<PAGE> 1
FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SOUTHDOWN, INC.
(exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
LOUISIANA 72-0296500
(State of incorporation (I.R.S. Employer Identification No.)
or organization)
1200 SMITH STREET, SUITE 2400
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
</TABLE>
Securities to be registered to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which
to be so registered each class is to be registered
<S> <C>
PREFERRED STOCK, $___ CUMMULATIVE NEW YORK STOCK EXCHANGE, INC.
CONVERTIBLE SERIES D, PAR VALUE
$.05 PER SHARE
</TABLE>
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The information under the captions "Description of Series D Preferred
Stock" and "Description of Capital Stock" set forth in the Prospectus related
to the Registration Statement on Form S-3 (No. 33-51133) to be filed pursuant
to Rule 424(b) will, upon filing of such Prospectus with the Securities and
Exchange Commission, be incorporated herein by reference. For convenience of
reference, a copy of the information set forth in Amendment No. 1 to the
Registration Statement under the captions "Description of Series D Preferred
Stock" and "Description of Capital Stock" (which will be modified by the
Prospectus referred to above) is filed as Exhibit 3 to this Registration
Statement.
ITEM 2. EXHIBITS.
Listed below are the exhibits filed as part of this registration
statement:
1. Restated Articles of Incorporation, as amended (incorporated by
reference to Exhibit 4.1 to the Current Report on Form 8-K dated
December 21, 1993).
2.* Form of Articles of Amendment to the Restated Articles of
Incorporation designating the Series D Preferred Stock.
3. Information set forth under the captions "Description of Series D
Preferred Stock" and "Description of Capital Stock" in Amendment No. 1
to the Registration Statement on Form S-3 (No. 33-51133).
__________________________
* To be supplied by Amendment.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securites Exchange
Act of 1934, the registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
SOUTHDOWN, INC.
By: /s/ JAMES L. PERSKY
----------------------
James L. Persky
Senior Vice President
Date: January 5, 1994
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INDEX TO EXHIBITS
1. Restated Articles of Incorporation, as amended (incorporated by
reference to Exhibit 4.1 to the Current Report on Form 8-K dated
December 21, 1993).
2.* Form of Articles of Amendment to the Restated Articles of
Incorporation designating the Series D Preferred Stock.
3. Information set forth under the captions "Description of Series D
Preferred Stock" and "Description of Capital Stock" in Amendment No. 1
to the Registration Statement on Form S-3 (No. 33-51133).
__________________________
* To be supplied by Amendment.
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EXHIBIT 3
DESCRIPTION OF CAPITAL STOCK
The following descriptions do not purport to be complete and are subject
to, and qualified in their entirety by reference to, the following documents:
(i) the Company's Restated Articles of Incorporation, as amended (the "Restated
Articles"); (ii) the Company's Bylaws, as amended; (iii) the Rights Agreement
dated as of March 4, 1991, between the Company and Chemical Shareholder Services
Group, Inc., as Rights Agent; and (iv) the Warrant Agreement dated as of October
31, 1991 between the Company and Chemical Shareholder Services Group, Inc., as
Warrant Agent.
The authorized capital stock of Southdown comprises 40,000,000 shares of
Common Stock, $1.25 par value, and 10,000,000 shares of Preferred Stock, $.05
par value (the "Preferred Stock").
COMMON STOCK
At December 31, 1993, 17,045,809 shares of Common Stock were issued and
outstanding and held of record by approximately 1,956 shareholders, and
approximately 7.6 million shares were reserved for future issuance upon exercise
of options granted under employee benefit plans or warrants or upon conversion
of convertible securities, excluding shares reserved for issuance upon
conversion of the Series D Preferred Stock.
Subject to the preferences of each series of outstanding Preferred Stock,
holders of Common Stock are entitled to receive ratably such dividends as may be
declared by the Board of Directors out of funds legally available therefor. In
the event of a liquidation or dissolution of the Company, holders of Common
Stock are entitled to share ratably (except as described below under the caption
"-- Series C Preferred Stock") in all assets remaining after payment of
liabilities and the liquidation preferences of each series of outstanding
Preferred Stock. Each share of Common Stock generally entitles the holder to one
vote on matters submitted to a vote of shareholders of the Company, including
the election of directors. The Board of Directors of the Company is divided into
three classes, as nearly equal in number as possible, having staggered
three-year terms. Holders of Common Stock have no preemptive rights and no
rights to convert their Common Stock into any other securities. By the
affirmative vote of the holders of 80% of the outstanding shares of all classes
of the Company's stock entitled to vote in the election of directors, the
Company's shareholders may remove any of the Company's directors from office. A
similar vote is required to amend certain provisions of the Restated Articles.
See "-- Change in Control Provisions." All of the outstanding shares of Common
Stock are fully paid and nonassessable.
Chemical Shareholder Services Group, Inc., a subsidiary of Chemical Banking
Corporation, serves as the registrar and transfer agent for the Common Stock and
the Series A Preferred Stock and the Series B Preferred Stock described below.
WARRANTS TO PURCHASE COMMON STOCK
In October 1991, the Company issued and sold an aggregate of 1,250,000
Warrants to purchase Common Stock (the "Warrants") pursuant to the terms of a
Warrant Agreement dated as of October 31, 1991 (the "Warrant Agreement"),
between the Company and First City, Texas -- Houston, N.A., as Warrant Agent.
Chemical Shareholder Services Group, Inc. is now the Warrant Agent. Each Warrant
entitles the holder to purchase one share of Common Stock at a price of $16 per
share, subject to adjustment in certain circumstances, until 5:00 p.m. New York
City time on October 31, 1996. The number and kind of securities purchasable
upon exercise of the Warrants are subject to adjustment from time-to-time upon
the occurrence of certain reclassifications, mergers or consolidations, stock
splits, stock dividends, certain other distributions and events and certain
issuances or sales of Common Stock at prices less than market value (as defined
in the Warrant Agreement). In lieu of an adjustment to the number of shares of
Common Stock issuable pursuant to the exercise of the Warrants, the Company may
elect to issue additional Warrants.
- --------------
* The information set forth herein duplicates information set forth in
Amendment No. 1 to the Registration Statement on Form S-3 (No. 33-51133) and
will be modified by the information set forth under corresponding captions in
a Prospectus to be filed with the Securities and Exchange Commission
pursuant to Rule 424(b).
<PAGE> 2
RIGHTS
On March 4, 1991, the Board of Directors of the Company declared a dividend
of one right to purchase preferred stock ("Right") for each outstanding share of
the Company's Common Stock, to shareholders of record at the close of business
on March 14, 1991. Each Right entitles the registered holder to purchase from
the Company a unit consisting of one one-hundredth of a share (a "Unit") of
Preferred Stock, Cumulative Junior Participating Series C, par value $.05 per
share (the "Series C Preferred Stock"), at a purchase price of $60 per Unit,
subject to adjustment (the "Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement dated as of March 4, 1991 (the
"Rights Agreement") between the Company and First City, Texas-Houston, N.A., as
Rights Agent. Chemical Shareholder Services Group, Inc. now serves as Rights
Agent.
The Rights are attached to all certificates representing outstanding shares
of Common Stock, and no separate certificates for the Rights ("Rights
Certificates") have been distributed. The Rights will separate from the Common
Stock and a "Distribution Date" will occur upon the earlier of (i) ten days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding shares of
Common Stock (the date of the announcement being the "Stock Acquisition Date"),
or (ii) ten business days (or such later date as may be determined by the
Company's Board of Directors before the Distribution Date occurs) following the
commencement of a tender offer or exchange offer that would result in a person's
becoming an Acquiring Person. Until the Distribution Date, (a) the Rights will
be evidenced by the Common Stock certificates (together with a copy of a Summary
of Rights or bearing the notation referred to below) and will be transferred
with and only with such Common Stock certificates, (b) new Common Stock
certificates will contain a notation incorporating the Rights Agreement by
reference and (c) the surrender for transfer of any certificate for Common Stock
outstanding (with or without a copy of the Summary of Rights) will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on March 14, 2001, unless earlier redeemed or exchanged
by the Company as described below. In the Rights Agreement, the Company has
generally agreed to use its best efforts to cause the securities of the Company
issuable pursuant to the exercise of Rights to be registered under the
Securities Act, as soon as practicable after the Rights become exercisable, and
to take such action as may be necessary to ensure compliance with applicable
state securities laws.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Common Stock as of the close of business
on the Distribution Date and, from and after the Distribution Date, the separate
Rights Certificates alone will represent the Rights. All shares of Common Stock
issued prior to the Distribution Date will be issued with Rights. Shares of
Common Stock issued after the Distribution Date in connection with certain
employee benefit plans or upon exercise or conversion of certain securities
(including the Series D Preferred Stock, except in certain limited
circumstances) will be issued with Rights. Except as otherwise determined by the
Board of Directors, no other shares of Common Stock issued after the
Distribution Date will be issued with Rights.
In the event (a "Flip-In Event") that a person becomes an Acquiring Person,
(except pursuant to a tender or exchange offer for all outstanding shares of
Common Stock at a price and on terms that a majority of the independent
directors of the Company determines to be fair to and otherwise in the best
interests of the Company and its shareholders (a "Permitted Offer")) each holder
of a Right will thereafter have the right to receive, upon exercise of such
Right, a number of shares of Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a Current Market Price (as
defined in the Rights Agreement) equal to two times the exercise price of the
Right. Notwithstanding the foregoing, following the occurrence of any Flip-In
Event, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person (or by
certain related parties) will be null and void in the circumstances set forth in
the Rights Agreement. However, Rights are not exercisable following the
occurrence of any Flip-In Event until such time as the Rights are no longer
redeemable by the Company as set forth below.
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For example, at an exercise price of $60 per Right, each Right not owned by
an Acquiring Person (or by certain related parties) following an event set forth
in the preceding paragraph would entitle its holder to purchase $120 worth of
Common Stock (or other consideration, as noted above), based upon its then
Current Market Price, for $60. Assuming that the Common Stock had a Current
Market Price of $15 per share at such time, the holder of each valid Right would
be entitled to purchase 8 shares of Common Stock for $60.
In the event (a "Flip-Over Event") that, at any time on or after the Stock
Acquisition Date, (i) the Company is acquired in a merger or other business
combination transaction (other than a specified type of merger that follows a
Permitted Offer), or (ii) 50% or more of the Company's assets or earning power
is sold or transferred, each holder of a Right (except Rights that previously
have been voided as set forth above) shall thereafter have the right to receive,
upon exercise, a number of shares of common stock of the acquiring company (or
in certain cases its controlling person) having a Current Market Price equal to
two times the exercise price of the Right. Flip-In Events and Flip-Over Events
are collectively referred to as "Triggering Events."
The Purchase Price payable, and the number of Units or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Series C Preferred Stock,
(ii) if holders of the Series C Preferred Stock are granted certain rights or
warrants to subscribe for Series C Preferred Stock or convertible securities at
less than the current market price of the Series C Preferred Stock, or (iii)
upon the distribution to holders of the Series C Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
No adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. No fractional Units are
required to be issued and, in lieu thereof, an adjustment in cash may be made
based on the market price of the Series C Preferred Stock on the last trading
date prior to the date of exercise. Pursuant to the Rights Agreement, the
Company reserves the right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Series C Preferred Stock will be issued.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right, payable, at the option of the Company, in cash, shares of Common Stock or
such other consideration as the Board of Directors may determine. After the
redemption period has expired, the Company's right of redemption may be
reinstated prior to the occurrence of any Triggering Event if (i) an Acquiring
Person reduces its beneficial ownership to 10% or less of the outstanding shares
of Common Stock in a transaction or series of transactions not involving the
Company and (ii) there are no other Acquiring Persons. Immediately upon the
effectiveness of the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the $.01 redemption price.
At any time after the occurrence of a Flip-In Event and prior to a person's
becoming the beneficial owner of 50% or more of the shares of Common Stock then
outstanding, the Company may exchange the Rights (other than Rights owned by an
Acquiring Person or an affiliate or an associate of an Acquiring Person, which
will have become void), in whole or in part, at an exchange ratio of one share
of Common Stock, and/or other equity securities deemed to have the same value as
one share of Common Stock, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. Shareholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for the
common stock of the acquiring company as set forth above or are exchanged as
provided in the preceding paragraph.
Other than certain provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution
<PAGE> 4
Date. Thereafter, the provisions of the Rights Agreement may be amended by the
Board of Directors in order to cure any ambiguity, defect or inconsistency, to
make changes that do not materially adversely affect the interests of holders of
Rights (excluding the interests of any Acquiring Person), or to shorten or
lengthen any time period under the Rights Agreement; provided, however, that no
amendment to lengthen the time period governing redemption shall be made at such
time as the Rights are not redeemable.
The provisions of the Rights and the Rights Agreement may in some cases
discourage or make more difficult the acquisition of control of the Company by
means of a tender offer, open market purchase or similar means. These provisions
are intended to discourage, or may have the effect of discouraging, partial
tender offers, front-end loaded two-tier tender offers and certain other types
of coercive takeover tactics and inadequate takeover bids and to encourage
persons seeking to acquire control of the Company first to negotiate with the
Company. The Company believes that these provisions, which are similar to those
of many other publicly held companies, provide benefits by enhancing the
Company's potential ability to negotiate with the proponent of any unfriendly or
unsolicited proposal to take over or restructure the Company that outweigh the
disadvantages of discouraging such proposals because, among other things,
negotiation of such proposals could result in an improvement in their terms.
PREFERRED STOCK
The Board of Directors is authorized to designate series of Preferred Stock
and fix the powers, preferences and rights of the shares of such series and the
qualifications, limitations or restrictions thereon.
Series A Preferred Stock. Pursuant to the terms of the Restated Articles,
the Board of Directors has created a series of Preferred Stock consisting of
1,999,998 shares of Preferred Stock, $.70 Cumulative Convertible Series A (the
"Series A Preferred Stock"). The Series A Preferred Stock is senior to the
Series B Preferred Stock with respect to dividends and assets. As of December
31, 1993, 1,999,000 shares of Series A Preferred Stock were issued and
outstanding. All such shares are fully paid and nonassessable.
The Series A Preferred Stock (a) has a stated value and liquidation
preference of $10 per share, plus accrued and unpaid dividends, (b) carries a
cumulative dividend of $.70 per year, payable quarterly, and entitles the
holders of a majority thereof to elect two directors if dividends are in arrears
for at least 540 days, (c) is initially convertible into one-half of a share of
Common Stock for each share of Series A Preferred Stock, subject to adjustment,
(d) is redeemable at the option of the Company at 120% of the stated value
thereof (declining to 100% of the stated value after April 30, 1997) plus
accrued and unpaid dividends, and (e) is entitled to one vote per share, voting
as a class with the Common Stock and any other capital stock of the Company
entitled to vote, on all matters submitted to shareholders. In addition, the
holders of Series A Preferred Stock have certain class voting rights, including
the right to approve certain mergers, consolidations and sales of assets;
however, if a holder of Series A Preferred Stock does not grant a proxy to the
Board of Directors to vote in favor of any such merger, consolidation or sale of
assets, the Company may redeem such holder's shares of Series A Preferred Stock
without the payment of any redemption premium. The Company has reserved 999,500
shares of Common Stock for issuance upon conversion of the Series A Preferred
Stock.
Series B Preferred Stock. Pursuant to the terms of the Restated Articles,
the Board of Directors has created a series of Preferred Stock consisting of
960,000 shares of Preferred Stock, $3.75 Convertible Exchangeable Series B (the
"Series B Preferred Stock"). The Series B Preferred Stock is junior to the
Series A Preferred Stock with respect to dividends and assets. As of December
31, 1993, 959,000 shares of Series B Preferred Stock were issued and
outstanding. All such shares are fully paid and nonassessable.
The Series B Preferred Stock (a) has a stated value and liquidation
preference of $50 per share, plus accrued and unpaid dividends, (b) carries a
cumulative dividend of $3.75 per year, payable semi-annually, and entitles the
holders of a majority thereof to elect two directors if dividends are in arrears
for at least 180 days, (c) is initially convertible into two and one-half shares
of Common Stock for each share of Series B Preferred Stock, subject to
adjustment, (d) is redeemable at the option of the Company at the stated value
thereof plus accrued and unpaid dividends, and (e) is entitled to one vote per
share, voting as a class with the Common Stock and any other capital stock of
the Company entitled to vote, on all matters submitted to shareholders. In
addition, the holders of the Series B Preferred Stock have certain class voting
rights. The Company has
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reserved 2,397,500 shares of Common Stock for issuance upon conversion of the
Series B Preferred Stock. In addition, the Series B Preferred Stock is
exchangeable, in whole but not in part, at the option of the Company at any time
for the Company's 7 1/2% Convertible Subordinated Debentures Due 2013 (the
"Debentures") at a rate of $50 in principal amount of Debentures per share of
Series B Preferred Stock, provided that all dividends on the Series B Preferred
Stock have been paid through the date of such exchange. The Company's Restated
Revolving Credit Facility requires the Company to obtain the consent of the
lenders thereunder as a condition to the exchange of the Series B Preferred
Stock for the Debentures.
Series C Preferred Stock. In connection with the distribution of the Rights
on March 14, 1991, the Board of Directors of the Company authorized 400,000
shares of Series C Preferred Stock, none of which are outstanding. The Series C
Preferred Stock would be issued only upon the exercise of Rights and only if the
Rights were exercised prior to a Flip-In Event or a Flip-Over Event. The Rights
are not exercisable as of the date hereof. See "-- Rights." If issued, the
Series C Preferred Stock would be junior to the Series A Preferred Stock, the
Series B Preferred Stock and the Series D Preferred Stock with respect to
dividends and assets.
The Series C Preferred Stock has a liquidation preference of $100 per
share, plus accrued and unpaid dividends and distributions (the "Series C
Liquidation Preference"). Following the payment of the Series C Liquidation
Preference, no additional distribution shall be made to the holders of shares of
Series C Preferred Stock unless the holders of Common Stock have received an
amount per share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series C Liquidation Preference by (ii) the Adjustment Number.
The Adjustment Number initially is 100, and is subject to adjustment in the
event the Company (i) declares any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivides the outstanding Common Stock or (iii) combines the
Common Stock into a smaller number of shares. Following the payment of the full
amount of the Series C Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series C Preferred Stock and Common Stock,
respectively, holders of Series C Preferred Stock and holders of Common Stock
shall receive their ratable and proportionate share of the remaining assets to
be distributed in the ratio of the Adjustment Number to one with respect to the
Series C Preferred Stock and Common Stock, on a per share basis, respectively.
If issued, the Series C Preferred Stock would carry a cumulative dividend
per share equal to the greater of (i) $2.00 or (ii) subject to certain
adjustments, the Adjustment Number times the aggregate per share amount of all
cash dividends, and the Adjustment Number times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than
dividends or distributions payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding quarterly dividend
payment date for the Series C Preferred Stock. The Series C Preferred Stock is
redeemable, at the option of the Company, at any time at a redemption price
equal to the Adjustment Number times the current per share market price (as
defined) of the Common Stock, together with accrued and unpaid dividends. Each
share of Series C Preferred Stock entitles the holder thereof to the number of
votes equal to the Adjustment Number for each share held and, except as
otherwise provided by law, the Series C Preferred Stock votes together as a
single class with the Common Stock and any other capital stock of the Company
entitled to vote. The Series C Preferred Stock entitles the holders thereof
(together with the holders of all Preferred Stock (other than the Series A
Preferred Stock and the Series B Preferred Stock) upon which similar voting
rights have been conferred) to elect two directors if dividends are in arrears
for at least 540 days.
LIMITATIONS ON DIVIDENDS AND CERTAIN OTHER PAYMENTS
The Company's ability to pay dividends and make certain other payments with
respect to its capital stock is restricted in certain circumstances by certain
provisions of its debt instruments, including the Company's Restated Revolving
Credit Facility and the Indenture relating to its 14% Senior Subordinated Notes
Due 2001. That Indenture provides a limitation on Restricted Payments, which are
defined to include, among other things, cash dividends or distributions and
repurchases or redemptions of capital stock. Subject to limited exceptions, the
Indenture prohibits Restrictive Payments unless, at the time of or after giving
effect to the proposed Restricted Payment, no Default or Event of Default shall
have occurred and be continuing. The aggregate amount of all Restricted Payments
declared or made after October 31, 1991 may not equal or
<PAGE> 6
exceed an amount calculated from time to time based on, among other things, the
Company's consolidated net income (with certain adjustments) since October 1,
1991, and the proceeds from most sales of capital stock. As of September 30,
1993 (after giving effect to the completion of the Preferred Stock Offering and
the application of the proceeds therefrom as set forth under "Use of Proceeds"),
the amount available under the Indenture for dividends and other Restricted
Payments would have been approximately $45 million.
So long as there is no Event of Default or Unmatured Event of Default under
the Restated Revolving Credit Facility, that facility does not restrict the
Company's payment of regularly scheduled cash dividends on the Series A
Preferred Stock, Series B Preferred Stock or Series D Preferred Stock. So long
as there is no Event of Default or Unmatured Event of Default under the Restated
Revolving Credit Facility, the Company may also pay cash dividends with respect
to the Common Stock so long as the Company's Adjusted Free Cash Flow Ratio (i)
on the first date on which such dividends are commenced, and (ii) on the final
day of each fiscal year in which such Common Stock dividends are paid, exceeds
1.00:1.00 (for 1993 and 1994), 1.30:1.00 (for 1995) and 1.60:1.00 (for 1996). As
of September 30, 1993 (after giving effect to the Preferred Stock Offering and
the use of proceeds thereof as set forth under "Use of Proceeds"), the Company's
Adjusted Free Cash Flow Ratio would have been 1.10:1.00.
The Company believes that, after giving effect to the Preferred Stock
Offering, these limitations will not materially affect its ability to make
dividend payments on the Series D Preferred Stock.
CHANGE IN CONTROL PROVISIONS
Charter Provisions. The Restated Articles require the affirmative vote or
consent of the holders of 80% of all classes of stock of the Company entitled to
vote in the election of directors to approve (a) any merger or consolidation of
the Company with or into any other corporation, (b) any sale or lease of all or
any substantial part of the assets of the Company or (c) any sale or lease to
the Company or any subsidiary thereof of assets with an aggregate fair market
value of $2 million or more in exchange for voting securities of the Company or
any subsidiary thereof (or securities convertible into or exchangeable for such
securities), if as of the record date for the determination of shareholders
entitled to vote or consent with respect to such merger, consolidation, sale or
lease, the other party to such transaction is the beneficial owner (as defined),
directly or indirectly, of 5% or more of the outstanding shares of stock of the
Company entitled to vote in the election of directors ("5% Beneficial Owner").
The foregoing provisions of the Restated Articles are inapplicable to (a) any
merger or similar transaction if the Board of Directors of the Company has
approved a memorandum of understanding with such other corporation prior to the
time such corporation became a 5% Beneficial Owner or (b) transactions with a
majority-owned subsidiary of the Company.
Statutory Provision. Although the constitutionality of the control share
provisions of the Louisiana Business Corporation Law ("LBCL") has not been
judicially determined, the Company believes that it is an "issuing public
corporation," subject to the control share provisions of the LBCL. Under the
control share provisions of the LBCL, the voting rights of the Company's shares
of voting stock are limited under certain circumstances. Subject to certain
exceptions, generally if "control shares" of the Company are acquired in a
"control share acquisition," the LBCL provides that such shares have the voting
rights they had before the control share acquisition only to the extent granted
by resolution of the shareholders of the Company. Such resolution must be
adopted by a majority of all votes entitled to be cast, excluding all
"interested shares."
"Interested shares" are defined as shares of the Company in respect of
which any of the following persons may exercise or direct the exercise of the
voting power of the Company in the election of directors: (a) an acquiring
person or member of a group with respect to a control share acquisition, (b) any
officer of the Company, or (c) any employee of the Company who is also a
director of the Company. "Control shares" are defined generally as shares that,
but for the control share provisions of the LBCL, would have voting power with
respect to shares of the Company that, when added to all other shares of the
Company owned by a person or in respect to which that person may exercise or
direct the exercise of voting power, would entitle that person, immediately
after acquisition of the shares, directly or indirectly, alone or as a part of a
group, to exercise or direct the exercise of the voting power of the Company in
the election of directors within any of the following ranges of voting power:
(a) one-fifth or more but less than one-third of all voting power, (b) one-
<PAGE> 7
third or more but less than a majority of all voting power, or (c) a majority or
more of all voting power. Subject to certain exceptions, a "control share
acquisition" means the acquisition, directly or indirectly, by any person of
ownership of, or the power to direct the exercise of voting power with respect
to, issued and outstanding control shares.
Under certain circumstances (including, but not limited to, the giving of
an undertaking by the acquiring person to pay the Company's expenses of the
meeting and, under certain circumstances, the obtaining by such person of
commitments for the financing of any cash portion of the consideration to be
paid), an acquiring person may compel the calling of a special meeting of the
Company's shareholders for the purpose of considering the voting rights to be
accorded the shares acquired or to be acquired in the control share acquisition.
Unless the acquiring person agrees in writing to another date, the special
meeting of shareholders shall be held within fifty days after the date on which
definitive proxy materials (within the meaning of the Securities Exchange Act of
1934, as amended, and the regulations thereunder) related to the special meeting
on behalf of the acquiring person and the Board of Directors of the Company have
been filed with the Securities and Exchange Commission.
The Company's Bylaws provide that (i) if no acquiring person statement is
filed by the acquiring person or (ii) if full voting rights are not approved,
the Company may redeem control shares acquired in a control share acquisition
(a) in the case of (i), within 60 days after the last acquisition of control
shares by an acquiring person and (b) in the case of (ii), at any time during
the period ending two years after the shareholder vote with respect to the
voting rights of such control shares. Any such redemption shall be made at the
fair value of the control shares and pursuant to such procedures as may be
adopted by the Board of Directors of the Company. If control shares acquired in
a control share acquisition representing a majority or more of all voting power
are accorded full voting rights, then all shareholders of the Company will have
dissenters' rights to receive the fair cash value of their shares, such amount
not to be less than the highest price per share paid by the acquiring person in
the control share acquisition.
<PAGE> 8
DESCRIPTION OF SERIES D PREFERRED STOCK
The following summary of certain provisions of the Series D Preferred Stock
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the provisions of the Company's Restated Articles and the
Articles of Amendment relating to the Series D Preferred Stock, copies of which
are available upon request from the Company.
When issued, the Series D Preferred Stock will be fully paid and
nonassessable. The holders of the Series D Preferred Stock will have no
preemptive rights with respect to any shares of capital stock of the Company or
any other securities of the Company convertible into or carrying rights or
options to purchase any such shares. The Series D Preferred Stock will not be
subject to any sinking fund or other obligation of the Company to redeem or
retire the Series D Preferred Stock. The Company is making application to list
the Series D Preferred Stock on the NYSE.
RANKING
The Series D Preferred Stock will rank senior to the Common Stock (and any
shares of the Series C Preferred Stock that may be issued) with respect to the
payment of dividends and amounts upon liquidation, dissolution or winding up of
the Company. The Series D Preferred Stock will rank junior to the Series A
Preferred Stock and pari passu with the Series B Preferred Stock with respect to
the payment of dividends and amounts upon liquidation, dissolution or winding up
of the Company.
So long as any shares of the Series D Preferred Stock are outstanding, the
Company may not authorize or create any series or class of stock that ranks
senior to the Series D Preferred Stock as to dividends or distribution of assets
upon liquidation or winding up of the Company without the consent of the holders
of a majority of the outstanding shares of Series D Preferred Stock. However,
the Company may, without the consent of any holder of the Series D Preferred
Stock, create additional series or classes or increase the authorized number of
shares of any series or class of capital stock of the Company that ranks pari
passu with or junior to the Series D Preferred Stock. See "-- Voting Rights"
below.
DIVIDEND RIGHTS
The holders of the Series D Preferred Stock shall be entitled to receive,
when and as declared by the Board of Directors out of the funds of the Company
legally available therefor, cumulative preferential dividends per share in cash
in an amount per annum equal to $ per share, and no more, until
conversion or redemption. Dividends on the Series D Preferred Stock will be
cumulative, will accrue from the date of original issuance and will be paid
quarterly in arrears on the first day of each April, July, October and January
commencing April 1, 1994.
Dividends in arrears may be declared and paid at any time, without
reference to any regular dividend payment date, to holders of record on such
date, not exceeding 45 days preceding the payment date thereof, as may be fixed
by the Board of Directors of the Company. No dividend may be declared on any
other series or class of stock ranking on a parity with the Series D Preferred
Stock unless there shall also be or have been declared on the Series D Preferred
Stock like dividends for all quarters at the dividend rates fixed therefor. If
full cumulative dividends on the Series D Preferred Stock have not been paid or
declared and set apart for payment, the Company may not declare or pay or set
apart for payment any dividends or make any other distributions on any capital
stock of the Company ranking junior to the Series D Preferred Stock (other than
dividends or distributions paid in shares of Common Stock or such other junior
ranking stock), until full cumulative dividends on the Series D Preferred Stock
are paid or declared and set apart for payment.
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution, or winding up of the affairs
of the Company, after payment or provision for payment of the debts and other
liabilities of the Company (including any liquidation preferences payable in
respect of capital stock of the Company ranking senior to the Series D Preferred
Stock as to assets), the holders of the Series D Preferred Stock shall be
entitled to receive $50.00 in cash per share, plus
<PAGE> 9
accrued and unpaid dividends. If upon any liquidation, dissolution or winding up
of the affairs of the Company, the amounts payable with respect to the Series D
Preferred Stock (and the Series B Preferred Stock and any other capital stock of
the Company ranking on a parity with the Series D Preferred Stock) are not paid
in full, the holders of the Series D Preferred Stock (and the Series B Preferred
Stock and any other capital stock of the Company ranking on a parity with the
Series D Preferred Stock) will share ratably in any such distribution of assets
in proportion to the respective amounts to which they are entitled.
OPTIONAL REDEMPTION
Shares of Series D Preferred Stock will not be redeemable prior to January
, 2001. On or after January , 2001, the shares of Series D Preferred Stock
are redeemable, in whole or in part, at any time at the option of the Company,
at a redemption price of $50.00 per share plus accrued and unpaid dividends to
the redemption date. If the redemption date falls after a dividend payment
record date but prior to the related payment date, the record holders of the
Series D Preferred Stock on that record date will be entitled to receive the
dividend payable on the Series D Preferred Stock notwithstanding the redemption
thereof. Except as provided in this paragraph, no payment or allowance will be
made for accrued dividends on any shares of Series D Preferred Stock called for
redemption.
Notice of redemption on or after January , 2001 will be mailed at least
30 days but not more than 60 days before the redemption date to each holder of
record of shares of Series D Preferred Stock to be redeemed at the address shown
on the books of the Company. Shares of Series D Preferred Stock redeemed by the
Company will be restored to the status of authorized but unissued shares of
preferred stock, without designation as to series, and may thereafter be issued,
but not as shares of Series D Preferred Stock.
If less than all of the outstanding shares of Series D Preferred Stock are
to be redeemed, the Company will select those to be redeemed pro rata or by lot
or in such other manner as the Board may determine. There is no mandatory
redemption or sinking fund obligation with respect to the Series D Preferred
Stock.
Provided that the Company has made available at the office of the transfer
agent a sufficient amount of cash to effect the redemption, on and after the
redemption date, dividends will cease to accrue on the Series D Preferred Stock
called for redemption, such shares shall no longer be deemed to be outstanding,
and all rights of the holders of such shares of Series D Preferred Stock will
cease, other than the right to receive any cash payable upon such redemption,
without interest.
CONVERSION RIGHTS
Conversion at the Option of the Company
On and after January , 1997 and until January , 2001, shares of Series
D Preferred Stock will be convertible at the option of the Company, in whole but
not in part, into fully paid and nonassessable shares of Common Stock at the
Conversion Price. The Company may exercise this option only if, for 20 trading
days within any period of 30 consecutive trading days, including the last
trading day of such period, the closing price of the Common Stock on the NYSE
exceeds 130% of the Conversion Price (initially $ per share) and only if
all dividends on the Series D Preferred Stock for all dividend periods ending on
or prior to the dividend payment date next preceding the conversion date have
been paid or declared and set aside for payment. To exercise this conversion
option, the Company must issue a press release announcing the conversion and
specifying the date on which such conversion will be effective prior to 9:00
A.M., New York City time on the second trading day after the end of any such 30
trading day period. The date for the conversion to become effective will be a
date selected by the Company not less than 15 nor more than 60 days after the
date on which the Company mails the required notice of conversion. On and after
the conversion date, the rights of holders of the Series D Preferred Stock, as
such, shall cease, the Series D Preferred Stock shall no longer be deemed to be
outstanding, and the certificates theretofore representing the shares of Series
D Preferred Stock shall represent the shares of Common Stock into which the
shares of Series D Preferred Stock have been converted, and the right to receive
cash in lieu of any fractional shares.
<PAGE> 10
Conversion at the Option of the Holder
At the option of the holder thereof, shares of Series D Preferred Stock may
at any time be converted into fully paid and nonassessable shares of Common
Stock at the Conversion Price, except that, with respect to shares of Series D
Preferred Stock called for redemption, conversion rights will expire at the
close of business on the redemption date (unless the Company defaults in the
payment of the redemption price), and, with respect to shares of Series D
Preferred Stock called for conversion at the option of the Company, conversion
rights at the option of the holder will expire at the close of business on the
conversion date selected by the Company.
General
The Conversion Price is subject to adjustment upon the occurrence of
certain events, including (a) certain reclassifications of the Common Stock,
combinations and subdivisions of the Common Stock, (b) the issuance of shares of
Common Stock as a stock dividend, (c) the issuance to all holders of Common
Stock of any warrant, option or other right to subscribe for or to purchase
Common Stock at a price per share less than the then-current Market Price (as
defined) of the Common Stock, and (d) dividends to all holders of Common Stock
of evidences of indebtedness of the Company, shares of capital stock of the
Company (other than Common Stock) or assets or rights or warrants to subscribe
for or purchase any of its securities (excluding those dividends, warrants,
options and rights referred to above and dividends and other distributions paid
in cash out of the profits or surplus of the Company legally available therefor
under the laws of the State of Louisiana). No adjustment in the Conversion Price
is required unless it would result in at least a $.05 per share increase or
decrease in the Conversion Price; however, any adjustment not made is carried
forward.
In the event of any reclassification or change of the Common Stock (other
than a change with respect to the par value thereof or as a result of a
subdivision or combination of the outstanding shares thereof); any consolidation
or merger of the Company with another entity, as a result of which the holders
of Common Stock are entitled to receive stock, other securities or other assets
with respect to or in exchange for such Common Stock; or any sale or conveyance,
in a single transaction or a series of related transactions with the same
person, of all or substantially all of the property or business of the Company
in its entirety, then the holders of the Series D Preferred Stock then
outstanding will have the right to convert such Series D Preferred Stock only
into the kind and amount of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock issuable upon
conversion of such Series D Preferred Stock immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance.
If the conversion date falls after a dividend payment record date but prior
to the related payment date, the record holders of the Series D Preferred Stock
on that record date will be entitled to receive the dividend payable on the
shares of Series D Preferred Stock being converted despite their conversion. No
other payment or adjustment will be made upon any conversion on account of
regular cash dividends declared or accrued on the Common Stock or the Series D
Preferred Stock surrendered for conversion. No fractional share of Common Stock
shall be issued and, in lieu of fractional shares, the Company will pay a cash
adjustment based on the then-current Market Price of the Common Stock.
VOTING RIGHTS
The Series D Preferred Stock is entitled to one vote per share, voting as a
class with the Common Stock and any other capital stock of the Company entitled
to vote, on all matters submitted to the shareholders. In addition, the holders
of the Series D Preferred Stock shall vote as a single class (and the
affirmative vote or consent of the holders of at least two-thirds of the
outstanding shares of Series D Preferred Stock shall be required) with respect
to any proposal to (a) change the dividend rate, liquidation preference,
redemption price, voting rights or conversion rights of the shares of the Series
D Preferred Stock or to increase the number of authorized shares of Series D
Preferred Stock; (b) increase the authorized amount of any series or class of
capital stock of the Company if the same ranks senior to the Series D Preferred
Stock as to dividends or distributions of assets on liquidation; (c) authorize,
create, issue or sell any shares of any series or class of
<PAGE> 11
capital stock of the Company that ranks senior to the Series D Preferred Stock
as to dividends or assets; and (d) change or modify their voting rights.
Whenever dividends on the Series D Preferred Stock are in arrears for the
equivalent of six quarterly dividend periods, the number of directors of the
Company shall be increased by two and the holders of the Series D Preferred
Stock, voting together as a single class with all other series or classes of
preferred stock which rank pari passu with the Series D Preferred Stock as to
dividends and which specifically state that they shall vote with the Series D
Preferred Stock for the election of two directors in such a case, shall be
entitled to elect such two additional directors of the Company, who shall be a
Class I director and a Class II director, respectively, at any meeting of
shareholders of the Company at which directors are to be elected during the
period such dividends remain in arrears. The Series D Preferred Stock will not
vote together with any of the Series A Preferred Stock, the Series B Preferred
Stock or, if any is issued, the Series C Preferred Stock with respect to the
election of two directors in such a case. The right of the holders of the Series
D Preferred Stock to elect directors shall terminate when all such dividends
accumulated have been paid in full. The term of office of all directors so
elected shall terminate immediately upon such payment and the number of
directors shall become the number otherwise provided by the Company's governing
documents irrespective of such increase.
The Series D Preferred Stock shall have no other voting rights, except as
required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Series D Preferred Stock will be
Chemical Shareholder Services Group, Inc., which also serves as transfer agent
and registrar for the Common Stock, the Series A Preferred Stock and the Series
B Preferred Stock and as Warrant Agent and Rights Agent for the Warrants and
Rights, respectively.
