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EXHIBIT 2.01
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
▇▇▇▇▇ CORPORATION
AND
GIANT INDUSTRIES, INC.
DATED AS OF APRIL 14, 1998
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TABLE OF CONTENTS
PAGE
ARTICLE I...............................................................................................1
1.01. The Merger.....................................................................................1
1.02. Closing........................................................................................1
1.03. Effective Time.................................................................................2
1.04. Effects of the Merger..........................................................................2
1.05. Certificate of Incorporation and Bylaws........................................................2
1.06. Directors and Officers.........................................................................2
ARTICLE II..............................................................................................3
2.01. Effect on Capital Stock........................................................................3
2.02. Exchange.......................................................................................3
ARTICLE III.............................................................................................7
3.01. Representations and Warranties of ▇▇▇▇▇........................................................7
3.02. Representations and Warranties of Giant.......................................................13
ARTICLE IV.............................................................................................20
4.01. Conduct of Business...........................................................................20
4.02. No Solicitation by ▇▇▇▇▇......................................................................26
4.03. No Solicitation By Giant......................................................................27
ARTICLE V..............................................................................................29
5.01. Preparation of the Form S-4 and the Joint Proxy Statement; Stockholders Meetings..............29
5.02. Letters of Holly's Accountants................................................................30
5.03. Letters of Giant's Accountants................................................................30
5.04. Access to Information; Confidentiality........................................................31
5.05. Reasonable Efforts............................................................................31
5.06. Stock Options and Phantom Stock Rights........................................................32
5.07. Certain Employee Matters......................................................................35
5.08. Indemnification, Exculpation and Insurance....................................................35
5.09. Fees and Expenses.............................................................................36
5.10. Public Announcements..........................................................................37
5.11. NYSE Listing..................................................................................37
5.12. Transfer Taxes, Etc...........................................................................37
5.13. Tax Treatment.................................................................................37
5.14. Indemnification Agreements....................................................................38
5.15. Certain Tax Matters...........................................................................38
ARTICLE VI.............................................................................................38
6.01. Conditions to Each Party's Obligation to Effect the Merger....................................38
6.02. Conditions to Obligations of Giant............................................................39
6.03. Conditions to Obligation of ▇▇▇▇▇.............................................................40
6.04. Frustration of Closing Conditions.............................................................41
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ARTICLE VII............................................................................................41
7.01. Termination...................................................................................41
7.02. Effect of Termination.........................................................................42
7.03. Amendment.....................................................................................43
7.04. Extension; Waiver.............................................................................43
7.05. Procedure for Termination, Amendment, Extension or Waiver.....................................43
ARTICLE VIII...........................................................................................43
8.01. Nonsurvival of Representations and Warranties.................................................43
8.02 Notices.......................................................................................43
8.03. Definitions...................................................................................44
8.04. Interpretation................................................................................48
8.05. Counterparts..................................................................................48
8.06. Entire Agreement; No Third-Party Beneficiaries................................................48
8.07. Governing Law.................................................................................48
8.08. Assignment....................................................................................48
8.09. Enforcement...................................................................................48
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement"), dated as of April
14, 1998, is by and between ▇▇▇▇▇ CORPORATION, a Delaware corporation ("▇▇▇▇▇"),
and GIANT INDUSTRIES, INC., a Delaware corporation ("Giant").
RECITALS
A. The respective Boards of Directors of Giant and ▇▇▇▇▇ have approved
the merger of ▇▇▇▇▇ with and into Giant (the "Merger"), upon the terms and
subject to the conditions set forth in this Agreement, whereby each issued and
outstanding share of common stock, par value $.01 per share, of ▇▇▇▇▇ ("▇▇▇▇▇
Common Stock"), other than shares owned by Giant, ▇▇▇▇▇ or any of their
wholly-owned subsidiaries, will be converted into the right to receive the
Merger Consideration (as defined in Section 2.01(b)).
B. The respective Boards of Directors of Giant and ▇▇▇▇▇ have each
determined that the Merger and the other transactions contemplated by this
Agreement are consistent with, and in furtherance of, their respective business
strategies and goals.
C. Giant and ▇▇▇▇▇ desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
D. For federal income tax purposes, it is intended that the Merger will
qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
AGREEMENTS
ARTICLE I
THE MERGER
1.01. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), ▇▇▇▇▇ shall be merged with and into Giant at the Effective
Time (as defined in Section 1.03). Following the Effective Time, Giant shall be
the surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of ▇▇▇▇▇ in accordance with the DGCL.
1.02. Closing. The closing of the Merger (the "Closing") will take
place at 10:00 a.m. on a date to be specified by the parties (the "Closing
Date"), which (subject to satisfaction or waiver of the conditions set forth in
Sections 6.02 and 6.03) shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Section 6.01, unless
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time or date is agreed to by the parties. The Closing will be held at such
location in the City of Phoenix, Arizona as is agreed to by the parties.
1.03. Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on or after the Closing Date, the parties shall file a
certificate of merger or other appropriate documents (in any such case, the
"Certificate of Merger"), executed in accordance with the relevant provisions of
the DGCL, and shall make all other filings or recordings required under the
DGCL. The Merger shall become effective at such time as the Certificate of
Merger is duly filed with the Delaware Secretary of State, or at such subsequent
date or time as Giant and ▇▇▇▇▇ shall agree and specify in the Certificate of
Merger (the time the Merger becomes effective being hereinafter referred to as
the "Effective Time").
1.04. Effects of the Merger. The Merger shall have the effects set
forth in Section 259 of the DGCL.
1.05. Certificate of Incorporation and Bylaws.
(a) The certificate of incorporation of Giant, as in effect
immediately prior to the execution of this Agreement, shall be amended and
restated as of the Effective Time as set forth in Exhibit A and, as so amended
and restated, such certificate of incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
(b) The bylaws of Giant, as in effect immediately prior to the
execution of this Agreement, shall be amended and restated as of the Effective
Time as set forth in Exhibit B and, as so amended and restated, such bylaws
shall be the bylaws of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
1.06. Directors and Officers. Giant shall cause the Board of Directors
and officers of Giant immediately prior to the effective time to resign. The
Board of Directors (including classes thereof) and senior officers of the
Surviving Corporation shall be as set forth in Exhibit C until the earlier of
the resignation or removal of any individual listed on or designated in
accordance with Exhibit C or until their respective successors are duly elected
and qualified, as the case may be, it being agreed that if any director shall be
unable to serve as a director at the Effective Time, the party which designated
such individual as indicated in Exhibit C shall designate another individual to
serve in such individual's place. If any officer listed on or appointed in
accordance with Exhibit C ceases to be a full-time employee of either ▇▇▇▇▇ or
Giant prior to the Effective Time, the parties will agree upon another person to
serve in such person's stead. The committees of the Board of Directors of the
Surviving Corporation will be elected by the Board of Directors in accordance
with the bylaws as amended and restated.
1.07 Surviving Corporation's Headquarters. The Surviving Corporation's
headquarters will be in Scottsdale, Arizona. In addition, the Surviving
Corporation will maintain an office in Dallas, Texas.
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ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.01. Effect on Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
▇▇▇▇▇ Common Stock or on the part of the holder of any shares of common stock,
par value $.01 per share, of Giant ("Giant Common Stock"):
(a) Cancellation of Treasury Stock and Giant-Owned Stock. Each
share, if any, of ▇▇▇▇▇ Common Stock that is owned by ▇▇▇▇▇ or by any
wholly-owned subsidiary of ▇▇▇▇▇ shall automatically be canceled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(b) Conversion of ▇▇▇▇▇ Common Stock. Subject to Sections 2.02(e)
and (j), all of the issued and outstanding shares (other than shares to be
canceled in accordance with Section 2.01(a)) of ▇▇▇▇▇ Common Stock shall be
converted, in the aggregate, into the right to receive (i) that number of fully
paid and nonassessable shares of Giant Common Stock equal to the number of
shares of Giant Common Stock issued and outstanding immediately before the
Effective Time and (ii) cash in an amount equal to $25,000,000 multiplied by a
fraction, the numerator of which is the number of issued and outstanding shares
of ▇▇▇▇▇ Common Stock immediately before the Effective Time and the denominator
of which is the sum of (A) the number of issued and outstanding shares of ▇▇▇▇▇
Common Stock immediately before the Effective Time, (B) the number of shares of
▇▇▇▇▇ Common Stock subject to ▇▇▇▇▇ stock options (whether vested or unvested)
outstanding immediately before the Effective Time and (C) the number of ▇▇▇▇▇
phantom stock rights outstanding immediately before the Effective Time (with the
consideration described in clauses (i) and (ii) collectively referred to as the
"Merger Consideration"). Accordingly, each issued and outstanding share of ▇▇▇▇▇
Common Stock (other than shares to be canceled in accordance with Section
2.01(a)) shall be converted into the right to receive a fraction of the Merger
Consideration equal to one divided by the number of shares of ▇▇▇▇▇ Common Stock
(other than shares to be canceled in accordance with Section 2.01(a), and
assuming no exercise, conversion or exchange of outstanding in-the-money
options, warrants and other rights to acquire ▇▇▇▇▇ Common Stock) issued and
outstanding immediately before the Effective Time. As of the Effective Time, all
such shares of ▇▇▇▇▇ Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate representing any such shares of ▇▇▇▇▇ Common Stock shall cease
to have any rights with respect thereto, except the right to receive the Merger
Consideration and any cash in lieu of fractional shares of Giant Common Stock to
be issued or paid in consideration therefor upon surrender of such certificate
in accordance with Section 2.02, without interest.
2.02. Exchange.
(a) Exchange Agent. As of the Effective Time, Giant shall enter
into an agreement with such bank or trust company as may be designated by Giant
and ▇▇▇▇▇ (the "Exchange Agent"), which shall provide that Giant shall deposit
with the Exchange Agent as of
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the Effective Time, for the benefit of the holders of shares of ▇▇▇▇▇ Common
Stock and for exchange in accordance with this Article II, through the Exchange
Agent, the Merger Consideration (such shares of Giant Common Stock, together
with any dividends or distributions with respect thereto with a record date
after the Effective Time, any cash payable in lieu of any fractional shares of
Giant Common Stock, and the cash portion of the Merger Consideration being
hereinafter referred to as the "Exchange Fund") issuable pursuant to Section
2.01 in exchange for issued and outstanding shares of ▇▇▇▇▇ Common Stock.
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of ▇▇▇▇▇ Common Stock (the "Certificates") whose
shares were converted into the right to receive the Merger Consideration
pursuant to Section 2.01, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Giant and ▇▇▇▇▇ may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Exchange Agent, together with such letter of
transmittal, duly executed, and such other documents as reasonably may be
required by the Exchange Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor a certificate representing that number of whole
shares of Giant Common Stock and cash which such holder has the right to receive
pursuant to the provisions of this Article II, and the Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of ownership
of ▇▇▇▇▇ Common Stock which is not registered in the transfer records of ▇▇▇▇▇,
a certificate representing the proper number of shares of Giant Common Stock may
be issued to a person other than the person in whose name the Certificate so
surrendered is registered if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such issuance
shall pay any transfer or other taxes required by reason of the issuance of
shares of Giant Common Stock to a person other than the registered holder of
such Certificate or establish to the satisfaction of Giant that such tax has
been paid or is not applicable. Until surrendered as contemplated by this
Section 2.02, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the Merger
Consideration and other cash, if any, which the holder thereof has the right to
receive in respect of such Certificate pursuant to the provisions of this
Article II. No interest will be paid or will accrue on any cash payable to
holders of Certificates pursuant to the provisions of this Article II.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Giant Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate, and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 2.02(e), and all such
dividends, other distributions and cash in lieu of fractional shares of Giant
Common Stock shall be paid by Giant to the Exchange Agent and shall be included
in the Exchange Fund, in each case until the surrender of such Certificate in
accordance with this Article II. Subject to the effect of applicable escheat or
similar laws, following surrender of any such Certificate there shall be paid to
the holder of the certificate representing whole shares of Giant Common Stock
issued in
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exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time previously paid with respect to such whole shares of Giant Common
Stock and the amount of any cash payable in lieu of a fractional share of Giant
Common Stock to which such holder is entitled pursuant to Section 2.02(e) and
(ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to such
surrender and with a payment date subsequent to such surrender payable with
respect to such whole shares of Giant Common Stock.
(d) No Further Ownership Rights in ▇▇▇▇▇ Common Stock. All shares
of Giant Common Stock issued and cash paid upon the surrender for exchange of
Certificates in accordance with the terms of this Article II shall be deemed to
have been issued and paid in full satisfaction of all rights pertaining to the
shares of ▇▇▇▇▇ Common Stock previously represented by such Certificates,
subject, however, to the Surviving Corporation's obligation to pay any dividends
or make any other distributions with a record date prior to the Effective Time
which may have been declared or made by ▇▇▇▇▇ on such shares of ▇▇▇▇▇ Common
Stock which remain unpaid at the Effective Time, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of ▇▇▇▇▇ Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange Agent
for any reason, they shall be canceled and exchanged as provided in this Article
II, except as otherwise provided by law.
(e) No Fractional Shares.
(i) No certificates or scrip representing fractional shares
of Giant Common Stock shall be issued upon the surrender for exchange of
Certificates, no dividend or distribution of Giant shall relate to such
fractional share interests and such fractional share interests will not entitle
the owner thereof to vote or to any rights of a stockholder of Giant.
(ii) In lieu of any such fractional shares, the Surviving
Corporation shall pay each holder of ▇▇▇▇▇ Common Stock an amount in cash equal
to the product obtained by multiplying (A) the fractional share interest to
which such holder (after taking into account all shares of ▇▇▇▇▇ Common Stock
held at the Effective Time by such holder) would otherwise be entitled by (B)
the closing price for a share of Giant Common Stock as reported on the New York
Stock Exchange, Inc. ("NYSE") Composite Transaction Tape (as reported in the
Wall Street Journal, or, if not reported therein, any other authoritative
source) on the Closing Date.
(iii) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of ▇▇▇▇▇ Common Stock with respect
to any fractional share interests, the Exchange Agent will make available such
amounts to such holders of ▇▇▇▇▇ Common Stock subject to and in accordance with
the terms of Section 2.02(b).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to Giant, upon demand, and
any holders of the Certificates who have not previously complied with this
Article II shall thereafter look only to Giant for payment of their
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claim for Merger Consideration, any cash in lieu of fractional shares of Giant
Common Stock and any dividends or distributions with respect to ▇▇▇▇▇ Common
Stock or Giant Common Stock.
(g) No Liability. None of Giant, ▇▇▇▇▇ or the Exchange Agent
shall be liable to any person in respect of any shares of Giant Common Stock (or
dividends or distributions with respect thereto) or cash from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If any Certificate shall not have been surrendered prior
to seven years after the Effective Time (or immediately prior to such earlier
date on which any Merger Consideration, any cash payable to the holder of such
Certificate representing ▇▇▇▇▇ Common Stock pursuant to this Article II or any
dividends or distributions payable to the holder of such Certificate would
otherwise escheat to or become the property of any Governmental Entity (as
defined in Section 3.01(d)), any such Merger Consideration or cash, dividends or
distributions in respect of such Certificate shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by Giant, on a daily
basis. Any interest and other income resulting from such investments shall be
paid to Giant.
(i) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration and, if applicable, any cash in lieu of
fractional shares, and unpaid dividends and distributions on shares of Giant
Common Stock deliverable in respect thereof, pursuant to this Agreement.
(j) Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of ▇▇▇▇▇ Common Stock outstanding immediately
prior to the Effective Time held by a holder (if any) who is entitled to demand,
and who properly demands, appraisal for such shares in accordance with Section
262 of the DGCL ("Dissenting Shares") shall not be converted into a right to
receive Merger Consideration unless such holder fails to perfect or otherwise
loses such holder's right to appraisal, if any. If after the Effective Time such
holder fails to perfect or loses any such right to appraisal, such Dissenting
Shares shall be treated as if they had been converted as of the Effective Time
into a right to receive Merger Consideration pursuant to Section 2.01(b). ▇▇▇▇▇
shall give prompt written notice to Giant of any demands received by ▇▇▇▇▇ for
appraisal of shares of ▇▇▇▇▇ Common Stock and Giant shall have the right to
participate in negotiations and proceedings with respect to such demands. Prior
to the Effective Time, ▇▇▇▇▇ shall not, except with the prior written consent of
Giant, which consent shall not be unreasonably withheld, make any payment with
respect to, or settle or offer to settle, any such demands. Any Merger
Consideration that would otherwise have been allocated to the Dissenting Shares
if
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the holders thereof had not properly perfected their appraisal rights will not
be paid under Section 2.01(b).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01. Representations and Warranties of ▇▇▇▇▇. Except as disclosed in
the ▇▇▇▇▇ Filed SEC Documents (as such term is defined in Section 3.01(g)) or as
set forth on the Disclosure Schedule delivered by ▇▇▇▇▇ to Giant prior to the
execution of this Agreement, which schedule shall identify exceptions and other
information by specific Section references (the "▇▇▇▇▇ Disclosure Schedule"),
▇▇▇▇▇ represents and warrants to Giant as follows:
(a) Organization, Standing and Corporate Power. Each of ▇▇▇▇▇ and
its Significant Subsidiaries is a corporation or other legal entity duly
organized, validly existing and in good standing (with respect to jurisdictions
which recognize such concept) under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power and authority to carry
on its business as now being conducted. Each of ▇▇▇▇▇ and its Significant
Subsidiaries is duly qualified or licensed to do business and is in good
standing (with respect to jurisdictions which recognize such concept) in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed or to be in
good standing individually or in the aggregate would not have a material adverse
effect (as defined in Section 8.03) on ▇▇▇▇▇. ▇▇▇▇▇ has delivered or made
available to Giant prior to the execution of this Agreement complete and correct
copies of its certificate of incorporation and bylaws and has made available to
Giant the certificates of incorporation and bylaws (or comparable organizational
documents) of its Significant Subsidiaries, in each case as amended to date. As
used in this Agreement, a "Significant Subsidiary" means any subsidiary of ▇▇▇▇▇
or Giant, as the case may be, that would constitute a "significant subsidiary"
of such party within the meaning of Rule 1-02 of Regulation S-X of the
Securities and Exchange Commission (the "SEC").
(b) Subsidiaries. Exhibit 21.1 to Holly's Annual Report on Form
10-K for the fiscal year ended July 31, 1997 includes all the subsidiaries of
▇▇▇▇▇ which as of the date of this Agreement are Significant Subsidiaries. All
the outstanding shares of capital stock of, or other equity interests in, each
such Significant Subsidiary have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by ▇▇▇▇▇, free and clear of
all pledges, claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever (collectively, "Liens").
(c) Capital Structure. The authorized capital stock of ▇▇▇▇▇
consists of 20,000,000 shares of ▇▇▇▇▇ Common Stock and 1,000,000 shares of
preferred stock, par value $1.00 per share ("▇▇▇▇▇ Preferred Stock"). At the
close of business on April 14, 1998, (i) 8,253,514 shares of ▇▇▇▇▇ Common Stock
were issued and outstanding, (ii) 396,768 shares of ▇▇▇▇▇ Common Stock were held
by ▇▇▇▇▇ in its treasury, (iii) no shares of ▇▇▇▇▇ Preferred Stock were
designated, issued, outstanding or held by ▇▇▇▇▇ in its treasury, and (iv)
751,500 shares of ▇▇▇▇▇ Common Stock were reserved for issuance pursuant to the
▇▇▇▇▇ Corporation Stock Option Plan
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(the "▇▇▇▇▇ Stock Plan"). Except as set forth above, at the close of business on
April 14, 1998: (x) no shares of capital stock or other voting securities of
▇▇▇▇▇ were issued, reserved for issuance or outstanding; and (y) there were no
outstanding stock appreciation rights (other than to the extent ▇▇▇▇▇ phantom
stock rights could be deemed to constitute such rights). The ▇▇▇▇▇ Disclosure
Schedule sets forth a complete and correct list, as of April 14, 1998, of the
number of shares of ▇▇▇▇▇ Common Stock subject to outstanding options under the
▇▇▇▇▇ Stock Plan and the exercise prices thereof. All outstanding shares of
capital stock of ▇▇▇▇▇ are, and all shares which may be issued will be, when
issued, duly authorized, validly issued, fully paid, nonassessable and not
subject to preemptive rights. As of the close of business on April 14, 1998,
there were no bonds, debentures, notes or other indebtedness of ▇▇▇▇▇ having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which stockholders of ▇▇▇▇▇ may vote. Except
for options outstanding under the ▇▇▇▇▇ Stock Plan, as of the close of business
on April 14, 1998, there were no outstanding securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of any kind
to which ▇▇▇▇▇ or any of its subsidiaries is a party or by which any of them is
bound obligating ▇▇▇▇▇ or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of ▇▇▇▇▇ or of any of its subsidiaries or obligating
▇▇▇▇▇ or any of its subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. As of the close of business on April 14, 1998, there were no
outstanding contractual obligations of ▇▇▇▇▇ or any of its subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of ▇▇▇▇▇ or
any of its wholly owned subsidiaries. As of the close of business on April 14,
1998, there were no outstanding contractual obligations of ▇▇▇▇▇ to vote or to
dispose of any shares of the capital stock of any of its subsidiaries.
(d) Authority; Noncontravention. ▇▇▇▇▇ has all requisite
corporate power and authority to enter into this Agreement and, subject to the
▇▇▇▇▇ Stockholder Approval (as defined in Section 3.01(m)), to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by ▇▇▇▇▇ and the consummation by ▇▇▇▇▇ of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of ▇▇▇▇▇, subject to ▇▇▇▇▇ Stockholder Approval.
This Agreement has been duly executed and delivered by ▇▇▇▇▇ and constitutes the
legal, valid and binding obligation of ▇▇▇▇▇, enforceable against ▇▇▇▇▇ in
accordance with its terms. The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result in
any obligation to or result in the creation of any Lien upon any of the
properties or assets of ▇▇▇▇▇ or any of its Significant Subsidiaries under, (i)
the certificate of incorporation or bylaws of ▇▇▇▇▇ or the comparable
organizational documents of any of its Significant Subsidiaries, (ii) any
material loan or credit agreement, note, bond, mortgage, indenture, lease or
other material agreement, instrument, permit, concession, franchise or license
applicable to ▇▇▇▇▇ or any of its Significant Subsidiaries or their respective
properties or assets, (iii) any employment, consulting or similar agreement, or
(iv) subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation
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applicable to ▇▇▇▇▇ or any of its Significant Subsidiaries or their respective
properties or assets, other than any such conflicts, violations, defaults,
rights, losses or Liens that individually or in the aggregate would not (x) have
a material adverse effect on ▇▇▇▇▇, (y) materially impair the ability of ▇▇▇▇▇
to perform its obligations under this Agreement, or (z) prevent or materially
delay the consummation of any of the transactions contemplated by this
Agreement. No consent, approval, order or authorization of, or registration,
declaration or filing with, any federal, state, local or foreign government or
any court, administrative or regulatory agency or commission or other
governmental authority or agency (a "Governmental Entity") is required by or
with respect to ▇▇▇▇▇ or any of its Significant Subsidiaries in connection with
the execution and delivery of this Agreement by ▇▇▇▇▇ or the consummation by
▇▇▇▇▇ of the transactions contemplated by this Agreement, except for: (1) the
filing of a premerger notification and report form by ▇▇▇▇▇ under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"); (2) the filing with the SEC of (A) a proxy statement relating to the
▇▇▇▇▇ Stockholders Meeting (as defined in Section 5.01(b)) (such proxy
statement, together with the proxy statement relating to the Giant Stockholders
Meeting (as defined in Section 5.01(c)), in each case as amended or supplemented
from time to time, the "Joint Proxy Statement"), and (B) such reports under
Section 13(a), 13(d), 15(d) or 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as may be required in connection with this
Agreement and the transactions contemplated by this Agreement; (3) the filing of
the Certificate of Merger with the Delaware Secretary of State and appropriate
documents with the relevant authorities of other states in which ▇▇▇▇▇ is
qualified to do business; (4) such other filings and consents as may be required
under any environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval necessitated by the Merger or the
transactions contemplated by this Agreement; and (5) such consents, approvals,
orders or authorizations the failure of which to be made or obtained would not
reasonably be expected to have a material adverse effect on ▇▇▇▇▇.
(e) SEC Documents; Undisclosed Liabilities. ▇▇▇▇▇ has timely
filed all required reports, schedules, forms, statements and other documents
with the SEC since August 1, 1996 (the "▇▇▇▇▇ SEC Documents"). As of their
respective dates, the ▇▇▇▇▇ SEC Documents complied in all material respects with
the requirements of the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act, as the case may be, and the rules and regulations of
the SEC promulgated thereunder applicable to such ▇▇▇▇▇ SEC Documents, and none
of the ▇▇▇▇▇ SEC Documents when filed contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to the extent
that information contained in any ▇▇▇▇▇ SEC Document has been revised or
superseded by a later ▇▇▇▇▇ Filed SEC Document, none of the ▇▇▇▇▇ SEC Documents
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of ▇▇▇▇▇ included in the ▇▇▇▇▇ SEC
Documents comply as to form, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and
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fairly present in all material respects the consolidated financial position of
▇▇▇▇▇ and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal recurring
year-end audit adjustments). Except (i) as reflected in such financial
statements or in the notes thereto, (ii) as contemplated by this Agreement,
(iii) for liabilities incurred in connection with this Agreement or the
transactions contemplated by this Agreement, and (iv) for liabilities and
obligations incurred since January 31, 1998 in the ordinary course of business
consistent with past practice, neither ▇▇▇▇▇ nor any of its subsidiaries has any
material liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise), including liabilities arising under any laws relating
to the protection of health, safety or the environment ("Environmental Laws")
which, individually or in the aggregate, could reasonably be expected to have a
material adverse effect on ▇▇▇▇▇.
(f) Information Supplied. None of the written information
designated or to be designated by ▇▇▇▇▇ and delivered to Giant specifically for
inclusion or incorporation by reference in (i) the registration statement on
Form S-4 to be filed with the SEC by Giant in connection with the issuance of
Giant Common Stock in the Merger (the "Form S-4") will, at the time the Form S-4
is filed with the SEC or at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) the Joint Proxy Statement will, at the date it
is first mailed to Holly's stockholders or at the time of the ▇▇▇▇▇ Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Joint Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by ▇▇▇▇▇ with
respect to statements made or incorporated by reference therein based on
information supplied by Giant specifically for inclusion or incorporation by
reference in the Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except (i) as
disclosed in the ▇▇▇▇▇ SEC Documents filed and publicly available prior to the
date of this Agreement (as amended to the date of this Agreement, the "▇▇▇▇▇
Filed SEC Documents"), (ii) for the transactions contemplated by this Agreement,
and (iii) for liabilities incurred in connection with or as a result of this
Agreement, since the date of the most recent financial statements included in
the ▇▇▇▇▇ Filed SEC Documents, ▇▇▇▇▇ has conducted its business only in the
ordinary course, and there has not been (1) any material adverse change in
▇▇▇▇▇; (2) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of Holly's
capital stock, other than regular quarterly dividends of $.15 per share on the
▇▇▇▇▇ Common Stock; (3) any split, combination or reclassification of any of
Holly's capital stock or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for shares of
Holly's capital stock; (4) other than as permitted by Sections 401(a)(xiii) and
5.07, (A) any granting by ▇▇▇▇▇ or any of its Significant Subsidiaries to any
director, executive officer or other key employee of ▇▇▇▇▇ of any increase in
compensation, except for normal increases in the ordinary course of business
consistent with past practice or as required under employment agreements in
effect as of the date of the most recent financial statements
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included in the ▇▇▇▇▇ Filed SEC Documents, (B) any granting by ▇▇▇▇▇ or any of
its Significant Subsidiaries to any such director, executive officer or key
employee of any increase in severance or termination pay, except as required
under any employment, severance or termination agreements in effect as of the
date of the most recent financial statements included in the ▇▇▇▇▇ Filed SEC
Documents, or (C) any entry by ▇▇▇▇▇ or any of its subsidiaries into any
employment, severance or termination agreement with any such executive officer
or key employee; or (5) except insofar as may have been disclosed in the ▇▇▇▇▇
Filed SEC Documents or required by a change in generally accepted accounting
principles, any change in accounting methods, principles or practices by ▇▇▇▇▇
materially affecting its assets, liabilities or business. For purposes of this
Agreement, "key employee" means any employee whose current salary and targeted
bonus exceeds $100,000 per annum.
(h) Litigation. There is no suit, action or proceeding pending
or, to the knowledge of ▇▇▇▇▇, threatened against or affecting ▇▇▇▇▇ or any of
its subsidiaries that individually or in the aggregate could reasonably be
expected to have a material adverse effect on ▇▇▇▇▇, nor is there any judgment,
order or decree of any Governmental Entity or arbitrator outstanding against
▇▇▇▇▇ or any of its subsidiaries having, or which could reasonably be expected
to have, any such effect.
(i) Compliance with Applicable Laws. ▇▇▇▇▇ and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities which are material to the operation of
the businesses of ▇▇▇▇▇ and its subsidiaries, taken as a whole (the "▇▇▇▇▇
Permits"). ▇▇▇▇▇ and its subsidiaries are in compliance with the terms of the
▇▇▇▇▇ Permits and all applicable statutes, laws, ordinances, rules and
regulations, including Environmental Laws, except where the failure so to
comply, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on ▇▇▇▇▇. The businesses of ▇▇▇▇▇ and its
subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any Governmental Entity, including Environmental Laws, except for
possible violations which could not reasonably be expected to have a material
adverse effect on ▇▇▇▇▇. As of the date of this Agreement, no action, demand,
requirement or investigation by any Governmental Entity with respect to ▇▇▇▇▇ or
any of its subsidiaries is pending or, to the knowledge of ▇▇▇▇▇, threatened,
other than, in each case, those the outcome of which, individually or in the
aggregate, could not reasonably be expected to have a material adverse effect on
▇▇▇▇▇.
(j) Absence of Changes in Benefit Plans. Since the date of the
most recent financial statements included in the ▇▇▇▇▇ Filed SEC Documents,
there has not been any adoption or amendment in any material respect by ▇▇▇▇▇ or
any of its subsidiaries of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding (whether or not legally binding) providing benefits
to any current or former employee, officer or director of ▇▇▇▇▇ or any of its
wholly-owned subsidiaries. Except as permitted by Sections 4.01(a)(xiii) and
5.07, since the date of the most recent financial statements included in the
▇▇▇▇▇ Filed SEC Documents, neither ▇▇▇▇▇ nor any of its wholly-owned
subsidiaries has entered into any employment, consulting, severance, termination
or
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indemnification agreements, arrangements or understandings with any current or
former employee, officer or director of ▇▇▇▇▇ or any of its wholly-owned
subsidiaries.
(k) ERISA Compliance.
(i) With respect to each employee benefit plan (including,
without limitation, any "employee benefit plan," as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) (all
the foregoing being herein called "Benefit Plans"), maintained or contributed to
by ▇▇▇▇▇ or any subsidiary of ▇▇▇▇▇ (the "▇▇▇▇▇ Benefit Plans"), ▇▇▇▇▇ has given
Giant the opportunity to review a true and correct copy of (A) the most recent
annual report (Form 5500) filed with the IRS, (B) such ▇▇▇▇▇ Benefit Plans, (C)
each trust agreement relating to such ▇▇▇▇▇ Benefit Plans, (D) the most recent
summary plan description for each ▇▇▇▇▇ Benefit Plan for which a summary plan
description is required, (E) the most recent actuarial report or valuation
relating to ▇▇▇▇▇ Benefit Plans subject to Title IV of ERISA, and (F) the most
recent determination letter issued by the IRS with respect to any ▇▇▇▇▇ Benefit
Plans qualified under Section 401(a) of the Code.
(ii) With respect to the ▇▇▇▇▇ Benefit Plans, individually
and in the aggregate, no event has occurred and, to the knowledge of ▇▇▇▇▇,
there exists no condition or set of circumstances, in connection with which
▇▇▇▇▇ or any of its subsidiaries could be subject to any liability that is
reasonably likely to have a material adverse effect on ▇▇▇▇▇ (except liability
for benefits claims and funding obligations payable in the ordinary course)
under ERISA, the Code or any other applicable law.
(iii) Each ▇▇▇▇▇ Benefit Plan has been administered in
accordance with its terms except for any failures so to administer any ▇▇▇▇▇
Benefit Plan as would not individually or in the aggregate have a material
adverse effect on ▇▇▇▇▇. ▇▇▇▇▇, its subsidiaries and all the ▇▇▇▇▇ Benefit Plans
are in compliance with the applicable provisions of ERISA, the Code and all
other applicable laws and the terms of all applicable collective bargaining
agreements, except for any failures to be in such compliance as would not
individually or in the aggregate have a material adverse effect on ▇▇▇▇▇.
(iv) No employee of ▇▇▇▇▇ will be entitled to any additional
benefits or any acceleration of the time of payment or vesting of any benefits
under any ▇▇▇▇▇ Benefit Plan as a result of the transactions contemplated by
this Agreement.
(l) Taxes.
(i) Each of ▇▇▇▇▇ and its subsidiaries has filed all tax
returns and reports required to be filed by it or requests for extensions to
file such returns or reports have been timely filed, granted and have not
expired, except to the extent that such failures to file or to have extensions
granted that remain in effect individually or in the aggregate would not have a
material adverse effect on ▇▇▇▇▇. ▇▇▇▇▇ and each of its subsidiaries has paid
(or ▇▇▇▇▇ has paid on its behalf) all taxes shown as due on such returns, and
the most recent financial statements contained in the ▇▇▇▇▇ Filed SEC Documents
reflect an adequate reserve for all taxes payable by
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▇▇▇▇▇ and its subsidiaries for all taxable periods and portions thereof accrued
through the date of such financial statements.
(ii) No deficiencies for any taxes have been proposed,
asserted or assessed against ▇▇▇▇▇ or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or in the
aggregate would not have a material adverse effect on ▇▇▇▇▇.
(iii) Neither ▇▇▇▇▇ nor any of its subsidiaries has taken any
action that is reasonably likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
(iv) As used in this Agreement, "taxes" shall include all
federal, state and local income, property, sales, excise and other taxes or
similar governmental charges.
(m) Voting Requirements. The affirmative vote of the holders of a
majority of the voting power of all outstanding shares of ▇▇▇▇▇ Common Stock,
voting as a single class, at the ▇▇▇▇▇ Stockholders Meeting (the "▇▇▇▇▇
Stockholder Approval") to adopt this Agreement is the only vote of the holders
of any class or series of Holly's capital stock necessary to approve and adopt
this Agreement.
(n) State Takeover Statutes. The Board of Directors of ▇▇▇▇▇ has
approved the terms of this Agreement and the consummation of the Merger and the
other transactions contemplated by this Agreement and such approval constitutes
approval of the Merger and the other transactions contemplated by this Agreement
by the ▇▇▇▇▇ Board of Directors under the provisions of Section 203 of the DGCL.
(o) Brokers. Except for ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of ▇▇▇▇▇.
(p) Opinion of Financial Advisor. ▇▇▇▇▇ has received the opinion
of ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation dated the date of this
Agreement, to the effect that, as of such date, the Merger Consideration is fair
to Holly's stockholders from a financial point of view, a signed copy of which
opinion has been delivered to Giant.
(q) Ownership of Giant Common Stock. Neither ▇▇▇▇▇ nor, to its
knowledge, any of its affiliates, (i) beneficially owns (as such term is defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, or (ii) is party
to any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of, in each case, shares of capital stock of Giant.
3.02. Representations and Warranties of Giant. Except as disclosed in
the Giant Filed SEC Documents (as such term is defined in Section 3.02(g)) or as
set forth on the Disclosure
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Schedule delivered by Giant to ▇▇▇▇▇ prior to the execution of this Agreement,
which schedule shall identify exceptions and other information by specific
Section references (the "Giant Disclosure Schedule"), Giant represents and
warrants to ▇▇▇▇▇ as follows:
(a) Organization, Standing and Corporate Power. Each of Giant
and its Significant Subsidiaries is a corporation or other legal entity duly
organized, validly existing and in good standing (with respect to jurisdictions
which recognize such concept) under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power and authority to carry
on its business as now being conducted. Each of Giant and its Significant
Subsidiaries is duly qualified or licensed to do business and is in good
standing (with respect to jurisdictions which recognize such concept) in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed or to be in
good standing individually or in the aggregate would not have a material adverse
effect on Giant. Giant has delivered or made available to ▇▇▇▇▇ prior to the
execution of this Agreement complete and correct copies of its certificate of
incorporation and bylaws and has made available to ▇▇▇▇▇ the certificates of
incorporation and bylaws (or comparable organizational documents) of its
Significant Subsidiaries, in each case as amended to date.
(b) Subsidiaries. Exhibit 21 to Giant's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 includes all the subsidiaries
of Giant which as of the date of this Agreement are Significant Subsidiaries.
All the outstanding shares of capital stock of, or other equity interests in,
each such Significant Subsidiary have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by Giant, free and clear of
all Liens.
(c) Capital Structure. The authorized capital stock of Giant
consists of 50,000,000 shares of Giant Common Stock and 10,000,000 shares of
preferred stock, par value $.01 per share, of Giant ("Giant Preferred Stock").
At the close of business on April 14, 1998, (i) 10,993,267 shares of Giant
Common Stock were issued and outstanding, (ii) 1,239,100 shares of Giant Common
Stock were held by Giant in its treasury, (iii) no shares of Giant Preferred
Stock were designated, issued, outstanding or held by Giant in its treasury, and
(iv) 421,550 shares of Giant Common Stock were reserved for issuance pursuant to
Giant's 1989 Stock Incentive Plan (the "Giant Stock Plan"). Except as set forth
above, at the close of business on April 14, 1998: (x) no shares of capital
stock or other voting securities of Giant were issued, reserved for issuance or
outstanding; and (y) there were no outstanding stock appreciation rights (other
and to the extent that Giant phantom stock rights would be deemed to constitute
such rights). The Giant Disclosure Schedule sets forth a complete and correct
list, as of April 14, 1998, of the number of shares of Giant Common Stock
subject to outstanding options under the Giant Stock Plan and the exercise
prices thereof. All outstanding shares of capital stock of Giant are, and all
shares which may be issued will be, when issued, duly authorized, validly
issued, fully paid, nonassessable and not subject to preemptive rights. As of
the close of business on April 14, 1998, there were no bonds, debentures, notes
or other indebtedness of Giant having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of Giant may vote. Except for options outstanding under the Giant
Stock Plan, as of the close of business on April 14, 1998, there were no
outstanding securities, options, warrants,
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calls, rights, commitments, agreements, arrangements or undertakings of any kind
to which Giant or any of its subsidiaries is a party or by which any of them is
bound obligating Giant or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of Giant or of any of its subsidiaries or obligating
Giant or any of its subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. As of the close of business on April 14, 1998, there were no
outstanding contractual obligations of Giant or any of its subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of Giant or
any of its wholly owned subsidiaries. As of the close of business on April 14,
1998, there were no outstanding contractual obligations of Giant to vote or to
dispose of any shares of the capital stock of any of its subsidiaries.
(d) Authority; Noncontravention. Giant has all requisite
corporate power and authority to enter into this Agreement and, subject to the
Giant Stockholder Approval (as defined in Section 3.02(m)), to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by Giant and the consummation by Giant of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of Giant, subject to Giant Stockholder Approval.
This Agreement has been duly executed and delivered by Giant and constitutes the
legal, valid and binding obligation of Giant, enforceable against Giant in
accordance with its terms. The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result in
any obligation to or result in the creation of any Lien upon any of the
properties or assets of Giant or any of its Significant Subsidiaries under, (i)
the certificate of incorporation or bylaws of Giant or the comparable
organizational documents of any of its Significant Subsidiaries, (ii) any
material loan or credit agreement, note, bond, mortgage, indenture, lease or
other material agreement, instrument, permit, concession, franchise or license
applicable to Giant or any of its Significant Subsidiaries or their respective
properties or assets, (iii) any employment, consulting or similar agreement, or
(iv) subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Giant or any of its Significant Subsidiaries or
their respective properties or assets, other than any such conflicts,
violations, defaults, rights, losses or Liens that individually or in the
aggregate would not (x) have a material adverse effect on Giant, (y) materially
impair the ability of Giant to perform its obligations under this Agreement, or
(z) prevent or materially delay the consummation of any of the transactions
contemplated by this Agreement. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Entity is required
by or with respect to Giant or any of its Significant Subsidiaries in connection
with the execution and delivery of this Agreement by Giant or the consummation
by Giant of the transactions contemplated by this Agreement, except for (1) the
filing of a premerger notification and report form by Giant under the HSR Act;
(2) the filing with the SEC of (A) the Joint Proxy Statement relating to the
Giant Stockholders Meeting (as defined in Section 5.01(c)), (B) the Form S-4 and
(C) such reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act
as may be required in connection with this Agreement and the transactions
contemplated by this
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Agreement; (3) the filing of the Certificate of Merger with the Delaware
Secretary of State and appropriate documents with the relevant authorities of
other states in which Giant is qualified to do business; (4) filings with
Governmental Entities to satisfy any applicable requirements of state securities
or "blue sky" laws; (5) such filings with and approvals of the NYSE to permit
the shares of Giant Common Stock that are to be issued in the Merger to be
listed on the NYSE; (6) such other filings and consents as may be required under
any environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval necessitated by the Merger or the
transactions contemplated by this Agreement; and (7) such consents, approvals,
orders or authorizations the failure of which to be made or obtained would not
reasonably be expected to have a material adverse effect on Giant.
(e) SEC Documents; Undisclosed Liabilities. Giant has timely
filed all required reports, schedules, forms, statements and other documents
with the SEC since January 1, 1997 (the "Giant SEC Documents"). As of their
respective dates, the Giant SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to
such Giant SEC Documents, and none of the Giant SEC Documents when filed
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any Giant SEC
Document has been revised or superseded by a later Giant Filed SEC Document,
none of the Giant SEC Documents contains any untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of Giant included
in the Giant SEC Documents comply as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of Giant and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal recurring year-end audit adjustments).
Except (i) as reflected in such financial statements or in the notes thereto,
(ii) as contemplated by this Agreement, (iii) for liabilities incurred in
connection with this Agreement or the transactions contemplated by this
Agreement, and (iv) for liabilities and obligations incurred since December 31,
1997 in the ordinary course of business consistent with past practice, neither
Giant nor any of its subsidiaries has any material liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise), including
liabilities arising under any Environmental Laws which, individually or in the
aggregate, could reasonably be expected to have a material adverse effect on
Giant.
(f) Information Supplied. None of the information supplied or
to be supplied by Giant specifically for inclusion or incorporation by reference
in (i) the Form S-4 will, at the time the Form S-4 is filed with the SEC or at
the time it becomes effective under the Securities
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Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) the Joint Proxy Statement will, at the date it
is first mailed to Giant's stockholders or at the time of the Giant Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Joint Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by Giant with
respect to statements made or incorporated by reference therein based on
information supplied by ▇▇▇▇▇ specifically for inclusion or incorporation by
reference in the Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except (i) as
disclosed in the Giant SEC Documents filed and publicly available prior to the
date of this Agreement (as amended to the date of this Agreement, the "Giant
Filed SEC Documents"), (ii) for the transactions provided for herein, and (iii)
for liabilities incurred in connection with or as a result of this Agreement,
since the date of the most recent financial statements included in the Giant
Filed SEC Documents, Giant has conducted its business only in the ordinary
course, and there has not been (1) any material adverse change in Giant; (2) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of Giant's capital
stock, other than regular quarterly dividends of $.05 per share on the Giant
Common Stock; (3) any split, combination or reclassification of any of Giant's
capital stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of Giant's
capital stock; (4) other than as permitted by Sections 4.01(b)(xiii) and 5.07,
(A) any granting by Giant or any of its Significant Subsidiaries to any
director, executive officer or other key employee of Giant of any increase in
compensation, except for normal increases in the ordinary course of business
consistent with past practice or as required under employment agreements in
effect as of the date of the most recent financial statements included in the
Giant Filed SEC Documents, (B) any granting by Giant or any of its Significant
Subsidiaries to any such director, executive officer or key employee of any
increase in severance or termination pay, except as required under any
employment, severance or termination agreements in effect as of the date of the
most recent financial statements included in the Giant Filed SEC Documents, or
(C) any entry by Giant or any of its subsidiaries into any employment, severance
or termination agreement with any such executive officer or key employee; or (5)
except insofar as may have been disclosed in the Giant Filed SEC Documents or
required by a change in generally accepted accounting principles, any change in
accounting methods, principles or practices by Giant materially affecting its
assets, liabilities or business.
(h) Litigation. There is no suit, action or proceeding pending
or, to the knowledge of Giant, threatened against or affecting Giant or any of
its subsidiaries that individually or in the aggregate could reasonably be
expected to have a material adverse effect on Giant , nor is there any judgment,
order or decree of any Governmental Entity or arbitrator outstanding against
Giant or any of its subsidiaries having, or which could reasonably be expected
to have, any such effect.
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(i) Compliance with Applicable Laws. Giant and its subsidiaries
hold all permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities which are material to the operation of the businesses of
Giant and its subsidiaries, taken as a whole (the "Giant Permits"). Giant and
its subsidiaries are in compliance with the terms of the Giant Permits and all
applicable statutes, laws, ordinances, rules and regulations, including
Environmental Laws, except where the failure so to comply, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on Giant. The businesses of Giant and its subsidiaries are not being
conducted in violation of any law, ordinance or regulation of any Governmental
Entity, including Environmental Laws, except for possible violations which could
not reasonably be expected to have a material adverse effect on Giant. As of the
date of this Agreement, no action, demand, requirement or investigation by any
Governmental Entity with respect to Giant or any of its subsidiaries is pending
or, to the knowledge of Giant, threatened, other than, in each case, those the
outcome of which, individually or in the aggregate could not reasonably be
expected to have a material adverse effect on Giant.
(j) Absence of Changes in Benefit Plans. Since the date of the
most recent financial statements included in the Giant Filed SEC Documents,
there has not been any adoption or amendment in any material respect by Giant or
any of its subsidiaries of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding (whether or not legally binding) providing benefits
to any current or former employee, officer or director of Giant or any of its
wholly-owned subsidiaries. Except as permitted by Sections 4.01(b)(xiii) and
5.07, since the date of the most recent financial statements included in the
Giant Filed SEC Documents, neither Giant nor any of its wholly-owned
subsidiaries has entered into any employment, consulting, severance, termination
or indemnification agreements, arrangements or understandings with any current
or former employee, officer or director of Giant or any of its wholly-owned
subsidiaries.
(k) ERISA Compliance.
(i) With respect to Benefit Plans maintained or contributed
to by Giant or any subsidiary of Giant (the "Giant Benefit Plans"), Giant has
given ▇▇▇▇▇ the opportunity to review a true and correct copy of (A) the most
recent annual report (Form 5500) filed with the IRS, (B) such Giant Benefit
Plans, (C) each trust agreement relating to such Giant Benefit Plans, (D) the
most recent summary plan description for each Giant Benefit Plan for which a
summary plan description is required, (E) the most recent actuarial report or
valuation relating to Giant Benefit Plans subject to Title IV of ERISA, and (F)
the most recent determination letter issued by the IRS with respect to any Giant
Benefit Plans qualified under Section 401(a) of the Code.
(ii) With respect to the Giant Benefit Plans, individually
and in the aggregate, no event has occurred and, to the knowledge of Giant,
there exists no condition or set of circumstances, in connection with which
Giant or any of its subsidiaries could be subject to any liability that is
reasonably likely to have a material adverse effect on Giant (except liability
for
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benefits claims and funding obligations payable in the ordinary course) under
ERISA, the Code or any other applicable law.
(iii) Each Giant Benefit Plan has been administered in
accordance with its terms, except for any failures so to administer any Giant
Benefit Plans as would not individually or in the aggregate have a material
adverse effect on Giant. Giant, its subsidiaries and all the Giant Benefit Plans
are in compliance with the applicable provisions of ERISA, the Code and all
other applicable laws and the terms of all applicable collective bargaining
agreements, except for any failures to be in such compliance as would not
individually or in the aggregate have a material adverse effect on Giant.
(iv) No employee of Giant will be entitled to any additional
benefits or any acceleration of the time of payment or vesting of any benefits
under any Giant Benefit Plan as a result of the transactions contemplated by
this Agreement.
(l) Taxes.
(i) Each of Giant and its subsidiaries has filed all tax
returns and reports required to be filed by it or requests for extensions to
file such returns or reports have been timely filed, granted and have not
expired, except to the extent that such failures to file or to have extensions
granted that remain in effect individually or in the aggregate would not have a
material adverse effect on Giant. Giant and each of its subsidiaries has paid
(or Giant has paid on its behalf) all taxes shown as due on such returns, and
the most recent financial statements contained in the Giant Filed SEC Documents
reflect an adequate reserve for all taxes payable by Giant and its subsidiaries
for all taxable periods and portions thereof accrued through the date of such
financial statements.
(ii) No deficiencies for any taxes have been proposed,
asserted or assessed against Giant or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or in the
aggregate would not have a material adverse effect on Giant.
(iii) Neither Giant nor any of its subsidiaries has taken any
action that is reasonably likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
(m) Voting Requirements. The affirmative vote of the holders of a
majority of the voting power of all outstanding shares of Giant Common Stock,
voting as a single class, at the Giant Stockholders Meeting to adopt this
Agreement is the only vote of the holders of any class or series of Giant's
capital stock necessary to approve and adopt this Agreement and to issue the
Merger Consideration; provided, however, that the affirmative vote of the
holders of 80% of all outstanding shares of Giant Common Stock, voting as a
single class, at the Giant Stockholders Meeting is required to approve certain
of the amendments to Giant's certificate of incorporation and bylaws
contemplated by Exhibits A and B, respectively. For purposes of this Agreement,
the "Giant Stockholder Approval" means the majority and 80% votes described
above in this Section
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3.02(m) as are necessary to adopt this Agreement and the amendments to the Giant
certificate of incorporation and bylaws contemplated hereby.
(n) State Takeover Statutes. The Board of Directors of Giant has
approved the terms of this Agreement and the consummation of the Merger and the
other transactions contemplated by this Agreement and such approval constitutes
approval of the Merger and the other transactions contemplated by this Agreement
by the Giant Board of Directors under the provisions of Section 203 of the DGCL.
(o) Brokers. Except for Bear, ▇▇▇▇▇▇▇ & Co. Inc., no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Giant.
(p) Opinion of Financial Advisor. Giant has received the
opinion of Bear, ▇▇▇▇▇▇▇ & Co. Inc., dated the date of this Agreement, to the
effect that, as of such date, the Merger Consideration is fair to Giant and,
accordingly, to Giant's stockholders from a financial point of view, a signed
copy of which opinion has been delivered to ▇▇▇▇▇.
(q) Ownership of ▇▇▇▇▇ Common Stock. Neither Giant nor, to its
knowledge, any of its affiliates, (i) beneficially owns (as such term is defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, or (ii) is party
to any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of, in each case, shares of capital stock of ▇▇▇▇▇.
(r) Ownership of Giant Common Stock Upon Exchange. Immediately
after the Effective Time, the holders of shares of ▇▇▇▇▇ Common Stock issued and
outstanding immediately before the Effective Time shall, in the aggregate, have
the right to receive, and shall receive pursuant to the provisions of Article
II, that number of shares of Giant Common Stock such that such holders shall own
fifty percent (50%) of the issued and outstanding capital stock of the Surviving
Corporation.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.01. Conduct of Business.
(a) Conduct of Business by ▇▇▇▇▇. Except as contemplated by
this Agreement or as set forth in the ▇▇▇▇▇ Disclosure Schedule, during the
period from the date of this Agreement to the Effective Time, ▇▇▇▇▇ shall, and
shall cause its subsidiaries to, carry on their respective businesses in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted and in compliance in all material respects with all
applicable laws and regulations and, to the extent consistent therewith, use all
reasonable efforts to preserve intact their current business organizations, use
reasonable efforts to keep available the services of their
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current officers and other key employees and preserve their relationships with
those persons having business dealings with them to the end that their goodwill
and ongoing businesses shall be unimpaired at the Effective Time, except such
impairment as would not have a material adverse effect on ▇▇▇▇▇. Except as set
forth in the ▇▇▇▇▇ Disclosure Schedule, without limiting the generality of the
foregoing, during the period from the date of this Agreement to the Effective
Time, ▇▇▇▇▇ shall not, and shall not permit any of its subsidiaries to:
(i) other than dividends and distributions (including
liquidating distributions) by a direct or indirect wholly-owned subsidiary of
▇▇▇▇▇ to its parent, or by a subsidiary that is partially-owned by ▇▇▇▇▇ or any
of its subsidiaries, provided that ▇▇▇▇▇ or any such subsidiary receives or is
to receive its proportionate share thereof, and other than the regular quarterly
dividends of $.15 per share with respect to the ▇▇▇▇▇ Common Stock, (x) declare,
set aside or pay any dividends on, or make any other distributions in respect
of, any of its capital stock, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
(z) purchase, redeem or otherwise acquire any shares of capital stock of ▇▇▇▇▇
or any of its Significant Subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities (other than the issuance of
▇▇▇▇▇ Common Stock upon the exercise of ▇▇▇▇▇ Employee Stock Options outstanding
on the date of this Agreement and in accordance with their present terms);
(iii) amend its certificate of incorporation, bylaws or other
comparable organizational documents;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, limited liability company, partnership,
joint venture, association or other business organization or division thereof,
except for (x) acquisitions publicly announced before the date of this
Agreement, (y) such acquisitions which do not in the aggregate exceed $5,000,000
and (z) purchases of inventory, feedstock and other items in the ordinary course
of business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or assets,
other than (x) in the ordinary course of business consistent with past practice
and (y) sales of assets which do not individually or in the aggregate exceed
$5,000,000;
(vi) (x) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of ▇▇▇▇▇
or any of its wholly-owned subsidiaries, guarantee any debt securities of
another person, enter into any "keep well" or other agreement to maintain any
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financial statement condition of another person or enter into any arrangement
having the economic effect of any of the foregoing, except for short-term
borrowings and guarantees of indebtedness of its subsidiaries incurred in the
ordinary course of business consistent with past practice, or (y) make any
loans, advances or capital contributions to, or investments in, any other
person, other than to ▇▇▇▇▇ or any direct or indirect subsidiary of ▇▇▇▇▇ or to
officers and employees of ▇▇▇▇▇ or any of its subsidiaries for travel, business
or relocation expenses in the ordinary course of business;
(vii) make or agree to make any capital expenditure or
capital expenditures other than capital expenditures set forth in the operating
budget of ▇▇▇▇▇ previously furnished to Giant, the relevant portions of which
are set forth in the ▇▇▇▇▇ Disclosure Schedule, other than capital expenditures
that do not or would not constitute a material change;
(viii) make any tax election that could reasonably be
expected to have a material adverse effect on ▇▇▇▇▇ or settle or compromise any
material income tax liability;
(ix) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, of liabilities reflected or reserved against
in, or contemplated by, the most recent consolidated financial statements (or
the notes thereto) of ▇▇▇▇▇ included in the ▇▇▇▇▇ Filed SEC Documents, incurred
since the date of such financial statements in the ordinary course of business
consistent with past practice or which do not in the aggregate have a material
adverse effect on ▇▇▇▇▇;
(x) except in the ordinary course of business or except as
would not reasonably be expected to have a material adverse effect on ▇▇▇▇▇,
modify, amend or terminate any material contract or agreement to which ▇▇▇▇▇ or
any subsidiary is a party or waive, release or assign any material rights or
claims thereunder;
(xi) make any material change to its accounting methods,
principles or practices, except as may be required by generally accepted
accounting principles;
(xii) except as required by law or contemplated by this
Agreement, enter into, adopt or amend in any material respect or terminate any
▇▇▇▇▇ Benefit Plan or any other agreement, plan or policy involving ▇▇▇▇▇ or its
subsidiaries and one or more of their directors, officers or employees, or
materially change any actuarial or other assumption used to calculate funding
obligations with respect to any ▇▇▇▇▇ pension plans, or change the manner in
which contributions to any ▇▇▇▇▇ pension plans are made or the basis on which
such contributions are determined;
(xiii) except for (a) new employment agreements with Holly's
three highest-ranking executives on terms no more favorable than Giant's
employment agreements (as amended pursuant to Section 5.06(g)) with its three
highest-ranking executives (with base salaries equal to the executives' current
base salaries or such other amounts approved by Giant), (b)
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bonus payments to ▇▇▇▇▇ employees in amounts and forms as agreed to by the ▇▇▇▇▇
and Giant Boards of Directors prior to the effective date of the S-4 and to be
paid at or before the Closing, (c) normal increases in the ordinary course of
business consistent with past practice that, in the aggregate, do not materially
increase benefits or compensation expenses of ▇▇▇▇▇ or its subsidiaries, and (d)
as contemplated hereby or by the terms of any contract the existence of which
does not constitute a violation of this Agreement, increase the compensation of
any director, executive officer or other key employee of ▇▇▇▇▇ or pay any
benefit or amount not required by a plan or arrangement as in effect on the date
of this Agreement to any such person; or
(xiv) authorize, or commit or agree to take, any of the
foregoing actions.
(b) Conduct of Business by Giant. Except as contemplated by this
Agreement or as set forth in the Giant Disclosure Schedule, during the period
from the date of this Agreement to the Effective Time, Giant shall, and shall
cause its subsidiaries to, carry on their respective businesses in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted and in compliance in all material respects with all applicable laws
and regulations and, to the extent consistent therewith, use all reasonable
efforts to preserve intact their current business organizations, use reasonable
efforts to keep available the services of their current officers and other key
employees and preserve their relationships with those persons having business
dealings with them to the end that their goodwill and ongoing businesses shall
be unimpaired at the Effective Time, except such impairment as would not have a
material adverse effect on Giant. Except as set forth in the Giant Disclosure
Schedule, without limiting the generality of the foregoing, during the period
from the date of this Agreement to the Effective Time, Giant shall not, and
shall not permit any of its subsidiaries to:
(i) other than dividends and distributions (including
liquidating distributions) by a direct or indirect wholly-owned subsidiary of
Giant to its parent, or by a subsidiary that is partially-owned by Giant or any
of its subsidiaries, provided that Giant or any such subsidiary receives or is
to receive its proportionate share thereof, and other than the regular quarterly
dividends of $.05 per share with respect to the Giant Common Stock, (x) declare,
set aside or pay any dividends on, or make any other distributions in respect
of, any of its capital stock, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
(z) purchase, redeem or otherwise acquire any shares of capital stock of Giant
or any of its Significant Subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities (other than the issuance of
Giant Common Stock upon the exercise of Giant Employee Stock Options outstanding
on the date of this Agreement and in accordance with their present terms);
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(iii) except as contemplated by this Agreement, amend its
certificate of incorporation, bylaws or other comparable organizational
documents;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, limited liability company, partnership,
joint venture, association or other business organization or division thereof,
except for (x) acquisitions publicly announced before the date of this
Agreement, (y) such other acquisitions which do not in the aggregate exceed
$5,000,000 and (z) purchases of inventory, feedstock and other items in the
ordinary course of business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or assets,
other than (x) in the ordinary course of business consistent with past practice
and (y) sales of assets which do not individually or in the aggregate exceed
$5,000,000;
(vi) except as contemplated by Section 4.01(f) of this
Agreement, (x) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or warrants or
other rights to acquire any debt securities of Giant or any of its wholly-owned
subsidiaries, guarantee any debt securities of another person, enter into any
"keep well" or other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of any
of the foregoing, except for short-term borrowings and guarantees of
indebtedness of its subsidiaries incurred in the ordinary course of business
consistent with past practice, or (y) make any loans, advances or capital
contributions to, or investments in, any other person, other than to Giant or
any direct or indirect subsidiary of Giant or to officers and employees of Giant
or any of its subsidiaries for travel, business or relocation expenses in the
ordinary course of business;
(vii) make or agree to make any capital expenditure or
capital expenditures other than capital expenditures set forth in the operating
budget of Giant previously furnished to ▇▇▇▇▇, the relevant portions of which
are set forth in the Giant Disclosure Schedule, other than capital expenditures
that do not or would not constitute a material change;
(viii) make any tax election that could reasonably be
expected to have a material adverse effect on Giant or settle or compromise any
material income tax liability;
(ix) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, of liabilities reflected or reserved against
in, or contemplated by, the most recent consolidated financial statements (or
the notes thereto) of Giant included in the Giant Filed SEC Documents, incurred
since the date of such financial statements in the ordinary course of business
consistent with past practice or which do not in the aggregate have a material
adverse effect on Giant;
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(x) except in the ordinary course of business or except as
would not reasonably be expected to have a material adverse effect on Giant,
modify, amend or terminate any material contract or agreement to which Giant,
any subsidiary is a party or waive, release or assign any material rights or
claims thereunder;
(xi) make any material change to its accounting methods,
principles or practices, except as may be required by generally accepted
accounting principles;
(xii) except as required by law or contemplated by this
Agreement, enter into, adopt or amend in any material respect or terminate any
Giant Benefit Plan or any other agreement, plan or policy involving Giant or its
subsidiaries and one or more of their directors, officers or employees, or
materially change any actuarial or other assumption used to calculate funding
obligations with respect to any Giant pension plans, or change the manner in
which contributions to any Giant pension plans are made or the basis on which
such contributions are determined;
(xiii) except for (a) bonus payments to Giant employees in
amounts and forms as agreed to by the Giant and ▇▇▇▇▇ Boards of Directors prior
to the effective date of the Form S-4 and to be paid at or before the Closing,
(b) the amendments to the Giant employment agreements, stock options and phantom
stock rights described in Section 5.06(g), (c) normal increases in the ordinary
course of business consistent with past practice that, in the aggregate, do not
materially increase benefits or compensation expenses of Giant or its
subsidiaries, and (d) as contemplated hereby or by the terms of any contract the
existence of which does not constitute a violation of this Agreement, increase
the compensation of any director, executive officer or other key employee of
Giant or pay any benefit or amount not required by a plan or arrangement as in
effect on the date of this Agreement to any such person; or
(xiv) authorize, or commit or agree to take, any of the
foregoing actions.
(c) Coordination of Dividends. Each of Giant and ▇▇▇▇▇ shall
coordinate with the other regarding the declaration and payment of dividends in
respect of the Giant Common Stock and the ▇▇▇▇▇ Common Stock and the record
dates and payment dates relating thereto, it being the intention of Giant and
▇▇▇▇▇ that any holder of ▇▇▇▇▇ Common Stock shall not receive two dividends, or
fail to receive one dividend, for any single calendar quarter with respect to
its shares of ▇▇▇▇▇ Common Stock and/or any shares of Giant Common Stock any
such holder receives in exchange therefor pursuant to the Merger.
(d) Other Actions. Except as required by law, ▇▇▇▇▇ and Giant
shall not, and shall not permit any of their respective subsidiaries to,
voluntarily take any action that would, or that could reasonably be expected to,
result in (i) any of the representations and warranties of such party set forth
in this Agreement that are qualified as to materiality becoming untrue, (ii) any
of such representations and warranties that are not so qualified becoming untrue
in any material respect, or (iii) any of the conditions to the Merger set forth
in Article VI not being satisfied.
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(e) Advice of Changes. ▇▇▇▇▇ and Giant shall promptly advise
the other party orally and in writing of (i) any representation or warranty made
by it contained in this Agreement that is qualified as to materiality becoming
untrue or inaccurate in any respect or any such representation or warranty that
is not so qualified becoming untrue or inaccurate in any material respect, (ii)
the failure by it to comply in any material respect with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, or (iii) any change or event having, or
which, insofar as can reasonably be foreseen, could reasonably be expected to
have, a material adverse effect on such party or on the truth of their
respective representations and warranties or the ability of the conditions set
forth in Article VI to be satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
(f) Financing Arrangement. Giant and ▇▇▇▇▇ shall have arranged
for the Surviving Corporation to finance appropriately the redemption
contingency that will result on account of the Merger with respect to Giant's
outstanding 9% Senior Subordinated Notes due 2007 ($150,000,000 aggregate
principal amount) and its outstanding 9 3/4% Senior Subordinated Notes due 2003
($100,000,000 aggregate principal amount). Such arrangement shall be on terms
and in amounts that are acceptable to each of the Giant Board of Directors and
the ▇▇▇▇▇ Board of Directors.
4.02. No Solicitation by ▇▇▇▇▇.
(a) ▇▇▇▇▇ shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any of its officers, directors
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its subsidiaries to, directly
or indirectly through another person, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
to facilitate, any inquiries or the making of any proposal which constitutes any
▇▇▇▇▇ Takeover Proposal (as hereinafter defined) or (ii) participate in any
discussions or negotiations regarding any ▇▇▇▇▇ Takeover Proposal; provided,
however, that if, at any time prior to the adoption of this Agreement by the
holders of ▇▇▇▇▇ Common Stock, the Board of Directors of ▇▇▇▇▇ determines in
good faith, after consultation with outside counsel, that it is necessary to do
so in order to comply with its fiduciary duties to Holly's stockholders under
applicable law, ▇▇▇▇▇ may, in response to a ▇▇▇▇▇ Takeover Proposal which was
not solicited by it or which did not otherwise result from a breach of this
Section 4.02(a), and subject to compliance with Section 4.02(c), (x) furnish
information with respect to ▇▇▇▇▇ and its subsidiaries to any person pursuant to
a customary confidentiality agreement (as determined by ▇▇▇▇▇ after consultation
with its outside counsel) and (y) participate in negotiations regarding such
▇▇▇▇▇ Takeover Proposal. For purposes of this Agreement, "▇▇▇▇▇ Takeover
Proposal" means any inquiry, proposal or offer from any person relating to any
direct or indirect acquisition or purchase of 35% or more of the assets of ▇▇▇▇▇
and its subsidiaries or 35% or more of any class of equity securities of ▇▇▇▇▇
or any of its subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 35% or more of any
class of equity securities of ▇▇▇▇▇ or any of its subsidiaries, or any merger,
consolidation, business combination,
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recapitalization, liquidation, dissolution or similar transaction involving
▇▇▇▇▇ or any of its subsidiaries, other than the transactions contemplated by
this Agreement.
(b) Except as expressly permitted by this Section 4.02,
neither the Board of Directors of ▇▇▇▇▇ nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Giant, the approval or recommendation by such Board of Directors or
such committee of the Merger or this Agreement, (ii) approve or recommend, or
propose publicly to approve or recommend, any ▇▇▇▇▇ Takeover Proposal, or (iii)
cause ▇▇▇▇▇ to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, a "▇▇▇▇▇ Acquisition
Agreement") related to any ▇▇▇▇▇ Takeover Proposal. Notwithstanding the
foregoing, in the event that prior to the adoption of this Agreement by the
holders of ▇▇▇▇▇ Common Stock: (x) the Board of Directors of ▇▇▇▇▇ determines in
good faith, after it has received a ▇▇▇▇▇ Superior Proposal (as defined below)
and after consultation with outside counsel, that it is necessary to do so in
order to comply with its fiduciary duties to Holly's stockholders under
applicable law, the Board of Directors of ▇▇▇▇▇ may (subject to this and the
following sentences) withdraw or modify its approval or recommendation of the
Merger or this Agreement; or (y) the Board of Directors of ▇▇▇▇▇ determines in
good faith that there is not a substantial probability that the adoption of this
Agreement by holders of ▇▇▇▇▇ Common Stock will be obtained due to the existence
of a ▇▇▇▇▇ Superior Proposal, the Board of Directors of ▇▇▇▇▇ may (subject to
this and the following sentences) approve or recommend such ▇▇▇▇▇ Superior
Proposal or terminate this Agreement (and concurrently with or after such
termination, if it so chooses, cause ▇▇▇▇▇ to enter into any ▇▇▇▇▇ Acquisition
Agreement with respect to any ▇▇▇▇▇ Superior Proposal), but in each of the cases
set forth in this clause (y), only at a time that is after the fifth business
day following Giant's receipt of written notice advising Giant that the Board of
Directors of ▇▇▇▇▇ has received a ▇▇▇▇▇ Superior Proposal, specifying the
material terms and conditions of such ▇▇▇▇▇ Superior Proposal and identifying
the person making such ▇▇▇▇▇ Superior Proposal. For purposes of this Agreement,
a "▇▇▇▇▇ Superior Proposal" means any proposal made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than 50% of the combined voting power of the shares of ▇▇▇▇▇ Common Stock
then outstanding or all or substantially all the assets of ▇▇▇▇▇ and otherwise
on terms which the Board of Directors of ▇▇▇▇▇ determines in its good faith
judgment (based on the advice of a financial advisor of nationally recognized
reputation) to be more favorable to Holly's stockholders than the Merger and for
which financing, to the extent required, is then committed or which, in the good
faith judgment of the Board of Directors of ▇▇▇▇▇, is reasonably capable of
being obtained by such third party.
(c) In addition to the obligations of ▇▇▇▇▇ set forth in
paragraphs (a) and (b) of this Section 4.02, ▇▇▇▇▇ shall immediately advise
Giant orally and in writing of any request for information or of any ▇▇▇▇▇
Takeover Proposal, the material terms and conditions of such request or ▇▇▇▇▇
Takeover Proposal and the identity of the person making such request or ▇▇▇▇▇
Takeover Proposal. ▇▇▇▇▇ will keep Giant reasonably informed of the status and
details (including amendments or proposed amendments) of any such request or
▇▇▇▇▇ Takeover Proposal.
(d) Nothing contained in this Section 4.02 shall prohibit
▇▇▇▇▇ from taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the
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Exchange Act or from making any disclosure to Holly's stockholders if, in the
good faith judgment of the Board of Directors of ▇▇▇▇▇, after consultation with
outside counsel, failure so to disclose would be inconsistent with its fiduciary
duties to Holly's stockholders under applicable law; provided, however, that
neither ▇▇▇▇▇ nor its Board of Directors nor any committee thereof shall, except
as permitted by Section 4.02(b), withdraw or modify, or propose publicly to
withdraw or modify, its position with respect to this Agreement or the Merger or
approve or recommend, or propose publicly to approve or recommend, a ▇▇▇▇▇
Takeover Proposal.
4.03. No Solicitation By Giant.
(a) Giant shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any of its officers, directors
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its subsidiaries to, directly
or indirectly through another person, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
to facilitate, any inquiries or the making of any proposal which constitutes any
Giant Takeover Proposal (as hereinafter defined) or (ii) participate in any
discussions or negotiations regarding any Giant Takeover Proposal; provided,
however, that if, at any time prior to the adoption of this Agreement by the
holders of Giant Common Stock, the Board of Directors of Giant determines in
good faith, after consultation with outside counsel, that it is necessary to do
so in order to comply with its fiduciary duties to Giant's stockholders under
applicable law, Giant may, in response to a Giant Takeover Proposal which was
not solicited by it or which did not otherwise result from a breach of this
Section 4.03(a), and subject to compliance with Section 4.03(c), (x) furnish
information with respect to Giant and its subsidiaries to any person pursuant to
a customary confidentiality agreement (as determined by Giant after consultation
with its outside counsel) and (y) participate in negotiations regarding such
Giant Takeover Proposal. For purposes of this Agreement, "Giant Takeover
Proposal" means any inquiry, proposal or offer from any person relating to any
direct or indirect acquisition or purchase of 35% or more of the assets of Giant
and its subsidiaries or 35% or more of any class of equity securities of Giant
or any of its subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 35% or more of any
class of equity securities of Giant or any of its subsidiaries, or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving Giant or any of its subsidiaries, other than
the transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 4.03,
neither the Board of Directors of Giant nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to ▇▇▇▇▇, the approval or recommendation by such Board of Directors or
such committee of the Merger, this Agreement or the issuance of Giant Common
Stock in connection with the Merger, (ii) approve or recommend, or propose
publicly to approve or recommend, any Giant Takeover Proposal, or (iii) cause
Giant to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, a "Giant Acquisition Agreement")
related to any Giant Takeover Proposal. Notwithstanding the foregoing, in the
event that prior to the adoption of this Agreement by the holders of Giant
Common Stock: (x) the Board of Directors of Giant determines in good faith,
after it has received a Giant Superior Proposal (as defined below) and after
consultation with outside
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counsel, that it is necessary to do so in order to comply with its fiduciary
duties to Giant's stockholders under applicable law, the Board of Directors of
Giant may (subject to this and the following sentences) withdraw or modify its
approval or recommendation of the Merger, this Agreement or the issuance of
Giant Common Stock in connection with the Merger; or (y) the Board of Directors
of Giant determines in good faith that there is not a substantial probability
that the adoption of this Agreement by holders of Giant Common Stock will be
obtained due to the existence of a Giant Superior Proposal, the Board of
Directors of Giant may (subject to this and the following sentences) approve or
recommend such Giant Superior Proposal or terminate this Agreement (and
concurrently with or after such termination, if it so chooses, cause Giant to
enter into any Giant Acquisition Agreement with respect to any Giant Superior
Proposal), but in each of the cases set forth in this clause (y), only at a time
that is after the fifth business day following Holly's receipt of written notice
advising ▇▇▇▇▇ that the Board of Directors of Giant has received a Giant
Superior Proposal, specifying the material terms and conditions of such Giant
Superior Proposal and identifying the person making such Giant Superior
Proposal. For purposes of this Agreement, a "Giant Superior Proposal" means any
proposal made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, more than 50% of the
combined voting power of the shares of Giant Common Stock then outstanding or
all or substantially all the assets of Giant and otherwise on terms which the
Board of Directors of Giant determines in its good faith judgment (based on the
advice of a financial advisor of nationally recognized reputation) to be more
favorable to Giant's stockholders than the Merger and for which financing, to
the extent required, is then committed or which, in the good faith judgment of
the Board of Directors of Giant, is reasonably capable of being obtained by such
third party.
(c) In addition to the obligations of Giant set forth in
paragraphs (a) and (b) of this Section 4.03, Giant shall immediately advise
▇▇▇▇▇ orally and in writing of any request for information or of any Giant
Takeover Proposal, the material terms and conditions of such request or Giant
Takeover Proposal and the identity of the person making such request or Giant
Takeover Proposal. Giant will keep ▇▇▇▇▇ reasonably informed of the status and
details (including amendments or proposed amendments) of any such request or
Giant Takeover Proposal.
(d) Nothing contained in this Section 4.03 shall prohibit
Giant from taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure
to Giant's stockholders if, in the good faith judgment of the Board of Directors
of Giant, after consultation with outside counsel, failure so to disclose would
be inconsistent with its fiduciary duties to Giant's stockholders under
applicable law; provided, however, that neither Giant nor its Board of Directors
nor any committee thereof shall, except as permitted by Section 4.03(b),
withdraw or modify, or propose publicly to withdraw or modify, its position with
respect to this Agreement, the Merger, the issuance of Giant Common Stock in
connection with the Merger, or approve or recommend, or propose publicly to
approve or recommend, a Giant Takeover Proposal.
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ARTICLE V
ADDITIONAL AGREEMENTS
5.01. Preparation of the Form S-4 and the Joint Proxy Statement;
Stockholders Meetings.
(a) As soon as practicable following the date of this Agreement,
▇▇▇▇▇ and Giant shall prepare and file with the SEC the Joint Proxy Statement
and Giant shall prepare and file with the SEC the Form S-4, in which the Joint
Proxy Statement will be included as a prospectus. Each of ▇▇▇▇▇ and Giant shall
use all reasonable efforts to have the Form S-4 declared effective under the
Securities Act as promptly as practicable after such filing. ▇▇▇▇▇ will use all
reasonable efforts to cause the Joint Proxy Statement to be mailed to Holly's
stockholders, and Giant will use all reasonable efforts to cause the Joint Proxy
Statement to be mailed to Giant's stockholders, in each case as promptly as
practicable after the Form S-4 is declared effective under the Securities Act.
Giant also shall take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or to file a general consent to
service of process) required to be taken under any applicable state securities
laws in connection with the issuance of Giant Common Stock in the Merger and
▇▇▇▇▇ shall furnish all information concerning ▇▇▇▇▇ and the holders of ▇▇▇▇▇
Common Stock as may be reasonably requested in connection with any such action.
(b) ▇▇▇▇▇ will, as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "▇▇▇▇▇ Stockholders Meeting") for the purpose of obtaining the
▇▇▇▇▇ Stockholder Approval. Without limiting the generality of the foregoing but
subject to Section 4.02(b), ▇▇▇▇▇ agrees that its obligations pursuant to the
first sentence of this Section 5.01(b) shall not be affected by the
commencement, public proposal, public disclosure or communication to ▇▇▇▇▇ of
any ▇▇▇▇▇ Takeover Proposal. ▇▇▇▇▇ will, through its Board of Directors,
recommend to its stockholders the approval and adoption of this Agreement, the
Merger and the other transactions contemplated by this Agreement, except to the
extent that the Board of Directors of ▇▇▇▇▇ shall have withdrawn or modified its
approval or recommendation of this Agreement or the Merger and terminated this
Agreement in accordance with Section 4.02(b).
(c) Giant will, as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Giant Stockholders Meeting") for the purpose of obtaining the
Giant Stockholder Approval. Without limiting the generality of the foregoing but
subject to Section 4.03(b), Giant agrees that its obligations pursuant to the
first sentence of this Section 5.01(c) shall not be affected by the
commencement, public proposal, public disclosure or commencement to Giant of any
Giant Takeover Proposal. Giant will, through its Board of Directors, recommend
to its stockholders the approval and adoption of this Agreement, the Merger and
the other transactions contemplated by this Agreement, except to the extent that
the Board of Directors of Giant shall have withdrawn or modified its
recommendation and terminated this Agreement in accordance with Section 4.03(b).
(d) Giant and ▇▇▇▇▇ will use reasonable efforts to hold the ▇▇▇▇▇
Stockholders Meeting and the Giant Stockholders Meeting on the same date and as
soon as practicable after the date hereof.
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5.02. Letters of Holly's Accountants. ▇▇▇▇▇ shall use reasonable
efforts to cause to be delivered to Giant two letters from Ernst & Young LLP,
Holly's independent accountants, one dated a date within two business days
before the date on which the Form S-4 shall become effective and one dated a
date within two business days before the Closing Date, each addressed to Giant,
in form and substance reasonably satisfactory to Giant and customary in scope
and substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
5.03. Letters of Giant's Accountants. Giant shall use reasonable
efforts to cause to be delivered to ▇▇▇▇▇ two letters from Deloitte & Touche
LLP, Giant's independent accountants, one dated a date within two business days
before the date on which the Form S-4 shall become effective and one dated a
date within two business days before the Closing Date, each addressed to ▇▇▇▇▇,
in form and substance reasonably satisfactory to ▇▇▇▇▇ and customary in scope
and substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
5.04. Access to Information; Confidentiality. Subject to the
Confidentiality Agreement (as defined below), each of ▇▇▇▇▇ and Giant shall, and
shall cause each of its respective subsidiaries to, afford to the other party
and to the officers, employees, accountants, counsel, financial advisors and
other representatives of such other party, reasonable access during normal
business hours during the period prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records and,
during such period, each of ▇▇▇▇▇ and Giant shall, and shall cause each of its
respective subsidiaries to, furnish promptly to the other party (a) a copy of
each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of federal or state securities
laws and (b) all other information concerning its business, properties and
personnel as such other party may reasonably request. Each of ▇▇▇▇▇ and Giant
will hold, and will cause its respective officers, employees, accountants,
counsel, financial advisors and other representatives and affiliates to hold,
any nonpublic information in accordance with the terms of the Confidentiality
Agreement dated April 6, 1998 between Giant and ▇▇▇▇▇ (the "Confidentiality
Agreement").
5.05. Reasonable Efforts.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use all reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions, waivers,
consents and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities, such as those referred to in Sections 3.01(d)(1)-(4) and
3.02(d)(1)-(6)) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary actions, waivers,
consents and approvals from third parties, (iii) the defending of any lawsuits
or other legal proceedings, whether judicial or administrative, challenging this
Agreement
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or the consummation of the transactions contemplated by this Agreement,
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed, and (iv) the execution
and delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement. Nothing set forth in this Section 5.05(a) will limit or affect
actions permitted to be taken pursuant to Sections 4.02 and 4.03.
(b) In connection with and without limiting the foregoing,
each of ▇▇▇▇▇ and Giant shall (i) take all action necessary to ensure that no
state takeover statute or similar statute or regulation is or becomes applicable
to the Merger, this Agreement or any of the other transactions contemplated by
this Agreement, and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to the Merger, this Agreement or any other
transaction contemplated by this Agreement, take all action necessary to ensure
that the Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Merger and the other transactions contemplated by this Agreement.
(c) In connection with and without limiting the foregoing,
each of ▇▇▇▇▇ and Giant shall (i) promptly make or cause to be made the filings
required of such party or any of its affiliates or subsidiaries under the HSR
Act with respect to the Merger, (ii) comply at the earliest practicable date
with any request under the HSR Act for additional information, documents, or
other material received by such party or any of its affiliates or subsidiaries
from the Federal Trade Commission or the Department of Justice or other
Governmental Entity in respect of such filings, the Merger or such other
transactions, and (iii) cooperate with the other party in connection with any
such filing and in connection with resolving any investigation or other inquiry
of any such agency or other Governmental Entity under the HSR Act, the ▇▇▇▇▇▇▇
Act, as amended, the ▇▇▇▇▇▇▇ Act, as amended, the Federal Trade Commission Act,
as amended, and any other federal, state or foreign statutes, rules,
regulations, or orders that are designed to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade
(collectively, the "Antitrust Laws") with respect to any such filing, the
Merger, or any such other transaction. Each party shall promptly inform the
other party of any material communication with, and any proposed understanding,
undertaking, or agreement with, any Governmental Entity regarding any such
filings, the Merger, or any such other transactions. Neither party shall
participate in any meeting with any Governmental Entity in respect of any such
filings, investigation, or other inquiry without giving the other party notice
of the meeting and, to the extent permitted by such Governmental Entity, the
opportunity to attend and participate.
(d) In connection with and without limiting the foregoing,
each of ▇▇▇▇▇ and Giant shall use its reasonable efforts to resolve such
objections, if any, as may be asserted by any Governmental Entity with respect
to the Merger or any other transactions provided for in this Agreement under the
Antitrust Laws. In connection therewith, if any administrative or judicial
action or proceeding is instituted (or threatened to be instituted) challenging
the transaction as violative of any Antitrust Law, and, if by mutual agreement,
▇▇▇▇▇ and Giant decide that litigation is in their best interests, each of ▇▇▇▇▇
and Giant shall cooperate and use reasonable efforts vigorously to contest and
resist any such action or proceeding and to have vacated, lifted,
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reversed, or overturned any order that is in effect and that prohibits,
prevents, or restricts consummation of the Merger. Each of ▇▇▇▇▇ and Giant shall
use its reasonable efforts to take such action as may be required to cause the
expiration of the notice periods under the HSR Act or other Antitrust Laws with
respect to the Merger as promptly as possible after the execution of this
Agreement. Notwithstanding anything to the contrary in this Section 5.05,
neither ▇▇▇▇▇ nor Giant shall be required to divest any of its businesses,
product lines, or assets, or to take or agree to take any other action or agree
to any limitation that would have a material adverse effect on such party.
5.06. Stock Options and Phantom Stock Rights.
(a) As soon as practicable following the date of this
Agreement, the Board of Directors of ▇▇▇▇▇ (or, if appropriate, any committee
administering the ▇▇▇▇▇ Stock Plan) shall adopt such resolutions or take such
other actions as may be required to effect the following:
(i) adjust the terms of all outstanding ▇▇▇▇▇ Employee
Stock Options granted under the ▇▇▇▇▇ Stock Plan, whether vested or unvested, as
necessary to provide that, immediately after the Effective Time, each ▇▇▇▇▇
Employee Stock Option outstanding immediately prior to the Effective Time shall
be deemed to constitute an option to acquire, on the same terms and conditions
as were applicable under such ▇▇▇▇▇ Employee Stock Option, including vesting,
the same Giant Common Stock portion of the Merger Consideration the holder of
such ▇▇▇▇▇ Employee Stock Option would have been entitled to receive pursuant to
the Merger had such holder exercised such ▇▇▇▇▇ Employee Stock Option in full
immediately prior to the Effective Time, at a price per share of Giant Common
Stock equal to (a) the aggregate exercise price for the shares of ▇▇▇▇▇ Common
Stock pursuant to such ▇▇▇▇▇ Employee Stock Option divided by (b) the aggregate
number of shares of Giant Common Stock that may be purchased pursuant to such
▇▇▇▇▇ Employee Stock Option (each, as so adjusted, an "Adjusted Option");
provided, however, that in the case of any option to which Section 421 of the
Code applies by reason of its qualification under any of Sections 422 through
424 of the Code ("qualified stock options"), the option price, the number of
shares purchasable pursuant to such option and the terms and conditions of
exercise of such option shall be determined in order to comply with Section 424
of the Code;
(ii) make such other changes to the ▇▇▇▇▇ Stock Plan as
▇▇▇▇▇ and Giant may agree are appropriate to give effect to the Merger; and
(iii) adjust the terms of all outstanding ▇▇▇▇▇ phantom
stock rights and take all such actions as necessary to make them obligations of
Giant consistent with the adjustment provisions of Section 5.06(a)(i) regarding
options.
Immediately following the Effective Time, Giant shall pay to each holder of
▇▇▇▇▇ Employee Stock Options immediately before the Effective Time an amount in
cash (subject to applicable withholding) equal to the number of ▇▇▇▇▇ shares
that were subject to such ▇▇▇▇▇▇'▇ ▇▇▇▇▇ stock options (whether vested or
unvested) immediately before the Effective Time times the amount in cash paid
per issued and outstanding ▇▇▇▇▇ share as part of the Merger Consideration
pursuant to
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Section 2.01(b). In addition, immediately following the Effective Time, Giant
shall pay to each holder of ▇▇▇▇▇ phantom share rights immediately before the
Effective Time an amount in cash (subject to applicable withholding) equal to
the number of phantom shares held by such holder immediately before the
Effective Time times the amount in cash paid per ▇▇▇▇▇ share as part of the
Merger Consideration pursuant to Section 2.01(b). This provision shall be
interpreted so that the sum of the total cash Merger Consideration payable at
the Effective Time under Section 2.01(b) (whether or not actually paid) and the
total of the cash payments (including applicable withholding) required to be
made under this Section 5.06(a) shall in all cases equal but not exceed
$25,000,000, subject to the provisions of Section 2.01(j). Such payments shall
be in lieu of any other payment or adjustment to any holder of a ▇▇▇▇▇ Employee
Stock Option or ▇▇▇▇▇ phantom share right relating to the cash portion of the
Merger Consideration.
(b) As soon as practicable after the Effective Time, Giant
shall deliver to the holders of ▇▇▇▇▇ Employee Stock Options appropriate notices
setting forth such holders' rights pursuant to the ▇▇▇▇▇ Stock Plan and the
agreements evidencing the grants of such ▇▇▇▇▇ Employee Stock Options and that
such ▇▇▇▇▇ Employee Stock Options and agreements shall be assumed by Giant and
shall continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 5.06 after giving effect to the Merger).
Giant shall comply with the terms of the ▇▇▇▇▇ Stock Plan and ensure, to the
extent required by and subject to the provisions of such ▇▇▇▇▇ Stock Plan, that
the ▇▇▇▇▇ Employee Stock Options which qualified as qualified stock options
prior to the Effective Time continue to qualify as qualified stock options after
the Effective Time.
(c) Giant shall take such actions as are necessary for the
assumption of the ▇▇▇▇▇ Stock Plan pursuant to Section 5.06(a), including the
reservation, issuance and listing of Giant Common Stock as is necessary to
effectuate the transactions contemplated by Section 5.06(a). As soon as
reasonably practicable after the Effective Time, Giant shall prepare and file
with the SEC a registration statement on Form S-8 or other appropriate form with
respect to shares of Giant Common Stock subject to ▇▇▇▇▇ Employee Stock Options
issued under the ▇▇▇▇▇ Stock Plan and shall use all reasonable efforts to
maintain the effectiveness of a registration statement or registration
statements covering such ▇▇▇▇▇ Employee Stock Options (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as such
▇▇▇▇▇ Employee Stock Options remain outstanding. With respect to those
individuals, if any, who subsequent to the Effective Time will be subject to the
reporting requirements under Section 16(a) of the Exchange Act, where
applicable, Giant shall use all reasonable efforts to administer the ▇▇▇▇▇ Stock
Plan assumed pursuant to Section 5.06(b) in a manner that complies with Rule
16b-3 promulgated under the Exchange Act to the extent the ▇▇▇▇▇ Stock Plan
complied with such rule prior to the Merger.
(d) A holder of an Adjusted Option may exercise such Adjusted
Option in whole or in part in accordance with its terms by delivering a properly
executed notice of exercise to Giant, together with the consideration therefor
and the federal withholding tax information, if any, required in accordance with
the ▇▇▇▇▇ Stock Plan.
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(e) Except as otherwise contemplated by this Section 5.06, all
restrictions or limitations on transfer and vesting with respect to ▇▇▇▇▇
Employee Stock Options awarded under the ▇▇▇▇▇ Stock Plan or any other plan,
program or arrangement of ▇▇▇▇▇ or any of its subsidiaries, to the extent that
such restrictions or limitations shall not have already lapsed, shall remain in
full force and effect with respect to such options after giving effect to the
Merger and the assumption by Giant as set forth above.
(f) Giant shall have the right to meet its obligation to assume
the ▇▇▇▇▇ Employee Stock Options under this Section 5.06 by granting to the
holder of ▇▇▇▇▇ Employee Stock Options as soon as practicable after the
Effective Time substitute options to acquire shares of Giant Common Stock on
identical terms as prescribed herein.
(g) Giant has certain outstanding stock options and phantom stock
rights which will become fully vested and will unless amended be required to be
cashed-out as a result of the Merger. Giant shall amend such options to provide
the holders thereof with the right to elect to be cashed out or to reject the
cash-out and continue to hold the option, as the case may be. Giant shall use
its reasonable efforts to cause the holders of such options, prior to the
Effective Time, to reject the cash-out and continue to hold the options. Giant
shall use its best efforts to obtain, prior to the Effective Time, waivers from
the holders of its phantom stock rights of the acceleration of vesting triggered
by the Merger (and, accordingly, any cash-out rights associated with the
accelerated vesting). Giant also has certain employment agreements that include
change of control provisions that may be triggered on account of the Merger.
Giant shall use its best efforts to cause such employment agreements to be
amended prior to the Effective Time to limit the change of control payments
thereunder so that such payments will not constitute excess parachute payments
triggering excise tax liability under the Code.
5.07. Certain Employee Matters. Following the Effective Time, Giant, as
the Surviving Corporation in the Merger, will honor all obligations under
employment agreements of ▇▇▇▇▇ or Giant the existence of which does not
constitute a violation of this Agreement (including those agreements entered
into by ▇▇▇▇▇ pursuant to Section 4.01(a)(xiii)) in accordance with the terms
thereof.
5.08. Indemnification, Exculpation and Insurance.
(a) Giant agrees that all rights to indemnification and
exculpation from liabilities for acts or omissions occurring at or prior to the
Effective Time now existing in favor of the current or former directors or
officers of ▇▇▇▇▇ and its subsidiaries as provided in their respective
certificates of incorporation or bylaws (or comparable organizational documents)
and any indemnification agreements of ▇▇▇▇▇, the existence of which does not
constitute a breach of this Agreement, shall be assumed by Giant, as the
Surviving Corporation in the Merger, without further action, as of the Effective
Time and shall survive the Merger and shall continue in full force and effect in
accordance with their terms. The Surviving Corporation shall (i) maintain in
effect for not less than three years after the Effective Time the current
policies of directors' and officers' liability insurance maintained by ▇▇▇▇▇
with respect to matters occurring on or prior to the Effective Time; provided,
however, that the Surviving Corporation may substitute therefor
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policies of at least the same coverage (with carriers comparable to Holly's
existing carriers) containing terms and conditions which are not materially less
advantageous to the former or current (immediately prior to the Effective Time)
directors or officers of ▇▇▇▇▇ and its subsidiaries and (ii) upon the request of
any former or current (immediately prior to the Effective Time) director or
officer of ▇▇▇▇▇ or any of its subsidiaries, enter into a contract obligating
the Surviving Corporation to indemnify and exculpate such individual for
liabilities as described in this Section 5.08. In addition, from and after the
Effective Time, directors and officers of ▇▇▇▇▇ who become directors or officers
of Giant will be entitled to the same indemnity rights and protections as are
afforded to other directors and officers of Giant.
(b) In the event that Giant or any of its successors or
assigns (i) consolidates with or merges into any other person and is not the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision will be made so
that the successors and assigns of Giant assume the obligations set forth in
this Section.
(c) The provisions of this Section 5.08 (i) are intended to be
for the benefit of, and will be enforceable by, each indemnified party, his or
her heirs and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
5.09. Fees and Expenses.
(a) Except as set forth in this Section 5.09, all fees and
expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such fees or expenses, whether or not the Merger is consummated, except that
each of Giant and ▇▇▇▇▇ shall bear and pay one-half of the costs and expenses
incurred in connection with (i) the filing, printing and mailing of the Form S-4
and the Joint Proxy Statement (including SEC filing fees) and (ii) the filings
of the premerger notification and report forms under the HSR Act (including
filing fees).
(b) In the event that (i) a ▇▇▇▇▇ Takeover Proposal shall have
been made known to ▇▇▇▇▇ or any of its subsidiaries or has been made directly to
its stockholders generally or any person shall have publicly announced an
intention (whether or not conditional) to make a ▇▇▇▇▇ Takeover Proposal and
thereafter this Agreement is terminated by either Giant or ▇▇▇▇▇ pursuant to
Section 7.01(b)(i) or (ii), or (ii) this Agreement is terminated (x) by ▇▇▇▇▇
pursuant to Section 7.01(g) or (y) by Giant pursuant to Section 7.01(e), then
▇▇▇▇▇ shall promptly, but in no event later than two days after the date of such
termination, pay Giant a fee equal to $8,000,000 (the "Termination Fee"),
payable by wire transfer of same day funds; provided, however, that no
Termination Fee shall be payable to Giant pursuant to clause (i) of this
paragraph (b) or pursuant to a termination by Giant pursuant to Section 7.01(e)
unless and until within 18 months of such termination ▇▇▇▇▇ or any of its
subsidiaries enters into any ▇▇▇▇▇ Acquisition Agreement or consummates any
▇▇▇▇▇ Takeover Proposal (for the purposes of the foregoing proviso the terms
"▇▇▇▇▇ Acquisition Agreement" and "▇▇▇▇▇ Takeover Proposal" shall have the
meanings assigned to such terms in Section 4.02). ▇▇▇▇▇ acknowledges that the
agreements contained in this Section
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5.09(b) are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, Giant would not enter into this Agreement.
Accordingly, if ▇▇▇▇▇ fails promptly to pay the amount due pursuant to this
Section 5.09(b), and, in order to obtain such payment, Giant commences a suit
which results in a judgment against ▇▇▇▇▇ for the fee set forth in this Section
5.09(b), ▇▇▇▇▇ shall pay to Giant its costs and expenses (including attorneys'
fees and expenses) in connection with such suit, together with interest on the
amount of the fee at the prime rate of Bank of America, N.A. in effect on the
date such payment was required to be made. In the event of a termination by
Giant pursuant to Section 7.01(e), ▇▇▇▇▇ shall promptly pay upon Giant's request
all out-of-pocket expenses incurred by Giant in connection with this Agreement
and the transactions contemplated by this Agreement in an amount not to exceed
$1,500,000, which payments shall be credited against any Termination Fee that
may subsequently become payable.
(c) In the event that (i) a Giant Takeover Proposal shall have
been made known to Giant or any of its subsidiaries or has been made directly to
its stockholders generally or any person shall have publicly announced an
intention (whether or not conditional) to make a Giant Takeover Proposal and
thereafter this Agreement is terminated by either Giant or ▇▇▇▇▇ pursuant to
Section 7.01(b)(i) or (iii), or (ii) this Agreement is terminated (x) by Giant
pursuant to Section 7.01(d) or (y) by ▇▇▇▇▇ pursuant to Section 7.01(h), then
Giant shall promptly, but in no event later than two days after the date of such
termination, pay ▇▇▇▇▇ the Termination Fee, payable by wire transfer of same day
funds; provided, however, that no Termination Fee shall be payable to ▇▇▇▇▇
pursuant to clause (i) of this paragraph (c) or pursuant to a termination by
▇▇▇▇▇ pursuant to Section 7.01(h) unless and until within 18 months of such
termination Giant or any of its subsidiaries enters into any Giant Acquisition
Agreement or consummates any Giant Takeover Proposal (for the purposes of the
foregoing proviso the terms "Giant Acquisition Agreement" and "Giant Takeover
Proposal" shall have the meanings assigned to such terms in Section 4.03. Giant
acknowledges that the agreements contained in this Section 5.09(c) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, ▇▇▇▇▇ would not enter into this Agreement.
Accordingly, if Giant fails promptly to pay the amount due pursuant to this
Section 5.09(c), and, in order to obtain such payment, ▇▇▇▇▇ commences a suit
which results in a judgment against Giant for the fee set forth in this Section
5.09(c), Giant shall pay to ▇▇▇▇▇ its costs and expenses (including attorneys'
fees and expenses) in connection with such suit, together with interest on the
amount of the fee at the prime rate of Bank of America, N.A. in effect on the
date such payment was required to be made. In the event of a termination by
▇▇▇▇▇ pursuant to Section 7.01(h), Giant shall promptly pay upon Holly's request
all out-of-pocket expenses incurred by ▇▇▇▇▇ in connection with this Agreement
and the transactions contemplated by this Agreement in an amount not to exceed
$1,500,000 which payments shall be credited against any Termination Fee that may
subsequently become payable.
5.10. Public Announcements. Giant and ▇▇▇▇▇ will consult with each
other before issuing, and provide each other the opportunity to review, comment
upon and concur with, any press release or other public statements with respect
to the transactions contemplated by this Agreement, and shall not issue any such
press release or make any such public statement prior to such consultation,
except as either party may determine is required by applicable law, court
process or by obligations pursuant to any listing agreement with any national
securities exchange.
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The parties agree that the initial press release to be issued with respect to
the transactions contemplated by this Agreement shall be in the form previously
agreed to by the parties.
5.11. NYSE Listing. Giant shall use best efforts to cause the shares of
Giant Common Stock to be issued in the Merger and under the ▇▇▇▇▇ Stock Plan (or
Giant Stock Plan, if Giant elects to issue substitute options to the holders of
▇▇▇▇▇ Employee Stock Options) to be approved for listing on the NYSE, subject to
official notice of issuance, prior to the Closing Date.
5.12. Transfer Taxes, Etc. The Surviving Corporation shall pay the
Merger Consideration to the holders of ▇▇▇▇▇ Common Stock without deduction or
withholding therefrom for transfer taxes, transfer fees, stamp fees, recording
fees, or other similar taxes or fees that may become payable in connection with
the Merger, all of which shall be paid by the Surviving Corporation.
5.13. Tax Treatment. Each of Giant and ▇▇▇▇▇ shall use reasonable
efforts to cause the Merger to qualify as a reorganization under the provisions
of Section 368 of the Code and to obtain the opinions of counsel referred to in
Sections 6.02 and 6.03.
5.14. Indemnification Agreements. Giant and ▇▇▇▇▇ agree that as soon as
practicable after the Effective Time, the Surviving Corporation will enter into
indemnification agreements with the directors and officers of the Surviving
Corporation providing for indemnification on the terms set forth in the bylaws
of the Surviving Corporation, as amended pursuant to Section 1.05, and as
otherwise provided for under this Agreement.
5.15. Certain Tax Matters. Giant and ▇▇▇▇▇ agree that they will not
treat the Merger as a change in the ownership or effective control of Giant or a
change in the ownership of a substantial portion of the assets of Giant, each
within the meaning of Section 280G of the Code, unless otherwise required by a
determination (as defined in Section 1313 of the Code).
5.16 Affiliate Agreements. ▇▇▇▇▇ shall, no later than two (2) days
prior to the Closing, cause to be delivered to Giant a list, reviewed by its
counsel and reasonably satisfactory to Giant, identifying all persons who are,
in its opinion, at the time of the meeting of the Holly's stockholders to be
held to approve the Merger, "affiliates" of ▇▇▇▇▇ for purposes of Rule 145 under
the Securities Act. ▇▇▇▇▇ shall furnish such information and documents as Giant
may reasonably request for the purpose of reviewing such list. ▇▇▇▇▇ shall use
its reasonable efforts to cause each person who is identified as an "affiliate"
in the list furnished pursuant to this Section 5.16 to execute a written
agreement on or prior to the Closing, in a form satisfactory to Giant (an
"Affiliate Agreement"), that such person shall not offer or sell or otherwise
dispose of any of the shares of Giant Common Stock issued to such person
pursuant to the Merger in violation of the Securities Act or the rules and
regulations promulgated by the SEC thereunder.
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ARTICLE VI
CONDITIONS PRECEDENT
6.01. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approvals. Each of the ▇▇▇▇▇ Stockholder Approval
and the Giant Stockholder Approval shall have been obtained.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
(c) No Injunctions or Restraints. No judgment, order, decree,
statute, law, ordinance, rule, regulation, temporary restraining order,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any court of competent jurisdiction or other
Governmental Entity or other legal restraint or prohibition (collectively,
"Restraints") preventing the consummation of the Merger shall be in effect;
provided, however, that each of the parties shall have used reasonable efforts
to prevent the entry of any such Restraints and to appeal as promptly as
possible any such Restraints that may be entered.
(d) No Litigation. There shall not be pending any suit, action or
proceeding, in each case brought by any Governmental Entity and (i) seeking to
restrain or prohibit the consummation of the Merger or any of the other
transactions contemplated by this Agreement or seeking to obtain from either of
▇▇▇▇▇ or Giant any damages that are material in relation to ▇▇▇▇▇ and its
subsidiaries taken as a whole or Giant and its subsidiaries taken as a whole, as
applicable, (ii) seeking to prohibit or limit the ownership or operation by
▇▇▇▇▇, Giant or any of their respective subsidiaries of any material portion of
the business or assets of ▇▇▇▇▇, Giant or any of their respective subsidiaries,
or to compel ▇▇▇▇▇, Giant or any of their respective subsidiaries to dispose of
or hold separate any material portion of the business or assets of ▇▇▇▇▇, Giant
or any of their respective subsidiaries, as a result of the Merger or any of the
other transactions contemplated by this Agreement or (iii) which otherwise could
reasonably be expected to have a material adverse effect on ▇▇▇▇▇ or Giant, as
applicable. In addition, there shall not be any Restraint enacted, entered,
enforced or promulgated that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (ii) or (iii)
above.
(e) Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order.
(f) NYSE Listing. The shares of Giant Common Stock issuable to
Holly's stockholders pursuant to this Agreement and under the ▇▇▇▇▇ Stock Plan
(or Giant Stock Plan, if Giant elects to issue substitute options to the holders
of ▇▇▇▇▇ Employee Stock Options) shall have been approved for listing on the
NYSE, subject to official notice of issuance.
(g) Major Stockholders' Agreement. The parties to such agreement
shall have executed a Major Stockholders' Agreement substantially in the form
attached as Exhibit D.
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(h) Dissenters' Rights. Dissenters' rights of appraisal under the
DGCL shall not have been exercised with respect to more than 5% of the issued
and outstanding shares of ▇▇▇▇▇ Common Stock.
6.02. Conditions to Obligations of Giant. The obligation of Giant to
effect the Merger is further subject to satisfaction or waiver of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of ▇▇▇▇▇ set forth in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and warranties of
▇▇▇▇▇ set forth in this Agreement that are not so qualified shall be true and
correct in all material respects, in each case as of the date of this Agreement
and as of the Closing Date as though made on and as of the Closing Date, except
to the extent such representations and warranties expressly relate to an earlier
date (in which case as of such date), and Giant shall have received a
certificate signed on behalf of ▇▇▇▇▇ by the chief executive officer and the
chief financial officer of ▇▇▇▇▇ to such effect.
(b) Performance of Obligations of ▇▇▇▇▇. ▇▇▇▇▇ shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Giant shall have
received a certificate signed on behalf of ▇▇▇▇▇ by the chief executive officer
and the chief financial officer of ▇▇▇▇▇ to such effect.
(c) Tax Opinion. Giant shall have received from counsel
reasonably acceptable to Giant, on the date of the Joint Proxy Statement and on
the Closing Date, opinions, in each case dated as of such respective dates and
stating that the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, that Giant and
▇▇▇▇▇ will each be a party to that reorganization within the meaning of Section
368(b) of the Code and that no gain or loss will be recognized by the
stockholders of ▇▇▇▇▇ upon their exchange of ▇▇▇▇▇ stock for Giant stock (except
to the extent such a stockholder receives cash as a portion of the Merger
Consideration or in lieu of fractional shares). In rendering such opinions, such
counsel shall be entitled to rely upon customary representations.
(d) Opinion of ▇▇▇▇▇ Counsel. Giant shall have received from
counsel to ▇▇▇▇▇ an opinion, in form and substance reasonably acceptable to
Giant, dated as of the Closing Date and addressing such matters as are customary
in connection with transactions such as the Merger.
(e) No Material Adverse Change. At any time after the date of
this Agreement there shall not have occurred any material adverse change
relating to ▇▇▇▇▇.
6.03. Conditions to Obligation of ▇▇▇▇▇. The obligation of ▇▇▇▇▇ to
effect the Merger is further subject to satisfaction or waiver of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Giant set forth in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and warranties of
Giant set forth in this Agreement that are not so qualified shall be true and
correct in all material respects, in each case as of the date of this Agreement
and
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as of the Closing Date as though made on and as of the Closing Date, except to
the extent such representations expressly relate to an earlier date (in which
case as of such date), and ▇▇▇▇▇ shall have received a certificate signed on
behalf of Giant by the chief executive officer and the chief financial officer
of Giant to such effect.
(b) Performance of Obligations of Giant. Giant shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and ▇▇▇▇▇ shall have
received a certificate signed on behalf of Giant by the chief executive officer
and the chief financial officer of Giant to such effect.
(c) Tax Opinion. ▇▇▇▇▇ shall have received from counsel
reasonably acceptable to ▇▇▇▇▇, on the date of the Joint Proxy Statement and on
the Closing Date, opinions, in each case dated as of such respective dates and
stating that the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, that Giant and
▇▇▇▇▇ will each be a party to that reorganization within the meaning of Section
368(b) of the Code and that no gain or loss will be recognized by the
stockholders of ▇▇▇▇▇ upon their exchange of ▇▇▇▇▇ stock for Giant stock (except
to the extent such a stockholder receives cash as a portion of the Merger
Consideration or in lieu of fractional shares). In rendering such opinions, such
counsel shall be entitled to rely upon customary representations.
(d) Opinion of Giant Counsel. ▇▇▇▇▇ shall have received from
counsel to Giant an opinion, in form and substance reasonably acceptable to
▇▇▇▇▇, dated as of the Closing Date and addressing such matters as are customary
in connection with transactions such as the Merger.
(e) No Material Adverse Change. At any time after the date of
this Agreement there shall not have occurred any material adverse change
relating to Giant.
(f) Amendments to Options, Phantom Stock Rights and Employment
Agreements. Giant shall have amended its outstanding stock options, phantom
stock rights and employment agreements as provided in Section 5.06(g) to the
reasonable satisfaction of Holly's Board of Directors.
6.04. Frustration of Closing Conditions. Neither Giant nor ▇▇▇▇▇ may
rely on the failure of any condition set forth in Section 6.01, 6.02 or 6.03, as
the case may be, to be satisfied if such failure was caused by such party's
failure to use reasonable efforts to consummate the Merger and the other
transactions contemplated by this Agreement, as required by and subject to
Section 5.05.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.01. Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after the ▇▇▇▇▇ Stockholder Approval or
the Giant Stockholder Approval:
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(a) by mutual written consent of Giant and ▇▇▇▇▇;
(b) by either Giant or ▇▇▇▇▇:
(i) if the Merger shall not have been consummated by
December 31, 1998; provided, however, that the right to terminate this Agreement
pursuant to this Section 7.01(b)(i) shall not be available to any party whose
action or failure to act has been the cause or resulted in the failure of the
Merger to be consummated by such date;
(ii) if the ▇▇▇▇▇ Stockholder Approval shall not have been
obtained at a ▇▇▇▇▇ Stockholders Meeting duly convened therefor or at any
adjournment or postponement thereof;
(iii) if the Giant Stockholder Approval shall not have
been obtained at a Giant Stockholders Meeting duly convened therefor or at any
adjournment or postponement thereof; or
(iv) if any Governmental Entity shall have issued a
Restraint or taken any other action permanently enjoining, restraining or
otherwise prohibiting the consummation of the Merger or any of the other
transactions contemplated by this Agreement and such Restraint or other action
shall have become final and nonappealable;
(c) by Giant, if ▇▇▇▇▇ shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform (A) would give rise to the failure of a condition set forth
in Section 6.02(a) or (b), and (B) cannot be or has not been cured within 30
days after the giving of written notice to ▇▇▇▇▇ of such breach (a "▇▇▇▇▇
Material Breach") (provided that Giant is not then in Giant Material Breach (as
defined in Section 7.01(f)) of any representation, warranty, covenant or other
agreement contained in this Agreement);
(d) by Giant in accordance with Section 4.03(b), provided that
it has complied with all provisions thereof, including the notice provisions
thereof, and that it complies with applicable requirements of Section 5.09;
(e) by Giant if (i) the Board of Directors of ▇▇▇▇▇ or any
committee thereof shall have withdrawn or modified in a manner adverse to Giant
its approval or recommendation of the Merger or this Agreement or failed to
reconfirm its recommendation within 15 business days after a written request to
do so, or approved or recommended any ▇▇▇▇▇ Takeover Proposal or (ii) the Board
of Directors of ▇▇▇▇▇ or any committee thereof shall have resolved to take any
of the foregoing actions;
(f) by ▇▇▇▇▇, if Giant shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform (A) would give rise to the failure of a condition set forth
in Section 6.03(a) or (b), and (B) cannot be or has not been cured within 30
days after the
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giving of written notice to Giant of such breach (a "Giant Material Breach")
(provided that ▇▇▇▇▇ is not then in ▇▇▇▇▇ Material Breach of any representation,
warranty, covenant or other agreement contained in this Agreement);
(g) by ▇▇▇▇▇ in accordance with Section 4.02(b), provided that it
has complied with all provisions thereof, including the notice provisions
therein, and that it complies with applicable requirements of Section 5.09; or
(h) by ▇▇▇▇▇ if (i) the Board of Directors of Giant or any
committee thereof shall have withdrawn or modified in a manner adverse to ▇▇▇▇▇
its approval or recommendation of the Merger or this Agreement or failed to
reconfirm its recommendation within 15 business days after a written request to
do so, or approved or recommended any Giant Takeover Proposal or (ii) the Board
of Directors of Giant or any committee thereof shall have resolved to take any
of the foregoing actions.
7.02. Effect of Termination. In the event of termination of this
Agreement by either ▇▇▇▇▇ or Giant as provided in Section 7.01, this Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of Giant or ▇▇▇▇▇, other than the provisions of Section
3.01(o), Section 3.02(o), the last sentence of Section 5.04, Section 5.09, this
Section 7.02 and Article VIII and except to the extent that such termination
results from the willful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement, in which case the non-breaching party shall have all rights and
remedies available to it at law or in equity as a result of such willful and
material breach.
7.03. Amendment. This Agreement may be amended by the parties at any
time before or after the ▇▇▇▇▇ Stockholder Approval or the Giant Stockholder
Approval; provided, however, that after any such approval, there shall not be
made any amendment that by law requires further approval by the stockholders of
▇▇▇▇▇ or Giant without the further approval of such stockholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties.
7.04. Extension; Waiver. At any time prior to the Effective Time, a
party may (a) extend the time for the performance of any of the obligations or
other acts of the other party, (b) waive any inaccuracies in the representations
and warranties of the other party contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of Section
7.03, waive compliance by the other party with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of a party to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
7.05. Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 7.01, an extension or waiver
pursuant to Section 7.04 and any amendment to this Agreement shall, in order to
be effective, require, in the case of Giant or ▇▇▇▇▇, action by its Board of
Directors.
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ARTICLE VIII
GENERAL PROVISIONS
8.01. Nonsurvival of Representations and Warranties. Except for the
representation made by Giant pursuant to Section 3.02(r), which shall survive
for a period of twelve months following the Effective Time, none of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 8.01
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
8.02. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given on the date of delivery, if delivered personally or telecopied (and
confirmed) during normal business hours, or on the following day if sent by
overnight courier (providing proof of delivery), in each case to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
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(a) if to Giant, to:
Giant Industries, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Secretary
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
(b) if to ▇▇▇▇▇, to
▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with a copy to:
▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇.
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
8.03. Definitions. For purposes of this Agreement:
(a) "Adjusted Option" has the meaning set forth in
Section 5.06(a)(i);
(b) "Agreement" has the meaning set forth in the first
paragraph of this Agreement;
(c) an "affiliate" of any person means another person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person;
(d) "Benefit Plans" has the meaning set forth in Section
3.01(k)(i);
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(e) "Certificates" has the meaning set forth in Section
2.02(b);
(f) "Certificate of Merger" has the meaning set forth in
Section 1.03;
(g) "Closing" has the meaning set forth in Section 1.02;
(h) "Closing Date" has the meaning set forth in Section
1.02;
(i) "Code" has the meaning set forth in paragraph D of
the Recitals;
(j) "Confidentiality Agreement" has the meaning set forth
in Section 5.04;
(k) "DGCL" has the meaning set forth in Section 1.01;
(l) "ERISA" has the meaning set forth in Section 3.01(k)
(i);
(m) "Effective Time" has the meaning set forth in Section
1.03;
(n) "Environmental Laws" has the meaning set forth in
Section 3.01(e);
(o) "Exchange Act" has the meaning set forth in Section
3.01(d);
(p) "Exchange Agent" has the meaning set forth in Section
2.02(a);
(q) "Exchange Fund" has the meaning set forth in Section
2.02(a);
(r) "Form S-4" has the meaning set forth in Section 3.01
(f);
(s) "Giant" has the meaning set forth in the first
paragraph of this Agreement;
(t) "Giant Acquisition Agreement" has the meaning set
forth in Section 4.03(b);
(u) "Giant Benefit Plans" has the meaning set forth in
Section 3.02(k)(i);
(v) "Giant Common Stock" has the meaning set forth in
Section 2.01;
(w) "Giant Filed SEC Documents" has the meaning set forth
in Section 3.02(g);
(x) "Giant Material Breach" has the meaning set forth in
Section 7.01(f);
(y) "Giant Permits" has the meaning set forth in Section
3.02(i);
(z) "Giant Preferred Stock" has the meaning set forth in
Section 3.02(c);
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(a-1) "Giant SEC Documents" has the meaning set forth in
Section 3.02(e);
(a-2) "Giant Stock Plan" has the meaning set forth in
Section 3.02(c);
(a-3) "Giant Stockholder Approval" has the meaning set
forth in Section 3.02(m);
(a-4) "Giant Stockholders Meeting" has the meaning set
forth in Section 5.01(c);
(a-5) "Giant Superior Proposal" has the meaning set forth
in Section 4.03(b);
(a-6) "Giant Takeover Proposal" has the meaning set forth
in Section 4.03(a);
(a-7) "Governmental Entity" has the meaning set forth in
Section 3.01(d);
(a-8) "HSR Act" has the meaning set forth in Section 3.01
(d);
(a-9) "▇▇▇▇▇" has the meaning set forth in the first
paragraph of this Agreement;
(a-10) "▇▇▇▇▇ Acquisition Agreement" has the meaning set
forth in Section 4.02(b);
(a-11) "▇▇▇▇▇ Benefit Plans" has the meaning set forth in
Section 3.01(k)(i);
(a-12) "▇▇▇▇▇ Common Stock" has the meaning set forth in
paragraph A of the Recitals;
(a-13) "▇▇▇▇▇ Disclosure Schedule" has the meaning set forth
in Section 3.01;
(a-14) "▇▇▇▇▇ Filed SEC Documents" has the meaning set forth
in Section 3.01(g);
(a-15) "▇▇▇▇▇ Material Breach" has the meaning set forth in
Section 7.01(c);
(a-16) "▇▇▇▇▇ Permits" has the meaning set forth in Section
3.01(i);
(a-17) "▇▇▇▇▇ Preferred Stock" has the meaning set forth in
Section 3.01(c);
(a-18) "▇▇▇▇▇ SEC Documents" has the meaning set forth in
Section 3.01(e);
(a-19) "▇▇▇▇▇ Stock Plan" has the meaning set forth in
Section 3.01(c);
(a-20) "▇▇▇▇▇ Stockholder Approval" has the meaning set
forth in Section 3.01(m);
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(a-21) "▇▇▇▇▇ Stockholders Meeting" has the meaning set
forth in Section 5.01(b);
(a-22) "▇▇▇▇▇ Superior Proposal" has the meaning set forth
in Section 4.02(b);
(a-23) "▇▇▇▇▇ Takeover Proposal" has the meaning set forth
in Section 4.02(a);
(a-24) "Joint Proxy Statement" has the meaning set forth in
Section 3.01(d);
(a-25) "key employee" has the meaning set forth in Section
3.01(g);
(a-26) "knowledge" of any person which is not an individual
means the knowledge of such person's executive officers after reasonable
inquiry.
(a-27) "Liens" has the meaning set forth in Section 3.01(b);
(a-28) "material adverse change" or "material adverse
effect" means, when used in connection with ▇▇▇▇▇ or Giant, any change, effect,
event or occurrence that is materially adverse to the business, financial
condition or results of operations of such party and its subsidiaries taken as a
whole other than any change, effect, event or occurrence relating to the United
States economy in general or to the petroleum refining and marketing industry in
general, and not specifically relating to ▇▇▇▇▇ or Giant or their respective
subsidiaries, and the terms "material" and "materially" have correlative
meanings;
(a-29) "Merger has the meaning set forth in paragraph A of
the Recitals;
(a-30) "Merger Consideration" has the meaning set forth in
Section 2.01(b);
(a-31) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity;
(a-32) "qualified stock options" has the meaning set forth
in Section 5.06(a)(i);
(a-33) "SEC" has the meaning set forth in Section 3.01(a);
(a-34) "Securities Act" has the meaning set forth in Section
3.01(e);
(a-35) "Significant Subsidiary" has the meaning set forth in
Section 3.01(a);
(a-36) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or indirectly by
such first person;
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(a-37) "Surviving Corporation" has the meaning set forth in
Section 1.01;
(a-38) "taxes" has the meaning set forth in Section 3.01(l)
(iv); and
(a-39) "Termination Fee" has the meaning set forth in
Section 5.09(b).
8.04. Interpretation. When a reference is made in this Agreement to an
Article, Section or Exhibit, such reference shall be to an Article or Section
of, or an Exhibit to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
8.05. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
8.06. Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) and the
Confidentiality Agreement (a) constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter of this Agreement and (b) except for the
provisions of Article II, Section 5.06 and Section 5.08, are not intended to
confer upon any person other than the parties any rights or remedies.
8.07. Governing Law. Except to the extent that the laws of the State of
Delaware are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of Arizona,
regardless of the laws that might otherwise govern under applicable principles
of conflict of laws thereof.
8.08. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by either of the parties hereto without
the prior written consent of the other party. Any assignment in violation of the
preceding sentence shall be void. Subject to the preceding sentence, this
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Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
8.09. Enforcement. The parties agree that irreparable damage would
occur and that the parties would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal court located in the
State of Arizona or in Arizona state court, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of the
parties hereto (a) consents to submit itself to the personal jurisdiction of any
federal court located in the State of Arizona or any Arizona state court in the
event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, and (c) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any court
other than a federal court sitting in the State of Arizona or an Arizona state
court.
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IN WITNESS WHEREOF, Giant and ▇▇▇▇▇ have caused this Agreement to be
signed by their respective duly authorized officers, all as of the date first
written above.
▇▇▇▇▇ CORPORATION
By:
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
GIANT INDUSTRIES, INC.
By:
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board,
President and Chief
Executive Officer
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EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF SURVIVING CORPORATION
A-1
56
RESTATED
CERTIFICATE OF INCORPORATION
OF
GIANT INDUSTRIES, INC.
-----------------------------------------
PURSUANT TO SECTIONS 242 AND 245 OF
THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE
-----------------------------------------
Giant Industries, Inc., a Delaware corporation organized under the name
Giant Oil Industries, Inc. on September 21, 1989, hereby amends and restates its
Certificate of Incorporation to read in its entirety as set forth below. This
Restated Certificate of Incorporation supersedes in its entirety the Restated
Certificate of Incorporation of Giant Industries, Inc. dated December 8, 1989.
FIRST: The name of the Corporation is Giant Industries, Inc.
(hereinafter the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, in the City of Wilmington, County of
New Castle. The name of its registered agent at that address is The Corporation
Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the
"DGCL").
FOURTH: The total number of shares which the Corporation shall have
authority to issue is 60,000,000 shares, consisting of (a) 50,000,000 shares of
common stock, par value $.01 per share (the "Common Stock"), and (b) 10,000,000
shares of preferred stock, par value $.01 per share (the "Preferred Stock").
The Board of Directors of the Corporation (the "Board of Directors") is
expressly authorized, at any time and from time to time, to fix, by resolution
or resolutions, the following provisions for shares of any class or classes of
Preferred Stock of the Corporation or any series of any class of Preferred
Stock:
(a) the designation of such class or series, the number of
shares to constitute such class or series and the stated value thereof if
different from the par value thereof;
(b) whether the shares of such class or series shall have
voting rights, in addition to any voting rights provided by law, and, if so, the
terms of such voting rights, which may (i) be general or limited, (ii) subject
to applicable law or regulation, including without limitation the rules of any
securities exchange on which securities of any class of the Corporation may be
listed, permit more than one vote per share, or (iii) vary among stockholders of
the same class based upon such factors as the Board of Directors may determine
including, without limitation, the size of a stockholder's position and/or the
length of time with respect to which such position has been held;
(c) the dividends, if any, payable on such class or series,
whether any such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall
57
be payable, and the preference or relation which such dividends shall bear to
the dividends payable on any shares of stock of any other class or any other
series of the same class;
(d) whether the shares of such class or series shall be
subject to redemption by the Corporation, and, if so, the times, prices and
other conditions of such redemption;
(e) the amount or amounts payable upon shares of such series
upon, and the rights of the holders of such class or series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any distribution of
the assets, of the Corporation;
(f) whether the shares of such class or series shall be
subject to the operation of a retirement or sinking fund and, if so, the extent
to and manner in which any such retirement or sinking fund shall be applied to
the purchase or redemption of the shares of such class or series for retirement
or other corporate purposes and the terms and provisions relative to the
operation thereof;
(g) whether the shares of such class or series shall be
convertible into, or exchangeable for, shares of stock of any other class or any
other series of the same class or any other securities (including Common Stock)
and, if so, the price or prices or the rate or rates of conversion or exchange
and the method, if any, of adjusting the same, and any other terms and
conditions of conversion or exchange;
(h) the limitations and restrictions, if any, to be effective
while any shares of such class or series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the purchase,
redemption or other acquisition by the Corporation of, the Common Stock or
shares of stock of any other class or any other series of the same class;
(i) the conditions or restrictions, if any, upon the creation
of indebtedness of the Corporation or upon the issue of any additional stock,
including additional shares of such class or series or of any other series of
the same class or of any other class;
(j) the ranking (be it pari passu, junior or senior) of each
class or series vis-a-vis any other class or series of any class of Preferred
Stock as to the payment of dividends, the distribution of assets and all other
matters; and
(k) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations and
restrictions thereof, insofar as they are not inconsistent with the provisions
of this Restated Certificate of Incorporation, to the full extent permitted in
accordance with the laws of the State of Delaware.
The powers, preferences and relative, participating, optional and other
special rights of each class or series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding.
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(a) The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors.
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(b) The directors shall have concurrent power with the
stockholders to make, alter, amend, change, add to or repeal the bylaws of the
Corporation.
(c) The business and affairs of the Corporation shall be
managed by or under the direction of a Board of Directors consisting of not less
than six nor more than twelve directors. The exact number of directors shall be
determined from time to time by resolution adopted by the affirmative vote of a
majority of the directors then in office. The Directors shall be divided into
three classes, designated Class I, Class II and Class III. Class I directors
shall have a term expiring at the Annual Meeting of Stockholders in 1999, Class
II directors shall have a term expiring at the Annual Meeting of Stockholders in
2000, and Class III directors shall have a term expiring at the Annual Meeting
of Stockholders in 2001. At each Annual Meeting of Stockholders beginning in
1999, successors to the class of directors whose term expires at the Annual
Meeting of Stockholders shall be elected by the holders of a majority of the
stock represented and entitled to vote thereat for a three-year term. A director
shall hold office until the Annual Meeting of Stockholders for the year in which
his term expires and until his successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office.
Notwithstanding the foregoing, whenever the holders of any one
or more classes or series of Preferred Stock issued by the Corporation, if any,
shall have the right, voting separately by class or series, to elect directors
at an annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such directorships shall be governed
by the terms of this Restated Certificate of Incorporation applicable thereto,
and such directors so elected shall not be divided into classes pursuant to this
Article FIFTH unless expressly provided by such terms.
(d) Directors of the Corporation may be removed by
stockholders of the Corporation only for cause.
(e) No director shall be personally liable to the Corporation
or any of its stockholders for monetary damages for breach of fiduciary duty as
a director, except to the extent that elimination or limitation of liability is
prohibited under the DGCL as in effect when such liability is determined. Any
repeal or modification of this Article FIFTH by the stockholders of the
Corporation shall not deprive a director of the benefits hereof with respect to
acts or omissions occurring prior to such repeal or modification.
(f) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless, to the provisions of the DGCL,
this Restated Certificate of Incorporation, and any bylaws adopted by the
stockholders; provided, however, that no bylaws hereafter adopted by the
stockholders shall invalidate any prior act of the directors which would have
been valid if such bylaws had not been adopted.
SIXTH: 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 the DGCL 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 the DGCL, 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
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manner as the said court directs. If a majority in number representing
seventy-five percent (75%) 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 the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
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.
SEVENTH: The Corporation shall, to the fullest extent
permitted by Section 145 of the Delaware GCL, as amended from time to time, or
any successor section, indemnify each person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation, as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding and any appeal therefrom.
Indemnification may include payment by the Corporation of
expenses in defending an action or proceeding in advance of the final
disposition of such action or proceeding upon receipt of an undertaking by the
person indemnified to repay such payment if it is ultimately determined that
such person is not entitled to indemnification under this Article, which
undertaking may be accepted without reference to the financial ability of such
person to make such repayments.
The Corporation shall not indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person unless the initiation thereof was approved by the Board of Directors
of the Corporation.
The indemnification rights provided in this Article SEVENTH
(i) shall not be deemed exclusive of any other rights to which those indemnified
may be entitled under any law, agreement or vote of stockholders or
disinterested directors or otherwise, and (ii) shall inure to the benefit of the
heirs, executors and administrators of such persons. The Corporation may, to the
extent authorized from time to time by its Board of Directors, grant
indemnification rights to other employees or agents of the Corporation or other
persons serving the Corporation and such rights may be equivalent to, or greater
or less than, those set forth in this Article SEVENTH.
EIGHTH: Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at an annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders. Unless otherwise required by law, special meetings
of stockholders of the Corporation may be called only by the Co-Chairmen of the
Board acting together, or the Chairman of the Board if only one is so appointed,
or the Board of Directors pursuant to a resolution adopted by a majority of the
entire Board of Directors. Written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for which the
meeting is called shall be given not less than ten (10) nor more than sixty (60)
days before the date of the meeting to each stockholder entitled to vote at such
meeting.
NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation or
in the bylaws of the Corporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation; provided, however, that subject to the powers and rights
provided for herein with
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respect to Preferred Stock issued by the Corporation, if any, but
notwithstanding anything else contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
eighty percent (80%) of the combined voting power of each outstanding class of
capital stock shall be required to alter, amend, rescind or repeal (i) Article
FOURTH, Article FIFTH, Article SIXTH, Article SEVENTH, Article EIGHTH, or this
Article NINTH or to adopt any provision inconsistent therewith and (ii) Sections
3 and 8 of Article II, Sections 1, 2 and 6 of Article III and Article VIII of
the Bylaws of the Corporation or to adopt any provision inconsistent therewith.
The foregoing provisions of this Restated Certificate of Incorporation
were duly adopted in accordance with the provisions of Sections 242 and 245 of
the DGCL.
IN WITNESS WHEREOF, Giant Industries, Inc. has caused this Restated
Certificate of Incorporation to be duly executed in its corporate name this ___
day of ____________, 1998.
GIANT INDUSTRIES, INC.
By:
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
ATTEST:
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇
Secretary
5
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EXHIBIT B
AMENDED AND RESTATED BYLAWS
OF SURVIVING CORPORATION
B-1
62
AMENDED AND RESTATED BYLAWS
OF
GIANT INDUSTRIES, INC.
(HEREINAFTER CALLED THE "CORPORATION")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The Annual Meetings of Stockholders shall
be held on such date and at such time as shall be designated from time to time
by the Board of Directors and stated in the notice of the meeting, at which
meetings the stockholders shall elect, in accordance with Section 1 of Article
III of these Bylaws, by the vote of the holders of a majority of the stock
represented and entitled to vote thereat, those Directors belonging to the class
or classes of directors to be elected at such meeting, and transact such other
business as may properly be brought before the meeting. Written notice of the
Annual Meeting stating the place, date and hour of the meeting shall be given to
each stockholder entitled to vote at such meeting not less than ten (10) nor
more than sixty (60) days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Restated Certificate of Incorporation, Special Meetings of Stockholders may
be called only by the Co-Chairmen of the Board acting together (or the Chairman
of the Board if only one is so appointed) or the Board of Directors pursuant to
a resolution adopted by a majority of the entire board of directors. Written
notice of a Special Meeting stating the place, date and hour of the meeting and
the purpose or purposes for which the meeting is called shall be given not less
than ten (10) nor more than sixty (60) days before the date of the meeting to
each stockholder entitled to vote at such meeting. Business transacted at all
special meetings shall be confined to the objects stated in the call.
Section 4. Quorum. Except as otherwise provided by law or by the
Restated Certificate of Incorporation, the holders of a majority of the capital
stock issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings
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of the stockholders for the transaction of business. If, however, such quorum
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder entitled to vote at the meeting.
Section 5. Voting. Unless otherwise required by law, the Restated
Certificate of Incorporation or these Bylaws, (i) any question brought before
any meeting of stockholders shall be decided by the vote of the holders of a
majority of the stock represented and entitled to vote thereat and (ii) each
stockholder represented at a meeting of stockholders shall be entitled to cast
one vote for each share of the capital stock entitled to vote thereat held by
such stockholder. Such votes may be cast in person or by proxy but no proxy
shall be voted on or after three years from its date, unless such proxy provides
for a longer period. The Board of Directors, in its discretion, or the officer
of the Corporation presiding at a meeting of stockholders, in his discretion,
may require that any votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder of the Corporation who is
present.
Section 7. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 6 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 8. Notice of Business. At any meeting of stockholders, only
such business shall be conducted as shall have been brought before the meeting
(a) by or at the direction of the Board of Directors or (b) by any stockholder
of the Corporation who is a stockholder of record at the time of giving of the
notice provided for in this Section 8 of this Article II, who shall be entitled
to vote at such meeting and who complies with the notice procedures set forth in
this Section 8 of this Article II. For business to be properly brought before a
meeting of stockholders by a stockholder, the stockholder shall have given
timely notice thereof in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice shall be delivered to or mailed and received at
the principal executive offices of the Corporation not less than ninety (90)
days nor more than 120
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days prior to the meeting; provided, however, that in the event that less than
100 days' notice or prior public disclosure of the date of the meeting is given
or made to stockholders, notice by the stockholder to be timely must be so
received not later than the close of business on the tenth day following the day
on which such notice of the date of the meeting was mailed or such public
disclosure was made, whichever first occurs. Such stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring
before the meeting (a) a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting and,
in the event that such business includes a proposal to amend either the Restated
Certificate of Incorporation or Bylaws of the Corporation, the language of the
proposed amendment, (b) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (c) the class
and number of shares of capital stock of the Corporation which are beneficially
owned by such stockholder and (d) any material interest of such stockholder in
such business. Notwithstanding anything in the Bylaws to the contrary, no
business shall be conducted at a stockholder meeting except in accordance with
the procedures set forth in this Section 8 of this Article II. The Chairman of
the meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting and in accordance with
the provisions of the Bylaws, and if he should so determine, he shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted. Notwithstanding the foregoing provisions of this
Section 8 of this Article II, a stockholder shall also comply with all
applicable requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder with respect to the matters set forth in
this Section 8 of this Article II.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The business and affairs
of the Corporation shall be managed by or under the direction of a Board of
Directors consisting of an even number of directors totaling not less than six
nor more than twelve. The exact number of directors shall be determined from
time to time by resolution adopted by the affirmative vote of a majority of the
directors then in office. One half of the directors shall be designated "G
Directors" and one half shall be designated "H Directors." The G Directors and H
Directors shall be divided into three classes, designated Class I, Class II and
Class III. Class I directors shall have a term expiring at the Annual Meeting of
Stockholders in 1999, Class II directors shall have a term expiring at the
Annual Meeting of Stockholders in 2000, and Class III directors shall have a
term expiring at the Annual Meeting of Stockholders in 2001. Each class shall
consist of an even number of directors composed equally of G Directors and H
Directors. At each Annual Meeting of Stockholders beginning in 1999, successors
to the class of directors whose term expires at that Annual Meeting of
Stockholders shall be elected for a three-year term. If the number of directors
is changed, any increase or decrease shall be apportioned so that there will be
equal numbers of G Directors and H Directors and so as to maintain the number of
directors in each class as nearly equal as possible, but in no case shall a
decrease in the number of directors shorten the term of any incumbent director.
A director shall hold office until the Annual Meeting of Stockholders for the
year in which his term expires and until his successor shall be elected and
shall qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office.
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Directors of the Corporation may be removed by stockholders of the
Corporation only for cause.
Section 2. Vacancies. It is intended that there shall be an equal
number of G Directors and H Directors and that any vacancy on the Board of
Directors shall be filled so as to restore and maintain the equality in number
of G Directors and H Directors. In the event of a vacancy on the Board of
Directors such that there is less than the required number of G Directors, the
remaining G Directors shall elect an additional director who shall fill the
vacancy as a G Director; in the event that a vacancy on the Board of Directors
results in there being less than the required number of H Directors, the
remaining H Directors shall elect an additional director who shall fill the
vacancy as an H Director. Vacancies on the Board of Directors that result from
an increase in the number of directors shall be filled one-half by a person or
persons elected by the G Directors and one-half by a person or persons elected
by the H Directors.
Any director of any class elected to fill a vacancy resulting from an
increase in the number of directors in such class shall hold office for a term
that shall coincide with the remaining term of that class. Any director elected
to fill a vacancy not resulting from an increase in the number of directors
shall have the same remaining term as that of his predecessor.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors which may exercise
all such powers of the Corporation and do all lawful acts and things as are not
by statute or by the Restated Certificate of Incorporation or by these Bylaws
directed or required to be exercised or done by the stockholders.
Section 4. Meetings. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware. Regular meetings of the Board of Directors may be held without notice
at such time and at such place as may from time to time be determined by the
Board of Directors. Special meetings of the Board of Directors may be called by
a Co-Chief Executive Officer or by any two directors. Notice thereof stating the
place, date, and hour of the meeting shall be given to each director either by
mail not less than forty-eight (48) hours before the date of the meeting or by
telephone, electronic facsimile or telegram on twenty-four (24) hours' notice.
All notices of meetings shall be given to the extent reasonably possible so that
all directors shall have the opportunity to attend either in person or by means
of conference telephone. Any director who does not attend a special meeting of
the Board of Directors shall be promptly informed of all action taken by the
Board of Directors at the special meeting.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Restated Certificate of Incorporation or these Bylaws, at all meetings
of the Board of Directors, a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 6. Voting. On all matters with respect to which the Board of
Directors shall vote, except as may be otherwise provided in the Restated
Certificate of Incorporation or these Bylaws,
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the number of affirmative votes required for any proposed action of the Board of
Directors shall be equal to the sum of (i) the greater of the number of G
Directors or the number of H Directors voting on the matter plus (ii) one.
Except as otherwise specified by the Board of Directors, the requirements of
this Section 6 shall also apply to all voting by committees of the Board of
Directors.
At all times until the occurrence of the Termination Date as defined in
Section 13 of this Article III, the unanimous vote of the entire Board of
Directors shall be required for the authorization of the issuance of Preferred
Stock having voting rights with respect to the election of directors of the
Corporation.
Except as may be otherwise specifically provided by law, the Restated
Certificate of Incorporation or these Bylaws, after the occurrence of the
Termination Date as defined in Section 13 of this Article III, the act of a
majority of the directors present and eligible to vote on a matter shall be the
act of the Board of Directors on that matter.
Section 7. Actions of the Board. Unless otherwise provided by the
Restated Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all the members of the
Board of Directors or committee, as the case may be, consent thereto in writing,
and the writing or writings are filed with the minutes of proceedings of the
Board of Directors or committee.
Section 8. Meetings by Means of Conference Telephone. Unless otherwise
provided by the Restated Certificate of Incorporation or these Bylaws, members
of the Board of Directors of the Corporation, or any committee designated by the
Board of Directors, may participate in a meeting of the Board of Directors or
such committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 8 of this
Article III shall constitute presence in person at such meeting.
Section 9. Committees. There shall be three standing committees of the
Board of Directors: an Audit Committee, a Compensation Committee and a
Nominating Committee. The Audit Committee and the Compensation Committee shall
each be composed of two G Directors and two H Directors who are not officers or
employees of the Corporation. The chairman of the Audit Committee and the
chairman of the Compensation Committee shall be selected by the Board of
Directors. The Nominating Committee shall be composed of the two Co-Chief
Executive Officers (who shall act as co-chairmen of the committee) and two other
directors, one a G Director and the other an H Director. The requirements of
Section 6 of this Article III shall apply to all votes of the standing
committees. The Board of Directors may, by resolution passed by a majority of
the entire Board of Directors, designate one or more additional committees, each
such additional committee to be composed of one or more of the directors of the
Corporation. Unless otherwise specifically provided by the Board of Directors,
each additional committee of the Board of Directors shall be composed of an
equal number of G Directors and H Directors and the requirements of Section 6
hereof shall apply to all votes of each such committee. The chairmen of each
standing committee and of any additional committees shall have the right to vote
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on their respective committees. Subject to the other requirements of these
Bylaws, the Board of Directors may designate one or more directors as alternate
members of any standing or additional committee, who may replace any absent or
disqualified member at any meeting of any such committee. Any committee of the
Board of Directors, to the extent allowed by law and provided in the resolution
establishing such committee, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation. Each committee shall keep regular minutes and report
to the Board of Directors when requested.
Section 10. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors and a stated
salary as director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
Section 11. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors (subject to the
requirements of Section 6 of this Article III), even though the disinterested
directors be less than a quorum; or (ii) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (iii) the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
Section 12. Nominations for Elections of Directors. For each meeting of
the stockholders at which directors of the Corporation are to be elected, the
Corporation shall propose to the stockholders a slate of nominees specifying one
nominee for each director to be elected by the stockholders at such meeting. The
Corporation's slate of nominees for director shall include the number of
nominees for G Director and for H Director such that the election of all
proposed nominees would result in an equal number of G Directors and H Directors
immediately after the election. The Corporation's nominee or nominees for G
Director shall be selected by the persons then serving as G Directors and the
Corporation's nominee or nominees for H Director shall be selected by the
persons then serving as H Directors.
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Section 13. Termination of Designations of G Directors and H Directors.
Unless otherwise determined by resolution of the Board of Directors, the
designation of directors of the Corporation as G Directors and H Directors and
the requirement that the Board of Directors be composed of an even number of
directors shall cease to apply upon the Termination Date, which shall be the
earlier of (i) an amendment to Article III, to Section 2 or Section 5 of Article
IV, or to Article IX of these Bylaws; (ii) either ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇")
or the ▇▇▇▇▇▇▇▇▇▇ Group (which ▇▇▇▇▇▇▇▇▇▇ Group consists of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇▇▇, NBN Capital Limited Partnership, a Texas limited
partnership, ▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust, ▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces County Trust, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Nueces County Trust and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Neuces County Trust) ceases to
hold at least a 3% Stock Interest (as defined below); (iii) either Acridge or
the ▇▇▇▇▇▇▇▇▇▇ Group purchases from the other the Subject Stock Interest (as
defined below); (iv) the death of Acridge or ▇▇▇▇▇▇▇▇▇▇; (v) December 31, 2003;
or (vi) either Acridge or ▇▇▇▇▇▇▇▇▇▇ resigns as Co-Chief Executive Officer and
Co-Chairman of the Board and becomes bound by the provisions of a standstill
agreement; provided, however, that, if the Termination Date arises because of
the death of Acridge or Norsworthy, the remaining G Directors (in the case of
Acridge's death) and the remaining H Directors (in the case of ▇▇▇▇▇▇▇▇▇▇'▇
death) shall have the power to select a director to fill the vacancy left by
Acridge or ▇▇▇▇▇▇▇▇▇▇, as the case may be, at the next meeting of the Board of
Directors after the death.
For purposes of these Bylaws, (i) "Acridge Stock Interest" means the
entire Stock Interest (as defined below) owned at the relevant time by Acridge
and his Affiliate Transferees (as defined below); (ii) "▇▇▇▇▇▇▇▇▇▇ Group Stock
Interest" means the entire Stock Interest owned at the relevant time by all
members of the ▇▇▇▇▇▇▇▇▇▇ Group and its Affiliate Transferees; (iii) "Stock
Interest" means the entire right, title and interest of a party in and to any
equity securities of the Corporation, including shares of common stock or
preferred stock held or otherwise beneficially owned from time to time by a
party and any other securities convertible into or exchangeable for equity
securities of the Corporation, but shall not include any unexercised options,
warrants or similar rights or any equity securities allocated to the account of
a party under an employee stock ownership plan unless the same may be
distributed to the party upon his resignation as an officer and director of the
Corporation without penalty under the Internal Revenue Code or other applicable
laws; (iv) "Subject Stock Interest" means if Acridge is the purchaser the Stock
Interest which is the lesser in number of the Acridge Stock Interest or the
▇▇▇▇▇▇▇▇▇▇ Group Stock Interest, and if the ▇▇▇▇▇▇▇▇▇▇ Group is the purchaser,
the "Subject Stock Interest" means the amount of the Acridge Stock Interest; and
(v) "Affiliate Transferee" means with respect to any transferor (a) any person
directly or indirectly controlling, controlled by or under common control with
such transferor ("Control Persons"); (b) individuals ("Family Members") who are
related by blood or marriage to the transferor or a Control Person of the
transferor; (c) entities that are controlled by any such Family Member; and (d)
entities in which the transferor, one or more Control Persons, or one or more
Family Members have a material interest, but shall not include the Corporation
with respect to any treasury stock acquired from any person.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be two Co-Chief Executive Officers, a Secretary
and a Treasurer. The Co-Chief
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Executive Officers shall be directors of the Corporation and shall be the
Co-Chairmen of the Board of Directors. The Board of Directors, in its
discretion, may also choose one or more Executive Vice Presidents, Senior Vice
Presidents and Vice Presidents, Assistant Secretaries, Assistant Treasurers and
other officers. Any number of offices may be held by the same person, unless
otherwise prohibited by law, the Restated Certificate of Incorporation or these
Bylaws. The officers of the Corporation need not be stockholders of the
Corporation nor, except in the case of the Co-Chief Executive Officers, need
such officers be directors of the Corporation.
Section 2. Co-Chief Executive Officers. At the effective date of these
Bylaws, the Co-Chief Executive Officers of the Corporation shall be ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. The Board of Directors at its first meeting held
after each Annual Meeting of Stockholders shall elect as hereinafter provided
the Co-Chief Executive Officers, who shall hold their offices until their
successors are chosen and qualified or until their earlier resignation or
removal pursuant to the terms of these Bylaws. In the election of the Co-Chief
Executive Officers after each Annual Meeting of Stockholders, the G Directors
shall elect the Co-Chief Executive Officer who shall occupy the position
occupied by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ at the date of the merger of the Corporation and
▇▇▇▇▇ Corporation and the H Directors shall elect the Co-Chief Executive Officer
who shall occupy the position occupied by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ at the date of the
merger of the Corporation and ▇▇▇▇▇ Corporation. Subject to the authority of the
Board of Directors, the two Co-Chief Executive Officers shall work together in
the Office of the Chief Executive Officer, shall have general supervision of the
business of the Corporation, and shall see that all orders and resolutions of
the Board of Directors are carried into effect. One of the Co-Chief Executive
Officers shall be designated as the Co-Chief Executive Officer to whom all
officers and employees of the Corporation (excluding the other Co-Chief
Executive Officer) shall, directly or indirectly, report; unless otherwise
specified from time to time by the Board of Directors, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall be
the Co-Chief Executive Officer to whom all officers (excluding the other
Co-Chief Executive Officer) directly or indirectly report. Each of the Co-Chief
Executive Officers shall be deemed to have the additional title of President of
the Corporation in any circumstance where an officer of the Corporation with the
title of President is required. Either of the Co-Chief Executive Officers shall
have the authority to execute all bonds, mortgages, contracts and other
instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these Bylaws, the Board of Directors or
a Co-Chief Executive Officer. The Co-Chief Executive Officers shall also perform
such other duties and may exercise such other powers as from time to time may be
assigned to them by these Bylaws or by the Board of Directors. The salaries of
the Co-Chief Executive Officers shall be determined pursuant to applicable
employment contracts between the Corporation and each Co-Chief Executive
Officer, which contracts shall be subject to the authority of the Compensation
Committee of the Board of Directors.
Unless otherwise determined by vote of a majority of the Board of
Directors, the Corporation shall cease to have Co-Chief Executive Officers and
shall have one Chief Executive Officer after the earlier to occur of the
following dates: (i) the date of the Corporation's Annual Meeting of
Stockholders in 2004 and (ii) the date that either ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ceases for any reason to be a Co-Chief Executive Officer of the
Corporation. When the Corporation has one Chief Executive Officer pursuant to
the preceding sentence of this
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Section 2 of this Article IV, all references in these Bylaws to Co-Chief
Executive Officers shall refer to the Chief Executive Officer.
Section 3. Election of Other Officers. The Board of Directors at its
first meeting held after each Annual Meeting of Stockholders shall elect the
officers of the Corporation (other than the Co-Chief Executive Officers whose
elections shall be as provided in Section 2 of this Article IV), who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors; and
all such officers of the Corporation shall hold office until their successors
are chosen and qualified, or until their earlier resignation or removal. Any
officer subject to this section may be removed at any time by the affirmative
vote of a majority of the Board of Directors. Any vacancy occurring in any
office of the Corporation subject to this section shall be filled by the Board
or Directors. The salaries of all officers of the Corporation subject to this
section shall be fixed by the Board of Directors or by the Compensation
Committee.
Section 4. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by one of the Co-Chief Executive Officers or by
any Vice President and any such officer may, in the name of and on behalf of the
Corporation, take all such action as any such officer may deem advisable to vote
in person or by proxy at any meeting of security holders of any corporation in
which the Corporation may own securities and at any such meeting shall possess
and may exercise any and all rights and powers incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have exercised
and possessed if present. The Board of Directors may, by resolution, from time
to time confer like powers upon any other person or persons.
Section 5. Co-Chairmen of the Board of Directors. The Co-Chief
Executive Officers, as Co-Chairmen of the Board of Directors, shall preside at
all meetings of the stockholders and of the Board of Directors.
Section 6. Executive Vice Presidents, Senior Vice Presidents and Vice
Presidents. Each Executive Vice President, Senior Vice President, or Vice
President shall exercise general supervision and have executive control of such
departments of the Corporation's business, or perform such other executive
duties as shall from time to time be assigned to him by the Board of Directors.
The Board of Directors shall have the power to designate particular areas of
authority and responsibility of an Executive Vice President, Senior Vice
President or Vice President and to indicate such designation in such officer's
title.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by either Co-Chairman of the Board of Directors, either Co-Chief
Executive Officer or a Vice President and (ii) by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by him in the Corporation.
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Section 2. Signatures. Where a certificate is countersigned by (i) a
transfer agent other than the Corporation or its employee, or (ii) a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such Officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such Officer, transfer agent or registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to advertise the same in such manner
as the Board of Directors shall require and/or to give the Corporation a bond in
such sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these Bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be cancelled before a new certificate shall be
issued.
Section 5. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
before the date of such meeting, nor more than sixty (60) days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
law.
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ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Restated Certificate of Incorporation or these Bylaws, to be given to any
director, member of a committee or stockholder, such notice may be given by
mail, addressed to such director, member of a committee or stockholder, at his
address as it appears on the records of the Corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited in the United States mail. Written notice may also be given
personally or by electronic facsimile, telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Restated Certificate of Incorporation or these Bylaws, to be given to any
director, member of a committee or stockholder, a waiver thereof in writing,
signed, by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent thereto.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Restated Certificate of
Incorporation, if any, may be declared by the Board of Directors at any regular
or special meeting, and may be paid in cash, in property, or in shares of the
capital stock. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for any proper
purpose, and the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware." The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings other
Than Those by or in the Right of the Corporation. Subject to Section 3 of this
Article VIII, the Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
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investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in
the Right of the Corporation. Subject to Section 3 of this Article VIII, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director or officer, of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification under
this Article VIII (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth in Section 1 or
Section 2 of this Article VIII, as the case may be. Subject to Section 6 of
Article III, such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action suit or proceeding, or (ii) if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders. To the extent,
however, that a director or officer of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding described
above, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith, without the necessity of authorization
in the specific case.
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Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article VIII, a person shall be deemed to have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe his conduct was unlawful,
if his action is based on the records or books of account of the Corporation or
another enterprise, or on information supplied to him by the officers of the
Corporation or another enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another enterprise or on
information or records given or reports made to the Corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Section 4 of this
Article VIII shall mean any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise of which such person is or was
serving at the request of the Corporation as a director, officer, employee or
agent. The provisions of this Section 4 of this Article VIII shall not be deemed
to be exclusive or to limit in any way the circumstances in which a person may
be deemed to have met the applicable standard of conduct set forth in Section 1
or Section 2 of this Article VIII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise permissible under Sections
1 and 2 of this Article VIII. The basis of such indemnification by a court shall
be a determination by such court that indemnification of the director or officer
is proper in the circumstances because he has met the applicable standards of
conduct set forth in Section 1 or Section 2 of this Article VIII, as the case
may be. Neither a contrary determination in the specific case under Section 3 of
this Article VIII nor the absence of any determination thereunder shall be a
defense to such application or create a presumption that the director or officer
seeking indemnification has not met any applicable standard of conduct. Notice
of any application for indemnification pursuant to this Section 5 of this
Article VIII shall be given to the Corporation promptly upon the filing of such
application. If successful in whole or in part, the director or officer seeking
indemnification shall also be entitled to be paid the expense of prosecuting
such application.
Section 6. Expenses Payable in Advance. Expenses incurred by a director
or officer in defending or investigating a threatened or pending action, suit or
proceeding shall be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Corporation as
authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or granted
pursuant to this Article VIII shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under any Bylaw, agreement, contract, vote of stockholders or
disinterested directors or pursuant to the direction (howsoever embodied) of any
court of competent jurisdiction or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, it
being the policy of the Corporation that
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indemnification of the persons specified in Sections 1 and 2 of this Article
VIII shall be made to the fullest extent permitted by law. The provisions of
this Article VIII shall not be deemed to preclude the indemnification of any
person who is not specified in Section 1 or Section 2 of this Article VIII but
whom the Corporation has the power or obligation to indemnify under the
provisions of the General Corporation Law of the State of Delaware, or
otherwise.
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power or the
obligation to indemnify him against such liability under the provisions of this
Article VIII.
Section 9. Certain Definitions. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors and officers, so that any person who is or was a director or officer
of such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, shall stand in
the same position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as such indemnification relates to his acts
while serving in any of the foregoing capacities, of such constituent
corporation, as he would have with respect to such constituent corporation if
its separate existence had continued. For purposes of this Article VIII,
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a director or officer of the
Corporation which imposes duties on, or involves services by, such director or
officer with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Article
VIII.
Section 10. Survival of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article VIII shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5 of this
Article VIII), the Corporation shall not be obligated to indemnify any director
or officer in connection with a proceeding (or part thereof) initiated by
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such person unless such proceeding (or part thereof) was authorized or consented
to by the Board of Directors of the Corporation.
Section 12. Indemnification of Employees and Agents. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article VIII to directors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
Section 1. In General. Except as otherwise provided in the Restated
Certificate of Incorporation or in Section 2 of this Article IX, these Bylaws
may be amended, in whole or in part, or new Bylaws may be adopted by the
stockholders or by the Board of Directors, provided, however, that notice of
such amendment or adoption of new Bylaws be contained in the notice of such
meeting of stockholders or Board of Directors as the case may be. Except as
otherwise provided in the Restated Certificate of Incorporation or in Section 2
of this Article IX, all such amendments must be approved by either the holders
of a majority of the outstanding capital stock or by a majority of the entire
Board of Directors then in office.
Section 2. Greater Than Majority Vote Required for Certain Amendments.
Any amendment to any provision of Article III of these Bylaws, to Section 1,
Section 2 and Section 5 of Article IV of these Bylaws, or to this Article IX of
these Bylaws shall require the affirmative vote of not less than eighty percent
(80%) of the entire Board of Directors then in office or the affirmative vote of
the holders of not less than eighty percent (80%) of the outstanding capital
stock of the Corporation..
Section 3. Entire Board of Directors. As used in this Article IX and in
these Bylaws generally, the term "entire Board of Directors" means the total
number of directors which the Corporation would have if there were no vacancies.
ARTICLE X
EFFECTIVE DATE
Section 1. Effective Date. These Amended and Restated Bylaws were
adopted and approved by the Board of Directors and the stockholders of the
Corporation, are effective as of _______________, 1998, and supersede in their
entirety all prior Bylaws adopted by the Corporation.
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EXHIBIT D
MAJOR STOCKHOLDERS' AGREEMENT
78
MAJOR STOCKHOLDERS' AGREEMENT
THIS MAJOR STOCKHOLDERS' AGREEMENT (the "Agreement") is made and
entered into this 14th day of April, 1998, by and among Giant Industries, Inc.,
a Delaware corporation ("Giant"), ▇▇▇▇▇ Corporation, a Delaware corporation
("▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇"), ▇▇▇▇
▇▇▇▇▇▇▇, NBN Capital Limited Partnership, a Texas limited partnership, ▇▇▇▇▇
▇▇▇▇▇▇▇ East Texas Trust, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
East Texas Trust, ▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces County Trust, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces
County Trust and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Neuces County Trust (such parties other than
Giant and ▇▇▇▇▇ are collectively referred to as the "Stockholder Parties," and
such parties other than Giant, ▇▇▇▇▇ and ▇▇▇▇▇▇▇ are collectively referred to as
the "▇▇▇▇▇▇▇▇▇▇ Group").
RECITALS
A. Giant and ▇▇▇▇▇ have simultaneously entered into an Agreement and
Plan of Merger, dated April 14, 1998 (such agreement as it hereafter may be
amended in accordance with its terms, the "Merger Agreement"), pursuant to which
▇▇▇▇▇ has agreed to merge with and into Giant with Giant as the surviving
corporation (the "Surviving Corporation") on the terms and subject to the
conditions set forth therein (the "Merger").
B. Each of the Stockholder Parties owns shares of the common stock of
▇▇▇▇▇ or Giant, as the case may be, equal to more than 1% of the respective
issued and outstanding shares of the common stock of ▇▇▇▇▇ or Giant, which
ownership is reflected on Schedule I attached hereto.
C. After giving effect to the Merger, Acridge and the ▇▇▇▇▇▇▇▇▇▇ Group
will own approximately 11.8% and 15.0%, respectively, of the issued and
outstanding capital stock of the Surviving Corporation without consideration of
any options, warrants or other rights to acquire capital stock of the Surviving
Corporation. In addition, among other things, (i) Acridge and ▇▇▇▇▇▇▇▇▇▇ will
serve as Co-Chairmen of the Board and be Co-Chief Executive Officers acting
together as the Office of the Chief Executive Officer, and (ii) there will be an
equal number of G Directors and H Directors on the Surviving Corporation's Board
of Directors pursuant to the Surviving Corporation's Bylaws.
D. As a condition to the Merger, the parties desire to (i) enter into a
binding voting agreement among the Stockholder Parties with respect to the
Merger and concerning voting by the Stockholder Parties as stockholders of the
Surviving Corporation on certain matters following the Merger, and (ii) provide
for a mechanism to resolve any deadlocked disputes between Acridge, on the one
hand, and ▇▇▇▇▇▇▇▇▇▇, on the other hand, in the fulfillment of their respective
obligations and duties to the Surviving Corporation.
E. This Agreement is the Major Stockholders' Agreement referenced in
the Merger Agreement.
NOW, THEREFORE, in consideration of the Merger and the mutual promises
and covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
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TERMS AND CONDITIONS
SECTION 1
DEFINITIONS
1.01 DEFINITIONS. In addition to the various words and phrases defined
throughout this Agreement, the following terms shall have the meanings set forth
in this Section 1.01:
(a) "Acridge Stock Interest" means the entire Stock Interest
owned at the relevant time by Acridge and his Affiliate Transferees.
(b) "Affiliate Transferee" means with respect to any
transferor (i) any person directly or indirectly controlling, controlled by or
under common control with such transferor ("Control Persons"); (ii) individuals
("Family Members") who are related by blood or marriage to the transferor or a
Control Person of the transferor; (iii) entities that are controlled by any such
Family Member; and (iv) entities in which the transferor, one or more Control
Persons, or one or more Family Members have a material interest, but shall not
include Giant, ▇▇▇▇▇ or the Surviving Corporation with respect to any treasury
stock acquired from any person.
(c) "Control Arrangements" means: (i) the establishment of the
positions for Acridge and ▇▇▇▇▇▇▇▇▇▇ of Co-Chairmen of the Board and the
designation of each as Co-Chief Executive Officer acting together as the Office
of the Chief Executive Officer; (ii) the equal number of G Directors and H
Directors on the Surviving Corporation's Board of Directors; (iii) the voting
agreements described in Section 2 of this Agreement; and (iv) the provisions of
the Restated Certificate of Incorporation and Bylaws of the Surviving
Corporation reflecting any of the foregoing.
(d) "Deadlock Resolution Proceedings" means the proceedings
described in Section 3.02 hereof.
(e) "Disputed Matter" means any matter upon which Acridge and
▇▇▇▇▇▇▇▇▇▇ are unable to agree and which causes either of them to believe that
the Control Arrangements are not meeting their objectives to enhance the overall
competitive and strategic position of the Surviving Corporation and to otherwise
serve the best interests of the Surviving Corporation and its stockholders.
(f) "Effective Date" means the date of this Agreement.
(g) "▇▇▇▇▇▇▇▇▇▇ Group Stock Interest" means the entire Stock
Interest owned at the relevant time by all members of the ▇▇▇▇▇▇▇▇▇▇ Group and
his Affiliate Transferees.
(h) "Purchase Price" of the Subject Stock Interest shall mean
the per share price set forth in the Offer to Sell or Purchase, multiplied by
the number of shares of equity securities comprising the Subject Stock Interest
to be sold or purchased as provided in Section 3.02 hereof.
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(i) "Standstill Period" means any period during which (i) a
Disputed Matter is referred to the Board of Directors as provided in Section
3.01 hereof, and for an additional five days thereafter, or (b) a Deadlock
Resolution Proceeding is pending pursuant to Section 3.02 hereof.
(j) "Stock Interest" means the entire right, title and
interest of a party in and to any equity securities of the Surviving
Corporation, including shares of common stock or preferred stock held or
otherwise beneficially owned from time to time by a party and any other
securities convertible into or exchangeable for equity securities of the
Surviving Corporation, but shall not include any unexercised options, warrants
or similar rights or any equity securities allocated to the account of a party
under an employee stock ownership plan unless the same may be distributed to the
party upon his resignation as an officer and director of the Surviving
Corporation without penalty under the Internal Revenue Code or other applicable
laws.
(k) "Subject Stock Interest" means the number of shares of the
stock of the Surviving Corporation required to be purchased or sold as
determined pursuant to Section 3.02(b).
SECTION 2
VOTING AGREEMENTS
2.01 VOTE WITH RESPECT TO MERGER. Each Stockholder Party shall vote all
of the shares of the common stock of Giant or ▇▇▇▇▇, as the case may be, owned
by such Stockholder Party at every meeting of stockholders of Giant or ▇▇▇▇▇, as
the case may be, and at every adjournment thereof, (i) in favor of approval of
the Merger and any matter that could reasonably be expected to facilitate the
Merger and (ii) against any proposal for any recapitalization, merger, sale of
assets or business combination (other than the Merger) or any other action or
agreement that could reasonably be expected to hinder the Merger or would result
in a breach of any covenant contained in the Merger Agreement. Nothing herein
limits the exercise of fiduciary duties of a Stockholder Party in his or her
capacity as a director of Giant or ▇▇▇▇▇.
2.02 VOTE WITH RESPECT TO DIRECTORS AND AMENDMENTS TO BYLAWS. After the
Effective Time (as defined in the Merger Agreement), each Stockholder Party
shall vote all of the stock of the Surviving Corporation owned by such
Stockholder Party whether acquired before, pursuant to or after the Merger at
each stockholders meeting of the Surviving Corporation (i) for each of the
directors of the Surviving Corporation who is nominated by the Board of
Directors of the Surviving Corporation pursuant to the terms of Section 12 of
Article III of the Surviving Corporation's Bylaws as in effect as of the
Effective Time and (ii) against any amendment to the Bylaws or the Certificate
of Incorporation of the Surviving Corporation that is not proposed by the
"entire Board of Directors," as such term is defined in Section 3 of Article IX
of the Bylaws of the Surviving Corporation as in effect as of the Effective
Time.
2.03. RIGHTS AND OBLIGATIONS APPLICABLE TO AFFILIATE TRANSFEREES. Any
Stockholder Party proposing to transfer shares of ▇▇▇▇▇ or Giant currently owned
or shares of the Surviving Corporation after the Effective Time to an Affiliate
Transferee shall notify the proposed Affiliate
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Transferee of the terms of this Agreement, shall promptly notify all other
parties to this Agreement of the proposed transfer and shall, prior to the
proposed transfer, require such Affiliate Transferee to sign an addendum to this
Agreement becoming a party hereto. ▇▇▇▇▇ and Giant will use their best efforts
to cause the Surviving Corporation to not recognize any proposed transfer on the
books and records of the Surviving Corporation made in contravention to this
Section 2.03 and any such proposed transfer shall be deemed ineffective. The
terms of this Agreement, including provisions of this Section 2.03 with respect
to subsequent transfers and rights to notice of transfers, shall apply fully to
any person who is an Affiliate Transferee. Except as set forth in the preceding
sentences of this Section 2.03, parties to this Agreement and Affiliate
Transferees shall not be restricted by this Agreement with respect to any
transfer (including any pledge) to any person of shares of the stock of ▇▇▇▇▇,
Giant or the Surviving Corporation.
SECTION 3
DEADLOCK RESOLUTION AGREEMENTS
3.01 ADVICE OF THE BOARD. If, at any time after the 15th month
following the Effective Time, either Acridge or ▇▇▇▇▇▇▇▇▇▇ believes that the
Control Arrangements are not meeting their objectives to enhance the overall
competitive and strategic position of the Surviving Corporation and to otherwise
serve the best interests of the Surviving Corporation and its stockholders, and
they are unable to resolve their differences through private discussion, either
may call a special meeting of the Board of Directors (the "Special Meeting") for
the sole purpose of considering the Disputed Matters.
(a) Procedures. Notwithstanding the provisions of the Surviving
Corporation's Bylaws: (i) the notice for the Special Meeting shall be given at
least 10 days prior to the meeting, (ii) the notice shall specifically state
that the meeting is being called to discuss one or more Disputed Matters, (iii)
a quorum for the meeting shall be at least three of the H Directors and three of
the G Directors, and (iv) the meeting shall be chaired jointly by a
representative of each such category of directors. Acridge and ▇▇▇▇▇▇▇▇▇▇ may,
but are not obligated to, reduce the nature of any Disputed Matter to writing
and provide the same to the Board of Directors in advance of the Special
Meeting; provided that if either elects to do so, he shall provide a copy of
such writing in advance to the other at least two days before sending the same
to the other members of the Board.
(b) Presentations by Acridge and ▇▇▇▇▇▇▇▇▇▇. At the Special
Meeting, both Acridge and ▇▇▇▇▇▇▇▇▇▇ shall have the opportunity to present fully
and fairly the Disputed Matters for consideration by the Board of Directors. The
Board of Directors shall discuss the Disputed Matters in good faith and
consistent with its fiduciary obligations, and may meet to do so privately,
without Acridge and ▇▇▇▇▇▇▇▇▇▇ or without either of them. The Board of Directors
may continue the Special Meeting one or more times if necessary for adequate
deliberation of any Disputed Matter for any reasonable period of time.
(c) Board Action. At the Special Meeting or any continuation
thereof permitted by Section 3.01(b), the Board shall provide to Acridge and
▇▇▇▇▇▇▇▇▇▇ its advice and
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recommendations or decisions, and, if the Board is unable to agree on a
recommended course of action, it shall so state and the individual members of
the Board shall each inform Acridge and ▇▇▇▇▇▇▇▇▇▇ of their opinion on the
Disputed Matters.
(d) Intent. It is the intent of Acridge and ▇▇▇▇▇▇▇▇▇▇ that
the process described in this Section 3.01 be conducted in a fair and impartial
manner with the best interests of the Surviving Corporation and its stockholders
as the guiding factor. To that end, if a Disputed Matter is submitted to the
Board, Acridge and ▇▇▇▇▇▇▇▇▇▇ agree that they will not contact or communicate
with the other Board members ex parte or outside of the contacts and
communications contemplated by this Section 3.01 unless either believes in his
good faith judgment that such contacts or other communications are required in
the exercise of his fiduciary duties. Further, to ensure the maximum
effectiveness of this process, the Board may adopt whatever procedures and may
consult with whatever professionals and advisers it deems necessary or
appropriate to provide informed advice and decisions and to make informed
recommendations to Acridge and ▇▇▇▇▇▇▇▇▇▇.
(e) Consideration of Board Action. Acridge and ▇▇▇▇▇▇▇▇▇▇ each
agree to consider the advice, recommendations or decisions of the Board in good
faith and without any pre-conceived determinations. Notwithstanding the
foregoing, (i) after five days following the communications described in Section
3.01(c), or (ii) if no Special Meeting is in fact held as provided in Section
3.01(a) or within five days following the Special Meeting no communications
under Section 3.01(c) are made by the Board to Acridge and ▇▇▇▇▇▇▇▇▇▇, and
either of them in his sole discretion remains dissatisfied with the Disputed
Matter, he shall have the right to implement the Deadlock Resolution Proceedings
described in Section 3.02.
(f) Successive Application. Unless the Deadlock Resolution
Proceedings are invoked with respect to any Disputed Matter, the provisions of
this Section 3.01 shall apply successively to all Disputed Matters whenever
arising.
3.02 DEADLOCK RESOLUTION PROCEEDINGS.
(a) Purpose. This Section 3.02 sets forth a procedure pursuant
to which either Acridge or ▇▇▇▇▇▇▇▇▇▇ can, if either determines that there are
Disputed Matters that cannot be otherwise resolved, obtain an efficient and
businesslike termination of the Control Arrangements through making an offer to
the other that results in a choice for such other as to the means whereby the
Control Arrangements are terminated. For purposes of this Section 3.02, the term
"Offeror Group" shall, if the Offeror (as defined in Section 3.02(b)) is
Norsworthy, refer to each member of the ▇▇▇▇▇▇▇▇▇▇ Group and any Affiliate
Transferees having a relationship to one or more members of the ▇▇▇▇▇▇▇▇▇▇ Group
and, if the Offeror is Acridge, such term shall refer to Acridge and any
Affiliate Transferee having a relationship to Acridge. The term "Offeree Group"
shall, if the Offeree (as defined in Section 3.02(b)) is ▇▇▇▇▇▇▇▇▇▇, refer to
each member of the ▇▇▇▇▇▇▇▇▇▇ Group and any Affiliate Transferees having a
relationship to one or more members of the ▇▇▇▇▇▇▇▇▇▇ Group and, if the Offeree
is Acridge, such term shall refer to Acridge and any Affiliate Transferee having
a relationship with Acridge. If there is an election under clause (i) or clause
(ii) of Section 3.02(d) below, the one of the
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Offeror Group or the Offeree Group that becomes the purchaser as a result of
such election is referred to as the "Purchasing Group," and the one of the
Offeror Group or the Offeree Group that becomes the seller as a result of such
election is referred to as the "Selling Group."
(b) Offer to Sell or Purchase. At any time after the time
period set forth in Section 3.01(e), either Acridge or ▇▇▇▇▇▇▇▇▇▇ (the
"Offeror") may make to the other (the "Offeree") an offer to sell or to purchase
a Stock Interest as set forth in this Section 3.02. The offer described in this
Section 3.02(b) is referred to hereinafter as an "Offer to Sell or Purchase." If
the Offer to Sell or Purchase is delivered by Acridge, the Stock Interest he
must propose to sell is the Acridge Stock Interest, and the Stock Interest he
must propose to purchase is the amount equal to the lesser in number of the
Acridge Stock Interest or the ▇▇▇▇▇▇▇▇▇▇ Group Stock Interest. If the Offer to
Sell or Purchase is delivered by the ▇▇▇▇▇▇▇▇▇▇ Group, the Stock Interest the
▇▇▇▇▇▇▇▇▇▇ Group must propose to sell is the amount equal to the lesser in
number of the ▇▇▇▇▇▇▇▇▇▇ Group Stock Interest or the Acridge Stock Interest, and
the Stock Interest the ▇▇▇▇▇▇▇▇▇▇ Group must propose to purchase is the Acridge
Stock Interest. The Offer to Sell or Purchase shall simultaneously be delivered
by the Offeror to the Offeree, the Surviving Corporation by delivery of the same
to the corporate secretary and to each member of the Board of Directors at his
or her last known address in the records of the Surviving Corporation. Once
given, the Offer to Sell or Purchase may not be revoked or altered by the
Offeror.
(c) Contents of Offer to Sell or Purchase. The Offer to Sell
or Purchase shall include the following:
(i) The per share price (which must be paid in full in
cash at the closing) at which the Offeror offers to sell or purchase the Subject
Stock Interest (which must be the same price);
(ii) Evidence of the Offeror Group's ability to fund the
Purchase Price, assuming that as a result of the Offer to Sell or Purchase the
Offeror Group was required to purchase the Subject Stock Interest from the
Offeree Group, including specifically a financing commitment if the Offeror
Group would borrow the necessary funds together with documentation evidencing
the escrow of funds (or equivalent security in the form of an irrevocable letter
of credit or other comparable instrument) in an amount equal to ten percent
(10%) of the Purchase Price (the "▇▇▇▇▇▇▇ Money Deposit") as ▇▇▇▇▇▇▇ money to
secure the Offeror Group's obligation to pay the Purchase Price in the event
that the Offeree Group elects to sell the Subject Stock Interest to the Offeror
Group pursuant to the Offer to Sell or Purchase;
(iii) A form of a complete and mutual release to be
delivered by the Offeror, the Offeree and the Surviving Corporation at closing
of a purchase transaction; and
(iv) Such other material terms for the purchase and sale
of the Subject Stock Interest deemed relevant by the Offeror and not
inconsistent with this Agreement.
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Each of the instruments and documents referred to above shall be in commercially
reasonable form and shall be prepared in good faith by the Offeror. The Offer to
Sell or Purchase may not require performance by any person other than Acridge
and the ▇▇▇▇▇▇▇▇▇▇ Group, any Affiliate Transferees, and any party required to
act under the ▇▇▇▇▇▇▇ Money Deposit arrangement. The Selling Group shall be
obligated to convey the Subject Stock Interest to the Purchasing Group free and
clear of any liens, claims or encumbrances and the Offer to Sell or Purchase
shall so provide.
(d) Response. The Offeree shall elect in writing, as soon as
reasonably possible but not more than 60 days after his receipt of the Offer to
Sell or Purchase, either:
(i) To resign all positions then held with the Surviving
Corporation, including as a director, effective as of the closing and to cause
the sale of the Subject Stock Interest to the Offeror Group in accordance with
the terms of the Offer to Sell or Purchase; or
(ii) To cause the purchase from the Offeror Group of the
Subject Stock Interest in accordance with the terms of the Offer to Sell or
Purchase; or
(iii) To resign all positions then held with the Surviving
Corporation, including as a director, and be subject to a Standstill Agreement
(as defined below) with the Surviving Corporation.
The Offeree's election pursuant to this Section 3.02(d) is referred to
hereinafter as the "Response." If issued pursuant to Section 3.02(d)(ii), the
Response shall include evidence of the Offeree's ability to fund the Purchase
Price, including specifically a financing commitment if the Offeree Group would
borrow the necessary funds together with documentation evidencing the escrow of
funds (or equivalent security in the form of an irrevocable letter of credit or
other comparable instrument) in an amount equal to ten percent (10%) of the
Purchase Price as the ▇▇▇▇▇▇▇ Money Deposit to secure the Offeree Group's
obligation to pay the Purchase Price to the Offeror Group pursuant to the
Response. The Response shall be delivered simultaneously to the Offeror and to
the Surviving Corporation by copy to the corporate secretary and to each member
of the Board of Directors. If the Offeree fails to deliver the Response within
the required 60-day period, the Offeree shall be deemed to have given the
Response on the last day of such period, electing under clause (iii) above to
resign his positions, including as a director, and be subject to the Standstill
Agreement with the Surviving Corporation as provided in Sections 3.02(e) and
(f).
(e) Election or Deemed Election Under Section 3.02(d)(iii). If
the Offeree makes the election under Section 3.02(d)(iii) or is deemed to have
made such election if no Response is delivered by the Offeree within the
required 60-day period as provided in Section 3.02(d), a closing will be held on
the fifth day following such election or deemed election, as the case may be, at
the offices of the Surviving Corporation. At the closing, (i) the Offeree shall
deliver his resignation as to all positions in the Surviving Corporation,
including as a director, then held by the Offeree, (ii) the Control Arrangements
shall terminate, (iii) each member of the Offeree Group shall use his, her or
its best efforts to cause each member of the category of directors (G or H) of
which the Offeree is a member to
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resign, and (iv) a Standstill Agreement and mutual release as provided in
Section 3.02(f) shall become effective.
(f) Standstill Agreement and Mutual Release. The parties
hereby agree that, if the election under Section 3.02(d)(iii) is made or is
deemed to have been made if no Response is made by the Offeree within the 60-day
period as provided in Section 3.02(d), each member of the Offeree Group shall be
subject to the following obligations (the "Standstill Agreement"): each such
member shall not, and he, she or it shall cause each of his, her or its
affiliates not to, directly or indirectly: (a) acquire, offer to acquire or
agree to acquire any equity securities of the Surviving Corporation, except by
way of stock dividends or other distributions or offerings made available to all
stockholders of the Surviving Corporation or pursuant to the exercise of
outstanding options, warrants or other rights; (b) make or otherwise participate
in any solicitation of proxies or consents, or seek to advise, encourage or
influence any person with respect to voting any of the Surviving Corporation's
equity securities; (c) initiate or propose any shareholder proposals, or induce
any other person to initiate a shareholder proposal; (d) form or cause the
formation of any "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended); (e) otherwise act to control or
seek to control the Surviving Corporation; (f) seek the removal of any member of
the Board; (g) initiate or propose any tender or exchange offers; or (h) serve
as a member of the Board; provided, however, that the foregoing shall not
prevent the members of the Offeree Group from effecting routine sales of
Surviving Corporation equity securities in transactions for purposes other than
those prescribed above. The applicable obligations of the members of the Offeree
Group under the Standstill Agreement as provided by this Section 3.02(f) shall
cease to apply on the fifth anniversary of the Standstill Agreement or at such
earlier time that the Offeree Group holds less than 3% of the Surviving
Corporation's issued and outstanding common stock. Each of the parties hereby
agrees that, if the Standstill Agreement as provided in this Section 3.02(f)
becomes effective, he, she or its shall release all other parties to this
Agreement with respect to any and all claims and causes of action arising under
or pursuant to or in connection with this Agreement and shall execute a document
confirming such mutual release.
(g) Adjustment to Offer to Sell or Purchase for Tax Purposes.
At the request of the Selling Group, the Purchasing Group agrees to use
reasonable efforts to structure the purchase and sale transaction to minimize
the income tax liabilities of the Selling Group, notwithstanding the express
terms of the Offer to Sell or Purchase; provided that: (i) such structure will
not delay the closing under Section 3.02(h); (ii) any transaction costs incurred
in such structuring are deducted from the Purchase Price; (iii) such structure
will not increase the risks to the Purchasing Group; and (iv) the Selling Group
agrees in writing to indemnify, defend and hold the Purchasing Group harmless
from any liability on account of such structure.
(h) Closing for Purchase Transaction. Closing of the transfer
of the Selling Group's Subject Stock Interest pursuant to Section 3.2(d)(i) or
(ii) shall take place as soon as reasonably possible, but not more than 30 days
after the delivery of the Response, at the offices of the Surviving Corporation,
and on the specific date selected by the Purchasing Group.
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(i) Closing Procedure for Purchase Transaction. At the
closing, (i) the Purchasing Group shall pay the Purchase Price to the Selling
Group in immediately available funds, (ii) the Selling Group shall deliver the
stock certificates representing the Subject Stock Interest to the Purchasing
Group, with duly executed stock powers bearing medallion signature guarantees,
(iii) the members of the Selling Group holding positions in the Surviving
Corporation shall resign all such positions, including as directors, (iv) the
Control Arrangements shall terminate, (v) the Selling Group will use best
efforts to cause the category of directors (G or H) of which any member of the
Selling Group is a member to resign, and (vi) the parties shall execute and
deliver all documents and instruments required under the terms of the Offer to
Sell or Purchase.
(j) Closing Adjustments. If, at the closing, the Selling
Group's Stock Interest in the Surviving Corporation is subject to any lien,
claim or encumbrance, the Purchasing Group shall at the reasonable request of
the Selling Group cause the Purchase Price (or a portion thereof) to be applied
to discharge such lien, claim or encumbrance; provided that (i) such arrangement
will not delay the closing; (ii) any transaction costs incurred in such
arrangement are deducted from the Purchase Price; (iii) such arrangement will
not prevent the acquisition of the Subject Stock Interest by the Purchasing
Group free and clear of all liens, claims and encumbrances; and (iv) the Selling
Group agrees in writing to indemnify, defend and hold the Purchasing Group
harmless from any liability on account of such arrangement.
(k) Failure to Close. If the Purchasing Group fails for any
reason to close such purchase (a "Breaching Group") by no later than the closing
date specified in Section 3.02(h), it shall be liable to the Selling Group for
all costs (including without limitation attorneys' fees) incurred by the Selling
Group in connection with the proceedings under this Section 3.02. The Selling
Group shall be entitled to the ▇▇▇▇▇▇▇ Money Deposit and shall have, in addition
to all other rights and remedies, the option, exercisable within 60 days after
the closing date specified in Section 3.02(h), to purchase the Breaching Group's
Subject Stock Interest in the Surviving Corporation, on the terms and conditions
set forth in the Offer to Sell or Purchase and this Section 3.02. If the Selling
Group does not elect the option described in the preceding sentence, the
Breaching Group shall be required to take the actions specified in Section
3.02(d)(iii). If the Selling Group elects the option to purchase the Subject
Stock Interest of the Breaching Stockholder, it shall close the purchase of the
Subject Stock Interest as soon as reasonably possible but not more than 30 days
after exercise of such option.
(l) Other Matters. For all purposes under this Section 3.02,
the members of the ▇▇▇▇▇▇▇▇▇▇ Group hereby irrevocably appoint ▇▇▇▇▇▇▇▇▇▇ to act
as the exclusive representative of members of the ▇▇▇▇▇▇▇▇▇▇ Group and their
Affiliate Transferees on all matters set forth herein. The obligations of the
▇▇▇▇▇▇▇▇▇▇ Group under this Agreement are joint and several. In the event that
part or all of the Acridge Stock Interest is owned by Affiliate Transferees from
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ will be the exclusive representative of all holders of the
Acridge Stock Interest. The obligations of Acridge and his Affiliate Transferees
shall be joint and several.
3.03 STANDSTILL. The Stockholder Parties agree that during any
Standstill Period hereunder, they shall not, and they shall cause each of their
affiliates not to, directly or indirectly: (a)
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acquire, offer to acquire or agree to acquire any equity securities of the
Surviving Corporation, except by way of stock dividends or other distributions
or offerings made available to all stockholders of the Surviving Corporation or
pursuant to the exercise of outstanding options, warrants or other rights; (b)
make or otherwise participate in any solicitation of proxies or consents, or
seek to advise, encourage or influence any person with respect to voting any of
the Surviving Corporation's equity securities, except for Acridge and ▇▇▇▇▇▇▇▇▇▇
in their respective capacities as members of the Board of Directors on matters
approved by the Board; (c) initiate or propose any shareholder proposals, or
induce any other person to initiate a shareholder proposal; (d) form or cause
the formation of any "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended); (e) otherwise act to control or
seek to control the Surviving Corporation; (f) seek the removal of any member of
the Board; or (g) initiate or propose any tender or exchange offers; provided,
however, that the foregoing shall not prevent the Stockholder Parties from
effecting routine sales of Surviving Corporation equity securities in
transactions for purposes other than those prescribed above.
3.04 INTENT. The parties acknowledge that the subject matter of this
Section 3 is complicated, and agree that it is not possible to foresee or
prudent to predict all of the possible Disputed Matters or other factors or
circumstances that might arise in the future and affect the provisions of this
Section 3 and the procedures established herein. The parties further acknowledge
that the purpose of this Section 3 is to provide a mechanism to deal with
Disputed Matters in an efficient and businesslike manner so as not to unduly
disrupt or damage the Surviving Corporation or the interests of its
stockholders. Accordingly, it is the express intent of the parties that the
provisions hereof and the procedures established herein be interpreted and
conducted with the overriding interests of the Surviving Corporation and its
stockholders in mind at all times; provided that the foregoing shall not affect
the implementation of the Deadlock Resolution Proceedings set forth in Section
3.02 hereof.
SECTION 4
TERM AND TERMINATION
4.01 TERM AND TERMINATION. This Agreement shall become effective on the
Effective Date, and shall continue in effect until the earlier of (i) an
amendment to Section 2.01 of the Merger Agreement; (ii) an amendment to Article
III, to Section 2 or Section 5 of Article IV, or to Article IX of the proposed
Bylaws of the Surviving Corporation attached as Exhibit B to the Merger
Agreement; (iii) the termination of the Merger Agreement in accordance with its
terms without consummation of the Merger; (iv) either Acridge or the ▇▇▇▇▇▇▇▇▇▇
Group ceases to hold at least 3% of the common stock of the Surviving
Corporation (without consideration of any options, warrants or other rights to
acquire Capital Stock of the Surviving Corporation or any shares of the capital
stock of the Surviving Corporation allocated to either Acridge or ▇▇▇▇▇▇▇▇▇▇
under any employee stock ownership plan); (v) the closing of any Deadlock
Resolution Proceeding under Section 3 hereof; (vi) the death of Acridge or
▇▇▇▇▇▇▇▇▇▇; or (vii) December 31, 2003. In addition, with respect to any
Stockholder Party other than Acridge or ▇▇▇▇▇▇▇▇▇▇ who shall cease to own a
Stock Interest in the Surviving Corporation (other than pursuant to a
transaction in violation of Section 2.03 of this Agreement), this Agreement
shall terminate as to such Stockholder Party only at such time as such
Stockholder Party ceases to own such Stock Interest. Notwithstanding the
termination of this Agreement as provided in this Section
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4.01, any Standstill Agreement then in effect as provided in Section 3.02(f)
shall continue in effect until it expires in accordance with the terms set forth
in Section 3.02(f).
SECTION 5
REPRESENTATIONS AND WARRANTIES
5.01 REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER PARTIES. Each
Stockholder Party represents to each party hereto: (i) at the date hereof, the
Stockholder Party owns the number of shares of stock of Giant or ▇▇▇▇▇ set forth
opposite his, her or its name on Schedule I attached hereto and such Stockholder
Party has sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to vote or otherwise agree to all
matters set forth in this Agreement, with no limitations, qualifications, or
restrictions on such rights, subject to applicable securities laws, the terms of
this Agreement and normal rights under trust agreements and pledge agreements
which do not circumvent the purpose or intent of this Agreement; (ii) each
Stockholder Party has the legal capacity, power, and authority to enter into and
perform all of his, her or its obligations under this Agreement; (iii) the
execution, delivery and performance of this Agreement by such Stockholder Party
do not require the consent of any other person which has not been obtained on
the date hereof and will not violate any other agreement to which such
Stockholder Party is a party, including, without limitation, any voting
agreement, stockholders' agreement or voting trust; and (iv) this Agreement has
been duly executed and delivered by such Stockholder Party and constitutes the
legal, valid and binding obligation of such Stockholder Party, enforceable
against such Stockholder Party in accordance with its terms.
SECTION 6
GENERAL PROVISIONS
6.01 GENERAL
(a) Non-Frustration. The parties agree that they shall not
take any actions during the term of this Agreement that would have the effect of
frustrating or circumventing the purpose and intent of this Agreement; provided,
however, that the foregoing shall not prevent the Stockholder Parties from
effecting routine sales of Surviving Corporation equity securities in
transactions (subject to securities laws restrictions) for purposes other than
those prescribed in Section 3.03 and elsewhere in this Agreement.
(b) Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given on the date of delivery, if delivered personally or telecopied (and
confirmed) during normal business hours, or on the following business day, if
sent by overnight courier (providing proof of delivery), in each case to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(i) if to the Surviving Corporation, to:
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Giant Industries, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Secretary
(ii) if to Giant, to:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Secretary
(iii) if to ▇▇▇▇▇, to:
▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
(iv) if to Acridge, to
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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(v) if to the ▇▇▇▇▇▇▇▇▇▇ Group, to:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Any Affiliate Transferee shall promptly give notice of that person's address for
purposes of this Section 6.01(b) to all of the other parties and Affiliate
Transferees.
(c) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties. Facsimile copies with signatures
of the parties to this Agreement, or their duly authorized representatives,
shall be legally binding and enforceable. All such facsimile copies are declared
to be originals and accordingly admissible in any jurisdiction or tribunal
having jurisdiction over any matter relating to this Agreement.
(d) Entire Agreement; No Third-Party Beneficiaries. This Agreement (i)
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement, and (ii) is not intended to confer upon any
person other than the parties any rights or remedies.
(e) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflict of laws
thereof.
(f) Assignment. Except as otherwise expressly set forth herein, neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by the parties hereto without the prior written consent of the other
parties. Any assignment in violation of the preceding sentence shall be void.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
(g) Enforcement. The parties agree that irreparable damage would occur
and that the parties would not have any adequate remedy at law in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any federal court located in the State of Delaware or in
Delaware state court, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of any federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises
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out of this Agreement or any of the transactions contemplated by this Agreement,
(ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (iii)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of Delaware or a Delaware state court. Each
party to this Agreement, including Giant, ▇▇▇▇▇ and the Surviving Corporation,
and each Affiliate Transferee shall, so long as that person holds stock of
Giant, ▇▇▇▇▇ or the Surviving Corporation, have the right to seek, against any
person subject to this Agreement, enforcement of any obligations under the terms
of this Agreement. Any party breaching any provision of this Agreement shall be
liable to each other party for that party's reasonable attorneys' fees incurred
in enforcing the terms of this Agreement against the breaching party.
(h) Descriptive Headings. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(i) Amendments and Waivers No amendment of this Agreement shall be
effective unless it is in writing and is signed by all parties hereto, and no
waiver of any provision of this Agreement or consent to any departure by any
party from the terms hereof shall in any event be effective unless in writing
and signed by the party or parties against whom such waiver or consent is
asserted, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose recited therein.
(j) Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision or provisions shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision or provisions were so excluded and shall be
enforceable in accordance with its terms.
(k) Schedule 13D Filing. The Stockholder Parties will cooperate in the
preparation and filing with the Securities and Exchange Commission, the New York
Stock Exchange and the American Stock Exchange of a Schedule 13D within ten days
following the date of this Agreement.
14
92
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first written above.
Giant Industries, Inc.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇ Corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
15
93
-------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
NBN Capital Limited Partnership
By: NBN Assets Management Company, L.L.C.
By:
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Manager
▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust Company
of Texas, Trustee
By:
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust Company
of Texas, Trustee
By:
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
16
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust Company
of Texas, Trustee
By:
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces County Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust Company
of Texas, Trustee
By:
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice
President
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces County
Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust Company of
Texas, Trustee
By:
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces County Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust
Company of Texas, Trustee
By:
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
17
95
SCHEDULE I
SHARES HELD BY THE STOCKHOLDER PARTIES
Acridge Number of Giant Industries Shares Owned
------- ---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 2,315,892
▇▇▇▇▇▇▇▇▇▇ Group Number of ▇▇▇▇▇ Corporation Shares Owned
---------------- ----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 328,859
▇▇▇▇ ▇▇▇▇▇▇▇ 328,132
NBN Capital Limited Partnership ▇▇▇,▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Trust 263,242
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust 263,242
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust 263,242
▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces County Trust 240,470
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Neuces County Trust 240,470
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Neuces County Trust 240,470
I-1
