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
----------------
NL Industries, Inc.
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(Exact name of Registrant as specified in its charter)
New Jersey 1-640 13-5267260
- ------------------- ------------------ -----------------
(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
----------------------------
Gregory M. Swalwell
Vice President, Finance and
Chief Financial Officer
Date: October 8, 2004
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- --------------------------------------------------
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.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (the "Agreement") is 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 together with NL, the "Stockholders"), and CompX Group,
Inc., a Delaware corporation ("CGI").
Recitals
A. The Stockholders are beneficial owners of 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").
B. Each of the Stockholders wishes to subscribe for one thousandth of a
share of common stock, par value $0.01 per share, of CGI (the "CGI Shares"), for
each CompX Share they contribute to CGI on the terms and subject to the
conditions of this Agreement (each time a contribution is made shall be referred
to as a "Transaction").
C. The certificate of incorporation and the bylaws of CGI, to which the
Stockholders have agreed in connection with the transactions contemplated by
this Agreement are attached as Exhibits A and B, respectively, to this
Agreement.
Agreement
The parties agree as follows:
ARTICLE I.
THE TRANSACTION
Section 1.1. Initial Contribution of CompX Shares for CGI Shares. In
consideration of CGI's issuance of one thousandth of a CGI Share for each CompX
Share the Stockholders contribute to CGI on the date hereof, each of NL and TFMC
hereby contributes and delivers to CGI the following CompX Shares:
Shares of CompX Shares of CompX Total CompX
Class A Class B Shares
Stockholder Common Stock Common Stock Contributed
- ---------------- -------------- -------------- --------------
NL.............. 374,000 10,000,000 10,374,000
- ---------------- -------------- -------------- --------------
TFMC............ 2,212,820 0 2,212,820
- ---------------- -------------- -------------- --------------
Certificates representing such CompX Shares are hereby delivered accompanied by
stock powers duly endorsed in blank or the holder has made an irrevocable
request to transfer such CompX Shares to such brokerage accounts designated by
CGI.
Section 1.2. Subsequent Contributions of CompX Shares for CGI Shares. In
consideration of CGI's issuance of one thousandth of a CGI Share for each CompX
Share the Stockholders may contribute to CGI in the future, each of the
Stockholders may in the future contribute and deliver CompX Shares to CGI.
Certificates representing such CompX Shares shall be delivered accompanied by
stock powers duly endorsed in blank or the holder shall make an irrevocable
request to transfer such CompX Shares to such brokerage accounts designated by
CGI on the date of the respective contribution.
Section 1.3. Voting Agreement. Each of the parties as a condition to all
Transactions shall execute and deliver to the other parties a Voting Agreement
substantially in the form of Exhibit C attached hereto (the "Voting Agreement").
Section 1.4. Sales of CompX Shares Contributed by TFMC. CGI agrees that it
will 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 this
Agreement without the express written consent of TFMC.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each of the Stockholders hereby individually represents and warrants to CGI
as of the date of this Agreement, and each time a Stockholder subsequently
contributes CompX Shares to CGI as though made on the date of such contribution,
as follows.
Section 2.1. Authority. It is validly existing and in good standing under
the laws of the state of its incorporation. It has the power and authority,
without the consent or approval of any other person, to execute and deliver this
Agreement and to consummate the respective Transaction. All action required to
be taken by or on behalf of it to authorize the execution, delivery and
performance of this Agreement and the respective Transaction has been duly and
properly taken.
Section 2.2. Validity. This Agreement is duly executed and delivered by it
and constitutes its lawful, valid and binding obligation, enforceable in
accordance with its terms. The execution and delivery of this Agreement and the
consummation of the respective Transaction by it are not prohibited by, do not
violate or conflict with any provision of, and do not result in a default under
(a) its charter or bylaws; (b) any material contract, agreement or other
instrument to which it is a party or by which it is bound; (c) any order, writ,
injunction, decree or judgment of any court or governmental agency applicable to
it; or (d) any law, rule or regulation applicable to it, except in each case for
such prohibitions, violations, conflicts or defaults that would not have a
material adverse consequence to the respective Transaction.
Section 2.3. Ownership of CompX Shares. It is the beneficial owner of the
CompX Shares it will contribute to CGI in the respective Transaction and upon
consummation of the respective Transaction CGI will acquire good and marketable
title to such CompX Shares free and clear of any liens, encumbrances, security
interests, restrictive agreements, claims or imperfections of any nature
whatsoever, other than restrictions on transfer imposed by applicable securities
laws and any liens of third party lending institutions exiting as of the date
hereof that have been disclosed to the other parties to this Agreement.
Section 2.4. Acquisition for Investment. It is acquiring the CGI Shares
issued and delivered to it in the respective Transaction for investment solely
for its own account and not with a view to, or for resale in connection with,
the distribution thereof. It understands that such CGI Shares are restricted
securities under the Securities Act of 1933, as amended (the "Securities Act"),
and that such CGI Shares must be held indefinitely unless they are registered
under the Securities Act and any applicable state securities or blue sky laws or
an exemption from such registration is available.
Section 2.5. Nature of Stockholder. It has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the acquisition of CGI Shares issued and delivered to it in the
respective Transaction.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF CGI
CGI hereby represents and warrants to each of the Stockholders as of the
date of this Agreement, and each time a Stockholder subsequently contributes
CompX Shares to CGI as though made on the date of such contribution, as follows.
Section 3.1. Authority. It is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of its incorporation.
It has the corporate power and authority, without the consent or approval of any
other person, to execute and deliver this Agreement and to consummate the
respective Transaction. All corporate action required to be taken by or on
behalf of it to authorize the execution, delivery and performance of this
Agreement and the respective Transaction has been duly and properly taken.
Section 3.2. Validity. This Agreement is duly executed and delivered by it
and constitutes its lawful, valid and binding obligation, enforceable in
accordance with its terms. The execution and delivery of this Agreement and the
consummation of the respective Transaction by it are not prohibited by, do not
violate or conflict with any provision of, and do not result in a default under
(a) its charter or bylaws; (b) any material contract, agreement or other
instrument to which it is a party or by which it is bound; (c) any order, writ,
injunction, decree or judgment of any court or governmental agency applicable to
it; or (d) any law, rule or regulation applicable to it, except in each case for
such prohibitions, violations, conflicts or defaults that would not have a
material adverse consequence to the respective Transaction.
Section 3.3. Issuance of CGI Shares. Upon the consummation of each
Transaction, the CGI Shares issued in such Transaction will be validly issued,
fully paid and non-assessable shares and the respective Stockholder receiving
such shares will acquire good and marketable title to such shares free and clear
of any liens, encumbrances, security interests, restrictive agreements, claims
or imperfections of any nature whatsoever, other than restrictions on transfer
imposed by applicable securities laws, except that NL's CGI Shares will be
subject to the restrictions of the Voting Agreement.
Section 3.4. Acquisition for Investment. It is acquiring the CompX Shares
contributed and delivered to it in the respective Transaction for investment
solely for its own account and not with a view to, or for resale in connection
with, the distribution thereof. It understands that such CompX Shares are
restricted securities under the Securities Act and that such CompX Shares must
be held indefinitely unless they are registered under the Securities Act and any
applicable state securities or blue sky laws or an exemption from such
registration is available.
Section 3.5. Nature of CGI. It has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the acquiring of the CompX Shares contributed and delivered to it in
the respective Transaction.
ARTICLE IV.
GENERAL PROVISIONS
Section 4.1. Restricted Shares. Each of the Stockholders hereby consents to
the placing of a legend on any stock certificates evidencing CGI Shares issued
to it in a Transaction stating that such CGI Shares are restricted securities.
NL agrees to the placing of a legend on any stock certificates evidencing its
CGI Shares stating that such CGI Shares are subject to the Voting Agreement.
Section 4.2. Access to Information. Each of the Stockholders shall provide
CGI and its representatives access to all information with respect to the
business of CompX possessed by such party and reasonably requested by CGI. CGI
shall provide each of the Stockholders and its respective representatives access
to all information with respect to the business of CGI possessed by CGI and
reasonably requested by such Stockholder.
Section 4.3. Survival. The representations and warranties set forth in this
Agreement shall survive the execution of this Agreement and the consummation of
the transactions contemplated herein.
Section 4.4. Amendment and Waiver. No amendment or waiver of any provision
of this Agreement shall in any event be effective unless the same shall be in a
writing referring to this Agreement and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 4.5. Parties and Interest. This Agreement shall bind and inure to
the benefit of the parties named herein and their respective successors and
assigns.
Section 4.6. Entire Agreement. This Agreement contains the entire
understanding among the parties with respect to the transactions contemplated
hereby and supersedes all other agreements and understandings among the parties
with respect to the subject matter of this Agreement.
Section 4.7. Applicable Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the state of Delaware, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the state of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the state of Delaware.
Section 4.8. Severability. If any provision of this Agreement is found to
violate any statute, regulation, rule, order or decree of any governmental
authority, court, agency or exchange, such invalidity shall not be deemed to
effect any other provision hereof or the validity of the remainder of this
Agreement and such invalid provision shall be deemed deleted to the minimum
extent necessary to cure such violation.
Section 4.9. Notice. All notices and other communications that are required
to be or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered in person or transmitted by
confirmed telecopy or upon receipt after dispatch by overnight courier or by
certified or registered mail, postage prepaid, to the party to whom the notice
is given. Notices shall be given to the address for the respective party
appearing under the party's signature to this Agreement or to such other address
as such party may designate by giving notice of such change of address to the
other parties to this Agreement.
Section 4.10. Headings. The sections and other headings contained in this
Agreement are for reference purposes only and shall not effect in any way the
meaning or interpretation of this Agreement.
Section 4.11. Counterparts. This Agreement may be executed in counterparts
each of which will be an original and all of which taken together shall
constitute one and the same agreement.
Section 4.12. Expenses. Except as otherwise expressly provided herein, each
party to this Agreement shall pay its own costs and expenses in connection with
the transactions contemplated hereby.
The parties hereto have caused this Agreement to be executed by their duly
authorized officers on October 5, 2004 but effective as of October 1, 2004.
NL INDUSTRIES, INC.
By: /s/ Robert D. Graham
---------------------------------
Robert D. Graham, Vice President,
General Counsel and Secretary
Address: Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
FAX: 972.448.1445
Attention: General Counsel
TIMET FINANCE MANAGEMENT COMPANY
By: /s/ Gregory M. Swalwell
---------------------------------
Gregory M. Swalwell, Vice President
Address: 103 Foulk Road, Suite 101
Wilmington, Delaware 19803
FAX: 972.448.1445
Attention: General Counsel
COMPX GROUP, INC.
By: /s/ Robert D. Graham
---------------------------------
Robert D. Graham, Vice President,
General Counsel and Secretary
Address: Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
FAX: 972.448.1445
Attention: General Counsel
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement") is 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 together with NL, the "Stockholders"), and CompX Group, Inc., a
Delaware corporation ("CGI"). Unless otherwise provided in this Agreement,
certain capitalized terms used herein are defined in Section 8.
Recitals
The parties hereto desire to enter into this Agreement to establish a
mechanism to elect as a director of CGI one person designated in writing by
TFMC.
Agreement
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows.
Section 1. Voting for Directorship. NL agrees to vote all of its CGI
Shares, and will take all other necessary or desirable actions within its
control, to elect as a director of CGI one person designated in writing by TFMC.
The parties agree that the initial person designated by TFMC to be elected a
director of CGI is J. Landis Martin. If in the future more than one person holds
TFMC's CGI Shares, such persons must jointly agree on one designee that they
desire to have NL elect as a director of CGI and notify NL in writing of such
designee before NL is obligated to elect such designee under this section.
Section 2. Size of Board of Directors; Governing Instruments. The
Stockholders hereby agree (a) that the board of directors shall be comprised of
five (5) persons as directors, and each Stockholder shall take or cause to be
taken all action to require that the certificate of incorporation and bylaws of
CGI shall so provide and (b) to ensure at all times that the certificate of
incorporation and bylaws of CGI are not at any time inconsistent with the
provisions of this Agreement.
Section 3. Impairment. NL agrees that it will not vote or otherwise consent
or take action with respect to its CGI Shares to amend CGI's certificate of
incorporation or bylaws in a manner that would affect the voting rights of CGI's
stockholders.
Section 4. Transfer of Shares. NL agrees that the agreement relating to the
voting of its CGI Shares evidenced by this Agreement shall encumber such shares,
and that any permitted successor, assignee, or transferee shall take such shares
subject to this Agreement. In addition, each party agrees to cause any permitted
successor, assignee, or transferee of such party to become a party to this
Agreement.
Section 5. Term. Unless earlier terminated by agreement of the parties,
this Agreement shall remain in effect for as long as TFMC or its permitted
successors, assigns and transferees hold CGI Shares.
Section 6. Legend. Each certificate evidencing NL's CGI Shares and each
certificate issued in exchange for or upon the transfer of such CGI Shares (if
such shares remain subject to the terms of this Agreement after such transfer)
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A VOTING
AGREEMENT ("AGREEMENT") DATED AS OF OCTOBER 1, 2004 AMONG THE ISSUER
OF SUCH SECURITIES (THE "ISSUER") AND THE ISSUER'S SECURITY HOLDERS. A
COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER
TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
The legend set forth above shall be removed from the certificates evidencing CGI
Shares that cease to be subject to the terms of this Agreement or the
termination of this Agreement.
Section 7. Specific Performance. NL agrees that the remedy at law for any
breach by it of this Agreement will be inadequate and that, in addition to any
other remedies TFMC might have, TFMC shall be entitled, without the necessity of
proving actual damages, to specific performance and injunctive relief to prevent
the breach of any provisions of this Agreement.
Section 8. Definitions.
"Common Stock" means CGI's common stock, par value $0.01 per share.
"Stockholder" means any stockholder of CGI who is subject to the terms of
this Agreement.
"CGI Shares" means any Common Stock and any other voting securities of CGI
acquired by any Stockholder. As to any particular shares constituting CGI
Shares, such shares will cease to be subject to this Agreement if and when they
have been acquired by CGI.
Section 9. Miscellaneous.
(a) Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement will be
effective against a Stockholder, unless such modification, amendment or waiver
is approved in writing by such Stockholder. The failure of any party to enforce
any of the provisions of this Agreement will in no way be construed as a waiver
of such provisions and will not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.
(b) Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Entire Agreement. This Agreement contains the entire understanding
among the parties with respect to the transactions contemplated hereby and
supersedes all other agreements and understandings among the parties with
respect to the subject matter of this Agreement.
(d) Successors and Assigns. Except as otherwise provided herein, this
Agreement will bind and inure to the benefit of and be enforceable by CGI and
its successors and assigns, and the Stockholders and any subsequent holders of
CGI Shares, and the respective successors and assigns of each of them, so long
as they hold CGI Shares.
(e) Counterparts. This Agreement may be executed in counterparts each of
which will be an original and all of which taken together shall constitute one
and the same agreement.
(f) Notice. All notices and other communications that are required to be or
may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person or transmitted by confirmed
telecopy or upon receipt after dispatch by overnight courier or by certified or
registered mail, postage prepaid, to the party to whom the notice is given.
Notices shall be given to the address for the respective party appearing under
the party's signature to this Agreement or to such other address as such party
may designate by giving notice of such change of address to the other parties to
this Agreement.
(g) Applicable Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the state of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
state of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the state of Delaware.
(h) Headings. The sections and other headings contained in this Agreement
are for reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
The parties hereto have caused this Agreement to be executed by their duly
authorized officers on October 5, 2004 but effective as of October 1, 2004.
NL INDUSTRIES, INC.
By: /s/ Robert D. Graham
----------------------------------
Robert D. Graham, Vice President,
General Counsel and Secretary
Address: Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
FAX: 972.448.1445
Attention: General Counsel
TIMET FINANCE MANAGEMENT COMPANY
By: /s/ Gregory M. Swalwell
----------------------------------
Gregory M. Swalwell, Vice President
Address: 103 Foulk Road, Suite 101
Wilmington, Delaware 19803
FAX: 972.448.1445
Attention: General Counsel
COMPX GROUP, INC.
By: /s/ Robert D. Graham
----------------------------------
Robert D. Graham, Vice President,
General Counsel and Secretary
Address: Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
FAX: 972.448.1445
Attention: General Counsel
CERTIFICATE OF INCORPORATION
OF
CompX Group, Inc.
------------------------------------------------------------------------------
ARTICLE I.
NAME
The name of the corporation is CompX Group, Inc. (the "Corporation").
ARTICLE II.
REGISTERED OFFICE AND AGENT
The address of the Corporation's registered office in the state of Delaware
is Corporation Service Company, 2711 Centerville Road, Suite 400, city of
Wilmington, county of New Castle, state of Delaware 19808. The name of the
Corporation's registered agent at such address is Corporation Service Company.
ARTICLE III.
PURPOSE
The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful business, act or activity for which
corporations may be organized under the General Corporation Law of the state of
Delaware.
ARTICLE IV.
AUTHORIZED STOCK
The Corporation shall have authority to issue thirteen thousand (13,000)
shares of common stock having a par value of one cent ($0.01) per share (the
"Common Stock"). The rights of the holders of common stock are set forth below.
Section 1. Voting Rights. The holders of Common Stock shall be
entitled to one vote per share on all matters to be voted on by the
stockholders of the Corporation.
Section 2. Dividends. The holders of Common Stock shall be entitled to
participate in such dividends and other distributions or proceeds in cash,
stock or property of the Corporation ratably on a per share basis as the
board of directors may declare out of assets or funds legally available
therefor.
Section 3. Liquidation. The holders of Common Stock shall be entitled
to participate ratably on a per share basis in all distributions to the
holders of Common Stock in any liquidation, dissolution or winding up of
the Corporation.
Section 4. Redemption. The Corporation shall redeem shares of Common
Stock on a date (the "Redemption Date") that is on or prior to the 45th day
(if such 45th day is a business day, and if not, the next successive
business day) after the date (the "Redemption Notice Date") that the
Corporation and each other holder of shares of Common Stock receives
written notice (a "Redemption Notice") from a holder of shares of Common
Stock (the "Holder") setting forth the number of shares the Holder wants
the Corporation to redeem (the "Redemption Shares"). After the Redemption
Notice Date, the Holder shall only be entitled to receive from the
Corporation on the Redemption Date the fair market value of the Redemption
Shares on the Redemption Notice Date (the "Redemption Price").
In the Redemption Notice, the Holder may elect (a "CompX Share
Election") to receive as part of the Redemption Price such number of shares
of the class A or class B common stock, par value $0.01 per share, of CompX
International Inc., a Delaware corporation (separately, the "CompX Class A
Common Stock" and the "CompX Class B Common Stock," respectively, and
collectively, the "CompX Common Stock"), contributed by the Holder or its
predecessor holders or assigns 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 Redemption
Shares.
After a Redemption Notice Date but before the Redemption Date, the
board of directors shall determine in good faith and in its best business
judgment the Redemption Price. In determining the Redemption Price, the
board of directors shall value each share of CompX Common Stock held by the
Corporation on the Redemption Notice Date (both the Class A and Class B
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 Redemption Notice Date, if such date is a trading day, and if not, on
the immediately prior trading day (the "CompX Common Stock Value").
If the Holder does not make a CompX Share Election, on the Redemption
Date the Corporation may pay the Redemption Price, in whole or in part, in
cash, shares of CompX Common Stock or other property, which other property
the board of directors shall value in good faith and in its best business
judgment. In determining the fair market value of securities traded on an
exchange that are used to pay the Redemption Price, the board of directors
shall value each such security on the Redemption Notice Date at the volume
weighted average sales price of such security as reported on the applicable
exchange for the ten trading days ending on the Redemption Notice Date, if
such date is a trading day, and if not, on the immediately prior trading
day.
If shares of CompX Common Stock are used to pay all or part of the
Redemption Price, on the Redemption Date:
(a) if the CompX Common Stock Value for such shares is less than
or equal to the Redemption Price, the Corporation shall transfer such
shares to the Holder and such additional cash or property in an amount
equal in value on the Redemption Notice Date, as the board of
directors determines in good faith and in its best business judgment,
to the excess, if any, of the Redemption Price over the CompX Common
Stock Value for such shares;
(b) if the CompX Common Stock Value for such shares is greater
than the Redemption Price, the Corporation shall transfer such shares
to the Holder and the Holder shall pay in cash to the Corporation an
amount equal to the excess of the CompX Common Stock Value for such
shares over the Redemption Price; and
(c) the Corporation shall deliver to the holder a stock
certificate representing the shares of CompX Common Stock comprising
the Redemption Price accompanied by a stock power duly endorsed in
blank and the holder shall acquire good and marketable title to such
shares free and clear of any liens, encumbrances, security interests,
restrictive agreements, claims or imperfections of any nature
whatsoever, other than restrictions on transfer imposed by applicable
securities laws.
On the Redemption Date, the Holder shall deliver to the Corporation a
stock certificate representing the Redemption Shares accompanied by a stock
power duly endorsed in blank and the Corporation shall acquire good and
marketable title to such shares free and clear of any liens, encumbrances,
security interests, restrictive agreements, claims or imperfections of any
nature whatsoever, other than restrictions on transfer imposed by
applicable securities laws.
After the Redemption Notice Date, the Redemption Shares shall not be
deemed to be outstanding and the Holder will only hold a contractual right
from the Corporation to receive the Redemption Price.
Section 5. Protective Provision. The Corporation shall not amend this
Article IV without obtaining the approval of the holders of 90% of the
outstanding shares of Common Stock.
Section 6. Record Holders. The Corporation shall be entitled to treat
the person in whose name any share of its stock is registered as the owner
thereof for all purposes and shall not be bound to recognize any equitable
or other claim to, or interest in, such share on the part of any other
person, whether or not the Corporation shall have notice thereof, except as
expressly provided by applicable law.
ARTICLE V.
EXISTENCE
The Corporation is to have perpetual existence.
ARTICLE VI.
BYLAWS
In furtherance and not in limitation of the powers conferred by statute,
the board of directors is expressly authorized to adopt, amend or repeal the
bylaws or adopt new bylaws.
ARTICLE VII.
MEETINGS OF STOCKHOLDERS
BOOKS OF CORPORATION
ELECTION OF DIRECTORS
Meetings of stockholders may be held within or without the state of
Delaware, as the bylaws of the Corporation may provide. The books of the
Corporation may be kept outside the state of Delaware at such place or places as
may be designated from time to time by the board of directors or in the bylaws
of the Corporation. Election of directors need not by written ballot unless the
bylaws of the Corporation so provide.
ARTICLE VIII.
BOARD OF DIRECTORS
The number of directors constituting the board of directors of the
Corporation shall be five. The Corporation shall not change the number of
directors on the board of directors from five members without obtaining the
approval of the holders of 90% of the outstanding shares of Common Stock.
The name and address of each of the persons to serve as a director until
the first annual meeting of the stockholders or until his successor has been
duly elected and qualified or his earlier resignation, removal or death, is:
Name Mailing Address
- ------------------------- ------------------------------
Harold C. Simmons Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
Glenn R. Simmons Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
Steven L. Watson Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
William J. Lindquist Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
J. Landis Martin 1999 Broadway, Suite 4300
Denver, Colorado 80202
ARTICLE IX.
INDEMNIFICATION
The Corporation shall, to the fullest extent permitted by law, indemnify
any and all officers and directors of the Corporation, and may, to the fullest
extent permitted by law or to such lesser extent as is determined in the
discretion of the board of directors, indemnify all other persons from and
against all expenses, liabilities or other matters and advance expenses to all
persons whom it shall have the power to indemnify.
ARTICLE X.
DIRECTOR LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for such liability as is expressly not subject to
limitation under the Delaware General Corporation Law, as the same exists or may
hereafter be amended to further limit or eliminate such liability. Any repeal or
modification of this ARTICLE by the stockholders of the Corporation shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
ARTICLE XI.
CERTAIN BUSINESS COMBINATIONS
The Corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
ARTICLE XII.
SETTLEMENTS WITH CREDITORS OR STOCKHOLDERS
Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the state of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and said reorganization shall, if sanctioned by the
court to which the said application has been made, be binding on all creditors
or class of creditors, and/or on all the stockholders or class of stockholders,
of the Corporation, as the case may be, and also on the Corporation.
ARTICLE XIII.
AMENDMENT
The Corporation shall have the right, subject to any express provisions or
restrictions contained in this certificate of incorporation or bylaws of the
Corporation, from time to time, to amend this certificate of incorporation or
any provision thereof in any manner now or hereafter provided by law, and all
rights and powers of any kind conferred upon a director or stockholder of the
Corporation by this certificate of incorporation or any amendment thereof are
conferred subject to such right.
ARTICLE XIV.
INCORPORATOR
The name and mailing address of the sole incorporator of the Corporation is
A. Andrew R. Louis, Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas,
Texas 75240-2697.
THE UNDERSIGNED, being the sole incorporator of the Corporation, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
state of Delaware, does make this certificate to acknowledge, declare and
certify that this certificate of incorporation is his act and deed and the facts
stated in this certificate of incorporation are true, and accordingly executes
this certificate of incorporation this 1st day of October, 2004.
/S/ A. Andrew R. Louis
-----------------------
A. Andrew R. Louis, Sole Incorporator
TAX AGREEMENT
BETWEEN
NL INDUSTRIES, INC.
AND
COMPX INTERNATIONAL INC.
This Agreement is executed on October 5, 2004 but effective as of October
1, 2004 by and among NL Industries, Inc. ("NL"), a Delaware corporation having
its principal executive offices at Three Lincoln Centre, 5430 LBJ Freeway, Suite
1700, Dallas, Texas 75240, Contran Corporation ("Contran"), a Delaware
corporation having its principal executive offices at Three Lincoln Centre, 5430
LBJ Freeway, Suite 1700, Dallas, Texas 75240 and CompX International Inc.
("CompX"), a Delaware corporation having its principal executive offices at
Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240.
Recitals
A. NL and CompX are eligible to file consolidated returns of federal income
taxes and, subject to certain jurisdictional limitations, will be subject to, or
continue to be subject to, combined state and local tax reporting effective
October 1, 2004.
B. NL and CompX wish to provide for the allocation of liabilities, and
procedures to be followed, with respect to federal income taxes of CompX and any
subsidiaries of CompX and with respect to certain combined foreign, state and
local taxes on the terms of this Agreement.
Agreement
The parties hereto agree as follows:
Section 1. Definitions. As used in this Agreement, the following terms have
the meanings set forth below:
(a) Code: The Internal Revenue Code of 1986, as amended, and with
respect to any section thereof any successor provisions under such Code or
any successor Code.
(b) Combined Foreign, State and Local Taxes: For a taxable period, the
amount of all foreign, state and local taxes, together with all interest
and penalties with respect thereto, for which liability is computed (1) on
the basis of a combined, unitary or consolidated return (whether at the
initiative of the tax authority or of the taxpayer) and (2) by reference to
one or more members of the CompX Group, one or more members of the NL Group
and one or more members of the Contran Group not included in the CompX
Group.
(c) Contran Corporation: A Delaware corporation that is the common
parent of a group of corporations electing to file a consolidated federal
income tax return and certain combined state and local returns.
(d) Federal Taxes: All federal income taxes, together with all
interest and penalties with respect thereto.
(e) NL Group: NL and those of its direct and indirect subsidiaries
which join in the filing of a consolidated federal income tax return with
its common parent, Contran (the "Contran Group"), as such Group is
constituted from time to time. For purposes of this Agreement (to the
extent related to Combined Foreign, State and Local Taxes), the term "NL
Group" shall include all direct and indirect subsidiaries of NL with
reference to which Combined Foreign, State and Local Taxes are determined.
(f) CompX Group: CompX International Inc. and each direct or indirect
subsidiary of CompX which would be a member of an affiliated group, within
the meaning of section 1504(a) of the Code, of which CompX was the common
parent, as such Group is constituted from time to time. For purposes of
this Agreement (to the extent related to Combined Foreign, State and Local
Taxes) , the term "CompX Group" shall include all direct and indirect
subsidiaries of CompX with reference to which Combined, Foreign, State and
Local taxes are determined.
(g) CompX Group Tax Liability: For a taxable period, the liability for
Federal Taxes and Combined Foreign, State and Local taxes, as applicable,
that the CompX Group would have had if it were not a member of the NL Group
or the Contran Group during such taxable period (or during any taxable
period prior thereto), and instead filed a separate consolidated return for
such taxable period (and during all prior taxable periods beginning after
October 1, 2004); provided, however, that for purposes of determining such
liability for a taxable period all tax elections shall be consistent with
the tax elections made by Contran for such period. In making such tax
elections it is understood the Contran Group will make those tax elections
that are beneficial to the Contran Group on a consolidated basis.
Nevertheless, Contran will use its best efforts in the case of those
elections which affect the computation of the CompX Group Tax Liability, to
make elections in a reasonable manner so as to minimize the CompX Group Tax
Liability.
Section 2. Contran as Agent. Contran shall be the sole agent for the CompX
Group in all matters relating to the CompX Group Tax Liability. The CompX Group
shall not (a) terminate such agency or (b) without the consent of Contran,
participate, or attempt to participate, in any matters related to the CompX
Group Tax Liability, including, but not limited to, preparation or filing of, or
resolution of disputes, protests or audits with the Internal Revenue Service,
state or local taxing authorities concerning, the Contran Group's consolidated
returns of Federal Taxes, returns of Combined Foreign, State and Local Taxes or
the CompX Group Tax Liability with respect thereto for any taxable period
beginning after October 1, 2004. The CompX Group shall cooperate fully in
providing Contran with all information and documents necessary or desirable to
enable Contran to perform its obligations under this Section, including
completion of Internal Revenue Service and state or local tax audits in
connection with such CompX Group Tax Liability and determination of the proper
liability for such CompX Group Tax Liability.
Section 3. Liability for Taxes; Refunds.
(a) NL, as the common parent of the CompX Group, shall be responsible
for, and shall pay to Contran or a taxing authority, as applicable, the
consolidated tax liability for the NL Group and has the sole right to any
refunds received from Contran or a taxing authority, as applicable, subject
to the provisions of Sections 5 and 6 of this Agreement.
(b) Notwithstanding any other provision of this Agreement, CompX and
each subsidiary of CompX which is a member of the CompX Group shall be
severally liable to NL for the CompX Group Tax Liability.
(c) CompX shall indemnify NL and hold it and the NL Group other than
the CompX Group, harmless from and against any deficiency in the CompX
Group Tax Liability that may be due to NL.
(d) NL shall indemnify CompX and hold it and the CompX Group harmless
from and against any Federal Taxes and Combined Foreign, State and Local
Taxes attributable to the NL Group or any other member of the Contran
Group, other than the CompX Group, as such taxes are determined under this
and other tax sharing agreements.
Section 4. Tax Returns. NL shall file on behalf of the CompX Group any and
all federal, foreign, state and local tax returns that are required as they
pertain to the CompX Group Tax Liability. The CompX Group, at NL's request,
shall join in any applicable consolidated returns of Federal Taxes and any
returns of Combined State and Local Taxes (for which returns have not been
theretofore filed) and execute its consent to each such filing on any form as
may be prescribed for such consent if such consent is required. The decision of
NL's Tax Director(or any other officer so designated by NL) with responsibility
for tax matters shall, subject to the provisions of this Agreement, be binding
in any dispute between NL and the CompX Group as to what tax position should be
taken with respect to any item or transaction of the CompX Group. The preceding
sentence is limited to the tax positions that affect the CompX Group Tax
Liability and the combined NL Group and Contran Group. In addition, NL and
members of the NL Group, including CompX and members of the CompX Group, shall
provide each other with such cooperation, assistance and information as each of
them may request of the other with respect to the filing of any tax return,
amended return, claim for refund or other document with any taxing authority.
CompX shall be solely responsible for all taxes due for the CompX Group with
respect to tax returns filed by CompX or a member of the CompX Group that are
required to be filed on a separate company basis, independent of NL.
Section 5. Payment of CompX Group Tax Liability for Federal Taxes. On or
before each date, as determined under section 6655 of the Code, for payment of
an installment of estimated Federal Taxes, CompX shall pay to NL an amount equal
to the installment which the CompX Group would have been required to pay as an
estimated payment of Federal Taxes to the Internal Revenue Service if it were
filing a separate consolidated return in respect of the CompX Group Tax
Liability. Any balance owed with respect to the CompX Group Tax Liability for
such taxable period shall be paid to NL on or before the 15th day of the third
month after the close of such taxable period. If it is not possible to determine
the amount of such balance on or before such day, (a) a reasonable estimate
thereof shall be paid on or before such day, (b) the amount of such balance
shall be finally determined on or before the earlier of; (i) the 15th day of the
ninth month after the close of such taxable period and (ii) the date on which
the consolidated tax return containing the CompX Group for such period is filed
with the Internal Revenue Service, and (c) any difference between the amount so
determined and the estimated amount paid shall; (i) in the case of an
underpayment, be promptly paid to NL and (ii) in the case of an overpayment, be
promptly refunded or applied against the estimated CompX Group Tax Liability for
the immediately following tax period, at the option of NL. If the overpayment is
not applied to the immediately following tax period, such overpayment shall be
promptly refunded to the CompX Group. As between the parties to this Agreement,
the CompX Group shall be solely responsible for the CompX Group Tax Liability
and shall have no responsibility for Federal Taxes of the NL Group or the
Contran Group other than payment of the CompX Group Tax Liability in accordance
with the terms of this Agreement.
Section 6. Refunds for CompX Group Losses and Credits for Federal Taxes. If
the calculation with respect to the CompX Group Tax Liability for Federal Taxes
results in a net operating loss ("NOL") for the current tax period that, in the
absence of a Code Section 172(b)(3) election made by Contran, is carried back
under Code Sections 172 and 1502 to a prior taxable period or periods of the
CompX Group with respect to which the CompX Group previously made payments to
NL, then, in that event, NL shall pay (or credit) CompX an amount equal to the
tax refund to which the CompX Group would have been entitled had the CompX Group
filed a separate consolidated federal income tax return for such year (but not
in excess of the net aggregate amount of the CompX Group Tax Liability paid to
NL with respect to the preceding two taxable periods). If the calculation with
respect to the CompX Group Tax Liability results in an NOL for the current tax
period, that subject to the Code Section 172(b)(3) election made by Contran, is
not carried back under Code Sections 172 and 1502 to a prior taxable period or
periods of the CompX Group with respect to which CompX made payments to NL or is
not carried back because the Contran Group does not have a consolidated net
operating loss for the current tax period, then, in that event such NOL shall be
an NOL carryover to be used in computing the CompX Group Tax Liability for
future taxable periods, under the law applicable to NOL carryovers in general,
as such law applies to the relevant taxable period. Furthermore, if the CompX
Group would have been entitled to a refund of Federal Taxes for any year had the
CompX Group filed a separate consolidated federal income tax return for the loss
year and the carryback year, NL shall pay to CompX the amount which CompX would
have received as a refund from the Internal Revenue Service. Payments made
pursuant to this Section 6 shall be made on the date that Contran (or any
successor common parent of a tax group to which the NL Group is a member) files
its consolidated federal income tax return for the taxable period involved.
Principles similar to those discussed in this Section 6 shall apply in the case
of the utilization of all CompX Group loss and credit carrybacks and carryovers.
Section 7. Payment of CompX Group Tax Liability for Foreign, State and
Local Taxes. The foregoing principles contained in Sections 5 and 6 shall apply
in similar fashion to any consolidated or combined foreign, state or other local
income tax returns, containing any member of the NL Group and any member of the
CompX Group that is not also a member of the NL Group, which may be filed.
Section 8. Subsequent Adjustments. If any settlement with the Internal
Revenue Service, foreign, state or local tax authority or court decision which
has become final results in any adjustment to any item of income, deduction,
loss or credit to the NL Group in respect of any taxable period subject to this
Agreement, which, in any such case, affects or relates to any member of the
CompX Group as constituted during such taxable period, the CompX Tax Group
Liability shall be redetermined to give effect to such adjustment as if it had
been made as part of or reflected in the original computation of the CompX Tax
Group Liability and proper adjustment of amounts paid or owing hereunder in
respect of such liability and allocation shall be promptly made in light
thereof.
Section 9. Amendments. This Agreement may be amended, modified, superseded
or cancelled, and any of the terms, covenants, or conditions hereof may be
waived, only by a written instrument specifically referring to this Agreement
and executed by both parties (or, in the case of a waiver, by or on behalf of
the party waiving compliance). The failure of either party at any time or times
to require performance of any provision of this Agreement shall in no manner
affect the right at a later time to enforce the same. No waiver by either party
of any condition, or of any breach of any term or covenant, contained in this
Agreement, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach, or a waiver of any
other condition or of any breach of any other term or covenant.
Section 10. Retention of Records. NL shall retain all tax returns, tax
reports, related workpapers and all schedules (along with all documents that
pertain to any such tax returns, reports or workpapers) that relate to a taxable
period in which the CompX Group is included in a consolidated or combined tax
return with NL. NL shall make such documents available to CompX at CompX's
request. NL shall not dispose of such documents without the permission of CompX.
Section 11. Headings. The headings of this Agreement are for convenience of
reference only, and shall not in any way affect the meaning or interpretation of
this Agreement.
Section 12. Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Delaware without regard to its
conflicts of laws provisions.
Section 13. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original, but all of which shall
constitute but one agreement.
Section 14. Successors. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective subsidiaries, and their
respective successors and assigns.
Section 15. Effective Date. This Agreement shall be effective as of October
1, 2004.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
October 5, 2004 but effective October 1, 2004.
NL INDUSTRIES, INC.
By: /s/ Kelly D. Luttmer
-------------------------
Kelly D. Luttmer
Tax Director
[Seal]
ATTEST:
/s/ A. Andrew R. Louis
- -----------------------
Assistant Secretary,
NL Industries, Inc.
CONTRAN CORPORATION
By: /s/ William J. Lindquist
-------------------------
William J. Lindquist
Senior Vice President
[Seal]
ATTEST:
/s/ A. Andrew R. Louis
- -----------------------
Secretary,
Contran Corporation
COMPX INTERNATIONAL INC.
By: /s/ Darryl R. Halbert
-------------------------
Darryl R. Halbert
Vice President, Chief Financial
Officer and Controller
[Seal]
ATTEST:
/s/ A. Andrew R. Louis
- -----------------------
Secretary,
CompX International Inc.