SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8)*
TREMONT CORPORATION
(Name of Issuer)
Common Stock, $1.00 par value
(Title of Class of Securities)
894745207
(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. 894745207
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)
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
Nevada
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 2,531,857
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
2,531,857
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,531,857
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.6%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
CUSIP No. 894745207
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)
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 2,882,217
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
2,882,217
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,882,217
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.8%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
CUSIP No. 894745207
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 2,882,217
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
2,882,217
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,882,217
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.8%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
CUSIP No. 894745207
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 2,531,857
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
2,531,857
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,531,857
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.6%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
CUSIP No. 894745207
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 2,531,857
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
2,531,857
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,531,857
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.6%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
CUSIP No. 894745207
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 2,882,217
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
2,882,217
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,882,217
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.8%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
CUSIP No. 894745207
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 3,118,588
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
3,118,588
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,118,588
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
46.3%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
CUSIP No. 894745207
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 3,375,841
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
3,375,841
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
-0-
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. 8
TO SCHEDULE 13D
This amended statement on Schedule 13D (collectively, this "Statement")
relates to the common stock, $1.00 par value per share (the "Shares"), of
Tremont Corporation, a Delaware corporation (the "Company"). Items 2, 4, 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") and National
City Lines, Inc. ("National") 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"),
Southwest Louisiana Land Company, Inc. ("Southwest") and Contran Corporation
("Contran") and (iii) by virtue of his positions with Contran and certain of the
other entities (as described in 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 and National Inc. are the direct holders of approximately 35.1% and
5.2%, respectively, of the 6,729,698 Shares outstanding as of December 8, 1997
according to information received from the Company (the "Outstanding Shares").
Together, VGI and National 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. Harold C. Simmons' children and
grandchildren (the "Trusts"), of which Mr. Simmons is the sole trustee. As sole
trustee of each 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 Harold Simmons Foundation, Inc. (the "Foundation") directly holds
approximately 3.7% of the Outstanding Shares and 0.5% of the outstanding Valhi
common stock. 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.
Valhi, Inc. ("Valhi"), NL Industries, Inc. ("NL") and Valmont Insurance
Company ("Valmont") directly hold approximately 1.5%, 0.5% and 0.5% of the
Outstanding Shares, respectively. Valhi and the Company 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 and Contran are
the direct holders of approximately 74.8%, 9.5%, and 7.6%, respectively, of the
outstanding common stock of Valhi. Together, VGI, National and Contran may be
deemed to control Valhi. Valhi is the direct 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 and president of Valhi and
chairman of the board of NL.
The Contran Deferred Compensation Trust No. 2 (the "CDCT No. 2") directly
holds approximately 3.5% and 0.2% of the Outstanding Shares and Valhi common
stock, respectively. 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 owed 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 and the shares of Valhi
common stock 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 and the outstanding shares of Valhi
common stock, respectively. The CMRT is a trust formed by Valhi to permit the
collective investment by trusts that maintain the assets of certain employee
benefit plans adopted by Valhi 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. Mr. Simmons, however, disclaims beneficial
ownership of the Shares held by the CMRT.
Valmont and NL directly own 1,000,000 shares and 1,186,200 shares,
respectively, of Valhi common stock. The Reporting Persons understand that the
shares of Valhi common stock owned by Valmont and NL are treated as treasury
stock by Valhi for voting purposes and for the purposes of this Statement are
not deemed outstanding.
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 the entities described above 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 except to the extent of
his interest as a beneficiary of the CDCT No. 2.
Harold C. Simmons' spouse is the direct owner of 3,747 Shares. Mr. Simmons
may be deemed to share indirect beneficial ownership of such Shares. Mr.
Simmons disclaims all such beneficial ownership.
Item 4. Purpose of Transaction.
No change except for the addition of the following:
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 described under Item 2 of this Statement, Harold C. Simmons may be
deemed to control the Company.
On February 6, 1998, Valhi, as lender, entered into a $120 million
revolving credit agreement with Contran, as borrower, that became effective on
February 11, 1998 (the "Credit Agreement"). Concurrently with the settlement of
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"), Valhi advanced to Contran an aggregate of approximately
$77.2 million under the Credit Agreement principally to fund the exercise of
certain redemption rights exercised by certain parties to the Settlement
Agreement, which redemption rights Contran had distributed pursuant to the
Settlement Agreement. Contran also converted an aggregate of $25.0 million of
prior intercompany borrowings from Valhi to Contran into an advance under the
Credit Agreement. The maturity date under the Credit Agreement is August 10,
1998. Currently, advances under the Credit Agreement have totaled approximately
$100.0 million.
On February 12, 1998, Valhi's board of directors expanded the
responsibilities of Valhi'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 Valhi.
On March 12, 1998, Contran presented Valhi's audit committee with a
proposal whereby Contran, VGI and National would offer to sell to Valhi 236,371
Shares, 2,361,300 Shares and 350,360 Shares, respectively. The 236,371 Shares
that Contran proposes to sell to Valhi directly are currently held by the CDCT
No. 2, and would be transferred to Contran prior to their proposed sale to
Valhi. The total number of Shares proposed to be sold to Valhi represent 43.8%
of the Outstanding Shares. Contran has informed Valhi that Contran intends
first to utilize proceeds resulting from the proposed sale of Shares to Valhi,
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 2 to this Statement, which is
incorporated into this Statement by reference.
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 their $40 million
credit facility dated as of November 8, 1996 with U.S. Bank National Association
("U.S. Bank") and Societe Generale, Southwest Agency, as amended (the "U.S.
Bank/SoGen Facility"). U.S. Bank has released to VGI and National the 1,942,107
Shares and the 350,360 Shares, respectively, that they each 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 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
this Statement filed with the Securities and Exchange Commission
on February 2, 1998).
Exhibit 2* 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
/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 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
this Statement filed with the Securities and Exchange Commission
on February 2, 1998).
Exhibit 2* 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.
