EXHIBIT 99.1
STOCKHOLDER'S AGREEMENT
STOCKHOLDER'S AGREEMENT, dated as of February 19, 2003 (the
"AGREEMENT"), between The Sports Authority, Inc., a Delaware corporation (the
"COMPANY"), and the undersigned stockholder (the "STOCKHOLDER") of Gart Sports
Company, a Delaware corporation ("PARENT").
RECITALS
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Company, Parent and Gart Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Parent ("MERGER SUB") are entering
into an Agreement and Plan of Merger, dated as of the date hereof (the "MERGER
AGREEMENT"), which provides for, among other things and upon the terms and
subject to the conditions set forth therein, (i) the merger of Merger Sub with
and into the Company (the "MERGER") and (ii) the conversion of each share of
common stock, par value $.01 per share, of the Company issued and outstanding
immediately prior to the Effective Time (other than certain specified shares)
into the right to receive the Merger Consideration;
WHEREAS, as of the date hereof, the Stockholder owns (beneficially (as
determined herein pursuant to Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT")) and of record) the number of shares of
common stock, par value $.01 per share, of Parent, set forth opposite the
Stockholder's name on the signature page hereto (all such shares so owned and
which may hereafter be acquired by the Stockholder prior to the termination of
this Agreement, whether upon the exercise of options or by means of purchase,
dividend, distribution or otherwise, but excluding any shares issuable pursuant
to any option exercise unless and until such shares are actually issued, being
referred to herein as the Stockholder's "SHARES");
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Company has required that the Stockholder enters into this
Agreement; and
WHEREAS, in order to induce the Company to enter into the Merger
Agreement, the Stockholder is willing to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements contained in this Agreement and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.01 DEFINED TERMS. Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement. References to the Merger Agreement herein mean the Merger Agreement
as in effect on the date hereof, as such agreement may be amended or modified by
any non-material amendment or modification and, for purposes of clarity, shall
not mean or include any material amendment or modification to the Merger
Agreement, whether such amendment or modification is made before or after the
receipt of the Parent Stockholder Approval.
ARTICLE II
TRANSFER AND VOTING OF SHARES
AND OTHER COVENANTS OF THE STOCKHOLDERS
Section 2.01 VOTING OF SHARES. From the date hereof until the
termination of this Agreement in accordance with Section 5.01 hereof (the
"TERM"), at any annual, special or other meeting of the stockholders of Parent
(or adjournment or postponement thereof) however called, and in any action by
consent of the stockholders of Parent, the Stockholder shall vote (or cause to
be voted) its Shares or execute and deliver a consent of the stockholders of
Parent (i) in favor of the adoption and approval of the Parent charter amendment
and the Parent share issuance contemplated by the Merger Agreement, and any
other actions in furtherance thereof requiring a vote of the stockholders of
Parent, (ii) against any Parent Acquisition Proposal or Parent Superior
Proposal, (iii) except for transactions contemplated by the Merger Agreement,
against any proposal, action, transaction or agreement that would result in a
breach in any material respect of any covenant, representation or warranty or
any other obligation or agreement of Parent or Merger Sub under the Merger
Agreement or which is reasonably likely to result in any of the conditions of
Parent's or Merger Sub's obligations under the Merger Agreement not being
fulfilled, (iv) except for transactions contemplated by the Merger Agreement,
against any other action which could reasonably be expected to prevent, impede,
interfere with or adversely affect the transactions contemplated by the Merger
Agreement or the likelihood of such transactions being consummated and (v) in
favor of any other matter necessary for consummation of the transactions
contemplated by the Merger Agreement and in connection therewith to execute any
documents which are necessary or appropriate in order to effectuate the
foregoing; PROVIDED, HOWEVER, that notwithstanding anything to the contrary
herein, (i) in the event that the vote of the Shares is required in order to
effect an amendment of the Merger Agreement, the provisions of this Agreement,
including this Section 2.01, shall not apply with respect to any Stockholder's
vote of such Shares and (ii) the provisions of this Agreement, including this
Section 2.01, shall not apply at any time after the Board of Directors of Parent
has, in accordance with the terms of the Merger Agreement, withdrawn its
recommendation in favor of the adoption and approval of the Parent charter
amendment and the Parent share issuance contemplated by the Merger Agreement.
Any such vote shall be cast or consent shall be given in accordance with the
applicable procedures relating thereto. The Stockholder agrees that it shall not
enter into any agreement with any Person during the Term of this Agreement the
effect of which would be inconsistent with or violative of this Section 2.01.
Section 2.02 NO INCONSISTENT ARRANGEMENTS. Except as contemplated by
this Agreement and the Merger Agreement, the Stockholder shall not during the
Term (i) transfer (which term shall include, without limitation, any sale,
assignment, gift, pledge, hypothecation or other disposition), or consent to any
transfer of, any or all of such Stockholder's Shares or any interest therein, or
create or permit to exist any Encumbrance (as defined below) on such Shares,
except in each such case to a party or parties that expressly consent to be
bound by all of the terms of this Agreement, (ii) enter into any contract,
option or other agreement or understanding with respect to, or consent to, any
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transfer of any or all of such Shares or any interest therein except with a
party or parties that expressly consent to be bound by all of the terms of this
Agreement, (iii) grant any proxy, power-of-attorney or other similar
authorization in or with respect to such Shares, (iv) deposit such Shares into a
voting trust or enter into a voting agreement or arrangement with respect to
such Shares or any interest therein or (v) take any other action that would have
the effect of materially interfering with the performance of its obligations
hereunder or the transactions contemplated hereby or by the Merger Agreement.
Section 2.03 IRREVOCABLE PROXY. The Stockholder hereby revokes any and
all prior proxies or powers of attorney in respect of any of the Stockholder's
Shares and constitutes and appoints the Company, or any nominee of the Company,
with full power of substitution and resubstitution, at any time during the Term,
as its proxy (its "PROXY"), for and in its name, place and stead, to vote each
of its Shares as its Proxy, at every annual, special, adjourned or postponed
meeting of the stockholders of Parent or to act by written consent in respect
thereof, including the right to sign its name (as stockholder) to any consent,
certificate or other document relating to Parent and any matter referred to in
Section 2.01 above that Delaware law may permit or require. This proxy is given
to secure the performance of the Stockholder's obligations under this Agreement.
The Stockholder acknowledges that THIS PROXY (a) constitutes, among other
things, an inducement for the Company to enter into the Merger Agreement, (b) IS
COUPLED WITH AN INTEREST and (c) IS IRREVOCABLE AND SHALL NOT BE TERMINATED UPON
THE OCCURRENCE OF ANY EVENT; PROVIDED, that this proxy shall terminate at the
end of the Term. The Stockholder hereby ratifies and confirms all that the Proxy
may lawfully do or cause to be done by virtue hereof. The proxy granted herein
by the Stockholder is executed and intended to be irrevocable in accordance with
the provisions of Section 212(e) of the DGCL. The Stockholder hereby agrees that
it shall not, during the Term of this Agreement, appoint or grant any subsequent
proxy (and if appointed or granted in violation hereof, any such proxy shall not
be effective). The Stockholder shall promptly cause a copy of this Agreement to
be deposited with Parent at its principal place of business. The Stockholder
shall take such further action or execute such other instruments as may be
reasonably requested to effectuate the intent of this Section 2.03.
Section 2.04 STOCKHOLDER CAPACITY; FIDUCIARY DUTIES. No Stockholder
executing this Agreement who is or becomes during the term hereof a director or
officer of Parent or any subsidiary of Parent makes any agreement or
understanding herein or is obligated hereunder in his or her capacity as such
director or officer. The Stockholder signs solely in the Stockholder's capacity
as the record holder and beneficial owner of the Stockholder's Shares. Nothing
in this Agreement shall be construed to prohibit a Stockholder who is a member
of the Board of Directors of Parent or any subsidiary of Parent or is an officer
of Parent or any subsidiary of Parent from taking any action or inaction solely
in such capacity or from taking any action or inaction with respect to any
Parent Acquisition Proposal, Parent Superior Proposal or otherwise, as a member
of, or at the direction of, the Board of Directors of Parent to the extent
permitted by the Merger Agreement.
Section 2.05 DISCLOSURE. The Stockholder hereby authorizes the Company
to publish and disclose in the Joint Proxy Statement/Prospectus its identity and
ownership of Shares and the nature of its commitments, arrangements and
understandings under this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to the Company as
follows:
Section 3.01 DUE AUTHORIZATION, ETC. The Stockholder has all requisite
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder, to appoint the Company as its Proxy and to consummate the
transactions contemplated hereby. The execution, delivery and performance by the
Stockholder of this Agreement, the appointment of the Company as the
Stockholder's Proxy and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of the Stockholder
and no other proceedings on the part of the Stockholder are necessary to
authorize this Agreement, to appoint the Company as the Stockholder's Proxy or
to consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by or on behalf of the Stockholder and, assuming due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of the Stockholder, enforceable against the Stockholder
in accordance with its terms. There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which the Stockholder is
trustee whose consent is required for the execution and delivery of this
Agreement or the consummation by the Stockholder of the transactions
contemplated hereby.
Section 3.02 NO CONFLICTS; REQUIRED FILINGS AND CONSENTS. The execution
and delivery of this Agreement by the Stockholder do not, and the performance of
this Agreement by the Stockholder and the consummation of the transactions
contemplated by this Agreement will not, (i) in the case of a Stockholder that
is not a natural person, conflict with or violate the Stockholder's
organizational documents, (ii) conflict with or violate any Law applicable to
the Stockholder or by which any of its properties or assets is bound or affected
or (iii) result in any breach or violation of, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of the Stockholder (including, without limitation, the
Stockholder's Shares) pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument, obligation or
arrangement (whether written or oral) to which the Stockholder is a party or by
which the Stockholder or any of its assets is bound or affected, except, in the
case of clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences that would not, individually or in the aggregate,
prevent or materially delay the performance by the Stockholder of its
obligations under this Agreement.
Section 3.03 TITLE TO SHARES. Except as set forth on the signature page
hereof, the Stockholder is the sole record and beneficial owner of its Shares,
free and clear of any pledge, lien, security interest, mortgage, charge, claim,
equity, option, proxy, voting restriction, voting trust or agreement,
understanding, arrangement, right of first refusal, limitation on disposition,
adverse claim of ownership or use or encumbrance of any kind ("ENCUMBRANCES"),
other than restrictions imposed by the securities laws or pursuant to this
Agreement and the Merger Agreement. The Stockholder has the sole power to vote
(or cause to be voted) all of the Shares.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Stockholder as
follows:
Section 4.01 DUE ORGANIZATION, AUTHORIZATION, ETC. The Company has all
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Company and no other
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by or on behalf of the Company and, assuming due
authorization, execution and delivery by the Stockholder, constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
ARTICLE V
MISCELLANEOUS
Section 5.01 TERMINATION. This Agreement shall automatically terminate
and be of no further force and effect upon the earliest of (i) the Effective
Time, (ii) the termination of the Merger Agreement in accordance with its terms
and (iii) the written mutual consent of the Company and the Stockholder. In the
event of the termination of this Agreement pursuant to this Section 5.01, this
Agreement will become null and void and of no effect with no liability on the
part of any party hereto and all proxies granted hereby will be automatically
revoked; PROVIDED, HOWEVER, that no such termination will relieve any party
hereto from any liability for any breach of this Agreement occurring prior to
such termination.
Section 5.02 FURTHER ASSURANCE. Subject to the terms and conditions of
this Agreement, the Stockholder will take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate the transactions contemplated by
this Agreement as soon as practicable after the date hereof, including, without
limitation, at the Company's reasonable request and without consideration,
executing and delivering such additional documents and taking all such further
action as may be necessary or desirable to consummate and make effective, in the
most expeditious manner practicable, the transaction contemplated by this
Agreement.
Section 5.03 CERTAIN EVENTS. The Stockholder agrees that this Agreement
and the Stockholder's obligations hereunder shall attach to the Stockholder's
Shares and shall be binding upon any person or entity to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise, including, without limitation, the Stockholder's heirs, guardians,
administrators, or successors.
Section 5.04 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof or are otherwise breached and that
the Company shall be entitled to an injunction or injunctions to prevent
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breaches of this Agreement and to enforce specifically the performance of the
terms and provisions hereof in any court having personal and subject matter
jurisdiction, in addition to any other remedy to which it is entitled at law or
in equity.
Section 5.05 NOTICE. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or by overnight courier service to the respective parties at the following
addresses, or at such other address for a party as shall be specified in a
notice given in accordance with this Section 5.05:
(a) If to the Company, to:
The Sports Authority, Inc.
0000 Xxxxx Xxxxx Xxxx 0
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile: 954.714.1728
With a copy to:
Xxxx X. Xxxxxxxx, Esq.
Xxxxxx, Xxxxx & Bockius LLP
5300 Wachovia Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000-0000
Facsimile: 305.415.3001
(b) If to the Stockholder, at the address set forth below the
Stockholder's name on the signature page hereof, with a copy to:
Xxxxxxxx Xxxxxx Xxxxxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 X. Xxxxx Xxxxxx Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Section 5.06 EXPENSES. All fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees, costs and expenses.
Section 5.07 HEADINGS. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 5.08 SEVERABILITY. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
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any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
Section 5.09 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any prior understandings, agreements, or representations by or among
the parties, written or oral, with respect to the subject matter hereof.
Section 5.10 NO THIRD-PARTY BENEFICIARIES. Other than as specifically
provided herein, nothing in this Agreement shall confer any rights or remedies
upon any person other than the parties hereto.
Section 5.11 SUCCESSORS; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
successors. The Company may not assign either this Agreement or any of its
rights, interests, or obligations hereunder other than in a manner contemplated
by the Merger Agreement, and the Stockholder may not assign its obligations
hereunder except pursuant to a transfer complying with Section 2.02 hereof.
Section 5.12 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of law thereof.
Section 5.13 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 5.14 WAIVER. Any party hereto may (a) extend the time for the
performance of any of the covenants, obligations or other acts of any other
party hereto or (b) waive any inaccuracy of any representations or warranties or
compliance with any of the agreements, covenants or conditions of any other
party. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
such party. The failure of any party hereto to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of those rights. The
waiver of any such right with respect to particular facts, particular parties
and other circumstances shall not be deemed a waiver with respect to any other
facts, party and circumstances and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time.
Section 5.15 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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THE SPORTS AUTHORITY, INC.
By /s/ XXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the
Board
STOCKHOLDER:
GREEN EQUITY INVESTORS,
L.P.
Number of Shares of Gart Sports By: Xxxxxxx Xxxxx & Associates,
Company common stock owned: 3,113,200 L.P., its General Partner
By: /s/ XXXXXXXX X. XXXXXXXX
----------------------------------
Xxxxxxxx X. Xxxxxxxx, its
General Partner
Exceptions to Section 3.03:
The Stockholder is an investment limited
partnership, and its activities are
subject to the Amended and Restated
Agreement of Limited Partnership of Green
Equity Investors, L.P. dated as of
December 29, 1989, as amended. Such
agreement does not prohibit or restrict
the Stockholder from executing and
delivering this Agreement, performing its
obligations under this Agreement or
consummating the transactions contemplated
by this Agreement.
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