EXHIBIT 99.1
MAJOR STOCKHOLDERS' AGREEMENT
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:
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 Norsworthy 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.
(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 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
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
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.
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 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.
(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) 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 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:
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: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(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 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.
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: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
___________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board
▇▇▇▇▇ Corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
__________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chairman of the board
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
______________________________
▇▇▇▇ ▇▇▇▇▇▇▇
NBN Capital Limited Partnership
By: NBN Assets Management Company, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Manager
▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust Company
of Texas, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust Company
of Texas, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ East Texas Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust Company
of Texas, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces County Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust Company
of Texas, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice
President
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces County
Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust
Company of Texas, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Nueces County Trust
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ Trust
Company of Texas, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive
Vice President
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
