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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"), Xxxxx Corporation, a Delaware corporation
("Xxxxx"), Xxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxxx Xxxxxxxxxx ("Xxxxxxxxxx"), Xxxx
Xxxxxxx, NBN Capital Limited Partnership, a Texas limited partnership, Xxxxx
Xxxxxxx East Texas Trust, Xxxxxxxx Xxxxxxx East Texas Trust, Xxxxxxx Xxxxxxx
East Texas Trust, Xxxxx Xxxxxxx Nueces County Trust, Xxxxxxxx Xxxxxxx Nueces
County Trust and Xxxxxxx Xxxxxxx Neuces County Trust (such parties other than
Giant and Xxxxx are collectively referred to as the "Stockholder Parties," and
such parties other than Giant, Xxxxx and Xxxxxxx are collectively referred to as
the "Xxxxxxxxxx Group").
RECITALS
A. Giant and Xxxxx 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
Xxxxx 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
Xxxxx or Giant, as the case may be, equal to more than 1% of the respective
issued and outstanding shares of the common stock of Xxxxx or Giant, which
ownership is reflected on Schedule I attached hereto.
C. After giving effect to the Merger, Acridge and the Xxxxxxxxxx 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 Xxxxxxxxxx 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 Xxxxxxxxxx, 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, Xxxxx 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 Xxxxxxxxxx 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
Xxxxxxxxxx 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) "Xxxxxxxxxx Group Stock Interest" means the entire Stock
Interest owned at the relevant time by all members of the Xxxxxxxxxx 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 Xxxxx, as the case may be, owned
by such Stockholder Party at every meeting of stockholders of Giant or Xxxxx, 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 Xxxxx.
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 Xxxxx 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. Xxxxx 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 Xxxxx,
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 Xxxxxxxxxx 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 Xxxxxxxxxx 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 Xxxxxxxxxx. At the Special
Meeting, both Acridge and Xxxxxxxxxx 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 Xxxxxxxxxx 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
Xxxxxxxxxx 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 Xxxxxxxxxx of their opinion on the
Disputed Matters.
(d) Intent. It is the intent of Acridge and Xxxxxxxxxx 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 Xxxxxxxxxx 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 Xxxxxxxxxx.
(e) Consideration of Board Action. Acridge and Xxxxxxxxxx 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 Xxxxxxxxxx, 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 Xxxxxxxxxx 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 Xxxxxxxxxx Group and any Affiliate
Transferees having a relationship to one or more members of the Xxxxxxxxxx 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 Xxxxxxxxxx, refer to
each member of the Xxxxxxxxxx Group and any Affiliate Transferees having a
relationship to one or more members of the Xxxxxxxxxx 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 Xxxxxxxxxx (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 Xxxxxxxxxx Group Stock Interest. If the Offer to
Sell or Purchase is delivered by the Xxxxxxxxxx Group, the Stock Interest the
Xxxxxxxxxx Group must propose to sell is the amount equal to the lesser in
number of the Xxxxxxxxxx Group Stock Interest or the Acridge Stock Interest, and
the Stock Interest the Xxxxxxxxxx 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 "Xxxxxxx Money Deposit") as xxxxxxx 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 Xxxxxxxxxx Group, any Affiliate Transferees, and any party required to
act under the Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx 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 Xxxxxxxxxx Group hereby irrevocably appoint Xxxxxxxxxx to act
as the exclusive representative of members of the Xxxxxxxxxx Group and their
Affiliate Transferees on all matters set forth herein. The obligations of the
Xxxxxxxxxx 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
Xxxxxxx, Xxxxxxx 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 Xxxxxxxxxx
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 Xxxxxxxxxx
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 Xxxxxxxxxx
under any employee stock ownership plan); (v) the closing of any Deadlock
Resolution Proceeding under Section 3 hereof; (vi) the death of Acridge or
Xxxxxxxxxx; or (vii) December 31, 2003. In addition, with respect to any
Stockholder Party other than Acridge or Xxxxxxxxxx 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 Xxxxx 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.
00000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Corporate Secretary
(ii) if to Giant, to:
00000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Corporate Secretary
(iii) if to Xxxxx, to:
Xxxxx Corporation
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxx
(iv) if to Acridge, to
00000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
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(v) if to the Xxxxxxxxxx Group, to:
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxx
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, Xxxxx and the Surviving Corporation,
and each Affiliate Transferee shall, so long as that person holds stock of
Giant, Xxxxx 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.
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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:
-----------------------------------
Xxxxx Corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-----------------------------------------
Xxxxx X. Xxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxxxx
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-------------------------------------------------
Xxxx Xxxxxxx
NBN Capital Limited Partnership
By: NBN Assets Management Company, L.L.C.
By:
-----------------------------------------
Xxxxxx X. XxXxxxxx,
Manager
Xxxxx Xxxxxxx East Texas Trust
By: Xxxxx Brothers Xxxxxxxx Trust Company
of Texas, Trustee
By:
-----------------------------------------
Xxxxxx X. XxXxxxxx, Executive
Vice President
Xxxxxxxx Xxxxxxx East Texas Trust
By: Xxxxx Brothers Xxxxxxxx Trust Company
of Texas, Trustee
By:
-----------------------------------------
Xxxxxx X. XxXxxxxx, Executive
Vice President
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Xxxxxxx Xxxxxxx Xxxx Xxxxx Trust
By: Xxxxx Brothers Xxxxxxxx Trust Company
of Texas, Trustee
By:
---------------------------------------
Xxxxxx X. XxXxxxxx, Executive
Vice President
Xxxxx Xxxxxxx Nueces County Trust
By: Xxxxx Brothers Xxxxxxxx Trust Company
of Texas, Trustee
By:
---------------------------------------
Xxxxxx X. XxXxxxxx, Executive Vice
President
Xxxxxxxx Xxxxxxx Nueces County
Trust
By: Xxxxx Brothers Xxxxxxxx Trust Company of
Texas, Trustee
By:
---------------------------------------
Xxxxxx X. XxXxxxxx, Executive
Vice President
Xxxxxxx Xxxxxxx Nueces County Trust
By: Xxxxx Brothers Xxxxxxxx Trust
Company of Texas, Trustee
By:
---------------------------------------
Xxxxxx X. XxXxxxxx, Executive
Vice President
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SCHEDULE I
SHARES HELD BY THE STOCKHOLDER PARTIES
Acridge Number of Giant Industries Shares Owned
------- ---------------------------------------
Xxxxx X. Xxxxxxx 2,315,892
Xxxxxxxxxx Group Number of Xxxxx Corporation Shares Owned
---------------- ----------------------------------------
Xxxxx Xxxxxxxxxx 328,859
Xxxx Xxxxxxx 328,132
NBN Capital Limited Partnership 000,000
Xxxxx Xxxxxxx Xxxx Xxxxx Trust 263,242
Xxxxxxxx Xxxxxxx East Texas Trust 263,242
Xxxxxxx Xxxxxxx East Texas Trust 263,242
Xxxxx Xxxxxxx Nueces County Trust 240,470
Xxxxxxxx Xxxxxxx Neuces County Trust 240,470
Xxxxxxx Xxxxxxx Neuces County Trust 240,470
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