8% of the Outstanding
Shares) directly held by VGI, National, Contran, the Foundation, the CDCT No. 2
the CMRT and Mr. Simmons' spouse. Except for the 3,383 Shares that he holds
directly and to the extent of his vested beneficial interest in Shares directly
held by the CMRT and his interest as a beneficiary of the CDCT No. 2, Mr.
Simmons disclaims beneficial ownership of all Shares.
(b) Each of VGI, National, Contran and Harold C. Simmons has the direct
power to vote and direct the disposition of the Shares directly held by it or
him. By virtue of the relationships described in Item 2:
(1) National may be deemed to share the indirect power to vote and
direct the disposition of the Shares directly held by VGI;
(2) Contran, Southwest and NOA may be deemed to share the indirect
power to vote and direct the disposition of the Shares directly held by VGI
and National;
(3) Dixie Rice and Dixie Holding may be deemed to share the indirect
power to vote and direct the disposition of the Shares directly held by
VGI;
(4) Contran may also be deemed to share the indirect power to vote
and direct the disposition of the Shares directly held by the CDCT No. 2;
and
(5) Harold C. Simmons may be deemed to share the indirect power to
vote and direct the disposition of the Shares directly held by VGI,
National, Contran, the Foundation, the CDCT No. 2, the CMRT and his spouse.
Additionally, the Reporting Persons may be deemed to have the indirect
power to direct the disposition of the Shares directly held by NL and Valmont.
(d) Each of VGI, National, the Foundation, the CDCT No. 2, Contran, the
CMRT, Harold C. Simmons and his spouse has the right to receive and the power to
direct the receipt of dividends from, and proceeds from the sale of, the shares
directly held by such entity or person.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
No change except for the addition of the following:
On February 11, 1998, VGI, National and Contran canceled the U.S.
Bank/SoGen Facility. U.S. Bank has released to National the 7,200,000 Shares
that National had pledged under the U.S. Bank/SoGen Facility.
Item 7. Material to be Filed as Exhibits.
Item 7 is amended and restated as follows:
Exhibit 1 Loan and Pledge Agreement, dated as of August 18, 1986,
between Dixie Rice Agricultural Corporation, Inc. and Southern
Methodist University (incorporated by reference to Exhibit 11 to
Amendment No. 59 to this Statement).
Exhibit 2 Collateral Agreement, dated as of December 29, 1988, between
Dixie Rice Agricultural Corporation, Inc. and Contran Corporation
(incorporated by reference to Exhibit 12 to Amendment No. 59 to
this Statement).
Exhibit 3 Contran Deferred Compensation Trust No. 2 (Amended and
Restated), dated as of January 2, 1998, between Contran
Corporation and Boston Safe Deposit and Trust Company
(incorporated by reference to Exhibit 1 to Amendment No. 7 to the
Schedule 13D filed on February 3, 1998 with the Securities and
Exchange Commission by Valhi Group, Inc., National City Lines,
Inc., NOA, Inc., Dixie Holding Company, Dixie Rice Agricultural
Corporation, Inc., Southwest Louisiana Land Company, Inc.,
Contran Corporation and Harold C. Simmons, with respect to the
common stock of Tremont Corporation).
Exhibit 4 Credit Agreement, between Contran Corporation, as Borrower,
and Valhi, Inc., Lender (incorporated by reference to Exhibit 6
to Amendment No. 60 to this Statement).
Exhibit 5* Letter, dated March 12, 1998, from Steven L. Watson, Vice
President of Contran Corporation to Mr. Norman S. Edelcup and Dr.
Kenneth R. Ferris, members of the audit committee of Valhi, Inc.
- ----------
* Filed herewith.
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: March 18, 1998
By: /s/ Harold C. Simmons
----------------------------
Harold C. Simmons
Signing in his individual capacity only.
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: March 18, 1998
/s/ Steven L. Watson
--------------------------------
Steven L. Watson
Signing in the capacities listed on Schedule
"A" attached hereto and incorporated herein by
reference.
SCHEDULE A
Steven L. Watson, as Vice President of each of:
CONTRAN CORPORATION
DIXIE RICE AGRICULTURAL CORPORATION, INC.
DIXIE HOLDING COMPANY
NATIONAL CITY LINES, INC.
NOA, INC.
VALHI GROUP, INC.
SOUTHWEST LOUISIANA LAND COMPANY, INC.
EXHIBIT INDEX
Exhibit 1 Loan and Pledge Agreement, dated as of August 18, 1986,
between Dixie Rice Agricultural Corporation, Inc. and Southern
Methodist University (incorporated by reference to Exhibit 11 to
Amendment No. 59 to this Statement).
Exhibit 2 Collateral Agreement, dated as of December 29, 1988, between
Dixie Rice Agricultural Corporation, Inc. and Contran Corporation
(incorporated by reference to Exhibit 12 to Amendment No. 59 to
this Statement).
Exhibit 3 Contran Deferred Compensation Trust No. 2 (Amended and
Restated), dated as of January 2, 1998, between Contran
Corporation and Boston Safe Deposit and Trust Company
(incorporated by reference to Exhibit 1 to Amendment No. 7 to the
Schedule 13D filed on February 3, 1998 with the Securities and
Exchange Commission by Valhi Group, Inc., National City Lines,
Inc., NOA, Inc., Dixie Holding Company, Dixie Rice Agricultural
Corporation, Inc., Southwest Louisiana Land Company, Inc.,
Contran Corporation and Harold C. Simmons, with respect to the
common stock of Tremont Corporation).
Exhibit 4 Credit Agreement, between Contran Corporation, as Borrower,
and Valhi, Inc., Lender (incorporated by reference to Exhibit 6
to Amendment No. 60 to this Statement).
Exhibit 5* Letter, dated March 12, 1998, from Steven L. Watson, Vice
President of Contran Corporation to Mr. Norman S. Edelcup and Dr.
Kenneth R. Ferris, members of the audit committee of Valhi, Inc.
- ----------
* Filed herewith.
CONTRAN CORPORATION
THREE LINCOLN CENTRE
5430 LBJ FREEWAY, SUITE 1700
DALLAS, TEXAS 75240-2697
March 12, 1998
Mr. Norman S. Edelcup Dr. Kenneth R. Ferris
5190 N.W. 167th Street 4202 North 58th Street
Miami, Florida 33014-6328 Phoenix, Arizona 85018
Dear Mr. Edelcup and Dr. Ferris:
As you are aware, on February 12, 1998 the Valhi, Inc. Board of Directors
expanded the responsibilities of the Valhi Audit Committee, of which each of you
are members, to review and act on any proposal involving the sale of assets to
Valhi by Contran Corporation, directly or through its affiliates, during the
period the $120 million credit agreement (the "Credit Agreement") between Valhi
and Contran remains effective. The purpose of this letter is to present such a
proposal to you. Advances to Contran pursuant to the terms of the Credit
Agreement have totaled $103 million to date. Contran intends to first utilize
the proceeds resulting from the proposed transaction, if consummated, to repay
outstanding balances under the Credit Agreement.
Contran, Valhi Group, Inc. and National City Lines, Inc., hereby offer to
sell 236,371 shares, 2,361,300 shares and 350,360 shares, respectively, of the
common stock of Tremont Corporation to Valhi in a privately negotiated
transaction on mutually acceptable terms and conditions, as may be agreed by you
on behalf of Valhi. The aggregate ownership of Tremont by Contran and all
related persons represents 50.2% of the outstanding shares, as set forth below:
SHARES %
------- ----
Contran Corporation 236,371(1) 3.5
Valhi Group, Inc. 2,361,300 35.1
National City Lines, Inc. 350,360 5.2
---------- -----
2,948,031 43.8
Valhi, Inc. 103,900 1.5
Valmont Insurance Ltd. 30,490 .5
NL Industries, Inc. 36,167 .5
---------- ------
3,118,588 46.3
The Combined Master Retirement Trust 3,506(2) .1
Harold Simmons Foundation, Inc. 250,000(3) 3.7
Harold C. Simmons (spouse) 3,747 .1
---------- -----
3,375,841 50.2
========== =====
(1) Currently held by the Contran Deferred Compensation Trust No. 2, which
shares would be transferred to Contran prior to the consummation of the proposed
transaction.
(2) The Combined Master Retirement Trust was formed to permit the collective
investment by trusts that maintain the assets of certain employee benefit plans
adopted by Valhi and related companies.
(3) The Harold Simmons Foundation, Inc. is a tax-exempt foundation organized
and existing exclusively for charitable purposes.
A separate package of recent public information regarding Valhi, Tremont,
NL and TIMET was sent to each of you. I expect each of such companies to file
their Annual Report on Form 10-K with the Securities and Exchange Commission on
or before March 31, 1998, at which time copies will be sent to you.
When you have retained the legal and financial advisors you determine
appropriate, we would like to meet to discuss the foregoing proposal. I and the
other members of Valhi's and/or Contran's management and corporate staff are
available to answer your questions and to provide any additional information you
and your advisors determine necessary.
Sincerely,
/s/ Steven L. Watson
Steven L. Watson,
Vice President
Enclosure
cc: Valhi, Inc. Board of Directors
Harold C. Simmons
Glenn R. Simmons
J. Walter Tucker, Jr.
