Fed. Sec. L. Rep. P 98,791 Texas Partners, Etc. v. Conrock Co., Etc.

Appellee Conrock Co. is a Delaware Corporation engaged primarily in extracting, processing, and selling rock, sand, and gravel in aggregate form or, with a mixture of cement, as ready-mixed concrete. Appellee California Portland Cement Co. (“CPC”), a cement manufacturer, owns approximately 33.5 percent of Conrock’s stock and sells cement to Conrock. In March 1980, Con-rock mailed its shareholders a proxy statement in connection with its April annual meeting. The proxy statement described two anti-takeover amendments to Conrock’s Certificate of Incorporation and bylaws to be proposed for shareholder approval at the annual meeting.

The amendment to the Certificate requires the affirmative vote of the holders of at least 60 percent of the outstanding shares of the Company to approve certain business combinations, namely mergers, reorganizations, consolidations, and sales or leases of assets, with “related persons,” defined as those persons or entities owning, directly or indirectly, 5 percent or more of the Company’s stock. Further, the 60 percent vote must include the affirmative vote of at least 50 percent of the voting shares held by shareholders other than the related person.…