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[NCS LOGO]
National Convenience Stores Incorporated----------------------------------------
November 14, 1995
Dear Securityholder:
On November 8, 1995, National Convenience Stores Incorporated ("NCS")
entered into a merger agreement with Diamond Shamrock, Inc. ("Diamond Shamrock")
and one of its subsidiaries that provides for the acquisition of NCS by Diamond
Shamrock at a price of $27 per share. Under the terms of the merger agreement, a
Diamond Shamrock subsidiary has commenced a tender offer for all outstanding
shares of NCS common stock at $27 per share and all outstanding warrants to
purchase NCS common stock at $9.25 per warrant.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE DIAMOND SHAMROCK OFFER
AND THE MERGER AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
FAIR TO AND IN THE BEST INTERESTS OF NCS' SECURITYHOLDERS. ACCORDINGLY, THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALL NCS SECURITYHOLDERS ACCEPT
THE DIAMOND SHAMROCK OFFER AND TENDER THEIR COMMON STOCK AND WARRANTS TO DIAMOND
SHAMROCK.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors. These factors included, among other
things, the opinion dated November 7, 1995 of ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇, Incorporated, financial advisor to NCS, that the cash consideration to be
received by the NCS stockholders and warrantholders pursuant to the Diamond
Shamrock offer and the merger is fair to such securityholders from a financial
point of view.
Following the successful completion of the tender offer, the Diamond
Shamrock subsidiary will be merged into NCS, and all shares not purchased in the
tender offer will be converted into the right to receive $27 per share in cash
without interest. Warrants not tendered in the tender offer or exercised prior
to the completion of the merger will remain outstanding, but upon exercise and
payment of the $17.75 exercise price will represent only the right to receive
$27 in cash rather than one share of common stock.
Attached to this letter is a copy of the Company's
Solicitation/Recommendation Statement on Schedule 14D-9. Also enclosed is the
offer to purchase of Diamond Shamrock's subsidiary, together with related
materials. These documents set forth the terms and conditions of the Diamond
Shamrock offer and other important information. We encourage you to read the
enclosed materials carefully.
On behalf of myself, the other members of management and the directors of
NCS, I want to thank you for the support you have given the Company.
Sincerely,
/s/ ▇. ▇. ▇▇▇ ▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇▇
President and Chief Executive Officer
P.O. Box 758 Houston, Texas 77001-0758
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