-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BbbEeuUqZQGvWWMoYMoVuSMMh9qD3KZo8GSZ6t/QyIK3oKNZVP0yI4efL/Vt6WXL e6cygjS3ZD+q61vWCMRFlQ== 0000950129-99-002365.txt : 19990521 0000950129-99-002365.hdr.sgml : 19990521 ACCESSION NUMBER: 0000950129-99-002365 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19990520 EFFECTIVENESS DATE: 19990520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHDOWN INC CENTRAL INDEX KEY: 0000313058 STANDARD INDUSTRIAL CLASSIFICATION: CEMENT, HYDRAULIC [3241] IRS NUMBER: 720296500 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-78887 FILM NUMBER: 99631061 BUSINESS ADDRESS: STREET 1: 1200 SMITH ST STE 2400 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7136506200 MAIL ADDRESS: STREET 1: 1200 SMITH STREET SUITE 2400 CITY: HOUSTON STATE: TX ZIP: 77002 S-8 1 SOUTHDOWN, INC. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 20, 1999 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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) 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)
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) --------------------- CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- 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 - --------------------------------------------------------------------------------------------------------------------- Common Stock, $1.25 par value(1).... 24,145 shares(2) $63.41(3) $1,531,034(3) $426(3) - --------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------
(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. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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 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*
EXHIBIT NO. DESCRIPTION ------- ----------- 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.
3 4 - --------------- * 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 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.
SIGNATURE TITLE DATE --------- ----- ---- /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 - --------------------------------------------------- Robert G. Potter /s/ FRANK J. RYAN Director May 20, 1999 - --------------------------------------------------- Frank J. Ryan /s/ WHITSON SADLER Director May 20, 1999 - --------------------------------------------------- Whitson Sadler /s/ ROBERT J. SLATER Director May 20, 1999 - --------------------------------------------------- Robert J. Slater
5 6
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. TIPPECONNIC Director May 20, 1999 - --------------------------------------------------- David J. Tippeconnic /s/ J. BRUCE TOMPKINS Director May 20, 1999 - --------------------------------------------------- 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
6 7 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION -------------- ----------- 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.
EX-15 2 LETTER OF DELOITTE & TOUCHE LLP 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 EX-23.1 3 CONSENT OF DELOITTE & TOUCHE LLP 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 EX-99.1 4 1999 PHANTOM STOCK PLAN FOR NON-EMPLOYEE DIRECTORS 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. 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 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 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 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 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 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: ------------------------------- 8 EXHIBIT "B" CALCULATION OF NUMBER OF PHANTOM STOCK UNITS
NAME OF PRESENT VALUE OF NON-EMPLOYEE RETIREMENT BENEFIT DIRECTORS FOREGONE --------- -------- 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
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: 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]
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