UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of the earliest event reported)
October 5, 2004
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NL Industries, Inc.
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(Exact name of Registrant as specified in its charter)
New Jersey 1-640 13-5267260
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(972) 233-1700
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
Pursuant to a Subscription Agreement (the "Subscription Agreement")
executed on October 5, 2004 but effective as of October 1, 2004, among NL
Industries, Inc., a New Jersey corporation ("NL"), TIMET Finance Management
Company, a Delaware corporation ("TFMC"), and CompX Group, Inc., a newly formed
Delaware corporation ("CGI"), NL and TFMC initially capitalized CGI by each
contributing to CGI effective October 1, 2004 the following shares (the "CompX
Shares") of either class A or class B common stock, par value $0.01 per share,
of CompX International Inc., a Delaware corporation ("CompX"), and receiving in
return for such initial capitalization of CGI the following shares of the common
stock, par value $0.01 per share of CGI (the "CGI Shares").
CGI
Shares Shares Shares Issued
of CompX of CompX to such CGI
Class A Class B Stockholder in
Common Stock Common Stock Exchange for the
CGI Contributed Contributed CompX Shares
Stockholder to CGI to CGI Contributed
--------------- --------------- --------------- ---------------
NL......................... 374,000 10,000,000 10,374.00
TFMC....................... 2,212,820 0 2,212.82
As a result of the initial contribution, NL and TFMC became the sole CGI
stockholders and record holders of 82.4% and 17.6% of the outstanding common
stock of CGI, respectively.
Pursuant to the Subscription Agreement, CGI agreed that it would not sell
any of the CompX Shares contributed to CGI by TFMC (as such number of CompX
Shares may be adjusted from time to time pursuant to stock splits of, stock
dividends on, or recapitalizations of, such CompX Shares) pursuant to the
Subscription Agreement without the express written consent of TFMC. In addition,
in accordance with the Subscription Agreement, the parties entered into a Voting
Agreement executed on October 5, 2004 but effective as of October 1, 2004 (the
"Voting Agreement").
The terms of the Voting Agreement provide that:
(1) NL will vote all of its CGI Shares to elect as a director of CGI one
person designated in writing by TFMC;
(2) The initial person designated by TFMC to be elected a director of CGI
would be J. Landis Martin; and
(3) The CGI board of directors would be comprised of five persons and each
CGI stockholder would take or cause to be taken all action to:
(i) require that the certificate of incorporation and bylaws of CGI
provides for a board of directors of five persons; and
(ii) ensure at all times that the certificate of incorporation and
bylaws of CGI would not at any time be inconsistent with the
provisions of the Voting Agreement.
Pursuant to CGI's certificate of incorporation (the "Certificate of
Incorporation"), upon the written request of a CGI stockholder, CGI is obligated
to redeem such number of the stockholder's shares of CGI common stock that the
stockholder requests. The CGI stockholder is also entitled to elect to receive
as part of the redemption price such number of shares of the CompX class A or
class B common stock, the stockholder or its predecessor holders or assigns
contributed to CGI that is equal to the product of 1,000 (equitably adjusted for
any applicable stock splits of, stock dividends on, or recapitalizations of,
CompX common stock) and the number of shares to be redeemed. CGI's board of
directors is then obligated to determine in good faith and in its best business
judgment the redemption price. Pursuant to the Certificate of Incorporation, in
determining the redemption price, the board of directors shall value each share
of CompX common stock held by CGI (both the CompX class A and class B shares of
common stock) at the volume weighted average sales price of a share of CompX
class A common stock as reported on the New York Stock Exchange composite
transactions reporting system for the ten trading days ending on the day CGI
receives the redemption request.
With the initial capitalization of CGI, NL and CompX became eligible to
file consolidated returns of federal income taxes with Contran Corporation, a
Delaware corporation and the parent of NL and CompX ("Contran"). Concurrently
with the initial capitalization of CGI, CompX, NL and Contran entered into a Tax
Agreement executed on October 5, 2004 but effective as of October 1, 2004 (the
"Tax Agreement"). The Tax Agreement provides that NL and its qualifying
subsidiaries, including CompX, compute provisions for U.S. income taxes on a
separate-company basis using the tax elections made by Contran. Pursuant to the
Tax Sharing Agreement and using the tax elections made by Contran, CompX will
make payments to, or receive payments from NL, in amounts it would have paid to
or received from the U.S. Internal Revenue Service had it not been a member of
NL's consolidated tax group but instead was a separate taxpayer. Refunds to
CompX are generally limited to amounts previously paid under the Tax Sharing
Agreement.
The descriptions of the Subscription Agreement, the Voting Agreement, the
Certificate of Incorporation and the Tax Agreement in this report are qualified
in their entirety by the terms of the actual documents filed as Exhibits 99.1
through 99.4 to this report and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Item No. Exhibit Index
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99.1 Subscription Agreement executed on October 5, 2004 but effective
as of October 1, 2004 among NL Industries, Inc., TIMET Finance
Management Company and CompX Group, Inc. Not all of the exhibits
to this Exhibit 99.1 have been filed; upon request, the
registrant will furnish supplementally to the Securities and
Exchange Commission a copy of the omitted exhibits.
99.2 Voting Agreement executed on October 5, 2004 but effective as
of October 1, 2004 among NL Industries, Inc., TIMET Finance
Management Company and CompX Group, Inc.
99.3 Certificate of Incorporation of CompX Group, Inc.
99.4 Tax Agreement executed on October 5, 2004 but effective as
of October 1, 2004 among NL Industries, Inc., Contran Corporation
and CompX International Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NL Industries, Inc.
(Registrant)
By: /s/ Gregory M. Swalwell
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Gregory M. Swalwell
Vice President, Finance and
Chief Financial Officer
Date: October 8, 2004
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Subscription Agreement executed on October 5, 2004 but effective
as of October 1, 2004 among NL Industries, Inc., TIMET Finance
Management Company and CompX Group, Inc. Not all of the exhibits
to this Exhibit 99.1 have been filed; upon request, the registrant
will furnish supplementally to the Securities and Exchange
Commission a copy of the omitted exhibits.
99.2 Voting Agreement executed on October 5, 2004 but effective as of
October 1, 2004 among NL Industries, Inc., TIMET Finance
Management Company and CompX Group, Inc.
99.3 Certificate of Incorporation of CompX Group, Inc.
99.4 Tax Agreement dated as of October 1, 2004 among NL Industries,
Inc., Contran Corporation and CompX International Inc.