<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 20, 1999
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
SOUTHDOWN, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
LOUISIANA 72-0296500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1200 SMITH STREET, SUITE 2400
HOUSTON, TEXAS 77002
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
SOUTHDOWN, INC.
1999 PHANTOM STOCK PLAN FOR
NON-EMPLOYEE DIRECTORS
(Full title of plan)
PATRICK S. BULLARD
SENIOR VICE PRESIDENT C GENERAL COUNSEL AND SECRETARY
SOUTHDOWN, INC.
1200 SMITH STREET, SUITE 2400
HOUSTON, TEXAS 77002
(Name and address of agent for service)
(713) 650-6200
(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $1.25 par value(1).... 24,145 shares(2) $63.41(3) $1,531,034(3) $426(3)
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</TABLE>
(1) Includes the Preferred Stock Purchase Rights issuable pursuant to the Rights
Agreement dated as of March 4, 1991, between the Registrant and American
Stock Transfer & Trust Company. As no separate consideration is payable with
respect to the Preferred Stock Purchase Rights, the registration fee with
respect to such securities is included in the registration fee for the
Common Stock.
(2) Pursuant to Rule 416 under the Securities Act of 1933, includes any
additional shares issued pursuant to the antidilution provisions of the
plan.
(3) The price of the Common Stock is estimated in accordance with Rule 457(c)
and (h) solely for the purpose of calculating the registration fee by
reference to the average of the high and low sale prices of the Common Stock
on the New York Stock Exchange on May 19, 1999 which was $63.41 per share.
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<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I will be sent
or given to non-employee directors as specified by Rule 428(b). In accordance
with the instructions to Part I of Form S-8, such documents are not being filed
and will not be filed with the Securities and Exchange Commission (the
"Commission"), either as part of this Registration Statement or as a prospectus
or prospectus supplement pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, or portions of documents, previously filed by
Southdown, Inc. (the "Company") with the Commission are hereby incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1998;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, as amended by Form 10-Q/A dated May 14, 1999; and
(c) The description of the Company's Common Stock, par value $1.25 per
share, set forth in the Company's Registration Statement on Form 8-C
relating to such Common Stock, and the description of the Company's
Preferred Stock Purchase Rights set forth in the Company's Registration
Statement on Form 8-A relating to such Preferred Stock Purchase Rights, as
each such Registration Statement is amended to date.
All reports and other documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), after the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference herein and
to be a part hereof from the respective dates of filing of such reports and
other documents, other than the portions of such documents which by statute, by
designation in such documents or otherwise are not required to be filed by the
Commission or are not required to be incorporated herein by reference.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for all purposes to the extent that a statement contained in any other
subsequently filed document that is also incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Louisiana Business Corporation Law ("LBCL") generally gives a
corporation the power to indemnify any of its directors or officers against
certain expenses, judgments, fines and amounts paid in
2
<PAGE> 3
settlement in connection with certain actions, suits or proceedings, provided
generally that such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. In the case of an action by, or in the right of, the
corporation, the corporation may indemnify such person against expenses,
including attorneys' fees and amounts paid in settlement not exceeding, in the
judgment of the board of directors, the estimated expense of litigating the
action to conclusion, actually and reasonably incurred in connection with the
defense or settlement of such action, and no indemnification shall be made in
respect of any claim, issue, or matter as to which such person shall have been
adjudged by a court of competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable for willful or intentional misconduct in the performance
of his duty to the corporation, unless, and only to the extent that the court
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, he is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Indemnification provided pursuant to the foregoing provisions is not, under
the LBCL, deemed exclusive of any other rights to which the person indemnified
is entitled under any bylaw, agreement, authorization of shareholders or
directors; however, no such other indemnification measure shall permit
indemnification of any person for the results of such person's willful or
intentional misconduct. In addition, the LBCL contains provisions to the general
effect that any director shall in the performance of his duties be fully
protected in relying in good faith upon the records of the corporation and upon
such information, opinions, reports or statements presented to the corporation,
the board of directors, or any committee thereof by any of the corporation's
officers or employees, or by any committee of the board of directors, or by any
counsel, appraiser, engineer (including a petroleum reservoir engineer), or
independent or certified public accountant selected by the board of directors or
any committee thereof with reasonable care, or by any other person as to matters
the director reasonably believes are within such other person's professional or
expert competence and which person is selected by the board of directors or any
committee thereof with reasonable care. A director shall not be liable for the
commission of a prohibited act if his dissent was either noted in the minutes of
the meetings or filed promptly thereafter in the registered office of the
corporation.
As permitted under Section 24(C)(4) of the LBCL, Article XIII of the
Restated Articles of Incorporation of the Company eliminates the personal
liability of any director or officer to the Company or its shareholders for
monetary damages for breach of fiduciary duty in such capacity, except for (i)
any breach of the duty of loyalty to the Company or its shareholders; (ii) acts
or omissions not in good faith or involving intentional misconduct or a knowing
violation of law; (iii) unlawful payment of dividends or unlawful stock purchase
or redemption; or (iv) any transaction from which the director or officer
derived an improper personal benefit.
Article VI, Section 6 of the Company's Bylaws contemplates that the Company
shall indemnify its directors and officers to the maximum extent permitted by
Louisiana law.
In addition, the Company has purchased a liability insurance policy under
which its directors and officers are indemnified against certain losses arising
from certain claims that may be made against them by reason of their serving in
such capacity.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS*
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
15 -- Letter of Deloitte & Touche LLP regarding unaudited
interim financial statements.
23.1 -- Consent of Deloitte & Touche LLP.
99.1 -- Southdown, Inc. 1999 Phantom Stock Plan for Non-Employee
Directors.
</TABLE>
3
<PAGE> 4
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* Because all of the securities being registered are being sold from the
Company's issued but not outstanding treasury shares, and therefore are not
original issuance securities, pursuant to Item 8(a) no opinion of counsel is
required.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 20th day of May,
1999.
SOUTHDOWN, INC.
By: /s/ CLARENCE C. COMER
----------------------------------
Clarence C. Comer
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
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<C> <S> <C>
/s/ CLARENCE C. COMER President and Chief Executive May 20, 1999
- --------------------------------------------------- Officer and Director
Clarence C. Comer (Principal Executive Officer)
/s/ DENNIS M. THIES Executive Vice May 20, 1999
- --------------------------------------------------- President -- Finance and Chief
Dennis M. Thies Financial Officer (Principal
Financial Officer)
/s/ ALLAN KORSAKOV Vice President and Corporate May 20, 1999
- --------------------------------------------------- Controller (Principal
Allan Korsakov Accounting Officer)
/s/ ROBERT S. EVANS Director May 20, 1999
- ---------------------------------------------------
Robert S. Evans
/s/ ROBERT G. POTTER Director May 20, 1999
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Robert G. Potter
/s/ FRANK J. RYAN Director May 20, 1999
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Frank J. Ryan
/s/ WHITSON SADLER Director May 20, 1999
- ---------------------------------------------------
Whitson Sadler
/s/ ROBERT J. SLATER Director May 20, 1999
- ---------------------------------------------------
Robert J. Slater
</TABLE>
5
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<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
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<C> <S> <C>
/s/ DAVID J. TIPPECONNIC Director May 20, 1999
- ---------------------------------------------------
David J. Tippeconnic
/s/ J. BRUCE TOMPKINS Director May 20, 1999
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J. Bruce Tompkins
/s/ GEORGE E. UDING, JR. Director May 20, 1999
- ---------------------------------------------------
George E. Uding, Jr.
/s/ V.H. VAN HORN, III Director May 20, 1999
- ---------------------------------------------------
V.H. Van Horn, III
/s/ STEVEN B. WOLITZER Director May 20, 1999
- ---------------------------------------------------
Steven B. Wolitzer
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
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<C> <S>
15 -- Letter of Deloitte & Touche LLP regarding unaudited
interim financial statements.
23.1 -- Consent of Deloitte & Touche LLP.
99.1 -- Southdown, Inc. 1999 Phantom Stock Plan for Non-Employee
Directors.
</TABLE>
<PAGE> 1
EXHIBIT 15
May 20, 1999
Southdown, Inc.
1200 Smith Street, Suite 2400
Houston, Texas 77002
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Southdown, Inc. and subsidiary companies for the periods ended
March 31, 1999 and 1998, as indicated in our report dated April 20, 1999;
because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which was included in your
amended Quarterly Report on Form 10-Q/A for the quarter ended March 31, 1999, is
being used in this Registration Statement.
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
DELOITTE & TOUCHE LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Southdown, Inc. on Form S-8 of our report dated January 27, 1999, incorporated
by reference in the Annual Report on Form 10-K of Southdown, Inc. for the year
ended December 31, 1998.
DELOITTE & TOUCHE LLP
Houston, Texas
May 20, 1999
<PAGE> 1
EXHIBIT 99.1
SOUTHDOWN, INC.
1999 PHANTOM STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
SECTION I.
PURPOSES OF PLAN, EFFECTIVE DATE AND DEFINITIONS
1.1 Purpose. The purpose of the Southdown, Inc. 1999 Phantom Stock Plan for
Non-Employee Directors ("Plan") is to provide members of the Board of Directors
who have accrued a benefit under the Southdown, Inc. Directors' Retirement Plan
("Directors' Retirement Plan") the right to relinquish any benefit earned or
accrued under the Directors' Retirement Plan and in the alternative receive a
benefit under this Plan which is Company equity based.
1.2 Effective Date. The Plan shall be effective upon the date of its adoption by
the Board ("Effective Date"), provided that if the March 25, 1999 Amendment to
the Southdown, Inc. 1991 Nonqualified Stock Option Plan for Non-Employee
Directors ("Option Plan Amendment") is not approved by the shareholders of the
Company at the Annual Meeting of the Shareholders of the Company in 1999 as
provided in paragraph 3 thereof, this Plan shall be null and void and have no
effect.
1.3 Definitions. For purposes of this Plan, the following phrases or terms shall
have the indicated meanings unless otherwise clearly apparent from the context.
(a) "Beneficiary" means any person or persons so designated in
accordance with the provisions of Section 4.4.
(b) "Board" means the Board of Directors of the Company.
(c) "Change of Control" means the occurrence of the following: (a) a
Change in Control is reported by the Company in response to either Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended ("Exchange Act") or Item 1 of Form 8-K promulgated under the
Exchange Act; (b) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing forty percent or more of the combined voting power of
the Company's then outstanding securities; or (c) following the election or
removal of directors, a majority of the Board consists of individuals who were
not members of the Board two (2) years before such election or removal, unless
the election of each director who was not a director at the beginning of such
two-year period has been approved in advance by directors representing at least
a majority of the directors then in office who were directors at the beginning
of the two-year period.
(d) "Common Stock" means the common stock of the Company, $1.25 par
value.
<PAGE> 2
(e) "Election" means the execution and delivery to the Company of the
Election Statement in the form attached hereto as Exhibit "A" whereby a
Participant relinquishes and forfeits all of his or her rights under the
Directors' Retirement Plan and elects a Phantom Stock Benefit under the Plan.
(f) "Fair Market Value" means the average (mean) of the reported "high"
and "low" sales prices for a share of Common Stock as reported in The Wall
Street Journal's NYSE-Composite Transactions listing for such day (corrected for
obvious typographical errors), or if shares of Common Stock are not reported in
such listing, the average of the reported "high" and "low" sales prices on the
largest national securities exchange (based on the aggregate dollar value of
securities listed) on which such shares are listed or traded, or if such shares
are not listed or traded on any national securities exchange, then the average
of the reported "high" and "low" sales prices for such shares in the
over-the-counter market, as reported on the National Association of Securities
Dealers Automated Quotations System, or, if such prices shall not be reported
thereon, the average between the closing bid and asked prices so reported, or,
if such prices shall not be reported, then the average closing bid and asked
prices reported by the National Quotation Bureau Incorporated, or, in all other
cases, the value established by the Board in good faith.
(g) "Participant" means each member of the Board who relinquishes and
forfeits all of his or her rights under the Directors' Retirement Plan and
elects a benefit under the Plan.
(h) "Phantom Stock Benefit" means the benefits provided under Section
IV of the Plan.
(i) "Plan Year" means the twelve month period commencing on January 1st
and ending December 31st.
(j) "Stock Unit" means a right to receive one share of Common Stock.
SECTION II.
ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board. Subject to the terms of
the Plan, the Board shall have the power to interpret the provisions and
supervise the administration of the Plan. All decisions made by the Board
pursuant to the provisions of the Plan shall be made by its members at a duly
held regular or special meeting or by written consent in lieu of any such
meeting. A majority of the Directors in office shall constitute a quorum and all
decisions made by the Board pursuant to provisions of the Plan shall be made by
a majority of directors present at any duly held regular or special meeting at
which a quorum is present (unless the concurrence of a greater proportion is
required by law or by the articles or bylaws of the Company) or by the written
consent of a majority of the directors in lieu of any such meeting.
2
<PAGE> 3
SECTION III.
COMMON STOCK RESERVED FOR THE PLAN
3.1 Reserved. The aggregate number of shares of Common Stock that may
be issued under the Plan shall not exceed 24,145, provided that after the time
for the Participants to elect the Phantom Stock Benefit, the aggregate number of
shares of Common Stock that may be issued shall not exceed the aggregate number
of shares of Common Stock which may be issued under all Participant Elections
and pursuant to Section 4.2. The Company shall at all times reserve a sufficient
number of shares of Common Stock out of the Company's treasury shares to satisfy
the requirements of the Plan.
3.2 Common Stock Offered. The Common Stock to be delivered pursuant to
the Plan shall only be treasury shares of Common Stock, shares previously issued
and outstanding and reacquired by the Company.
3.3 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Common Stock that occurs after the Effective Date by
reason of a Common Stock dividend or split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate
change, the aggregate number of shares of Common Stock or other securities
subject to a Stock Unit shall be adjusted appropriately by the Board, whose
determination shall be conclusive.
SECTION IV.
PHANTOM STOCK BENEFIT
4.1 Award of Stock Units. Upon a Participant completing and delivering
to the Company the Election Statement and electing the Phantom Stock Benefit,
the Participant will be awarded the number of Stock Units stated by the Company
in his or her Election Statement, which number of Stock Units shall be
calculated as set forth on Exhibit "B". The Company shall maintain an account
("Account") for each Participant electing the Phantom Stock Benefit which will
reflect the current number of Stock Units maintained on behalf of a Participant
at any time.
4.2 Dividend - Stock Units. Upon the payment of any cash dividend by the
Company to holders of Common Stock, a Participant will be awarded a number of
Stock Units to be added to such Participant's Account in an amount equal to the
product of (i) the number of Stock Units held in a Participant's Account on the
date the cash dividend was declared (rounded down to the nearest whole share),
multiplied by (ii) a fraction, where the numerator is the amount of cash
dividend paid on one share of Common Stock and the denominator is the Fair
Market Value of a share of Common Stock on the date the cash dividend was paid
by the Company to the holders of Common Stock.
3
<PAGE> 4
4.3 Distribution of Phantom Stock Benefits.
(a) Cessation from Board. The Phantom Stock Benefit shall
terminate and be of no force and effect on the Participant's termination
of service as a Director of the Company for any reason (other than by
death or disability) prior to a Change of Control of the Company if the
Participant at such time has not served on the Board for an aggregate of
at least sixty (60) months since his or her initial election to the
Board. Within ten (10) days from the date a Participant ceases to serve
on the Board by reason of death or disability or after a Change of
Control, the Company shall deliver a certificate or certificates to such
Participant (or in the case of death, as provided in Section 4.4) for a
number of shares of Common Stock equal to the total number of Stock
Units (rounded up to the nearest whole Stock Unit) in such Participant's
Account as of the date the Participant's service on the Board ceased.
(b) Termination of the Plan. If the Plan is terminated pursuant
to Section 5.2, within ten (10) days from the date of such termination
of the Plan ("Plan Termination Date"), the Company shall deliver a
certificate or certificates to each Participant for a number of shares
of Common Stock equal to the total number of Stock Units (rounded up to
the nearest whole Stock Unit) in a Participant's Account as of the Plan
Termination Date.
4.4 Beneficiary. In the event of the death of a Participant before
delivery of a certificate or certificates of Common Stock pursuant to Sections
4.3(a) or (b) above, the Company shall deliver the shares of Common Stock to the
individual designated as Primary Beneficiary on the latest executed "Notice of
Change of Beneficiary" form on file with the Company within a reasonable time
period, but no later than 180 days after the date of death of the Participant.
If the Primary Beneficiary designated on the latest executed "Notice of Change
of Beneficiary" form is no longer living, the Company shall deliver the shares
of Common Stock to the individual designated as Secondary Beneficiary on the
latest executed "Notice of Change of Beneficiary" form on file with the Company.
If the Second Beneficiary designated on the latest executed "Notice of Change of
Beneficiary" form is no longer living, the Company shall deliver the shares of
Common Stock to the Participant's estate. If a Participant desires to change the
Beneficiary he or she has previously designated, the Participant may do so at
any time by submitting a new "Notice of Change of Beneficiary" form to the Board
of Directors.
4.5 Phantom Stock Benefits Payable from General Assets. Phantom Stock
Benefits hereunder shall be paid exclusively from the general assets of the
Company, and no person entitled to payment hereunder shall have any claim,
right, security interest, or other interest in any fund, trust, account,
insurance contract, or asset of the Company which may be looked to for such
payment. The Company's liability for the payment of Phantom Stock Benefits
hereunder shall be evidenced only by this Plan. A Participant shall have only
the right of a general unsecured creditor of the Company with respect to any
rights to Phantom Stock Benefits under the Plan. Nothing contained in the Plan
shall constitute a guaranty by the Company or any other entity or person that
the assets of the Company will be sufficient to pay Phantom Stock Benefits
hereunder.
4
<PAGE> 5
4.6 Nonalienation of Phantom Stock Benefits. No right or benefit under
the Phantom Stock Benefit shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge the same will be void. No
right or benefit hereunder shall in any manner be liable for or subject to any
debts, contracts, liabilities or torts of the person entitled to such benefits.
If any Participant or Beneficiary hereunder shall become bankrupt or attempt to
anticipate, alienate, assign, sell, pledge, encumber or charge any right of
benefit hereunder, or if any creditor shall attempt to subject the same to a
writ of garnishment, attachment, execution, sequestration or any other form of
process or involuntary lien or seizure, then such right or benefit shall be held
by the Company for the sole benefit of the Participant or the Beneficiary, his
or her spouse, children or other dependents, or any of them in such manner and
in such proportion as the Board shall deem proper, free and clear of the claims
of any other party whatsoever.
SECTION V.
MISCELLANEOUS
5.1 Prerequisites to Benefits. No Participant, or any person claiming
through a Participant, shall have any right or interest in the Plan or any
benefits hereunder unless and until all the terms, conditions and provisions of
the Plan that affect such Participant or such other person shall have been
complied with as specified herein. The Participant shall complete such forms and
furnish such information as the Board may require in the administration of the
Plan.
5.2 Amendment or Termination of the Plan. The Board may amend or
terminate this Plan at any time. Any amendment or termination of this Plan shall
not, however, affect the rights of any Participant to the Phantom Stock Benefit
then standing to the credit of any such Participant at the time of such
amendment or termination.
5.3 Governing Law. The Plan is established under, and the validity,
interpretation and performance of this Plan shall be determined and governed
exclusively by, the laws of the State of Texas, without reference to the
principles of conflict of laws. Exclusive jurisdiction with respect to any legal
proceeding brought by a Participant, or any party representing Participant or
claiming to have an interest in Participant's benefits under the Plan, shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association, and judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction. In reaching his
or her decision, the arbitrator shall have no authority to change or modify any
provision of this Plan. In addition, any and all charges which may be made for
the cost of the arbitration and the fees and expenses of the arbitrator shall be
borne equally by the parties. Jurisdiction with respect to any legal proceeding
brought by the Company concerning any subject matter contained in this Plan
shall rest in state or federal courts sitting in the State of Texas or in any
jurisdiction where Participant resides, does or has done business, or owns
property. Also, the Company, at its election, may submit any dispute it has with
a Participant or claiming party to arbitration in accordance with the procedures
set forth in this Section.
5.4 Severability. All provisions herein are severable and in the event
any one of them shall be held invalid by any court of competent jurisdiction,
the Plan shall be interpreted as if such invalid provisions was not contained
herein.
5
<PAGE> 6
5.5 Headings. The headings of the sections of this Plan are inserted
for convenience only and shall not be deemed to constitute a part of this Plan.
5.6 Non-Waiver. Failure on the part of any party in any one or more
instances to enforce any of its rights which arise in connection with this Plan
or to insist upon the strict performance of any of its terms, conditions, or
covenants of this Plan shall not be construed as a waiver or a relinquishment
for the future of any such rights, terms, conditions, or covenants. No waiver of
any condition of this Plan shall be valid unless it is in writing.
5.7 Plan on File. The Company shall place this Plan on file in the
office of its principal place of business.
5.8 Notices. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested. Notices
delivered personally shall be deemed communicated as of actual receipt; mailed
notices shall be deemed communicated as of three (3) days after mailing.
5.9 Date of Adoption. This plan is adopted by the Board on March 25,
1999.
Approved: Date:
-------------------------------- ---------------------------
6
<PAGE> 7
EXHIBIT "A"
ELECTION STATEMENT
FOR THE
SOUTHDOWN, INC.
1999 PHANTOM STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
I,________________________, hereby elect to participate in the
Southdown, Inc. 1999 Phantom Stock Plan for Non-Employee Directors ("Plan") as
set forth below, and for and in consideration of my participation in the Plan,
I, on my own behalf and on behalf of any of my related family members or
beneficiaries, hereby KNOWINGLY and VOLUNTARILY RELEASE, ACQUIT, and FOREVER
DISCHARGE Southdown, Inc., and any successors thereto, from any and all
benefits, obligations, or liabilities which are or may be due me or any of my
related family members or beneficiaries under the Southdown, Inc. Directors'
Retirement Plan.
Under the Plan, I hereby elect [check if you wish to elect]
[ ] Phantom Stock Benefit -- ____ Stock Units are awarded to me under
the Plan. [Blank to be completed by the Company as provided in
Exhibit "B" to the Plan.]
IF YOU WISH TO PARTICIPATE IN THE PLAN, THIS ELECTION STATEMENT MUST BE
COMPLETED AND RETURNED TO PATRICK BULLARD OF THE COMPANY BY ["X" DAYS AFTER THE
1999 ANNUAL SHAREHOLDERS MEETING].
Note: If you do not wish to participate in the Plan, do not complete or sign
this Election Statement.
Director
------------------------------------
Name:
-------------------------------
Date:
-------------------------------
<PAGE> 8
EXHIBIT "B"
CALCULATION OF NUMBER OF
PHANTOM STOCK UNITS
<TABLE>
<CAPTION>
NAME OF PRESENT VALUE OF
NON-EMPLOYEE RETIREMENT BENEFIT
DIRECTORS FOREGONE
--------- --------
<S> <C>
Robert S. Evans $ 14,511
Robert G. Potter $ 53,284
Frank J. Ryan $ 531,039
M. Whitson Sadler $ 48,183
Robert J. Slater $ 104,216
David J. Tippeconnic $ 50,669
George E. Uding, Jr $ 24,000
V. H. Van Horn, III $ 161,652
Steven B. Wolitzer $ 48,998
</TABLE>
NUMBER OF PHANTOM STOCK UNITS
Each Non-Employee Director listed above may elect to receive a number of Phantom
Stock Units calculated as set forth below:
<TABLE>
<S> <C> <C>
Present Value of Retirement Benefit
Foregone, as set forth above x 1.25 (for risk adjustment) = Number of Phantom
- ---------------------------------------- Stock Units
Average Fair Market Value per share of
Common Stock on the ten trading days
following March 25, 1999 [date Plan
approved by Board]
</TABLE>
