Former Acquisition Proposal

9 Months Ended

Sep. 30, 2011

Former Acquisition Proposal [Abstract]

Former Acquisition Proposal

17. Former acquisition proposal

On October 29, 2010, our Chairman and Chief Executive Officer, Douglas H. Miller presented a letter to our board of directors indicating an interest in acquiring all of the outstanding shares of our stock not already owned by Mr. Miller for a cash purchase price of $20.50 per share. The proposal did not represent a definitive offer and there was no assurance that a definitive offer would be made or accepted, that any agreement would be executed or that any transaction would be consummated. Our board of directors established a special committee on November 4, 2010 comprised of two independent directors to, among other things, evaluate and determine the Company's response to the October 29, 2010 proposal.

At the direction of the special committee, on January 12, 2011, the Company adopted a shareholder rights plan, or the Rights Plan, with a one year term. Under the terms of the Rights Plan, one right was attached to each share of the Company's common stock that was outstanding as of the close of business on January 24, 2011 and one right would attach to each share issued thereafter prior to the expiration of the rights. The rights would have become exercisable (subject to customary exceptions) only if a person or group acquired 10% or more of the Company's common stock (thereby becoming an "acquiring person") or commenced a tender offer for 10% or more of the Company's common stock. The plan exempted each holder of 10% or more of the Company's common stock on the date of the plan's adoption as long as they did not thereafter acquire an additional 1% or more shares of the Company's common stock, as well as parties that enter into qualifying standstill agreements with the Company. The special committee could have, in its sole discretion, also exempted any transaction from triggering the plan. On August 19, 2011, the Board determined to amend the Rights Plan to accelerate the Expiration Date from the close of business on January 24, 2012 to the close of business on September 30, 2011.

On January 13, 2011, the special committee of the board of directors announced it would explore strategic alternatives to maximize shareholder value, including a potential sale of the Company. As part of a comprehensive process, the special committee stated that it would consider Mr. Miller's proposal as well as acquisition proposals the special committee may receive from other interested parties and other strategic alternatives potentially available to the Company. There was no assurance that the special committee's exploration of strategic alternatives would result in a sale of the Company or any other transaction.

On July 8, 2011, after consultation with its independent financial and legal advisors, the special committee released a statement that its review of strategic alternatives did not result in any firm proposal or any other proposal that was in the best interests of the Company and its shareholders and that they had terminated the review process. On August 12, 2011, our board of directors, following the report of the special committee that it had fulfilled its responsibilities, determined that it was appropriate to disband the special committee.

Since November 3, 2010, nine related shareholder derivative lawsuits were filed purportedly on behalf of the Company in state and federal courts in Dallas, Texas alleging claims related to Mr. Miller's proposal.

Also, since November 3, 2010, two putative shareholder class actions were filed against the Company and all of the members of our board of directors in state district courts in Dallas County, Texas.

All of the state court proceedings were consolidated into one court and were handled as a consolidated derivative action and a consolidated class action. Separate lead plaintiffs' counsel were appointed for the consolidated derivative action and the consolidated direct class action. As a result, there were three lawsuits in Texas state and federal courts related to Mr. Miller's proposal: the consolidated derivative action and consolidated direct class action were pending in state court and one derivative action was pending in federal court. During the third quarter 2011, the plaintiffs in the two state court actions voluntarily nonsuited those cases and the federal court action was dismissed.