Shelf Registration and Anti-takeover Provisions ...
On May 11 2009, EXP made a shelf registration that could be used to trigger massive dilution of the stock and turn this conservatively run company into a financial basketcase... The CFO also quit (or was asked to leave) with what appears to be a one month notice... These are disquieting events.
I don’t have any idea as to why the CFO left, but I believe the shelf registration is designed to prevent Ash Grove or some other entity from acquiring the company and causing a “change in control”.
Ash Grove showed an interest in EXP on Aug 19, 2008 when it filed a SEC Form SC 13D stating that it had acquired 5.05% of EXP stock at an average price of about $24.5 (#msg-33841335). On 10/16/08, EXP submitted a 8K stating that Ash Grove had made a filing under the Hart-Scott-Rodino Antitrust Improvements Act indicating that it intended to purchase another 1% of EXP stock.
My guess is that EXP does not welcome Ash Grove’s interest. Soon after Ash Grove filed its 13D, EXP’s Board of Directors established a policy whereby items to be placed before the shareholders via normal channels at the annual meeting must be submitted 100 days in advance. This is clearly designed to prevent a surprise hostile takeover.
EXP’s anti-takeover arsenal is substantial. It has been detailed best in the 2003-12-01 Definitive Proxy Statement SEC DEF14A that was submitted when EXP was spun off from Centex. The anti-takeover provisions available to EXP include:
Governance and By-law Restrictions
Special Meeting Restrictions (updated Nov 18, 2008): Proposals for stockholder action, such as a proposed amendment to the bylaws or a proposal for the removal of directors for cause, can, if the board of directors desires, be delayed until the next annual meeting of the stockholders. The board of directors can still call a special meeting of the stockholders when issues arise that require a stockholder meeting.
Supermajority Voting Restrictions. Two thirds of the outstanding shares of EXP’s common stock is required to alter, amend, rescind or repeal the bylaws or to adopt or modify the provisions of the certificate of incorporation. The provisions in the certificate of incorporation affected include: 1) limits to the voting rights of beneficial owners of 15% or more of the outstanding shares, b) staggard terms of board members, 3) limits to the ability of stockholders to call special meetings, etc.
Tenure and Selection of the Board. EXP’s current BoD, if it so elects, can increase the number of members of the Board to 15 Directors and fill the resulting vacancies with its own designees. A three year staggard classification of Director appointments limits the ability of majority stockholders or persons holding proxies to vote a majority of shares to change control of the Board of Directors in fewer than two annual stockholder meetings.
Stockholder’s Rights Plan (Amended and restated: 2006-04-11 8-A12B/A)
The board of directors has the authority to authorize the issuance of preferred stock in one or more series and to fix the rights (including the voting rights, if any), preferences, privileges and restrictions granted to or imposed upon any series, without any further vote or action by the stockholders. The effect of the exercise of the rights would be to dilute the ownership position of a person who has acquired 15% or more of the common stock by allowing the stockholders (other than the acquiring stockholder) to buy capital stock at a lower price.
Pre-authorized Capital Increase
The Board of Directors can create and issue a series of preferred stock with such designations, powers, preferences and rights which have the effect of discriminating against an existing or prospective holder of our common stock, thus making it more difficult for, or discouraging any attempt by, a potential acquiror to obtain control of EXP by means of a merger, tender offer, proxy contest or otherwise in a transaction not approved by the Board of Directors.
Change of Control Provisions.
The stock compensation plans contain provisions to the effect that, if there occurs a change of control of EXP, all options granted pursuant to such plans will vest and become exercisable and all restrictions will lapse on shares of restricted stock granted under such plans.
Delaware Anti-Takeover Statutes (EXP is incorporated in Delaware).
Under the business combination statute of the Delaware General Corporation Law, a corporation is generally restricted from engaging in a business combination with an interested stockholder for a three-year period following the time the stockholder became an interested stockholder.
News 
Market Data 
Discover 
