STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into as
of the 23rd day of September, 1998, by and among (i) Valhi Inc., a Delaware
corporation (the "Purchaser"), (ii) NL Industries, Inc., a New Jersey
corporation ("NL"), and (iii) the shareholders of NL listed on the signature
page hereto (the "Sellers").
Recitals
A. Each of the Sellers holds options (each an "Option" and, collectively, the
"Options") to purchase the number of shares of common stock, par value $.125 per
share (the "NL Common Stock"), of NL set forth opposite such Seller's name under
the column heading "Number of Options Exercised" on Schedule I to this
Agreement,
B. Each of the Sellers proposes, severally and not jointly, upon exercise of
such Seller's Option, to sell certain of the shares of NL Common Stock received
upon exercise of such Seller's Option (as set forth on Schedule I hereto),
constituting a total of 136,780 shares of NL Common Stock (such shares being
collectively referred to herein as the "Shares"), to the Purchaser, and the
Purchaser proposes to purchase the Shares from the several Sellers, on the terms
and subject to the conditions set forth in this Agreement (the "Transaction").
The parties hereto agree as follows:
ARTICLE I.
THE TRANSACTION
Section 1.1. Purchase and Sale of Shares. Against payment of the purchase
price therefor as specified in Section 1.2, each of the Sellers, severally and
not jointly, hereby sells, transfers, assigns and delivers to the Purchaser the
number of Shares set forth opposite such Seller's name under the column heading
"Number of Shares Sold to Purchaser" on Schedule I hereto.
Section 1.2. Delivery of Shares. In connection with the exercise by each
Seller of his or her Option, such Seller hereby directs NL, and NL hereby
agrees, to deliver on or before the end of the third business day after the
execution of this Agreement (a) to the Purchaser a certificate for the number of
Shares set forth opposite such Seller's name under the column heading "Number of
Shares Sold to Purchaser" on Schedule I hereto, registered in the name of the
Purchaser and (b) to such Seller a certificate for the number of Shares set
forth opposite such Seller's name under the column heading "Number of Shares
Retained by Seller" on Schedule I hereto, registered in the name of such Seller
or such other name or names as such Seller may designate to NL.
Section 1.3. Purchase Price and Payment. The Purchaser hereby purchases
the total number of Shares set forth in the column heading "Number of Shares
Sold to Purchaser" on Schedule I hereto for a purchase price in cash of $20.50
per Share. In payment of the Shares, the Purchaser hereby transfers (a) to each
Seller that portion of the aggregate purchase price for such Seller's Shares set
forth opposite such Seller's name under the column heading "Purchase Price
Retained by Seller" on Schedule I to this Agreement by wire transfer of
immediately available funds to an account designated by such Seller and (b) to
NL, at the direction of such Seller, in payment of the exercise price for the
shares issued upon exercise of such Seller's Option and related withholding
taxes, the amount set forth opposite such Seller's name under the column heading
"Payment to NL in respect of Exercise Price and Withholding Taxes" by wire
transfer of immediately available funds to an account designated by NL. NL
hereby agrees to apply the amounts described in clause (b) of the immediately
preceding sentence to pay the respective exercise prices and applicable required
and incremental withholding taxes payable upon exercise of the Sellers' Options.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers, severally and not jointly, represents and warrants to
the Purchaser and NL as of the date of this Agreement as follows:
Section 2.1. Authority. Such Seller is a natural person and has full
legal right, power and authority, without the consent or approval of any other
person, to execute and deliver this Agreement and to perform his or her
obligations hereunder.
Section 2.2. Validity. This Agreement has been duly executed and
delivered by such Seller and constitutes a lawful, valid and binding obligation
of such Seller, enforceable against such Seller in accordance with its terms.
The execution and delivery of this Agreement and the consummation of the
Transaction by such Seller do not and will not violate or conflict with any
provision of, and do not and will not result in a default under (a) any material
contract, agreement or other instrument to which such Seller is a party or by
which such Seller is bound, (b) any order, writ, injunction, decree or judgment
of any court or governmental agency applicable to such Seller, or (c) any law,
rule or regulation applicable to such, except in each case for such violations,
conflicts or defaults that would not have a material adverse consequence to the
Transaction.
Section 2.3. Ownership of Shares. Upon exercise of such Seller's Option,
such Seller will be the beneficial owner of the Shares underlying such Option
and, upon consummation of the transactions contemplated by this Agreement, the
Purchaser will acquire good and marketable title to such Seller's 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.
Section 2.4. Notice of Election, Etc. Such Seller has heretofore
delivered to NL a notice of election to exercise his or her Option for the
number of shares of NL Common Stock set forth opposite such Seller's name under
the column heading "Number of Options Exercised" on Schedule I to this
Agreement. If such Seller is electing to make payment for all or a portion of
the shares of NL Common Stock and related required and incremental withholding
taxes payable in respect thereof upon exercise of such Seller's Option in shares
of NL Common Stock, then such Seller represents and warrants that he or she has
held the shares of NL Common Stock set forth opposite such Seller's name under
the column heading "Number of Shares Deliverd to NL in Respect of Exercise Price
and Withholding Taxes" on Schedule I to this Agreement (other than any shares
included therein which are being delivered in respect of required withholding
taxes, for which no such representation need be made) for a period of at least
six months and has delivered an attestation to such effect to NL.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to each of the Sellers and NL
as of the date of this Agreement as follows:
Section 3.1. Authority. The Purchaser is a corporation validly existing
and in good standing under the laws of the State of Delaware. It has full
corporate power and authority, without the consent or approval of any other
person, to execute and deliver this Agreement and to perform its obligations
hereunder. All corporate and other actions required to be taken by or on behalf
of the Purchaser to authorize the execution, delivery and performance of this
Agreement have been duly and properly taken.
Section 3.2. Validity. This Agreement has been duly executed and
delivered by the Purchaser and constitutes a lawful, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms. The execution and delivery of this Agreement and the
consummation of the Transaction by the Purchaser do not and will not violate or
conflict with any provision of, and do not and will not result in a default
under (a) the Purchaser's charter or bylaws; (b) any material contract,
agreement or other instrument to which the Purchaser 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 the Purchaser; or (d) any law, rule or
regulation applicable to the Purchaser, except in each case for such violations,
conflicts or defaults that would not have a material adverse consequence to the
Transaction.
Section 3.3. Purchase for Investment. The Purchaser is purchasing the
Shares sold and delivered to it hereunder for investment solely for its own
account and not with a view to, or for resale in connection with, the
distribution thereof. The Purchaser understands that such Shares are restricted
securities under the Securities Act of 1933, as amended (the "Securities Act"),
and that such 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 3.4. Nature of Purchaser. The Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the purchase of the Shares.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF NL
NL hereby represents and warrants to the Purchaser and each of the Sellers
as of the date of this Agreement as follows:
Section 4.1 Authority. NL is a corporation validly existing and in good
standing under the laws of the State of New Jersey. It has full corporate power
and authority, without the consent or approval of any other person, to execute
and deliver this Agreement and to perform its obligations hereunder. All
corporate and other actions required to be taken by or on behalf of NL to
authorize the execution, delivery and performance of this Agreement have been
duly and properly taken.
Section 4.2 Validity. This Agreement has been duly executed and delivered
by NL and constitutes a lawful, valid and binding obligation of NL, enforceable
against NL in accordance with its terms. The execution and delivery of this
Agreement and the consummation of the Transaction by NL do not and will not
violate or conflict with any provision of, and do not and will not result in a
default under (a) NL's charter or bylaws; (b) any material contract, agreement
or other instrument to which NL 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 NL; or (d) any law, rule or regulation applicable to NL, except in
each case for such violations, conflicts or defaults that would not have a
material adverse consequence to the Transaction.
ARTICLE V.
GENERAL PROVISIONS
Section 5.1 Access to Information. The Purchaser and each of the Sellers
has received all information desired with respect to the business NL.
Section 5.2 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 5.3 Amendment and Waiver. No amendment or waiver of any provision
of this Agreement shall in be effective unless the same shall be in writing
signed by the party or parties against whom enforcement is sought.
Section 5.4 Parties and Interest. This Agreement shall bind and inure to
the benefit of the parties named herein and their respective heirs, successors
and assigns.
Section 5.5 Entire Transaction. 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 5.6 Applicable Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Texas, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Texas or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Texas.
Section 5.7 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 5.8 Notice. All notices, requests, demands and other
communications hereunder shall be in writing and shall be sent by registered or
certified mail, postage prepaid as follows:
If to the Purchaser: Valhi, Inc.
0000 XXX Xxxxxxx
Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: General Counsel
If to the Sellers: c/o NL Industries, Inc.
00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
If to NL: NL Industries, Inc.
00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Section 5.9 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 5.10 Expenses. Except as otherwise expressly provided herein,
each of the Sellers and the Purchaser 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 September 28, 1998 to be effective as of September 23,
1998.
PURCHASER:
VALHI, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
SELLERS:
/s/ J. Xxxxxx Xxxxxx
--------------------------------
J. Xxxxxx Xxxxxx
/s/ Xxxxx X. Xxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
NL INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
SCHEDULE I
Number of
Shares
Delivered
to NL in
respect of
Number of Number of Exercise
Number of Shares Sold Shares Price and
Options to Retained Withholding
Name of Seller Exercised Purchaser by Seller Taxes
----------------- --------- ---------- --------- ----------
J. Xxxxxx Xxxxxx 300,000 72,650 39,476 187,874*
Xxxxx X. Xxxxxxxx 85,000 33,889 12,906 38,205*
Xxxxx X. Xxxxxx 85,000 30,241 14,935 39,824*
---------- ----------- ---------- ----------
Total 470,000 136,780 67,317 265,903
========= ========== ======== ==========
Payment to
NL in
Aggregate respect of
Purchase Exercise Purchase
Price Paid Price and Price
by Withholding Retained
Name of Seller Purchaser Taxes by Seller
----------------- --------- ---------- ---------
J. Xxxxxx Xxxxxx $1,489,325 $680,103 $809,222
Xxxxx X. Xxxxxxxx $694,725 $430,091 $264,634
Xxxxx X. Xxxxxx $619,941 $313,768 $306,173
---------- ----------- ----------
Total $2,803,991 $1,423,962 $1,380,029
========== =========== ==========
