<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 18, 1995
NATIONAL CONVENIENCE STORES INCORPORATED
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-7936 74-1361734
---------------------------- ----------- ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 Waugh Drive
Houston, Texas 77007
--------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 863-2200
<PAGE> 2
Item 5. Other Events.
On August 18, 1995, a purported class action lawsuit was filed in the Chancery
Court of New Castle County, Delaware against the Company and its directors
alleging that the directors improperly refused to negotiate or consider any
bona fide offer for the Company (including the previously disclosed August 8,
1995 proposal by The Circle K Corporation ("Circle K") to acquire all of the
stock of the Company at $17 per share), and that such action and the amendment
on August 10, 1995 of the Company's By-Laws to increase the number of votes of
the holders of Common Stock needed to amend the section of the By-Laws dealing
with the number of directors to 75% (the "By-Law Amendment") constituted unfair
dealing, improper interference with shareholder voting rights, a manipulation
of corporate machinery for personal purposes, an attempt by the directors to
entrench themselves in their positions with the Company and a breach of the
directors' fiduciary duty to maximize shareholder value. The Complaint seeks,
among other things, injunctive relief against enforcement of the By-Law
Amendment, an order compelling the directors of the Company to carry out their
fiduciary duties to the plaintiff stockholder and the other members of the
class, and unspecified damages. The case is styled Crandon Capital Partners v.
V. H. Van Horn, et al., C.A. 14489, and as of September 14, 1995, service of
process has not been made on the Company or, to its knowledge, the other
defendants. The Complaint in the foregoing action is filed as Exhibit 99.1
hereto and is incorporated by reference herein; the foregoing description is
qualified in its entirety by reference to such Exhibit.
On September 5, 1995, Circle K filed a lawsuit against the Company and its
directors in the Chancery Court of New Castle County, Delaware alleging, among
other things, that the directors improperly refused to negotiate or
consider any bona fide offer for the Company and that such action, the By-Law
Amendment and the adoption by the directors of the Rights Agreement dated
August 31, 1995 (the "Rights Agreement") constituted unfair dealing, improper
interference with shareholder voting rights, a manipulation of corporate
machinery for personal purposes, an effort by the directors to entrench
themselves in their positions with the Company and a breach of the directors'
fiduciary duties to the Company's stockholders. The Complaint requests, among
other things, that the Court declare the By-Law Amendment and the Rights
Agreement void or enjoin the enforcement thereof and unspecified damages. This
case is styled The Circle K Corporation v. National Convenience Stores
Incorporated, et al., C.A. 14518 (the "Circle K Case"). The Complaint in the
foregoing action is filed as Exhibit 99.2 hereto and is incorporated by
reference herein; the foregoing description is qualified in its entirety by
reference to such Exhibit.
Counsel for the plaintiffs and the Company in the previously disclosed case of
Thomas J. McKula, Jr. v. William K. Wilde, et al. and the Circle K Case have
agreed to an expedited discovery schedule in preparation for a trial limited to
on the By- Law Amendment issue in Chancery Court that has been scheduled by the
Court for October 18, 1995.
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<PAGE> 3
On September 5, 1995, Circle K filed a second lawsuit against the Company and
its directors in the United States District Court for the District of Delaware
alleging, among other things, that omissions of certain information concerning
the By-Law Amendment from a press release issued by the Company on August 14,
1995 and the omission of certain information relating to a nomination of
directors received from Bedford Falls Investors, L.P. from a Form 8-K filed by
the Company with the Commission on August 14, 1995 rendered the press release
and the Form 8-K materially false and misleading. Therefore, the Complaint
alleges, the press release and the Form 8-K violated Section 10(b) of the
Exchange Act and Rule 10b-5 promulgated thereunder. The Complaint requests,
among other things, that the Court compel the defendants to make corrective
disclosures and enjoin the defendants from soliciting proxies from the
Company's stockholders until such corrective action is completed. The case is
styled The Circle K Corporation v. National Convenience Stores Incorporated, et
al., C.A. 95-537. The Complaint in the foregoing action is filed as Exhibit
99.3 hereto and is incorporated by reference herein; the foregoing description
is qualified in its entirety by reference to such Exhibit.
On August 31, 1995, the Board of Directors of the Company authorized in concept
certain agreements and the amendment of certain employment agreements and
benefit plans of the Company, subject to the preparation of documents
reflecting such agreements and amendments, in form and substance satisfactory
to the Company and its counsel. The Company and its counsel and special
counsel to the officers and directors agreed on the form of such agreements and
amendments on September 14, 1995, and the relevant agreements and plans were
amended and restated. Such agreements and amendments and restatements,
together with a previous amendment to the Company's Profit Sharing Plan and
Trust, are filed as Exhibits hereto.
On August 31, 1995, the Company and NationsBank of Texas, N.A., entered into a
Master Agreement for ATM Facilities, a copy of which is filed as an Exhibit
hereto.
On September 6, 1995, an Order Providing for Closing Chapter 11 Cases was
signed by the Judge of the United States Bankruptcy Court for the Southern
District of Texas--Houston Division, a copy of which is filed as an Exhibit
hereto.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Identification of Exhibit
------- -------------------------
<S> <C>
99.1 Class Action Complaint, Crandon Capital Partners v. V.H. Van Horn, et al., C.A. 14489 (Chancery
Court of the State of Delaware in and for New Castle County) (as filed August 18, 1995).
</TABLE>
-3-
<PAGE> 4
<TABLE>
<S> <C>
99.2 Complaint, The Circle K Corporation v. National Convenience Stores Incorporated, et al., C.A.
14518 (Chancery Court of the State of Delaware in and for New Castle County) (as filed
September 5, 1995).
99.3 Complaint, The Circle K Corporation v. National Convenience Stores Incorporated, et al., C.A.
95-537 (U.S. District Court for the District of Delaware) (as filed September 5, 1995).
99.4 Amended and Restated National Convenience Stores Incorporated Officers' Retirement Plan
effective as of August 31, 1995.
99.5 Amended and Restated Trust under National Convenience Stores Incorporated Officers' Retirement
Plan effective as of August 31, 1995, by and between the Company and Bank One, Texas, N.A.
99.6 Amended and Restated National Convenience Stores Incorporated Directors' Retirement Plan
effective as of August 31, 1995.
99.7 Amended and Restated Trust under National Convenience Stores Incorporated Directors' Retirement
Plan effective as of August 31, 1995, by and between the Company and Bank One, Texas, N.A.
99.8 Form of Twenty-second Amendment to National Convenience Stores Incorporated Profit Sharing Plan
and Trust effective as of July 1, 1995.
99.9 Form of Director Agreement executed effective as of August 31, 1995 by and between the Company
and each of Richard C. Steadman, Dunbar N. Chambers, Jr., Charles J. Luellen, Raymond W.
Oeland, Jr., Lionel Sosa, Robert B. Stobaugh, and William K. Wilde.
99.10 Agreement Amending and Restating Employment Agreement executed as of August 31, 1995 but
effective from and after July 1, 1995 by and between the Company and V.H. Van Horn.
99.11 Agreement Amending and Restating Employment Agreement executed as of August 31, 1995 but
effective as of May 18, 1993 by and between the Company and A.J. Gallerano.
99.12 Agreement Amending and Restating Employment Agreement executed as of August 31, 1995 but
effective as of May 18, 1993 by and between the Company and Arnold Van Zanten.
</TABLE>
-4-
<PAGE> 5
<TABLE>
<S> <C>
99.13 Agreement Amending and Restating Employment Agreement executed as of August 31, 1995 but
effective as of May 18, 1993 by and between the Company and C. R. Wortham.
99.14 Agreement Amending and Restating Employment Agreement executed as of August 31, 1995 but
effective as of May 18, 1993 by and between the Company and Brian Fontana.
99.15 Agreement Amending and Restating Employment Agreement executed as of August 31, 1995 but
effective as of October 31, 1994 by and between the Company and Douglas B. Binford.
99.16 Employment Agreement executed as of March 21, 1995 but effective February 1, 1995 by and between the
Company and Janice E. Bryant.
99.17* Master Agreement for ATM Facilities dated August 31, 1995 between the Company and NationsBank of Texas,
N.A.
99.18 Order Providing for Closing Chapter 11 Cases, In Re: Schepps Food Stores, Inc., et al., Case
nos. 91-49816-H2-11, 91-49818-H3-11 through 91-49835-H2-11, jointly administered under Case No.
91-49816-H4-11 (U.S. Bankruptcy Court for the Southern District of Texas--Houston Division) (as
filed September 11, 1995).
99.19 Promissory Note dated August 31, 1995 by and between V.H. Van Horn, as Maker, and the Company, as Payee.
</TABLE>
__________________
*Confidential Treatment has been requested with respect to portions of this
Exhibit.
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<PAGE> 6
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
NATIONAL CONVENIENCE STORES
INCORPORATED
/s/ A. J. GALLERANO
Dated: September 15, 1995 By: _______________________________
A. J. Gallerano
Senior Vice President,
General Counsel and Secretary
-6-
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
------ ----------- ------
<S> <C>
99.1 Class Action Complaint,Crandon Capital Partners v. V.H. Van Horn,
et al., C.A. 14489 (Chancery Court of the State of Delaware in and
for New Castle County) (as filed August 18, 1995).
99.2 Complaint, The Circle K Corporation v. National Convenience Stores
Incorporated, et al., C.A. 14518 (Chancery Court of the State of
Delaware in and for New Castle County) (as filed September 5,
1995).
99.3 Complaint, The Circle K Corporation v. National Convenience Stores
Incorporated, et al., C.A. 95-537 (U.S. District Court for the
District of Delaware) (as filed September 5, 1995).
99.4 Amended and Restated National Convenience Stores Incorporated
Officers' Retirement Plan effective as of August 31, 1995.
99.5 Amended and Restated Trust under National Convenience Stores
Incorporated Officers' Retirement Plan effective as of August 31,
1995, by and between the Company and Bank One, Texas, N.A.
99.6 Amended and Restated National Convenience Stores Incorporated
Directors' Retirement Plan effective as of August 31, 1995.
99.7 Amended and Restated Trust under National Convenience Stores
Incorporated Directors' Retirement Plan effective as of August 31,
1995, by and between the Company and Bank One, Texas, N.A.
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C>
99.8 Form of Twenty-second Amendment to National Convenience Stores
Incorporated's Profit Sharing Plan and Trust effective as of July
1, 1995.
99.9 Form of Director Agreement executed effective as of August 31, 1995
by and between the Company and each of Richard C. Steadman, Dunbar
N. Chambers, Jr., Charles J. Luellen, Raymond W. Oeland, Jr.,
Lionel Sosa, Robert B. Stobaugh, and William K. Wilde.
99.10 Agreement Amending and Restating Employment Agreement executed as
of August 31, 1995 but effective from and after July 1, 1995 by and
between the Company and V.H. Van Horn.
99.11 Agreement Amending and Restating Employment Agreement executed as
of August 31, 1995 but effective as of May 18, 1993 by and between
the Company and A.J. Gallerano.
99.12 Agreement Amending and Restating Employment Agreement executed as
of August 31, 1995 but effective as of May 18, 1993 by and between
the Company and Arnold Van Zanten.
99.13 Agreement Amending and Restating Employment Agreement executed as
of August 31, 1995 but effective as of May 18, 1993 by and between
the Company and C. R. Wortham.
99.14 Agreement Amending and Restating Employment Agreement executed as
of August 31, 1995 but effective as of May 18, 1993 by and between
the Company and Brian Fontana.
99.15 Agreement Amending and Restating Employment Agreement executed as
of August 31, 1995 but effective as of October 31, 1994 by and
between the Company and Douglas B. Binford.
</TABLE>
-8-
<PAGE> 9
<TABLE>
<S> <C>
99.8 Form of Twenty-second Amendment to National Convenience Stores
99.16 Employment Agreement executed as of March 21, 1995 but effective
February 1, 1995 by and between the Company and Janice E. Bryant.
99.17* Master Agreement for ATM Facilities dated August 31, 1995 between
the Company and NationsBank of Texas, N.A.
99.18 Order Providing for Closing Chapter 11 Cases, In Re: Schepps Food
Stores, Inc., et al., Case nos. 91-49816-H2-11, 91-49818-H3-11 through
91-49835-H2-11, jointly administered under Case No. 91-49816-H4-11
(U.S. Bankruptcy Court for the Southern District of Texas--Houston
Division) (as filed September 11, 1995).
99.19 Promissory Note dated August 31, 1995 by and between V.H. Van Horn, as
Maker, and the Company, as Payee.
</TABLE>
__________________
*Confidential Treatment has been requested with respect to portions of this
Exhibit.
-9-
<PAGE> 1
EXHIBIT 99.1
IN THE COURT CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
)
CRANDON CAPITAL PARTNERS, )
a Florida Partnership, )
)
Plaintiff, )
)
v. )
) C.A. No. 14489
V. H. VAN HORN, RICHARD C. )
STEADMAN, DUNBAR N. CHAMBERS, JR., )
RAYMOND W. OELAND, JR., ROBERT B. )
STOBAUGH, WILLIAM K. WILDE, )
CHARLES J. LUELLEN, LIONEL SOSA )
and NATIONAL CONVENIENCE )
STORES INC. )
)
Defendants. )
)
CLASS ACTION COMPLAINT
Plaintiff, by its attorney, alleges upon personal knowledge as to its
own acts and upon information and belief as to all other matters, as follows:
NATURE OF THE ACTION
1. This is a stockholders' class action lawsuit brought on behalf of
the public stockholders of National Convenience Stores Inc. ("NCS" or the
"Company") who have been, and continue to be, deprived of the opportunity to
realize fully the benefits of their investment in the Company. The individual
defendants have wrongfully refused properly to negotiate or consider any bona
fide offer for the Company, including that of Circle K Corp. ("Circle K"), and
have taken a reactive defensive action, which was wrongfully designed to
entrench NCS officers and directors in their positions of control,
1
<PAGE> 2
and which was and is unreasonable in relation to any perceived threat posed by
Circle K. In furtherance of these efforts, the individual defendants, on August
10, 1995, specifically adopted and implemented an amendment to the Company's
Restated By-Laws which provides that any change in the number of directors must
be approved by 75 percent of the shares entitled to vote at a meeting of
stockholders (the "75 Percent By-Law Provision"). Their actions constitute
unfair dealing, improper interference with shareholder voting rights, a
manipulation of corporate machinery for personal purposes, and a breach of
fiduciary duty to maximize shareholder value. The individual defendants are
using their fiduciary positions of control over NCS to thwart others in their
legitimate attempts to acquire NCS, and the individual defendants are trying
to entrench themselves in their positions with the Company.
Parties
2. Plaintiff is and, at all relevant times, has been the owner of
shares of NCS common stock.
3. NCS is a corporation duly organized and existing under the laws of
the State of Delaware. NCS operates approximately 660 specialty convenience
stores under the name of "Stop N' Go" in Texas. NCS maintains its principal
executive offices at 100 Waugh Drive, Texas 77007. NCS has approximately
6,000,000 shares of common stock outstanding and 1,380 stockholders of record.
NCS's stock trades over the NASDAQ National Market System.
4. Defendant V. H. Van Horn ("Van Horn") is and has at all times been
NCS' President, Chief Executive Officer and a director.
5. Defendant Richard C. Steadman ("Steadman") is and has at all
2
<PAGE> 3
relevant times been Chairman of NCS' Board of Directors.
6. Defendants Dunbar N. Chambers, Jr. ("Chambers"), Raymond W. Oeland,
Jr. ("Oeland,"), Robert B. Stobaugh ("Stobaugh"), William K. Wilde ("Wilde"),
Charles J. Luellen ("Luellen") and Lionel Sosa ("Sosa") are and have been at all
relevant times directors of NCS.
7. The defendants named in paragraphs 4 through 6 are hereinafter
referred to as the "Individual Defendants."
8. Because of their positions as officers/directors of the Company,
the Individual Defendants owe a fiduciary duty of loyalty and due care to
plaintiff and the other members of the class.
CLASS ACTION ALLEGATIONS
9. Plaintiff brings this case in its own behalf and as a class action,
on behalf of all stockholders of the Company, except defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants, or any of the Company's principal stockholders, who will
be threatened with injury arising from defendants' actions as is described more
fully below.
10. This action is properly maintainable as a class action.
11. The class is so numerous that joinder of all members is
impracticable. The Company has over a thousand stockholders who are scattered
throughout the United States.
12. There are questions of law and fact common to the class including,
inter alia, whether:
a. defendants have breached their fiduciary duties owed by them
3
<PAGE> 4
to plaintiffs and other members of the Class by failing and refusing to attempt
in good faith to maximize shareholder value in the sale of NCS;
b. defendants have improperly interfered with the voting rights of
NCS shareholders and/or improperly manipulated corporate machinery;
c. defendants engaged in a plan and scheme to thwart and reject
offers and proposals from third parties, including Circle K, by means which
include enacting a provision to the bylaws which provides that any change in
the number of directors must be approved by 75 percent of the shares entitled
to vote at a meeting of stockholders; and
d. plaintiffs and the other members of the Class are being and
will continue to be injured by the wrongful conduct alleged herein and, if so,
what is the proper remedy and/or measure of damages.
13. Plaintiff is committed to prosecuting the action and has retained
competent counsel experienced in litigation of this nature. Plaintiff's claims
are typical of the claims of the other members of the class and plaintiff has
the same interests as the other members of the class. Plaintiff is an adequate
representative of the class.
14. The prosecution of separate actions by individual members of the
Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to
individual members of the Class which would as a practical matter be
dispositive of the interests of the other members not parties to the
adjudications or substantially impair or impede their ability to protect their
interests.
4
<PAGE> 5
15. The defendants have acted, or refused to act, on grounds generally
applicable to, and causing injury to, the Class and, therefore, preliminary and
final injunctive relief on behalf of the Class as a whole is appropriate.
SUBSTANTIVE ALLEGATIONS
16. By the acts, transactions, and courses of conduct alleged
herein, defendants, individually and as part of a common plan and scheme
and/or aiding and abetting one another in total disregard of their fiduciary
duties, are attempting to deprive plaintiff and the Class unfairly of the full
value of their investment in NCS, and doing so by interfering with corporate
democratic processes.
17. On August 14, 1995, Circle K announced that on August 8, 1995, it
had submitted to management and the Board of Directors of NCS, a proposal
whereby Circle K would purchase all outstanding common stock of NCS at a price
of $17 per share in cash. In addition, Circle K would agree to assume
approximately $100 million in existing debt of NCS. The transaction was valued
at approximately $210 million.
18. On August 14, 1995, it was also announced that, on August 8, 1995,
Circle K's President and Chief Executive Officer, John Antioco wrote defendant
Van Horn that:
We believe that this proposal presents an extremely attractive
opportunity for your stockholders at a price which provides
them a significant premium. We hope that you and your Board of
Directors will view this offer, as we do, as an excellent
opportunity for the stockholders of NCS to realize full value
for their shares to an extent not likely to be available to
them in the marketplace.
19. At the same time, Circle K also announced that, on August 11,
1995, it submitted a proposal for shareholder vote at NCS's upcoming anuual
meeting to
5
<PAGE> 6
expand the size of NCS's Board of Directors from eight to 17 directors and has
proposed a slate of nine candidates for election at such meeting. According to
its August 14, 1995 press release, Circle K announced that it would also seek
to repeal any by-law amendment adopted since January 1, 1994.
20. NCS has a staggered board of eight members. The Company will
propose the re-election of its four Class III directors (namely, Wilde,
Steadman, Sosa and Luellen) at its annual meeting this year, which is typically
held in October.
21. Although NCS announced on August 14, 1995 that it would be
"premature" to characterize the Company's response to the Circle K proposal,
the Individual Defendants, in enacting the 75 Percent By-Law Provision, have
indicated opposition to it. Indeed, although NCS stated that it would consider
the offer "in due course," the Company's first action was, unbeknownst to
Circle K or the public, to institute the 75 Percent By-Law Provision on August
11, 1995.
22. The 75 Percent By-Law Provision has the effect of making it
extraordinarily time-consuming, difficult, and expensive for any potential
acquiror not approved by the Individual Defendants to fully acquire NCS. It
also makes more difficult shareholder action through corporate suffrage to
change Board composition. Therefore, the 75 Percent By-Law Provision has the
effect of interfering with shareholder voting and precluding successful and
timely completion of even the most attractive offer for NCS unless the Board
acquiesces, thus denying the Company's shareholders an opportunity to make
their own unfettered choice.
23. As a consequence, the adoption and implementation of the 75
Percent By-Law Provision has the force and effect of entrenching the Individual
Defendants in their corporate offices against any real or perceived threat to
their control,
6
<PAGE> 7
and dramatically impairs the rights of Class members to exercise freedom of
choice in a proxy contest or to avail themselves of a bona fide offer to
purchase their shares by an acquiror unfavored by incumbent management. This
fundamental shift of control of the Company's destiny from the hands of its
shareholders to the hands of the Individual Defendants results in a heightened
fiduciary duty of the Individual Defendants to consider, in good faith, a third
party bid.
24. Defendants owe fundamental fiduciary obligations to the Company's
shareholders to consider seriously any bona fide offers for the Company, and to
conduct fair and active bidding procedures or other mechanisms for checking
the market to consider offers received for the Company. Further, the Individual
Defendants must adequately insure that no conflict of interest exists between
their own interests and their fiduciary obligations to maximize shareholder
value or, if such conflicts exist, to insure that all such conflicts will be
resolved in the best interests of the Company's public stockholders.
25. The Individual Defendants have breached their fiduciary and other
common law duties owed to plaintiffs and other members of the class in that
they have not and are not exercising independent business judgment and have
acted and are acting to the detriment of the Class in order to benefit
themselves and NCS's senior management.
26. The Individual Defendants are acting to entrench themselves in
their offices and positions and maintain their substantial salaries and
perquisites, all to the expense and to the detriment of the public shareholders
of NCS.
27. By the acts, transactions and courses of conduct alleged herein,
the Individual Defendants, individually and as part of a common plan and
scheme in breach
7
<PAGE> 8
of their fiduciary duties and obligations, are attempting to unfairly deprive
plaintiff and the other members of the class of the premiums they could realize
in an acquisition transaction and to ensure continuance of their positions as
directors and officers. The Individual Defendants have been engaged in a
wrongful effort to entrench themselves in their offices and positions of
control and prevent the acquisition of NCS except on terms which would further
their own personal interests.
28. As a result of defendants' actions, plaintiff and the other
members of the Class have been and will be injured in that they have been
deprived of the ability to change meaningfully the composition of the Board and
they have not and will not receive their fair proportion of the value of NCS's
assets and businesses and/or have been and will be prevented from obtaining a
fair and adequate price for their shares of NCS's common stock.
29. Plaintiff seeks preliminary and permanent injunctive relief and
declaratory relief against enforcement of the 75 Percent By-Law Provision,
preventing defendants from inequitably and unlawfully depriving plaintiff and
the Class of their rights to realize a full and fair value for their stock at a
substantial premium over the market price, and to compel defendants to carry
out their fiduciary duties to maximize shareholder value in selling NCS.
30. Only through the exercise of this Court's equitable powers can
plaintiff be fully protected from the immediate and irreparable injury which
the defendants' actions threaten to inflict.
31. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
(a) Declaring this to be a proper class action and certifying
8
<PAGE> 9
plaintiff as class representative;
(b) enjoining enforcement of the 75 Percent By-Law Provision;
(c) Ordering the Individual Defendants to carry out their
fiduciary duties to plaintiff and the other members of the Class by announcing
their intention to:
i) cooperate fully with any entity or person, including
Circle K, having a bona fide interest in proposing any transaction that would
maximize shareholder value, including but not limited to, a buy-out or takeover
of the Company;
ii) immediately undertake an appropriate evaluation of
NCS's worth as a merger/acquisition candidate;
iii) take all appropriate steps to enhance NCS's value
and attractiveness as a merger/acquisition candidate;
iv) take all appropriate steps to effectively expose
NCS to the marketplace in an effort to create an active auction of the Company;
v) rescind and render void the amendment by which the
75 Percent By-Law Provision was enacted;
vi) act independently so that the interests of the
Company's public shareholders will be protected; and
vii) adequately ensure that no conflicts of interest
exist between the Individual Defendants' own interest and their fiduciary
obligation to maximize shareholder value or, in the event such conflicts exist,
to ensure that all conflicts of interest are resolved in the best interests of
the public shareholders of NCS;
(d) Ordering the Individual Defendants jointly and severally
to account to plaintiff and the Class for all damages suffered and to be
suffered by them as a result of the acts and transactions alleged herein;
9
<PAGE> 10
(e) Awarding plaintiff the costs and disbursements of this
action, including a reasonable allowance for plaintiff's attorneys' and expert'
fees; and
(f) Granting such other and further relief as may be just and
proper.
Dated: August 18, 1995
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
BY: /s/ HERMAN M. MONHAIT
-----------------------------------------
First Federal Plaza, Suite 214
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
WECHSLER SKIRNICK HARWOOD
HALEBIAN & FEFFER LLP
805 Third Avenue
New York, New York 10022
(212) 935-7400
10
<PAGE> 1
EXHIBIT 99.2
IN THE COURT CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
)
THE CIRCLE K CORPORATION, )
)
)
Plaintiff, )
)
- against - )
) Civil Action No. 14518
NATIONAL CONVENIENCE STORES )
INCORPORATED, V.H. VAN HORN, )
RICHARD C. STEADMAN, DUNBAR N. )
CHAMBERS, JR., RAYMOND W. )
OELAND, JR., ROBERT B. STOBAUGH, )
WILLIAM K. WILDE, CHARLES J. )
LUELLEN and LIONEL SOSA. )
)
Defendants. )
)
COMPLAINT
Plaintiff, The Circle K Corporation ("Circle K"), by its attorneys, for
its complaint herein, alleges as follows:
NATURE OF THE ACTION
1. Circle K is a holder of common stock of National Convenience Stores
Incorporated ("NCS" or the "Company") and has offered to acquire all remaining
shares of NCS. The individual defendants have wrongfully refused properly to
negotiate or consider any bona fide offer for the Company, and have taken
reactive defensive actions, which were wrongfully designed to entrench NCS
officers and directors in their positions of control, and which were and are
unreasonable in relation to any perceived threat posed by Circle K. In
furtherance of these efforts, the individual defendants, on August 10, 1995,
specifically adopted and
<PAGE> 2
implemented an amendment to the Company's Restated By-Laws that purports to
require that any amendment to the By-Laws to change the number of directors
must be approved by holders of 75 percent of the shares entitled to vote at a
meeting of stockholders (the "75 Percent By-Law Provision"). In addition, on
August 31, 1995, the individual defendants adopted a poison pill. Their actions
constitute unfair dealing, improper interference with shareholder voting
rights, a manipulation of corporate machinery for personal purposes, and a
breach of their fiduciary duties to NCS stockholders. The individual defendants
are using their fidiciary positions of control over NCS to thwart Circle K in
its legitimate attempt to acquire NCS, and the individual defendants are trying
to entrench themselves in their positions with the Company.
PARTIES
2. Plaintiff is and, at all relevant times, has been the owner of
shares of NCS common stock.
3. NCS is a corporation organized under the laws of Delaware. NCS
operates approximately 660 specialty convenience stores under the name of "Stop
N' Go" in Texas. NCS has approximately 6 million shares of common stock
outstanding and 1,380 stockholders of record. NCS's stock is listed on the New
York Stock Exchange. NCS's Board of Directors has 8 members, 4 of whom will be
elected at the next annual meeting of NCS stockholders.
4. Defendant V. H. Van Horn is and has at all relevant times been NCS'
President and Chief Executive Officer and a member
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<PAGE> 3
of its Board of Directors.
5. Defendant Richard C. Steadman is and has at all relevant times been
Chairman of NCS' Board of Directors.
6. Defendants Dunbar N. Chambers, Jr., Raymond W. Oeland, Jr., Robert
B. Stobaugh, William K. Wilde, Charles J. Luellen, and Lionel Sosa are and have
been at all relevant times directors of NCS.
SUBSTANTIVE ALLEGATIONS
7. On August 8, 1995, Circle K submitted to the management and Board
of Directors of NCS a proposal whereby Circle K would purchase all outstanding
common stock of NCS at a price of $17 per share in cash. In addition, Circle K
would agree to assume approximately $100 million in existing debt of NCS. The
transaction was valued at approximately $210 million. Circle K also advised
Mr. Van Horn on August 8, 1995 that it intended to nominate a slate of
directors for election at NCS' upcoming annual meeting of stockholders, which
has now been scheduled for November 7, 1995.
8. During the fiscal year ending June 30, 1995, the last full fiscal
year before the offer, NCS's common stock traded at prices as low as $6.50 and
never traded higher than $12.63.
9. On August 10, 1995, the individual defendants enacted the 75
Percent By-Law Provision, but made no public announcement of its enactment.
10. On August 11, 1995, Circle K (a) submitted a proposal for
shareholder vote at NCS's upcoming annual meeting to
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<PAGE> 4
amend NCS' By-Laws to increase the size of NCS's Board of Directors from 8 to 17
directors, (b) proposed a slate of nine candidates for election at that
meeting, and (c) announced that it would seek to repeal any bylaw amendment
adopted since January 1, 1994.
11. On August 31, 1995, the individual defendants announced that they
had rejected Circle K's offer. The individual defendants did not engage in or
invite Circle K to engage in any negotiations concerning a possible
acquisition.
12. On August 31, the individual defendants also announced that they
had adopted a poison pill anti-takeover device (the "Poison Pill").
13. The NCS Poison Pill will have the result that, if Circle K or
anyone else becomes the beneficial owner (as therein defined) of 10% or more of
the Company's outstanding common stock, NCS' stockholders will have the right
to receive, upon exercise of the rights provided for therein, a number of
newly-issued shares of common stock having a current market price equal to two
times the exercise price of the right (which is now $55).
14. By enacting the 75 Percent By-Law Provision, the defendants have
purported, by unilateral board action, to restrict the stockholders' right to
amend the bylaws of their company. Delaware law does not permit corporate
directors to limit stockholders' right to amend corporate bylaws in this
manner.
15. The 75 Percent By-Law Provision and the Poison Pill have the
effect of making it extraordinarily time-consuming, difficult, and expensive for
any potential acquiror not approved by
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<PAGE> 5
the individual defendants to acquire NCS. It also makes more difficult
shareholder action through corporate suffrage to change Board composition.
Therefore, the 75 Percent By-Law Provision and the Poison Pill have the effect
of interfering with shareholder voting and precluding successful and timely
completion of even the most attractive offer for NCS unless the Board
acquiesces, thus denying the Company's shareholders an opportunity to make
their own unfettered choice.
16. As a consequence, the adoption and implementation of the 75
Percent By-Law Provision and the Poison Pill have the force and effect of
entrenching the individual defendants in their corporate offices against any
real or perceived threat to their control, and dramatically impairs the rights
of shareholders to exercise freedom of choice in a proxy contest or to avail
themselves of a bona fide offer to purchase their shares by an acquiror
unfavored by incumbent management.
17. The individual defendants have breached the duties they owe to
plaintiff and other shareholders in that they have not and are not exercising
independent business judgment and have acted and are acting to the detriment of
the shareholders to benefit themselves.
18. The individual defendants are acting to entrench themselves in
their offices and positions and maintain their substantial salaries and
perquisites, all to the expense and to the detriment of the shareholders of
NCS.
19. By the acts, transactions and courses of conduct
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<PAGE> 6
alleged herein, the individual defendants, individually and as part of a common
plan and scheme in breach of their fiduciary duties and obligations, are
attempting to ensure continuance of their positions as directors and officers.
The individual defendants have been engaged in a wrongful effort to entrench
themselves in their offices and positions of control and prevent the
acquisition of NCS except on terms which would further their own personal
interests.
20. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment against defendants as follows:
(a) declaring void and/or enjoining enforcement of the 75 Percent
By-Law Provision and the Poison Pill;
(b) ordering the individual defendants jointly and severally to
account to plaintiff for all damages suffered and to be suffered as a result of
the acts and transactions alleged herein;
(c) awarding plaintiff the costs and disbursements of this action,
including reasonable allowance for plaintiff's attorneys' and experts' fees;
and
(d) granting such other and further relief as may be just and proper.
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<PAGE> 7
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ KENNETH NACHBAR
--------------------------------
Kenneth Nachbar
1201 North Market Street
P. O. Box 1347
Wilmington, DE 19899
(302) 658-9200
Attorneys for Plaintiff
OF COUNSEL:
Mitchell A. Karlan
GIBSON, DUNN & CRUTCHER
200 Park Avenue
New York, New York 10166
(212) 351-4000
September 5, 1995
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<PAGE> 1
EXHIBIT 99.3
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
)
THE CIRCLE K CORPORATION, )
)
)
Plaintiff, )
)
- against - )
) C.A. No. 95-537
NATIONAL CONVENIENCE STORES )
INCORPORATED, V.H. VAN HORN, )
RICHARD C. STEADMAN, DUNBAR N. )
CHAMBERS, JR., RAYMOND W. )
OELAND, JR., ROBERT B. STOBAUGH, )
WILLIAM K. WILDE, CHARLES J. )
LUELLEN and LIONEL SOSA. )
)
Defendants. )
)
COMPLAINT
Plaintiff, The Circle K Corporation ("Circle K"), by its undersigned
attorneys, for its Complaint herein, alleges as follows:
JURISDICTION AND VENUE
1. This Court has jurisdiction over this action pursuant to Section 27
of the Securities Exchange Act of 1934, 15 U.S.C. Section 78aa (the "Exchange
Act") and 28 U.S.C. Sections 1331 and 1337.
2. Venue is proper in this District pursuant to Section 27 of the
Exchange Act, and 28 U.S.C. Section 1391(c) because acts and transactions
complained of here occurred and, unless enjoined, will continue to occur, in
this Distrct.
<PAGE> 2
PARTIES
3. Plaintiff is a corporation organized under the laws of Delaware
with its principal place of business in Arizona. Plaintiff owns shares of the
common stock of defendant National Convenience Stores Incorporated ("NCS"). On
August 8, 1995, Circle K offered to acquire all of the remaining shares of NCS
common stock.
4. Defendant NCS is a corporation organized under the laws of Delaware
with its principal place of business in Texas. NCS's 6 million shares of
outstanding common stock are listed on the New York Stock Exchange.
5. Each of the 8 remaining defendants (the "individual defendants") is
a member of the NCS Board of Directors. NCS has a "staggered" Board; only 4
directors will stand for reelection at the upcoming annual meeting of NCS
stockholders.
DEFENDANTS' WRONGFUL CONDUCT
6. After Circle K offered to acquire NCS's common stock, the
individual defendants undertook a series of acts and transactions intended to
entrench themselves in their positions of power, prestige, and economic
advantage.
7. On August 8, 1995, Circle K submitted to the management and Board
of Directors of NCS a proposal whereby Circle K would purchase all outstanding
common stock of NCS at a price of $17 per share in cash. In addition, Circle K
would agree to assume approximately $100 million in existing debt of NCS. The
transaction was valued at approximately $210 million. Circle K also advised Mr.
Van Horn on August 8, 1995 that it intended to nominate a slate of directors
for election at NCS' upcoming annual
<PAGE> 3
meeting of stockholders.
8. On August 10, 1995, the NCS Board purported to amend NCS's bylaws
to make it substantially more difficult for shareholders to vote to expand the
number of persons serving on NCS's Board. Whereas under NCS's prior bylaws,
holders of a simple majority of NCS's outstanding common stock could amend the
company's bylaws to expand the size of the Board, now such a change purportedly
requires the vote of the holders of 75% of NCS's common stock.
9. On August 11, 1995, Circle K formally notified the individual
defendants of its intention, in connection with the annual meeting of NCS
stockholders this autumn,
(a) to propose bylaw amendments (i) expanding the size of the
NCS Board from 8 to 17 members, and (ii) rescinding the August 10
bylaw amendment requiring a 75% shareholder vote to expand the size
of the Board, and
(b) to nominate 9 persons for election to the NCS Board.
10. On August 14, 1995, the individual defendants caused NCS to issue
a press release purporting to describe, among other things, Circle K's offer
and its proposals concerning the Board. The August 14 press release stated in
part as follows:
The Company's bylaws provide that any change in the number of directors
must be approved by 75% of the shares entitled to vote at a meeting of
stockholders.
11. In describing the 75% vote requirement, the August 14 press
release did not reveal that the Board had voted to impose such a requirement
just 4 days earlier, or that, up until
3
<PAGE> 4
that time, a simple majority of shareholders could amend the bylaws to increase
the number of directors.
12. The August 14 press release also did not advise stockholders that,
under Delaware law, corporate directors may not act unilaterally to restrict
stockholders' ability to amend or repeal bylaws, or in the alternative, that
there is at the very least a substantial legal question about the ability of
corporate directors to take such action.
13. In describing Circle K's proposals, the press release did not
reveal that Circle K was proposing to reduce from 75% to a simple majority the
number of shares needed to vote to expand the size of the Board.
14. These omissions rendered the press release materially false and
misleading.
15. On August 14, 1995, the individual defendants caused NCS to file a
report on Form 8-K (the "8-K") with the Securities and Exchange Commission
("SEC"). The 8-K reported, among other things, that another shareholder of NCS
nominated 4 persons to be elected to the NCS Board of Directors at this
autumn's annual meeting of shareholders.
16. The 8-K failed to state that the other shareholder (which the 8-K
failed to identify by name) also proposed to expand the size of the Board so
that 5 directors would be elected this year and also announced its intention to
nominate an additional candidate to fill that newly created directorship.
17. These omissions rendered the 8-K materially false and misleading.
4
<PAGE> 5
18. Defendants made the representations and omissions set forth in the
press release and the 8-K through the use of the mails and other
instrumentalities of interstate commerce.
19. Plaintiff has no adequate remedy of law.
FIRST CLAIM FOR RELIEF
(For Violations of Section 10(b)
of the Exchange Act and Rule 10b-5)
20. Plaintiff repeats and realleges paragraphs 1-19 above as if set
forth here in full.
21. Defendants violated Section 10(b) of the 1934 Act, 15 U.S.C.
Section 78j(b), and Rule 10b-5 promulgated thereunder, 17 C.F.R. Section
240.10b-5, in that defendants, by the use of a means of instrumentality of
interstate commerce and the mails and to the detriment of plaintiff:
(a) employed devices, schemes and artifices to defraud;
(b) made untrue statements of material facts and omitted to state
material facts necessary in order to make the statements made, in the light of
circumstances in which they were made, not misleading; and
(c) engaged in acts, practices and courses of business which operated
as a fraud and deceit upon plaintiff.
WHEREFORE, plaintiff respectfully requests judgment against defendants
as follows:
(a) compelling defendants to make immediate corrective action to
disclose material facts necessary to make defendants' statements not
misleading;
(b) enjoining defendants, until after an appropriate
5
<PAGE> 6
period of time after full dissemination of the corrective disclosure referred
to above, from soliciting proxies from owners of NCS stock;
(c) granting plaintiff reasonable costs and expenses incurred in this
action; and
(d) granting such other and further relief as this Court may find just
and proper.
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ KENNETH NACHBAR
--------------------------------------
Kenneth Nachbar
1201 North Market Street
P. O. Box 1347
Wilmington, DE 19899
(302) 658-9200
Attorneys for Plaintiff
OF COUNSEL:
Mitchell A. Karlan
GIBSON, DUNN & CRUTCHER
200 Park Avenue
New York, New York 10166
(212) 351-4000
September 5, 1995
<PAGE> 1
EXHIBIT 99.4
AMENDED AND RESTATED
NATIONAL CONVENIENCE STORES INCORPORATED
OFFICERS' RETIREMENT PLAN
ARTICLE I
Definitions
As used herein, the following terms shall have the meanings indicated.
1.01 Actuarial Equivalent and Actuarially Equivalent shall mean a
form of benefit differing in time, period or manner of payment from the Basic
Retirement Benefit provided under the Plan, but having the same value when
computed using the mortality rate assumptions set forth in the "1983 Group
Annuity Mortality Table" and using a 7.0% interest rate assumption, which rate
shall be reviewed periodically and may be changed by the Board of Directors.
Soley for purposes of determining a Participant's Termination Benefit in
accordance with Section 4.01, the Actuarial Equivalent shall be determined by
using both the morality and interest rate assumptions of this Section 1.01 for
purposes of discounting for time periods after age 65, and the interest rate
assumption only for time periods prior to age 65.
1.02 Basic Retirement Benefit shall mean a life annuity payable at
age 65, equal to 2% of Final Average Earnings multiplied by Credited Service.
1.03 Beneficiary shall mean the person who, upon the death of a
Participant or a Retired Participant, is entitled to receive either of a
Participant's (i) Termination Benefit (as defined in Section 4.01); or, (ii)
Basic Retirement Benefit and Deferred Compensation Account, if a Participant
has elected to have the Basic Retirement Benefit and Deferred Compensation
Account paid either as a lump sum or in three equal annual payments, as
provided for in Article III, and dies before all payments have been made. A
Participant may designate a Beneficiary in a written notice delivered to the
Company. In the event no written designation of beneficiary has been received
by the Company prior to a Participant's death, the Beneficiary shall be deemed
to be Participant's estate.
1.04 Board of Directors shall mean the Board of Directors of
National Convenience Stores Incorporated.
1.05 Bonus Compensation shall mean the amount of bonus
compensation, if any, earned by a Participant in a Fiscal Year.
1.06 Change in Control of the Company shall mean the occurrence
with respect to the Company of any of the following events:
<PAGE> 2
(i) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(ii) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(iii) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 20
percent or more of the combined voting power of the then-outstanding
securities of the Company (as determined under paragraph (d) of Rule
13d-3 promulgated under the Exchange Act, in the case of rights to
acquire common stock);
(iv) the stockholders of the Company shall approve:
(A) any merger, consolidation, or reorganization
of the Company:
(1) in which the Company is not the
continuing or surviving corporation,
(2) pursuant to which shares of common
stock of the Company would be
converted into cash, securities or
other property,
(3) with a corporation which prior to
such merger, consolidation, or
reorganization owned 20 percent or
more of the combined voting power of
the then-outstanding securities of
the Company, or
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<PAGE> 3
(4) in which the Company will not
survive as an independent,
publicly-owned corporation;
(B) any sale, lease, exchange or other transfer
(in one transaction or a series of related
transactions) of all or substantially all the
assets of the Company, or
(C) any liquidation or dissolution of the Company;
(v) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(vi) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(vii) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(viii) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
of Directors of the Company cease for any reason to constitute a
majority of the Board of Directors of the Company, unless the election
or nomination for election by the Company's stockholders of each new
director during any such two-year period was approved by the vote of
two-thirds of the directors then still in office who were directors at
the beginning of such two-year period.
1.07 Committee shall mean the committee appointed to administer
the Plan.
1.08 Company shall mean National Convenience Stores Incorporated, a
Delaware corporation doing business under the laws of the State of Texas, or
any successor company thereto, or any of its affiliates or subsidiaries or
their successors.
1.09 Credited Service as of any date shall mean the number of
years, and any fractions thereof, of continuous employment with the Company of
a Participant from the most recent hire date. Credited Service shall include
leaves of absence granted by the Company for any period of not more than two
years. The Board of Directors, in its sole discretion, may make an irrevocable
grant to any Officer of additional years of service which shall be used in
calculation of Credited Service. The number of years which shall be utilized
in calculation of Credited Service shall never exceed thirty (30).
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<PAGE> 4
1.10 Deferred Compensation Account shall mean the account credited
with Employer Credits and Elective Deferral Credits. Earnings in the Deferred
Compensation Account shall be credited: (i) from the dates that amounts are
posted to such account through the date the Deferred Compensation Account is
distributed to a Participant or Beneficiary; and (ii) at a gross rate equal to
the actual investment return before expenses and taxes. A Participant may
request a preferred investment of funds in his Deferred Compensation Account.
1.11 Effective Date shall mean March 31, 1994.
1.12 Elective Deferral Credits shall mean the amount of Bonus
Compensation, if any, a Participant may elect to defer. A Participant may make
an Elective Deferral Credit by sending written notice to the Company, prior to
the beginning of the Fiscal Year in which the Bonus Compensation may be earned,
designating the portion of Bonus Compensation to be deferred. Such amount will
be credited to the Deferred Compensation Account on the date Bonus Compensation
is first available to be paid to Participant not elected to defer. An Elective
Deferral Credit shall continue until modified or revoked by Participant's
delivery of written notice to the Company; provided, however, that any such
revocation or modification shall be effective beginning with the Fiscal Year
next following the date of such notice.
1.13 Employer Credits shall mean an amount equal to 15% of any
Bonus Compensation earned by a Participant which amount will be credited to the
Deferred Compensation Account on the date Bonus Compensation is paid or, if
deferred, is first available to be paid to Participant. No Employer Credits
shall be made on any Bonus Compensation paid to or received by a Participant
for any Fiscal Year after Fiscal Year 1995.
1.14 Earnings shall mean the sum of:
(i) Amounts paid by the Company to a Participant for
services rendered, as reported on Participant's Federal income tax
withholding statement (Form W-2 or its subsequent equivalent), for
each calendar year (ending during a Plan Year) Participant is an
employee of the Company, exclusive of reimbursements and other expense
allowances, fringe benefits (cash and noncash), moving expenses,
welfare benefits, and all other extraordinary compensation; and,
(ii) Amounts, if any, which would have been included in
1.14(i) above for any calendar year if such amounts had not been
deferred by a Participant through a plan of deferred compensation
under a salary reduction agreement pursuant to Section 125 or Section
401(k) of the Internal Revenue Code of 1986 ("Code"), or any other
applicable provision of the Code.
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<PAGE> 5
1.15 Final Average Earnings shall mean a Participant's average
monthly Earnings during any three of the five calendar years immediately
preceding the date on which his employment terminates, which yields the highest
Final Average Earnings.
1.16 Fiscal Year shall mean the fiscal year of the Company.
1.17 Involuntary Termination shall mean the cessation by
Participant of employment with the Company, other than by reason of Voluntary
Termination, death, becoming Permanently and Totally Disabled or retirement
after age 65.
1.18 Joint and 50% Spouse Annuity shall mean an annuity payable to
a Participant during his lifetime and 50% payable to his spouse, on the death
of Participant, during the lifetime of the spouse of Participant.
1.19 Late Retirement Benefit shall mean a benefit provided pursuant
to Section 3.02 of the Plan.
1.20 Normal Retirement Benefit shall mean a benefit provided
pursuant to Section 3.01 of the Plan.
1.21 Normal Retirement Date shall mean the first day of the month
coincident with or immediately following a Participant's sixty-fifth birthday.
1.22 Participant shall mean any person eligible or selected
pursuant to Article II to participate in the Plan and who has elected to do so.
1.23 Permanently and Totally Disabled shall have the same
definition as that contained in the Company's LTD plan. In the absence of such
plan, it shall mean a mental or physical impairment which in the opinion of a
qualified doctor, selected by the Committee, renders a Participant unable to
perform with reasonable diligence the ordinary functions and duties of such
Participant on a full time basis and which impairment will continue in the
opinion of such doctor for a period of not less than 180 days.
1.24 Plan shall mean the National Convenience Stores Incorporated
Officers' Retirement Plan.
1.25 Plan Restatement Date shall mean August 31, 1995.
1.26 Plan Year shall mean Fiscal Year.
1.27 Retired Participant shall mean a Participant who has qualified
for and taken retirement from the Company.
1.28 Termination Benefit shall mean a benefit provided pursuant to
Section 4.01 of the Plan.
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<PAGE> 6
1.29 Trust shall mean the trust established pursuant to Section
7.03 of the Plan.
1.30 Voluntary Termination shall mean the voluntary cessation by a
Participant of employment with the Company, whether by reason of resignation or
otherwise, but excluding termination by reason of Involuntary Termination,
death, becoming Permanently and Totally Disabled or retirement after age 65.
1.31 Any words herein used in the masculine shall be read and
construed in the feminine in all cases where they would so apply. Words in the
singular shall be read and construed as though used in the plural in all cases
where they would so apply.
ARTICLE II
Participation in the Plan
2.01 Participation in the Plan shall be limited to management
personnel of the Company who have a significant impact upon the formulation of
policy for the Company and upon its profitability. Those persons eligible to
participate in the Plan are: (i) the senior officers of the Company which shall
include, and are limited to, the President, Senior Vice Presidents, Vice
Presidents, Secretary and Treasurer ("Officer"); and (ii) any other key
management employees of the Company who are approved by the Board of Directors.
2.02 Participation in the Plan shall commence as of the first day
of the month coincident with or immediately following the date a person is
either elected an Officer or is approved by the Board of Directors as provided
in 2.01(ii) above and such person elects to participate by execution of a form
provided by the Company.
2.03 If a Participant becomes entitled to a benefit under Sections
3.01, 3.02 or 4.01 of the Plan, he shall no longer be entitled to a benefit
under any other Section of the Plan unless such Participant is re-employed by
the Company either as an Officer or is approved by the Board of Directors as
provided in 2.01(ii) above.
ARTICLE III
Normal Retirement Benefit
3.01 If Participant shall continue in the employ of the Company
until Normal Retirement Date, he may retire as of such date and be entitled to
receive a Normal Retirement Benefit which shall be the sum of: (i) the Basic
Retirement Benefit payable monthly as a Joint and 50% Spouse Annuity for a
married Participant or as a life annuity for a single Participant, and (ii) the
Deferred Compensation Account payable as a lump sum.
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<PAGE> 7
Notwithstanding the foregoing, a Participant may within 30 days of
commencement of participation in the Plan irrevocably elect, by written notice
delivered to the Company, to have the Basic Retirement Benefit paid either as
an Actuarial Equivalent lump sum or in three Actuarial Equivalent equal annual
installments.
3.02 No provision of the Plan shall require the retirement of a
Participant at the Normal Retirement Date. If a Participant retires after the
Normal Retirement Date, he shall be entitled to receive a Late Retirement
Benefit, the monthly amount of which shall be equal to the monthly benefit
calculated in accordance with the provisions of Section 3.01 above, but
utilizing Participant's Final Average Earnings and Credited Service as of the
actual date of retirement.
3.03 The benefit payments provided for in Sections 3.01 and 3.02
above shall commence as soon as practicable following retirement but in no
event later than 90 days after the date Participant retires.
ARTICLE IV
Termination Benefit
4.01 A Participant who ceases to be employed by the Company prior
to age 65 and is vested pursuant to Article V is entitled to a Termination
Benefit which shall be the sum of: (i) the present value (using the same
interest rate assumption for determining Actuarial Equivalent) as of the date a
Participant ceases employment with the Company prior to age 65 of the Actuarial
Equivalent lump sum of the Basic Retirement Benefit (utilizing Final Average
Earnings and Credited Service of Participant), and (ii) the vested portion of
the Deferred Compensation Account.
4.02 The Termination Benefit shall be paid only in a lump sum and
as soon as practicable after termination, but in no event later than 90 days
after the termination date of such Participant.
ARTICLE V
Vesting
5.01 A Participant shall be fully vested in the Basic Retirement
Benefit upon the earliest to occur of the following:
(a) Continuous employment with the Company until Normal Retirement
Date,
(b) Five years of Credited Service,
(c) Death,
(d) Permanent and Total Disability,
(e) Change in Control of the Company, or
(f) Discontinuation of the Plan.
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<PAGE> 8
5.02 A Participant shall be fully vested: (i) in the Employer
Credits portion of the Deferred Compensation Account three years after the date
of each Employer Credit; (ii) immediately in the earnings in the Deferred
Compensation Account; and, (iii) immediately in the Elective Deferral Credits
portion of the Deferred Compensation Account. Notwithstanding the provision of
5.02(i), the Deferred Compensation Account shall be fully vested upon the
earliest to occur of the following:
(a) Continuous employment with the Company until Normal Retirement
Date,
(b) Involuntary Termination of a Participant with more than five
years of Credited Service,
(c) Death,
(d) Permanent and Total Disability,
(e) Change in Control of the Company, or
(f) Discontinuation of the Plan.
5.03 The benefits provided in the Plan (other than the Effective
Deferral Credits portion of the Deferred Compensation Account) shall be
forfeited by a Participant if his employment with the Company is terminated as
a result of any act of dishonesty, fraud, theft or embezzlement in connection
with such employment and Participant is convicted of such crime in a court of
competent jurisdiction.
ARTICLE VI
The Committee
6.01 The Board of Directors shall administer the Plan but may
delegate its responsibilities, other than its rights to designate any other key
management employee as a Participant and to discontinue or amend the Plan, to a
Committee appointed by it. The Board of Directors may overrule any decision of
the Committee. The Committee, or in the absence of a Committee the Board of
Directors, shall be the Plan Administrator. The Company agrees to indemnify
and to hold harmless each person serving as Plan Administrator from all
liabilities and claims arising form the performance of his duties in accordance
with the terms of the Plan, unless such liability or expense results from gross
negligence or willful act or omission, or an act or omission performed in bad
faith. The Committee shall keep a permanent record of its meetings and
actions.
6.02 All members of the Committee shall be appointed by and serve
at the pleasure of the Board of Directors. No compensation shall be paid to
members of the Committee.
6.03 Subject to the limitations of the Plan, the Committee may
promulgate and adopt such rules, regulations and procedures for the transaction
of its business which it deems necessary for the proper administration of the
Plan. The Committee shall rely upon the records of the Company, as certified
to it, with respect to factual matters relating to a Participant. In the event
of a factual dispute, the Committee shall resolve
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such dispute by giving due weight to the evidence available to it. The
Committee shall interpret the Plan in the administration and application
thereof. All such determinations shall be final, conclusive and binding,
except to the extent that they are appealed under the following procedure. In
the event that the claim of any person shall be denied as to all or any part of
any payment or benefit under this Plan, the Committee shall provide to the
claimant (i) the reason or reasons for the denial; (ii) reference to the Plan
provisions on which the denial is based; (iii) a description of additional
material or information necessary for the person to perfect the claim and an
explanation of why such material or information is necessary; and, (iv) an
explanation of the Plan's claims procedure.
The claimant shall have 60 days after receipt of the above material to
appeal the claim denial by the Committee to the Board of Directors for review.
The claimant may (i) request a review upon written notice to the Board of
Directors; (ii) review pertinent documents; and, (iii) submit issues and
comments in writing.
The Board of Directors shall render its decision not later than 60
days after receipt of a request for review by the claimant, unless special
circumstances require an extension of time, in which event a decision shall be
rendered as soon as possible, but in no event later than 120 days after such
receipt. The Board of Directors' decision shall be written and shall include
the reasons for its decision with reference to the Plan provisions on which the
decision is based.
6.04 A Participant who is a member of the Board of Directors shall
disqualify himself from voting on any issue which pertains to his eligibility
for any benefit under the Plan or the amount of payment or any benefit for
which he is eligible. Every decision and action of the Board of Directors
shall be binding.
6.05 The Committee may employ such counsel, accountants, actuaries
and agents as it shall deem advisable. The Company shall pay, or cause to be
paid, the compensation and other expenses of such counsel, accountants,
actuaries and agents incurred by the Committee in the administration of the
Plan.
ARTICLE VII
Funding
7.01 The Company's obligation under the Plan shall be an unsecured
promise to pay.
7.02 The Plan shall not be construed so as to provide a
Participant, Retired Participant or surviving spouse or Beneficiary any greater
rights than those of an unsecured creditor of the Company. At no time shall a
Participant, Retired Participant or surviving spouse or Beneficiary be deemed
to have any right, title, or interest in or to any specified asset or assets of
the Company.
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7.03 To fund the benefits payable pursuant to the Plan, the Company
shall establish an irrevocable trust for the benefit of the Participants but
which shall be subject to the general claims of the Company's creditors. The
Company shall: (i) make contributions to the Trust during each Plan Year to
fund the Basic Retirement Benefit on an actuarially sound basis; (ii) fund the
Trust with the Employer Credits on the date the Bonus Compensation is paid or,
if deferred, is first available to be paid to the Participants; and, (iii) fund
the Trust with the Elective Deferral Credits on the date the Bonus Compensation
is first available to be paid to the Participants. Immediately prior to a
Change in Control of the Company, the Company shall contribute to the Trust an
amount which, with the existing amounts in the Trust, shall be sufficient to
pay each Participant, Retired Participant or surviving spouse or Beneficiary,
all benefits calculated as of the day prior to the Change in Control of the
Company, which are due to each such person under the terms and provisions of
the Plan. If the assets of the Trust are insufficient to make any payments
required under the Plan, the Company shall make up such deficit from its
assets. Upon termination of the Trust, if all benefits required to be paid
pursuant to the Plan have been paid, any assets which remain shall be paid to
the Company.
7.04 Pursuant to Section 1.10 above, a Participant may request a
preferred investment of funds in his Deferred Compensation Account; provided,
however, that the Company shall have no obligation to make investments or to
segregate assets according to a Participant's request.
ARTICLE VIII
Reservation of Rights by the Company
and Limitations on Rights of Participants
8.01 Nothing contained in the Plan shall be deemed to provide a
Participant the right to be retained in the service of the Company or to
interfere with the right of the Company to discharge a Participant, or any
other employee, at any time.
8.02 The benefits provided by the Plan are granted by the Company
as a fringe benefit to the Participants and are not part of any salary
increase. No Participant in the Plan has any option to take any current
payment or bonus in lieu of the benefits provided by the Plan.
8.03 None of the benefits under the Plan shall be subject to the
claims of creditors of Participants, Retired Participants or surviving spouses
or Beneficiaries, and shall not be subject to attachment, garnishment, or any
other legal process. Neither a Participant, Retired Participant or surviving
spouse or Beneficiary may assign, sell, or otherwise encumber any beneficial
interest in the Plan, nor shall any such benefits be in any manner liable for
or subject to the deeds, contracts, liabilities, engagements or torts of any
Participant, Retired Participant or surviving spouse or Beneficiary.
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8.04 The Company shall withhold from any benefit payments due under
the Plan all federal, state or local taxes required to be withheld therefrom as
determined by the Company in its sole, good faith judgment.
ARTICLE IX
Amendments
The Board of Directors reserves the right to modify or amend, in whole
or in part, any or all of the provisions of the Plan, including the right to
make any such modifications or amendments effective retroactively, at any time
and from time-to-time, without the consent of Participants, Retired
Participants or surviving spouses, or Beneficiaries or any person or persons
claiming through them; provided, however, that no modification or amendment
shall be made which would have the effect, in any way, of diminishing,
limiting, modifying or restricting any right or benefit, which had accrued
through the effective date of such modification or amendment, to a Participant,
Retired Participant or surviving spouse or Beneficiary.
ARTICLE X
Discontinuation
The Board of Directors reserves the right to discontinue the Plan at
any time, without the consent of Participants, Retired Participants or
surviving spouses, or Beneficiaries or any person or persons claiming through
them; provided however, that discontinuation of the Plan shall not have the
effect, in any way, of diminishing, limiting, modifying or restricting any
right or benefit, which had accrued through the effective date of such
discontinuation, to a Participant, Retired Participant or surviving spouse or
Beneficiary.
ARTICLE XI
Miscellaneous
11.01 Nothing contained in the Plan shall be construed so as to
alter, abridge, or in any manner affect the rights and privileges of
Participants to participate in and be covered by any defined benefit, defined
contribution, savings, profit sharing, Section 401(k) of the Code, group
insurance, group disability, health or medical, bonus, or similar employee
plans which the Company may now or hereafter have.
11.02 The provisions of the Plan shall bind and inure to the benefit
of the Company and its successors and assigns. The term successors as used
herein shall include any corporate or business entity which shall, whether by
merger, consolidation, purchase or otherwise acquire all or substantially all
of the business or assets of the Company and successors of any such corporation
or other business entity.
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11.03 Any headings or subheadings in the Plan are inserted for
convenience of reference only and are to be ignored in the construction of any
provisions hereof.
11.04 This Plan shall be construed in accordance with the laws of
the State of Texas.
11.05 In case any provision of the Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions of the Plan, and the Plan shall be construed and enforced
as if such illegal and invalid provisions had never been inserted herein.
11.06 Any notice or filing required or permitted to be given to the
Company under the Plan shall be sufficient if in writing and hand delivered, or
sent by registered or certified mail, to the Secretary of the Company at 100
Waugh Drive, Houston, Texas 77007. Such notice shall be deemed given as of
the date of delivery or, if delivery is made by mail, as of the date shown on
the receipt for registration or certification.
IN WITNESS WHEREOF, National Convenience Stores Incorporated has
caused this Amended and Restated National Convenience Stores Incorporated
Officers' Retirement Plan to be executed in its name and on its behalf by its
proper officers thereunto authorized on this 14th day of September, 1995,
effective as of the 31st day of August, 1995.
NATIONAL CONVENIENCE STORES
INCORPORATED
/s/ A. J. GALLERANO
By: ____________________________________
A. J. Gallerano
Senior Vice President,
General Counsel and Secretary
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EXHIBIT 99.5
AMENDED AND RESTATED
TRUST UNDER
NATIONAL CONVENIENCE STORES INCORPORATED
OFFICERS' RETIREMENT PLAN
This agreement made and effective as of the 31st day of August, 1995,
by and between National Convenience Stores Incorporated ("Company") and Bank
One, Texas, N.A. ("Trustee") ("Amended Trust Agreement").
WHEREAS, Company adopted the National Convenience Stores Incorporated
Officers' Retirement Plan ("Original Plan"); and,
WHEREAS, Company incurred or expected to incur liability under the
terms of the Original Plan with respect to the individuals participating
therein; and,
WHEREAS, Company established a trust ("Trust") under the terms of that
agreement between Company and Trustee entitled Trust Under National Convenience
Stores Incorporated Officers' Retirement Plan dated June 30, 1994 ("Original
Trust Agreement"), and contributed to the Trust assets to be held therein,
subject to the claims of Company's creditors in the event of Company's
Insolvency, as therein defined, until paid to participants in the Original Plan
and their beneficiaries in such manner and at such times as specified in the
Original Plan; and,
WHEREAS, the Original Plan has now been amended and restated by the
Company in that Amended and Restated National Convenience Stores Incorporated
Officers' Retirement Plan ("Amended and Restated Plan") adopted by the Company,
a copy of which is attached hereto as Appendix A and Company intends for the
Trust to apply to the Amended and Restated Plan as it has applied to the
Original Plan; and,
WHEREAS, it is the intention of the parties that the Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Amended and Restated Plan as an unfunded plan maintained for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees for purposes of Title I of the Employee Retirement Income
Security Act of 1974; and,
WHEREAS, it is the intention of Company to make contributions to the
Trust to provide itself with a source of funds to assist it in meeting its
liabilities under the Amended and Restated Plan.
NOW, THEREFORE, the parties do hereby agree that the Trust shall be
comprised, held and disposed of in connection with the Amended and Restated
Plan as follows:
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SECTION 1
ESTABLISHMENT OF TRUST
(a) Company has deposited with Trustee in trust funds which have become
the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Amended Trust Agreement.
(b) The Trust shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as
amended, and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of Amended and Restated Plan
participants and general creditors as herein set forth. Amended and
Restated Plan participants and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any
assets of the Trust. Any rights created under the Amended and
Restated Plan and this Amended Trust Agreement shall be mere unsecured
contractual rights of Amended and Restated Plan participants and their
beneficiaries against Company. Any assets held by the Trust will be
subject to the claims of Company's general creditors under federal and
state law in the event of Insolvency, as defined in Section 3(a)
herein.
(e) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in trust with
Trustee to augment the principal to be held, administered and disposed
of by Trustee as provided in this Amended Trust Agreement. Neither
Trustee nor any Amended and Restated Plan participant or beneficiary
shall have any right to compel such additional deposits.
SECTION 2
PAYMENTS TO AMENDED AND RESTATED PLAN PARTICIPANTS
AND THEIR BENEFICIARIES
(a) Company shall deliver to Trustee a schedule ("Payment Schedule") that
indicates the amounts payable in respect of each Amended and Restated
Plan participant (and his or her beneficiaries), that provides a
formula or other instructions acceptable to Trustee for determining
the amounts so payable, the form in which such amount is to be paid
(as provided for or available under the Amended and Restated Plan),
and the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the Amended
and Restated Plan participants and their beneficiaries in accordance
with such Payment Schedule. The Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that
may be
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required to be withheld with respect to the payment of benefits
pursuant to the terms of the Amended and Restated Plan and shall pay
amounts withheld to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by Company.
(b) The entitlement of an Amended and Restated Plan participant or his
beneficiaries to benefits under the Amended and Restated Plan shall be
determined by Company or such party as it shall designate under the
Amended and Restated Plan, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Amended
and Restated Plan.
(c) Company may make payment of benefits directly to Amended and Restated
Plan participants or their beneficiaries as they become due under the
terms of the Amended and Restated Plan. Company shall notify Trustee
of its decision to make payment of benefits directly prior to the time
amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon, are
not sufficient to make payments of benefits in accordance with the
terms of the Amended and Restated Plan, Company shall make the balance
of each such payment as it falls due. Trustee shall notify Company
where principal and earnings are not sufficient.
SECTION 3
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS
TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT
(a) Trustee shall cease payment of benefits to Amended and Restated Plan
participants and their beneficiaries if the Company is Insolvent.
Company shall be considered "Insolvent" for purposes of this Amended
Trust Agreement if (i) Company is unable to pay its debts as they
become due, or (ii) Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of the Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be
subject to claims of general creditors of Company under federal and
state law as set forth below:
(1) The Board of Directors and the Chief Executive Officer of
Company shall have the duty to inform Trustee in writing of
Company's Insolvency. If a person claiming to be a creditor
of Company alleges in writing to Trustee that Company has
become Insolvent, Trustee shall determine whether Company is
Insolvent and, pending such determination, Trustee shall
discontinue payment of benefits to Amended and Restated Plan
participants or their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's Insolvency,
or has received notice from Company or a person claiming to be
a creditor alleging that Company is Insolvent, Trustee shall
have no duty to inquire
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whether Company is Insolvent. Trustee may in all events rely
on such evidence concerning Company's solvency as may be
furnished to Trustee and that provides Trustee with a
reasonable basis for making a determination concerning
Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Amended and
Restated Plan participants or their beneficiaries and shall
hold the assets of the Trust for the benefit of Company's
general creditors. Nothing in this Amended Trust Agreement
shall in any way diminish any rights of Amended and Restated
Plan participants or their beneficiaries to pursue their
rights as general creditors of Company with respect to
benefits due under the Amended and Restated Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Amended and
Restated Plan participants or their beneficiaries in
accordance with Section 2 of this Amended Trust Agreement only
after Trustee has determined that Company is not Insolvent (or
is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due
to Amended and Restated Plan participants or their beneficiaries under
the terms of the Amended and Restated Plan for the period of such
discontinuance, less the aggregate amount of any payments made to
Amended and Restated Plan participants or their beneficiaries by
Company in lieu of the payments provided for hereunder during any such
period of discontinuance.
SECTION 4
PAYMENTS TO COMPANY
Except as provided in Section 3 hereof, after Trust has become irrevocable,
Company shall have no right or power to direct Trustee to return to Company or
to divert to others any of the Trust assets before all payments of benefits
have been made to Amended and Restated Plan participants and their
beneficiaries pursuant to the terms of the Amended and Restated Plan.
SECTION 5
INVESTMENT AUTHORITY
(a) In no event may Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by Company, other than
a de minimis amount held in common investment vehicles in which
Trustee invests. All rights associated with assets of the Trust shall
be exercised by Trustee or the person designated
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by Trustee, and shall in no event be exercisable by or rest with
Amended and Restated Plan participants.
(b) The Trustee shall have the power to invest and reinvest the Trust in
accordance with the "Investment Guidelines" attached hereto as
Appendix B, as directed by the Board of Directors of the Company or by
the Committee appointed by it.
SECTION 6
DISPOSITION OF INCOME
During the term of the Trust, all income received by the Trust, net of expenses
and taxes, shall be accumulated and reinvested.
SECTION 7
ACCOUNTING BY TRUSTEE
Trustee shall keep accurate and detailed records of all investments, receipts,
disbursements, and all other transactions required to be made, including such
specific records as shall be agreed upon in writing between Company and
Trustee. Within sixty (60) days following the close of each calendar year and
within sixty (60) days after the removal or resignation of Trustee, Trustee
shall deliver to Company a written account of its administration of the Trust
during such year or during the period from the close of the last preceding year
to the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold with the cost
or net proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other property
held in the Trust at the end of such year or as of the date of such removal or
resignation, as the case may be.
SECTION 8
RESPONSIBILITY OF TRUSTEE
(a) Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however,
that Trustee shall incur no liability to any person for any action
taken pursuant to a direction, request or approval given by Company
which is contemplated by, and in conformity with, the terms of the
Amended and Restated Plan or the Trust and is given in writing by
Company. In the event of a dispute between Company and a party,
Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
(b) If Trustee undertakes or defends any litigation arising in connection
with the Trust, Company agrees to indemnify Trustee against Trustee's
costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses)
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relating thereto and to be primarily liable for such payments. If
Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations
hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an
asset of the Trust, Trustee shall have no power to name a beneficiary
of the policy other than the Trust, to assign the policy (as distinct
from conversion of the policy to a different form) other than to a
successor Trustee, or to loan to any person the proceeds of any
borrowing against such policy.
(f) However, notwithstanding the provisions of Section 8(e) above, Trustee
may loan to Company the proceeds of any borrowing against an insurance
policy held as an asset of the Trust.
(g) Notwithstanding any powers granted to Trustee pursuant to this Amended
Trust Agreement or to applicable law, Trustee shall not have any power
that could give the Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of section 301.7701-2
of the Procedure and Administrative Regulations promulgated pursuant
to the Internal Revenue Code.
SECTION 9
COMPENSATION AND EXPENSES OF TRUSTEE
Company shall pay all administrative and Trustee's fees and expenses. If not
so paid, the fees and expenses shall be paid from the Trust.
SECTION 10
RESIGNATION AND REMOVAL OF TRUSTEE
(a) Trustee may resign at any time by written notice to Company, which
shall be effective ninety (90) days after receipt of such notice
unless Company and Trustee agree otherwise.
(b) Trustee may be removed by Company on thirty (30) days notice or upon
shorter notice accepted by Trustee.
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(c) Upon a Change of Control, as defined herein, Trustee may not be
removed by Company for two (2) years.
(d) If Trustee resigns or is removed within two (2) years of a Change of
Control, as defined herein, Trustee shall select a successor Trustee
in accordance with the provisions of Section 11(b) hereof prior to the
effective date of Trustee's resignation or removal.
(e) Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within thirty (30) days
after receipt of notice of resignation, removal or transfer, unless
Company extends the time limit.
(f) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraphs (a) or (b) of this Section.
If no such appointment has been made, Trustee may apply to a court of
competent jurisdiction for appointment of a successor or for
instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
SECTION 11
APPOINTMENT OF SUCCESSOR
(a) If Trustee resigns or is removed in accordance with Section 10(a) or
(b) hereof, Company may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers
under state law, as a successor to replace Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing
by the new Trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the trust assets. The
former Trustee shall execute any instrument necessary or reasonably
requested by Company or the successor Trustee to evidence the
transfer.
(b) If Trustee resigns or is removed pursuant to the provisions of Section
10(d) hereof and selects a successor Trustee, Trustee may appoint any
third party, such as a bank trust department or other party that may
be granted corporate trustee powers under state law. The appointment
of a successor Trustee shall be effective when accepted in writing by
the new Trustee. The new Trustee shall have all the rights and powers
of the former Trustee, including ownership rights in trust assets.
The former Trustee shall execute any instrument necessary or
reasonably requested by the successor Trustee to evidence the
transfer.
(c) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets,
subject to Sections 7 and 8 hereof. The successor Trustee shall not
be responsible for and Company shall indemnify and defend the
successor Trustee from any claim or liability
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<PAGE> 8
resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes
successor Trustee.
SECTION 12
AMENDMENT OR TERMINATION
(a) This Amended Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no
such amendment shall conflict with the terms of the Amended and
Restated Plan or shall make the Trust revocable after it has become
irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which Amended and
Restated Plan participants and their beneficiaries are no longer
entitled to benefits pursuant to the terms of the Amended and Restated
Plan. Upon termination of the Trust any assets remaining in the Trust
shall be returned to Company.
(c) Section 1 through Section 14, inclusive, of this Amended Trust
Agreement may not be amended by Company for five (5) years following a
Change of Control, as defined herein.
SECTION 13
MISCELLANEOUS
(a) Any provision of this Amended Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition, without
invalidating the remaining provisions hereof.
(b) Benefits payable to Amended and Restated Plan participants and their
beneficiaries under this Amended Trust Agreement may not be
anticipated, assigned (either at law or in equity), alienated,
pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Amended Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
(d) Change of Control shall mean the occurrence with respect to the
Company of any of the following events:
(i) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act),
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directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(ii) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(iii) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 20
percent or more of the combined voting power of the then-outstanding
securities of the Company (as determined under paragraph (d) of Rule
13d-3 promulgated under the Exchange Act, in the case of rights to
acquire common stock);
(iv) the stockholders of the Company shall approve:
(A) any merger, consolidation, or reorganization
of the Company:
(1) in which the Company is not the
continuing or surviving corporation,
(2) pursuant to which shares of common
stock of the Company would be
converted into cash, securities or
other property,
(3) with a corporation which prior to
such merger, consolidation, or
reorganization owned 20 percent or
more of the combined voting power of
the then-outstanding securities of
the Company, or
(4) in which the Company will not
survive as an independent,
publicly-owned corporation;
(B) any sale, lease, exchange or other transfer
(in one transaction or a series of related
transactions) of all or substantially all the
assets of the Company, or
(C) any liquidation or dissolution of the Company;
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(v) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(vi) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(vii) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(viii) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
of Directors of the Company cease for any reason to constitute a
majority of the Board of Directors of the Company, unless the election
or nomination for election by the Company's stockholders of each new
director during any such two-year period was approved by the vote of
two-thirds of the directors then still in office who were directors at
the beginning of such two-year period.
(e) Notwithstanding anything contained herein to the contrary, Company
reserves the right to, and shall, fund the Trust pursuant to the terms
and provisions of the Amended and Restated Plan.
SECTION 14
EFFECTIVE DATE
The effective date of the Original Trust Agreement was June 30, 1994. The
effective date of this Amended Trust Agreement shall be August 31, 1995.
IN WITNESS WHEREOF, the parties hereto have caused these presents to
be executed in its name and on its behalf by its proper officers thereunto
authorized on this 8th day of September, 1995, effective as of the 31st day
of August, 1995.
NATIONAL CONVENIENCE STORES
ATTEST: INCORPORATED
/s/ JANICE L. IVEY By: /s/ A. VAN ZANTEN
__________________ ________________________
Janice L. Ivey Name: Arnold Van Zanten
Assistant Secretary Title: Senior Vice President
of Administration
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<PAGE> 11
BANK ONE, TEXAS, N.A.
/s/ ROBERTA GROSSMAN By: /s/ ERIC PLANGMAN
____________________ ____________________
Trust Officer Name: Eric Plangman
Title: Vice President
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<PAGE> 12
APPENDIX A
Amended And Restated
National Convenience Stores Incorporated Officers' Retirement Plan
<PAGE> 13
APPENDIX B
AMENDED AND RESTATED
TRUST UNDER
NATIONAL CONVENIENCE STORES INCORPORATED
OFFICERS' RETIREMENT PLAN
Investment Guidelines
Permitted Instruments
1. U.S. Treasury Obligations and Agencies (Guaranteed by the U.S.
Government)
2. Commercial Paper
3. Corporate Notes
4. Certificate of Deposit and Time Deposits
5. Money Market Funds
6. National Convenience Stores Incorporated securities only to the extent
it is a de minimis amount held in common investment vehicles in which
the Trustee invests, as provided for in Section 5(a) of the Amended
Trust Agreement.
7. Mutual Funds
8. Common Stock or Preferred Stock
Special Provisions
1. Investments may only be made in U.S. domiciled banks, corporations and
money market funds.
2. Commercial paper may be purchased only if the issuer's commercial
paper is rated A1 or better and its long term debt is rated A+ or
better by Standard and Poor's.
3. Corporate notes may be purchased only from corporations whose senior
long term debt is rated AA or better by Standard and Poor's.
4. Certificates of deposit may be purchased only from banks whose senior
long term debt is rated AA or better by Standard & Poor's.
5. Time deposits may be made only in banks whose senior long term debt is
rated AA or better by Standard & Poor's.
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<PAGE> 14
6. All investments (except numbers 6, 7 and 8 of the Permitted
Instruments above) must be scheduled to mature within two (2) years of
the date of the investment.
7. The weighted average maturity of all investments (except numbers 6, 7
and 8 of the Permitted Instruments above) may not exceed one (1) year.
8. The maximum investment per issuer/obligor is 10% if the total
portfolio exceeds $1,000,000.00; 25% if the total portfolio is less
than or equal to $1,000,000.00 but greater than $100,000.00; 100% if
the total portfolio is less than or equal to $100,000.00.
9. Money market funds considered for investments must be subject to
quality and maturity guidelines no less restrictive than those
contained herein.
10. Stock and mutual funds are to be of high to superior investment
quality.
Trustee Discretionary Power
1. The Trustee shall have, with respect to the Trust, the power in its
discretion:
(a) To retain any property at any time received by it;
(b) To sell, exchange, convey, transfer, or dispose of, and to
grant options for the purchase or exchange with respect to,
any property at any time held by it, by public or private sale
for cash or on credit or partly for cash and partly upon
credit;
(c) To participate in any plan of reorganization, consolidation,
merger, combination, liquidation, or other similar plan or
oppose any such plan or any action thereunder, or any
contract, purchase, sale, or other action by any person or
corporation;
(d) To deposit any property with any protective, reorganization or
similar committee, to delegate discretionary power to any such
committee and to pay and agree to pay part of the expenses and
compensation of any such committee and any assessments levied
with respect to any property so deposited;
(e) To exercise all conversion and subscription rights pertaining
to any property;
(f) To extend the time of payment of any obligation held in the
Trust;
(g) To enter into stand-by agreements for future investment,
either with or without a stand-by fee; and
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<PAGE> 15
(h) To invest and reinvest all or any specified portion of the
Trust through the medium of any common, collective or
commingled Trust which has been or may hereafter be
established and maintained by the Trustee.
2. The Trustee shall have the power in its discretion:
(a) To exercise all voting rights with respect to the shares of
stock held in the Trust Fund and to grant proxies,
discretionary or otherwise;
(b) To cause any shares of stock to be registered and held in the
name of one or more of its nominees, or one or more nominees
of any system for the central handling of securities, without
increase or decrease of liability;
(c) To collect and receive any and all money and other property
due to the Trust and to give full discharge therefor;
(d) Subject to the provisions of Section 8 of the Amended Trust
Agreement, to settle, compromise or submit to arbitration any
claims, debts, or damages due or owing to or from the Trust;
to commence or defend suits or legal proceedings to protect
any interest of the Trust; and to represent the Trust in all
suits or legal proceedings in any court or before any other
body or tribunal;
(e) To organize under the laws of any state a corporation for the
purpose of acquiring and holding title to any property which
it is authorized to acquire under the Amended Trust Agreement
and to exercise with respect thereto any or all of the powers
set forth in the Amended Trust Agreement;
(f) Generally to do all acts, whether or not expressly authorized,
which the Trustee may deem necessary or desirable for the
protection of the Trust.
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<PAGE> 1
EXHIBIT 99.6
AMENDED AND RESTATED
NATIONAL CONVENIENCE STORES INCORPORATED
DIRECTORS' RETIREMENT PLAN
ARTICLE I
Definitions
As used herein, the following terms shall have the meanings indicated.
1.01 Board of Directors shall mean the Board of Directors of
National Convenience Stores Incorporated.
1.02 Change in Control of the Company shall mean the occurrence
with respect to the Company of any of the following events:
(i) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(ii) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(iii) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 20
percent or more of the combined voting power of the then-outstanding
securities of the Company (as determined under paragraph (d) of Rule
13d-3 promulgated under the Exchange Act, in the case of rights to
acquire common stock);
(iv) the stockholders of the Company shall approve:
<PAGE> 2
(A) any merger, consolidation, or reorganization
of the Company:
(1) in which the Company is not the
continuing or surviving corporation,
(2) pursuant to which shares of common
stock of the Company would be
converted into cash, securities or
other property,
(3) with a corporation which prior to
such merger, consolidation, or
reorganization owned 20 percent or
more of the combined voting power of
the then-outstanding securities of
the Company, or
(4) in which the Company will not
survive as an independent,
publicly-owned corporation;
(B) any sale, lease, exchange or other transfer
(in one transaction or a series of related
transactions) of all or substantially all the
assets of the Company, or
(C) any liquidation or dissolution of the Company;
(v) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(vi) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(vii) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(viii) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
of Directors of the Company cease for any reason to constitute a
majority of the Board of Directors of the Company, unless the election
or nomination for election by the Company's stockholders of each new
director during any such two-year period was approved by the vote of
two-thirds of the directors then still in office who were directors at
the beginning of such two-year period.
1.03 Committee shall mean the committee appointed to administer
the Plan.
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<PAGE> 3
1.04 Company shall mean National Convenience Stores Incorporated, a
Delaware corporation doing business under the laws of the State of Texas, or
any successor company thereto, or any of its affiliates or subsidiaries or
their successors.
1.05 Director shall mean any person serving on the Board of
Directors.
1.06 Director Service as of any date shall mean the number of
completed months of service as a non-employee Director and shall include
non-continuous periods of service and service prior to the Plan Restatement
Date.
1.07 Effective Date shall mean March 31, 1994.
1.08 Fee shall mean the then current annual retainer paid to a
Director as compensation for service on the Board of Directors immediately
prior to Retirement, but shall exclude amounts paid for expense reimbursement.
1.09 Guaranteed Period shall have the same meaning as Director
Service.
1.10 Participant shall mean any person eligible, pursuant to
Article II, to participate in the Plan.
1.11 Plan shall mean the National Convenience Stores Incorporated
Directors' Retirement Plan.
1.12 Plan Restatement Date shall mean August 31, 1995.
1.13 Plan Year shall mean the fiscal year of the Company.
1.14 Retirement shall mean the cessation by a Director of service
on the Board of Directors for any reason except death or as provided in Section
3.02 of the Plan.
1.15 Retirement Benefit shall mean 100% of the Fee divided by 12.
1.16 Trust shall mean the trust established pursuant to Section
6.03 of the Plan.
1.17 Any words herein used in the masculine shall be read and
construed in the feminine in all cases where they would so apply. Words in the
singular shall be read and construed as though used in the plural in all cases
where they would so apply.
ARTICLE II
Participation in the Plan
2.01 Participation in the Plan shall be limited to: (i) any person
who, on the Effective Date, is a Director and who is not an employee of the
Company; and, (ii) any person elected to the Board of Directors subsequent to
the Effective Date and who is not an employee of the Company.
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<PAGE> 4
2.02 Participation in the Plan shall commence as of the first day
of the month coincident with or immediately following the date a person is
elected a Director.
ARTICLE III
Retirement Benefit
3.01 A Director shall be entitled to receive, and the Company shall
pay to such Director, the Retirement Benefit commencing on the first day of the
month following Retirement and on the first day of each month thereafter, until
the expiration of the Guaranteed Period or until and including the date of the
death of the Director, whichever occurs first; provided, however, that if a
Director is married at the time of death and dies prior to the expiration of
the Guaranteed Period, 50% of the Retirement Benefit shall be paid to his
spouse on the first day of each month following the date of the Director's
death until the expiration of the Guaranteed Period or the death of the spouse,
whichever occurs first.
3.02 The benefits provided in the Plan shall be forfeited by a
Director if his service on the Board of Directors is terminated as a result of
any act of dishonesty, fraud, theft or embezzlement in connection with such
service as a Director and if the Director is convicted of such crime in a court
of competent jurisdiction.
ARTICLE IV
Payment Upon Director's Death
Upon the death of a Director, the surviving spouse, if any, shall be
entitled to receive a death benefit (i) equal to 50% of the Retirement Benefit
which the Director would have received had Retirement occurred on the date of
death and (ii) paid on the first day of the month next following the date of
death and on the first day of each month thereafter until the expiration of the
Guaranteed Period or the death of the spouse, whichever occurs first.
ARTICLE V
The Committee
5.01 The Board of Directors shall administer the Plan but may
delegate its responsibilities, other than its right to continue or amend the
Plan, to a Committee appointed by it. The Board of Directors may overrule any
decision of the Committee. The Committee, or in the absence of a Committee the
Board of Directors, shall be the Plan Administrator. The Company agrees to
indemnify and to hold harmless each person serving as Plan Administrator from
all liabilities and claims arising from the performance of his duties in
accordance with the terms of the Plan, unless such liability or expense results
from gross negligence or willful act or omission, or an act or omission
performed in bad faith. The Committee shall keep a permanent record of its
meetings and actions.
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<PAGE> 5
5.02 All members of the Committee shall be appointed by and serve
at the pleasure of the Board of Directors. No compensation shall be paid to
members of the Committee.
5.03 Subject to the limitations of the Plan, the Committee may
promulgate and adopt such rules, regulations and procedures for the transaction
of its business which it deems necessary for the proper administration of the
Plan. The Committee shall rely upon the records of the Company, as certified
to it, with respect to factual matters relating to a Participant. In the event
of a factual dispute, the Committee shall resolve such dispute by giving due
weight to the evidence available to it. The Committee shall interpret the Plan
in the administration and application thereof. All such determinations shall
be final, conclusive and binding, except to the extent that they are appealed
under the following procedure. In the event that the claim of any person shall
be denied as to all or any part of any payment or benefit under this Plan, the
Committee shall provide to the claimant (i) the reason or reasons for the
denial; (ii) reference to the Plan provisions on which the denial is based;
(iii) a description of additional material or information necessary for the
person to perfect the claim and an explanation of why such material or
information is necessary; and, (iv) an explanation of the Plan's claims
procedures.
The claimant shall have 60 days after receipt of the above material to
appeal the claim denial by the Committee to the Board of Directors for review.
The claimant may (i) request a review upon written notice to the Board of
Directors; (ii) review pertinent documents; and (iii) submit issues and
comments in writing.
The Board of Directors shall render its decision not later than 60
days after receipt of a request for review by the claimant, unless special
circumstances require an extension of time, in which event a decision shall be
rendered as soon as possible, but in not event later than 120 days after such
receipt. The Board of Directors' decision shall be written and shall include
the reasons for its decision with reference to the Plan provisions on which the
decision is based.
5.04 A Participant shall disqualify himself from voting on any
issue which pertains to his eligibility for any benefit under the Plan or the
amount of payment or any benefit for which he is eligible. Every decision and
action of the Board of Directors shall be binding.
5.05 The Committee may employ such counsel, accountants, actuaries
and agents as it shall deem advisable. The Company shall pay, or cause to be
paid, the compensation and other expenses of such counsel, accountants,
actuaries and agents incurred by the Committee in the administration of the
Plan.
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ARTICLE VI
Funding
6.01 The Company's obligation under the Plan shall be an unsecured
promise to pay.
6.02 The Plan shall not be construed so as to provide a Participant
or surviving spouse any greater rights than those of an unsecured creditor of
the Company. At no time shall a Participant or surviving spouse be deemed to
have any right, title, or interest in or to any specified asset or assets of
the Company.
6.03 To fund the benefits payable pursuant to the Plan, the Company
shall establish an irrevocable trust for the benefit of the Participants but
which shall be subject to the general claims of the Company's creditors. The
Company shall make contributions to the Trust during each Plan Year to fund the
Retirement Benefit on an actuarially sound basis. Immediately prior to a
Change in Control of the Company, the Company shall contribute to the Trust an
amount which, with the existing amounts in the Trust, shall be sufficient to
pay each Participant or surviving spouse all benefits, calculated as of the day
prior to the Change in Control of the Company, which are due to each such
person under the terms and provisions of the Plan. If the assets of the Trust
are insufficient to make any payments required under the Plan, the Company
shall make up such deficit from its assets. Upon termination of the Trust, if
all benefits required to be paid pursuant to the Plan have been paid, any
assets which remain shall be paid to the Company.
ARTICLE VII
Reservation of Rights by the Company
and Limitations on Rights of Participants
7.01 Nothing contained in the Plan shall be deemed to provide a
Participant the right to be retained as a Director or to interfere with the
right of the stockholders of the Company, pursuant to the By-laws, to remove a
Director.
7.02 The benefits provided by the Plan are granted by the Company
as a fringe benefit to the Participants. No Participants in the Plan has any
option to take any current payment in lieu of the benefits provided by the
Plan.
7.03 None of the benefits under the Plan shall be subject to the
claims of creditors of Participants or surviving spouses, and shall not be
subject to attachment, garnishment, or any other legal process. Neither a
Participant nor surviving spouse may assign, sell, or otherwise encumber any
beneficial interest in the Plan, nor shall any such benefits be in any manner
liable for or subject to the deeds, contracts, liabilities, engagements or
torts of any Participant or surviving spouse.
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<PAGE> 7
7.04 The Company shall withhold from any benefit payments due under
the Plan all federal, state or local taxes required to be withheld therefrom as
determined by the Company in its sole, good faith judgment.
ARTICLE VIII
Amendments
The Board of Directors reserves the right to modify or amend, in whole
or in part, any or all of the provisions of the Plan, including the right to
make any such modifications or amendments effective retroactively, at any time
and from time-to-time, without the consent of Participants or surviving spouses
or any person or persons claiming through them; provided, however, that no
modification or amendment shall be made which would have the effect, in any
way, of diminishing, limiting, modifying or restricting any right or benefit,
which had accrued through the effective date of such modification or amendment,
to a Participant or surviving spouse.
ARTICLE IX
Discontinuation
The Board of Directors reserves the right to discontinue the Plan at
any time, without the consent of Participants or surviving spouses or any
person or persons claiming through them; provided, however, that
discontinuation of the Plan shall not have the effect, in any way, of
diminishing, limiting, modifying or restricting any right or benefit, which had
accrued through the effective date of such discontinuation, to a Participant or
a surviving spouse.
ARTICLE X
Miscellaneous
10.01 The provisions of the Plan shall bind and inure to the benefit
of the Company and its successors and assigns. The term successors as used
herein shall include any corporate or business entity which shall, whether by
merger, consolidation, purchase or otherwise acquire all or substantially all
of the business or assets of the Company and successors of any such corporation
or other business entity.
10.02 Any headings or subheadings in the Plan are inserted for
convenience of reference only and are to be ignored in the construction of any
provision hereof.
10.03 This Plan shall be construed in accordance with the laws of
the State of Texas.
10.04 In case any provision of the Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions of the Plan, and the Plan shall be construed and enforced
as if such illegal and invalid provisions had never been inserted herein.
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<PAGE> 8
10.05 Any notice or filing required or permitted to be given to the
Company under the Plan shall be sufficient if in writing and hand delivered, or
sent by registered or certified mail, to the Secretary of the Company at 100
Waugh Drive, Houston, Texas 77007. Such notice shall be deemed given as of the
date of delivery or, if delivery is made by mail, as of the date shown on the
receipt for registration or certification.
IN WITNESS WHEREOF, National Convenience Stores Incorporated has caused
this Amended and Restated National Convenience Stores Incorporated Directors'
Retirement Plan to be executed in its name and on its behalf by its proper
officers thereto authorized on this 14th day of September, 1995, effective as
of the 31st day of August, 1995.
NATIONAL CONVENIENCE STORES
INCORPORATED
/s/ A. J. GALLERANO
By:_____________________________________
A. J. Gallerano
Senior Vice President,
General Counsel and Secretary
-8-
<PAGE> 1
EXHIBIT 99.7
AMENDED AND RESTATED
TRUST UNDER
NATIONAL CONVENIENCE STORES INCORPORATED
DIRECTORS' RETIREMENT PLAN
This agreement made and effective as of the 31st day of August, 1995,
by and between National Convenience Stores Incorporated ("Company") and Bank
One, Texas, N.A. ("Trustee") ("Amended Trust Agreement").
WHEREAS, Company adopted the National Convenience Stores Incorporated
Directors' Retirement Plan ("Original Plan"); and,
WHEREAS, Company incurred or expected to incur liability under the
terms of the Original Plan with respect to the individuals participating
therein; and,
WHEREAS, Company established a trust ("Trust") under the terms of that
agreement between Company and Trustee entitled Trust Under National Convenience
Stores Incorporated Directors' Retirement Plan dated June 30, 1994 ("Original
Trust Agreement"), and contributed to the Trust assets to be held therein,
subject to the claims of Company's creditors in the event of Company's
Insolvency, as therein defined, until paid to participants in the Original Plan
and their beneficiaries in such manner and at such times as specified in the
Original Plan; and,
WHEREAS, the Original Plan has now been amended and restated by the
Company in that Amended and Restated National Convenience Stores Incorporated
Directors' Retirement Plan ("Amended and Restated Plan") adopted by the
Company, a copy of which is attached hereto as Appendix A and Company intends
for the Trust to apply to the Amended and Restated Plan as it has applied to
the Original Plan; and,
WHEREAS, it is the intention of the parties that the Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Amended and Restated Plan as an unfunded plan maintained for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees for purposes of Title I of the Employee Retirement Income
Security Act of 1974; and,
WHEREAS, it is the intention of Company to make contributions to the
Trust to provide itself with a source of funds to assist it in meeting its
liabilities under the Amended and Restated Plan.
NOW, THEREFORE, the parties do hereby agree that the Trust shall be
comprised, held and disposed of in connection with the Amended and Restated
Plan as follows:
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<PAGE> 2
SECTION 1
ESTABLISHMENT OF TRUST
(a) Company has deposited with Trustee in trust funds which have become
the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Amended Trust Agreement.
(b) The Trust shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as
amended, and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of Amended and Restated Plan
participants and general creditors as herein set forth. Amended and
Restated Plan participants and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any
assets of the Trust. Any rights created under the Amended and
Restated Plan and this Amended Trust Agreement shall be mere unsecured
contractual rights of Amended and Restated Plan participants and their
beneficiaries against Company. Any assets held by the Trust will be
subject to the claims of Company's general creditors under federal and
state law in the event of Insolvency, as defined in Section 3(a)
herein.
(e) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in trust with
Trustee to augment the principal to be held, administered and disposed
of by Trustee as provided in this Amended Trust Agreement. Neither
Trustee nor any Amended and Restated Plan participant or beneficiary
shall have any right to compel such additional deposits.
SECTION 2
PAYMENTS TO AMENDED AND RESTATED PLAN PARTICIPANTS
AND THEIR BENEFICIARIES
(a) Company shall deliver to Trustee a schedule ("Payment Schedule") that
indicates the amounts payable in respect of each Amended and Restated
Plan participant (and his or her beneficiaries), that provides a
formula or other instructions acceptable to Trustee for determining
the amounts so payable, the form in which such amount is to be paid
(as provided for or available under the Amended and Restated Plan),
and the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the Amended
and Restated Plan participants and their beneficiaries in accordance
with such Payment Schedule. The Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that
may be
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<PAGE> 3
required to be withheld with respect to the payment of benefits
pursuant to the terms of the Amended and Restated Plan and shall pay
amounts withheld to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by Company.
(b) The entitlement of an Amended and Restated Plan participant or his
beneficiaries to benefits under the Amended and Restated Plan shall be
determined by Company or such party as it shall designate under the
Amended and Restated Plan, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Amended
and Restated Plan.
(c) Company may make payment of benefits directly to Amended and Restated
Plan participants or their beneficiaries as they become due under the
terms of the Amended and Restated Plan. Company shall notify Trustee
of its decision to make payment of benefits directly prior to the time
amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon, are
not sufficient to make payments of benefits in accordance with the
terms of the Amended and Restated Plan, Company shall make the balance
of each such payment as it falls due. Trustee shall notify Company
where principal and earnings are not sufficient.
SECTION 3
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS
TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT
(a) Trustee shall cease payment of benefits to Amended and Restated Plan
participants and their beneficiaries if the Company is Insolvent.
Company shall be considered "Insolvent" for purposes of this Amended
Trust Agreement if (i) Company is unable to pay its debts as they
become due, or (ii) Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of the Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be
subject to claims of general creditors of Company under federal and
state law as set forth below:
(1) The Board of Directors and the Chief Executive Officer of
Company shall have the duty to inform Trustee in writing of
Company's Insolvency. If a person claiming to be a creditor
of Company alleges in writing to Trustee that Company has
become Insolvent, Trustee shall determine whether Company is
Insolvent and, pending such determination, Trustee shall
discontinue payment of benefits to Amended and Restated Plan
participants or their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's Insolvency,
or has received notice from Company or a person claiming to be
a creditor alleging that Company is Insolvent, Trustee shall
have no duty to inquire
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<PAGE> 4
whether Company is Insolvent. Trustee may in all events rely
on such evidence concerning Company's solvency as may be
furnished to Trustee and that provides Trustee with a
reasonable basis for making a determination concerning
Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Amended and
Restated Plan participants or their beneficiaries and shall
hold the assets of the Trust for the benefit of Company's
general creditors. Nothing in this Amended Trust Agreement
shall in any way diminish any rights of Amended and Restated
Plan participants or their beneficiaries to pursue their
rights as general creditors of Company with respect to
benefits due under the Amended and Restated Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Amended and
Restated Plan participants or their beneficiaries in
accordance with Section 2 of this Amended Trust Agreement only
after Trustee has determined that Company is not Insolvent (or
is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due
to Amended and Restated Plan participants or their beneficiaries under
the terms of the Amended and Restated Plan for the period of such
discontinuance, less the aggregate amount of any payments made to
Amended and Restated Plan participants or their beneficiaries by
Company in lieu of the payments provided for hereunder during any such
period of discontinuance.
SECTION 4
PAYMENTS TO COMPANY
Except as provided in Section 3 hereof, after Trust has become irrevocable,
Company shall have no right or power to direct Trustee to return to Company or
to divert to others any of the Trust assets before all payments of benefits
have been made to Amended and Restated Plan participants and their
beneficiaries pursuant to the terms of the Amended and Restated Plan.
SECTION 5
INVESTMENT AUTHORITY
(a) In no event may Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by Company, other than
a de minimis amount held in common investment vehicles in which
Trustee invests. All rights associated with assets of the Trust shall
be exercised by Trustee or the person designated
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<PAGE> 5
by Trustee, and shall in no event be exercisable by or rest with
Amended and Restated Plan participants.
(b) The Trustee shall have the power to invest and reinvest the Trust in
accordance with the "Investment Guidelines" attached hereto as
Appendix B, as directed by the Board of Directors of the Company or by
the Committee appointed by it.
SECTION 6
DISPOSITION OF INCOME
During the term of the Trust, all income received by the Trust, net of expenses
and taxes, shall be accumulated and reinvested.
SECTION 7
ACCOUNTING BY TRUSTEE
Trustee shall keep accurate and detailed records of all investments, receipts,
disbursements, and all other transactions required to be made, including such
specific records as shall be agreed upon in writing between Company and
Trustee. Within sixty (60) days following the close of each calendar year and
within sixty (60) days after the removal or resignation of Trustee, Trustee
shall deliver to Company a written account of its administration of the Trust
during such year or during the period from the close of the last preceding year
to the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold with the cost
or net proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other property
held in the Trust at the end of such year or as of the date of such removal or
resignation, as the case may be.
SECTION 8
RESPONSIBILITY OF TRUSTEE
(a) Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however,
that Trustee shall incur no liability to any person for any action
taken pursuant to a direction, request or approval given by Company
which is contemplated by, and in conformity with, the terms of the
Amended and Restated Plan or the Trust and is given in writing by
Company. In the event of a dispute between Company and a party,
Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
(b) If Trustee undertakes or defends any litigation arising in connection
with the Trust, Company agrees to indemnify Trustee against Trustee's
costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses)
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relating thereto and to be primarily liable for such payments. If
Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations
hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an
asset of the Trust, Trustee shall have no power to name a beneficiary
of the policy other than the Trust, to assign the policy (as distinct
from conversion of the policy to a different form) other than to a
successor Trustee, or to loan to any person the proceeds of any
borrowing against such policy.
(f) However, notwithstanding the provisions of Section 8(e) above, Trustee
may loan to Company the proceeds of any borrowing against an insurance
policy held as an asset of the Trust.
(g) Notwithstanding any powers granted to Trustee pursuant to this Amended
Trust Agreement or to applicable law, Trustee shall not have any power
that could give the Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of section 301.7701-2
of the Procedure and Administrative Regulations promulgated pursuant
to the Internal Revenue Code.
SECTION 9
COMPENSATION AND EXPENSES OF TRUSTEE
Company shall pay all administrative and Trustee's fees and expenses. If not
so paid, the fees and expenses shall be paid from the Trust.
SECTION 10
RESIGNATION AND REMOVAL OF TRUSTEE
(a) Trustee may resign at any time by written notice to Company, which
shall be effective ninety (90) days after receipt of such notice
unless Company and Trustee agree otherwise.
(b) Trustee may be removed by Company on thirty (30) days notice or upon
shorter notice accepted by Trustee.
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(c) Upon a Change of Control, as defined herein, Trustee may not be
removed by Company for two (2) years.
(d) If Trustee resigns or is removed within two (2) years of a Change of
Control, as defined herein, Trustee shall select a successor Trustee
in accordance with the provisions of Section 11(b) hereof prior to the
effective date of Trustee's resignation or removal.
(e) Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within thirty (30) days
after receipt of notice of resignation, removal or transfer, unless
Company extends the time limit.
(f) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraphs (a) or (b) of this Section.
If no such appointment has been made, Trustee may apply to a court of
competent jurisdiction for appointment of a successor or for
instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
SECTION 11
APPOINTMENT OF SUCCESSOR
(a) If Trustee resigns or is removed in accordance with Section 10(a) or
(b) hereof, Company may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers
under state law, as a successor to replace Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing
by the new Trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the trust assets. The
former Trustee shall execute any instrument necessary or reasonably
requested by Company or the successor Trustee to evidence the
transfer.
(b) If Trustee resigns or is removed pursuant to the provisions of Section
10(d) hereof and selects a successor Trustee, Trustee may appoint any
third party, such as a bank trust department or other party that may
be granted corporate trustee powers under state law. The appointment
of a successor Trustee shall be effective when accepted in writing by
the new Trustee. The new Trustee shall have all the rights and powers
of the former Trustee, including ownership rights in trust assets.
The former Trustee shall execute any instrument necessary or
reasonably requested by the successor Trustee to evidence the
transfer.
(c) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets,
subject to Sections 7 and 8 hereof. The successor Trustee shall not
be responsible for and Company shall indemnify and defend the
successor Trustee from any claim or liability
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<PAGE> 8
resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes
successor Trustee.
SECTION 12
AMENDMENT OR TERMINATION
(a) This Amended Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no
such amendment shall conflict with the terms of the Amended and
Restated Plan or shall make the Trust revocable after it has become
irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which Amended and
Restated Plan participants and their beneficiaries are no longer
entitled to benefits pursuant to the terms of the Amended and Restated
Plan. Upon termination of the Trust any assets remaining in the Trust
shall be returned to Company.
(c) Section 1 through Section 14, inclusive, of this Amended Trust
Agreement may not be amended by Company for five (5) years following a
Change of Control, as defined herein.
SECTION 13
MISCELLANEOUS
(a) Any provision of this Amended Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition, without
invalidating the remaining provisions hereof.
(b) Benefits payable to Amended and Restated Plan participants and their
beneficiaries under this Amended Trust Agreement may not be
anticipated, assigned (either at law or in equity), alienated,
pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Amended Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
(d) Change of Control shall mean the occurrence with respect to the
Company of any of the following events:
(i) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act),
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<PAGE> 9
directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(ii) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(iii) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 20
percent or more of the combined voting power of the then-outstanding
securities of the Company (as determined under paragraph (d) of Rule
13d-3 promulgated under the Exchange Act, in the case of rights to
acquire common stock);
(iv) the stockholders of the Company shall approve:
(A) any merger, consolidation, or reorganization
of the Company:
(1) in which the Company is not the
continuing or surviving corporation,
(2) pursuant to which shares of common
stock of the Company would be
converted into cash, securities or
other property,
(3) with a corporation which prior to
such merger, consolidation, or
reorganization owned 20 percent or
more of the combined voting power of
the then-outstanding securities of
the Company, or
(4) in which the Company will not
survive as an independent,
publicly-owned corporation;
(B) any sale, lease, exchange or other transfer
(in one transaction or a series of related
transactions) of all or substantially all the
assets of the Company, or
(C) any liquidation or dissolution of the Company;
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<PAGE> 10
(v) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(vi) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(vii) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(viii) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
of Directors of the Company cease for any reason to constitute a
majority of the Board of Directors of the Company, unless the election
or nomination for election by the Company's stockholders of each new
director during any such two-year period was approved by the vote of
two-thirds of the directors then still in office who were directors at
the beginning of such two-year period.
(e) Notwithstanding anything contained herein to the contrary, Company
reserves the right to, and shall, fund the Trust pursuant to the terms
and provisions of the Amended and Restated Plan.
SECTION 14
EFFECTIVE DATE
The effective date of the Original Trust Agreement was June 30, 1994. The
effective date of this Amended Trust Agreement shall be August 31, 1995.
IN WITNESS WHEREOF, the parties hereto have caused these presents to
be executed in its name and on its behalf by its proper officers thereunto
authorized on this 8th day of September, 1995, effective as of the 31st day
of August, 1995.
NATIONAL CONVENIENCE STORES
ATTEST: INCORPORATED
/s/ JANICE L. IVEY By: /s/ A. VAN ZANTEN
________________________________ ___________________________________
Janice L. Ivey Name: Arnold Van Zanten
Assistant Secretary Title: Administration
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<PAGE> 11
BANK ONE, TEXAS, N.A.
/s/ ROBERTA GROSSMAN By: /s/ ERIC PLANGMAN
_______________________________ __________________________________
Trust Officer Name: Eric Plangman
Title: Vice President
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<PAGE> 12
APPENDIX A
Amended And Restated
National Convenience Stores Incorporated Directors' Retirement Plan
<PAGE> 13
APPENDIX B
AMENDED AND RESTATED
TRUST UNDER
NATIONAL CONVENIENCE STORES INCORPORATED
DIRECTORS' RETIREMENT PLAN
Investment Guidelines
Permitted Instruments
1. U.S. Treasury Obligations and Agencies (Guaranteed by the U.S.
Government)
2. Commercial Paper
3. Corporate Notes
4. Certificate of Deposit and Time Deposits
5. Money Market Funds
6. National Convenience Stores Incorporated securities only to the extent
it is a de minimis amount held in common investment vehicles in which
the Trustee invests, as provided for in Section 5(a) of the Amended
Trust Agreement.
7. Mutual Funds
8. Common Stock or Preferred Stock
Special Provisions
1. Investments may only be made in U.S. domiciled banks, corporations and
money market funds.
2. Commercial paper may be purchased only if the issuer's commercial
paper is rated A1 or better and its long term debt is rated A+ or
better by Standard and Poor's.
3. Corporate notes may be purchased only from corporations whose senior
long term debt is rated AA or better by Standard and Poor's.
4. Certificates of deposit may be purchased only from banks whose senior
long term debt is rated AA or better by Standard & Poor's.
5. Time deposits may be made only in banks whose senior long term debt is
rated AA or better by Standard & Poor's.
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<PAGE> 14
6. All investments (except numbers 6, 7 and 8 of the Permitted
Instruments above) must be scheduled to mature within two (2) years of
the date of the investment.
7. The weighted average maturity of all investments (except numbers 6, 7
and 8 of the Permitted Instruments above) may not exceed one (1) year.
8. The maximum investment per issuer/obligor is 10% if the total
portfolio exceeds $1,000,000.00; 25% if the total portfolio is less
than or equal to $1,000,000.00 but greater than $100,000.00; 100% if
the total portfolio is less than or equal to $100,000.00.
9. Money market funds considered for investments must be subject to
quality and maturity guidelines no less restrictive than those
contained herein.
10. Stock and mutual funds are to be of high to superior investment
quality.
Trustee Discretionary Power
1. The Trustee shall have, with respect to the Trust, the power in its
discretion:
(a) To retain any property at any time received by it;
(b) To sell, exchange, convey, transfer, or dispose of, and to
grant options for the purchase or exchange with respect to,
any property at any time held by it, by public or private sale
for cash or on credit or partly for cash and partly upon
credit;
(c) To participate in any plan of reorganization, consolidation,
merger, combination, liquidation, or other similar plan or
oppose any such plan or any action thereunder, or any
contract, purchase, sale, or other action by any person or
corporation;
(d) To deposit any property with any protective, reorganization or
similar committee, to delegate discretionary power to any such
committee and to pay and agree to pay part of the expenses and
compensation of any such committee and any assessments levied
with respect to any property so deposited;
(e) To exercise all conversion and subscription rights pertaining
to any property;
(f) To extend the time of payment of any obligation held in the
Trust;
(g) To enter into stand-by agreements for future investment,
either with or without a stand-by fee; and
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<PAGE> 15
(h) To invest and reinvest all or any specified portion of the
Trust through the medium of any common, collective or
commingled Trust which has been or may hereafter be
established and maintained by the Trustee.
2. The Trustee shall have the power in its discretion:
(a) To exercise all voting rights with respect to the shares of
stock held in the Trust Fund and to grant proxies,
discretionary or otherwise;
(b) To cause any shares of stock to be registered and held in the
name of one or more of its nominees, or one or more nominees
of any system for the central handling of securities, without
increase or decrease of liability;
(c) To collect and receive any and all money and other property
due to the Trust and to give full discharge therefor;
(d) Subject to the provisions of Section 8 of the Amended Trust
Agreement, to settle, compromise or submit to arbitration any
claims, debts, or damages due or owing to or from the Trust;
to commence or defend suits or legal proceedings to protect
any interest of the Trust; and to represent the Trust in all
suits or legal proceedings in any court or before any other
body or tribunal;
(e) To organize under the laws of any state a corporation for the
purpose of acquiring and holding title to any property which
it is authorized to acquire under the Amended Trust Agreement
and to exercise with respect thereto any or all of the powers
set forth in the Amended Trust Agreement;
(f) Generally to do all acts, whether or not expressly authorized,
which the Trustee may deem necessary or desirable for the
protection of the Trust.
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<PAGE> 1
EXHIBIT 99.8
TWENTY-SECOND AMENDMENT TO
NATIONAL CONVENIENCE STORES INCORPORATED
PROFIT SHARING PLAN AND TRUST
W I T N E S S E T H
National Convenience Stores Incorporated ("Company") has adopted,
effective July 1, 1968, the National Convenience Stores Incorporated Profit
Sharing Plan and Trust ("Plan"). Section 16 of the Plan permits the Company to
amend the Plan. Pursuant to the provisions of Section 16 of the Plan, the
Company hereby amends the Plan as follows:
1. The first sentence of Article III, Section 3.1 is amended to read as
follows:
3.1 Deferral Contributions. For each Plan Year beginning with the
first Plan Year with respect to which this Plan is adopted by a
Signatory Company, each Participant employed by such Signatory
Company may elect to have allocated to his Account as a Deferral
Contribution any whole percentage from one percent (1%) to fifteen
percent (15%) of his Considered Compensation for the Plan Year;
provided, however, that for the purposes of satisfying IRS
regulations the Committee in its discretion may limit the percentage
deferred by any Participant.
2. The first sentence of Article III, Section 3.4 is amended to read as
follows:
3.4 After-Tax Employee Contributions. For each Plan Year
beginning with the first Plan Year with respect to which this Plan is
adopted by a Signatory Company, each Participant employed by such
Signatory Company may elect to have allocated to his Account as an
After-Tax Employee Contribution in two percent (2%) increments from
two percent (2%) to six percent (6%) of his Considered Compensation
for the Plan Year; provided, however, that for the purposes of
satisfying IRS regulations the Committee in its discretion may limit
the percentage allocated by any Participant.
IN WITNESS WHEREOF, the Company has caused this Twenty-Second
Amendment to be executed in its name and on its behalf by the proper officers
hereto duly authorized this 25th day of July, 1995, effective as of
July 1, 1995.
ATTEST: NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A. J. GALLERANO, L.S. By: /s/ V. H. VAN HORN
---------------------------- -----------------------------------
A. J. Gallerano, Secretary V. H. Van Horn, President
<PAGE> 1
EXHIBIT 99.9
DIRECTOR AGREEMENT
THIS DIRECTOR AGREEMENT (this Agreement") is executed effective as of
August 31, 1995 (the "Effective Date"), by and between NATIONAL CONVENIENCE
STORES INCORPORATED, a Delaware corporation (the "Company"), and
______________________ ("Director").
R E C I T A L S:
A. Director was elected a director of the Company to serve as
such until the Company's ____ Annual Meeting of Stockholders, or until
Director's successor has been elected.
B. The Board of Directors of the Company (the "Board of
Directors") has authorized the President of the Company to enter into a written
agreement with Director regarding and formalizing (i) the compensation and
other amounts to be paid Director in connection with Director's service on the
Board of Directors, and (ii) certain other matters relating to Director's
service on the Board of Directors.
W I T N E S S E T H:
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Director hereby agree as follows:
ARTICLE I
COMPENSATION AND RELATED ITEMS
1.1 Compensation. As compensation and consideration for Director
serving on the Board of Directors and/or serving on any committee of the Board
of Directors, the Company agrees to pay Director, and Director agrees to
accept, such compensation as may be approved from time to time by the Board of
Directors, including, but not limited to, any retirement plans and programs,
stock option agreements, and any medical, prescription, dental, disability,
individual life, group life, and accidental death and travel insurance plans,
programs and policies.
1.2 Expenses. The Company agrees that, during Director's term on
the Board of Directors, Director shall be allowed reasonable and necessary
business expenses in connection with his serving on the Board of Directors
and/or serving on any committee of the Board of Directors within guidelines
established by the Board of Directors ("Business Expenses"). Company will
promptly reimburse Director for all Business Expenses incurred by Director upon
Director's presentation to the Company of an itemized account thereof, together
with receipts, vouchers, or other supporting documentation. After the
expiration of Director's term on the Board of Directors, however such
expiration may come about, Director shall have ninety (90) days to submit for
reimbursement Business Expenses incurred by Director.
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<PAGE> 2
1.3 Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or any of its affiliates to or for the benefit of
Director, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (any such payments or distributions
being individually referred to herein as a "Payment," and any two or more of
such payments or distributions being referred to herein as "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") (such excise tax, together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such excise tax, and any interest in respect of such penalties,
additions to tax or additional amounts, being collectively referred herein to
as the "Excise Tax"), then Director shall be entitled to receive an additional
payment or payments (individually referred to herein as a "Gross-Up Payment"
and any two or more of such additional payments being referred to herein as
"Gross-Up Payments") in an amount such that after payment by Director of all
taxes (as hereinafter defined) imposed upon the Gross-Up Payment, Director
retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
(b) Subject to the provisions of Section 1.3(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 1.3, including whether a Gross-Up Payment is required and
the amount of such Gross-Up Payment, shall initially be made, at the Company's
expense, by nationally recognized tax counsel mutually acceptable to the
Company and Director (the "Tax Counsel"). Tax Counsel shall provide detailed
supporting legal authorities, calculations, and documentation both to the
Company and Director within 15 business days of the termination of Director's
employment, if applicable, or such other time or times as is reasonably
requested by the Company or Director. If Tax Counsel makes the initial
determination that no Excise Tax is payable by Director with respect to a
Payment or Payments, it shall furnish Director with an opinion reasonably
acceptable to Director that no Excise Tax will be imposed with respect to any
such Payment or Payments. Director shall have the right to dispute a
Determination (a "Dispute") within 15 business days after delivery of Tax
Counsel's opinion with respect to such Determination. The Gross-Up Payment, if
any, as determined pursuant to such Determination shall be paid by the Company
to Director within five business days of Director's receipt of such
Determination. The existence of a Dispute shall not in any way affect
Director's right to receive the Gross-Up Payment in accordance with the
Determination. If there is no Dispute, the Determination shall be binding,
final and conclusive upon the Company and Director, subject in all respects,
however, to the provisions of Section 1.3(c) through (i) below. As a result of
the uncertainty in the application of Sections 4999 and 280G of the Code, it is
possible that Gross-Up Payments (or portions thereof) which will not have been
made by the Company should have been made ("Underpayment"), and if upon any
reasonable written request from Director or the Company or upon the Tax
Counsel's own initiative, Tax Counsel, at the Company's expense, thereafter
determines that Director is required to make a payment of any Excise Tax or any
additional Excise Tax, as the case may be, Tax Counsel shall determine, at the
Company's expense, the amount of the Underpayment that has
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<PAGE> 3
occurred and any such Underpayment shall be promptly paid by the Company to the
Director.
(c) The Company shall defend, hold harmless, and
indemnify Director on a fully grossed-up after tax basis from and against any
and all claims, losses, liabilities, obligations, damages, impositions,
assessments, demands, judgements, settlements, costs and expenses (including
reasonable attorneys', accountants', and experts' fees and expenses) with
respect to any tax liability of the Director resulting from any Final
Determination (as hereinafter defined) that any Payment is subject to the
Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending
or threatened audit, examination, investigation or administrative, court or
other proceeding which, if pursued successfully, could result in or give rise
to a claim by Director against the Company under this Section 1.3 ("Claim"),
including, but not limited to, a claim for indemnification of Director by the
Company under Section 1.3(c), then such party shall promptly notify the other
party hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Director ("Director
Claim"), the Director shall take or cause to be taken such action in connection
with contesting such Director Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide
that the Company shall be solely responsible for the payment of any and all
fees and disbursements of such counsel and any experts) and the execution of
powers of attorney, provided that:
(i) within 30 calendar days after the Company
receives or delivers, as the case may be, the Tax Claim Notice
relating to such Director Claim (or such earlier date that any
payment of the taxes claimed is due from Director, but in no
event sooner than five calendar days after the Company
receives or delivers such Tax Claim Notice), the Company shall
have notified the Director in writing ("Election Notice") that
the Company does not dispute its obligations (including, but
not limited to, its indemnity obligations) under this
Agreement and that the Company elects to contest, and to
control the defense or prosecution of, such Director Claim at
the Company's sole risk and sole cost and expense; and
(ii) the Company shall have advanced to Director
on an interest-free basis, the total amount of the tax claimed
in order for Director, at the Company's request, to pay or
cause to be paid the tax claimed, file a claim for refund of
such tax and, subject to the provisions of the last sentence
of Section 1.3(g), sue for a refund of such tax if such claim
for refund is disallowed by the appropriate taxing authority
(it being understood and agreed by the parties hereto that the
Company shall only be entitled to sue for a refund and the
Company shall not be entitled to initiate any
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<PAGE> 4
proceeding in, for example, United States Tax Court) and shall
indemnify and hold Director harmless, on a fully grossed-up
after tax basis, from any tax imposed with respect to such
advance or with respect to any imputed income with respect
to such advance; and
(iii) the Company shall reimburse Director for any
and all costs and expenses resulting from any such request by
the Company and shall indemnify and hold Director harmless, on
fully grossed-up after-tax basis, from any tax imposed as a
result of such reimbursement.
(f) Subject to the provisions of Section 1.3(e) hereof,
the Company shall have the right to defend or prosecute, at the sole cost,
expense and risk of the Company, such Director Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
the Company to a Final Determination; provided, however, that (i) the Company
shall not, without Director's prior written consent, enter into any compromise
or settlement of such Director Claim that would adversely affect the Director,
(ii) any request from the Company to Director regarding any extension of the
statute of limitations relating to assessment, payment, or collection of taxes
for the taxable year of Director with respect to which the contested issues
involved in, and amount of, the Director Claim relate is limited solely to such
contested issues and amount, and (iii) the Company's control of any contest or
proceeding shall be limited to issues with respect to the Director Claim and
Director shall be entitled to settle or contest, in his sole and absolute
discretion, any other issue raised by the Internal Revenue Service or any other
taxing authority. So long as the Company is diligently defending or
prosecuting such Director Claim, Director shall provide or cause to be provided
to the Company any information reasonably requested by the Company that relates
to such Director Claim, and shall otherwise cooperate with the Company and its
representatives in good faith in order to contest effectively such Director
Claim. The Company shall keep Director informed of all developments and events
relating to any such Director Claim (including, without limitation, providing
to Director copies of all written materials pertaining to any such Director
Claim), and Director or his authorized representatives shall be entitled, at
Director's expense, to participate in all conferences, meetings and proceedings
relating to any such Director Claim.
(g) If, after actual receipt by Director of an amount of
a tax claimed (pursuant to an Director Claim) that has been advanced by the
Company pursuant to Section 1.3(e)(ii) hereof, the extent of the liability of
the Company hereunder with respect to such tax claimed has been established by
a Final Determination, Director shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, the Director
with respect to such tax (together with any interest paid or credited thereon
by the taxing authority and any recovery of legal fees from such taxing
authority related thereto), except to the extent that any amounts are then due
and payable by the Company to Director, whether under the provisions of this
Agreement or otherwise. If, after the receipt by Director of an amount
advanced by the Company pursuant to Section 1.3(e)(ii), a determination is made
by the Internal Revenue Service or other appropriate taxing authority that
Director shall not be entitled to any refund with respect to such tax claimed
and the Company does not notify Director in writing of its intent to contest
such denial of refund prior to the
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<PAGE> 5
expiration of thirty days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of any Gross-Up Payments and
other payments required to be paid hereunder.
(h) With respect to any Director Claim, if the Company
fails to deliver an Election Notice to Director within the period provided in
Section 1.3(e)(i) hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Section 1.3(e)(ii) and (iii) and
(f) hereof, then Director shall at any time thereafter have the right (but not
the obligation), at his election and in his sole and absolute discretion, to
defend or prosecute, at the sole cost, expense and risk of the Company, such
Director Claim. Director shall have full control of such defense or
prosecution and such proceedings, including any settlement or compromise
thereof. If requested by Director, the Company shall cooperate, and shall
cause its affiliates to cooperate, in good faith with Director and his
authorized representatives in order to contest effectively such Director Claim.
The Company may attend, but not participate in or control, any defense,
prosecution, settlement or compromise of any Director Claim controlled by
Director pursuant to this Section 1.3 and shall bear its own costs and expenses
with respect thereto. In the case of any Director Claim that is defended or
prosecuted by Director, Director shall, from time to time, be entitled to
current payment, on a fully grossed-up after tax basis, from the Company with
respect to costs and expenses incurred by Director in connection with such
defense or prosecution.
(i) In the case of any Director Claim that is defended or
prosecuted to a Final Determination pursuant to the terms of this Section 1.3,
the Company shall pay, on a fully grossed-up after tax basis, to Director in
immediately available funds the full amount of any taxes arising or resulting
from or incurred in connection with such Director Claim that have not
theretofore been paid by the Company to Director, together with the costs and
expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by the Company to Director,
within ten calendar days after such Final Determination. In the case of any
Director Claim not covered by the preceding sentence, the Company shall pay, on
a fully grossed-up after tax basis, to Director in immediately available funds
the full amount of any taxes arising or resulting from or incurred in
connection with such Director Claim at least ten calendar days before the date
payment of such taxes is due from Director, except where payment of such taxes
is sooner required under the provisions of this Section 1.3, in which case
payment of such taxes (and payment, on a fully grossed-up after tax basis, of
any costs and expenses required to be paid under this Section 1.3) shall be
made within the time and in the manner otherwise provided in this Section 1.3.
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment
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<PAGE> 6
of tax unless a suit is filed on a timely basis; or (D) any final disposition
by reason of the expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including, but not
limited to, any and all Excise Taxes, income taxes, and employment taxes),
together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such tax and any interest in respect of such
penalties, additions to tax or additional amounts.
(l) For purposes of this Agreement, the terms "affiliate"
and "affiliates" mean, when used with respect to any entity, individual, or
other person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by,
or is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to
direct or cause the direction of the management and policies of such entity or
other person, whether through the ownership of voting securities, by contract
or otherwise.
1.4 Legal Fees and Expenses. The Company shall defend, hold
harmless, and indemnify Director on a fully grossed-up after tax basis from and
against any and all costs and expenses (including reasonable attorneys',
accountants' and experts' fees and expenses) incurred by Director from time to
time as a result of any contest (regardless of the outcome) by the Company or
others contesting the validity or enforcement of, or liability under, any term
or provision of this Agreement, plus in each case interest at the applicable
federal rate provided for in Section 7872(f)(2)(B) of the Code.
ARTICLE II
INDEMNIFICATION
Director shall be entitled to such rights of indemnification and
advancement of expenses as he may now or in the future be entitled under
applicable law, the Company's certificate of incorporation and/or by-laws, any
agreement, vote of stockholders, resolution of directors, or otherwise.
ARTICLE III
GENERAL PROVISIONS
3.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
3.2 Assignability. This Agreement is a personal services
agreement which, except as provided in this Agreement, may not be assigned or
transferred by Director. This Agreement shall be binding upon Director and the
Company, and their respective heirs, successors and assigns. The Company shall
require any corporation, entity, individual or other person who is the
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization, or otherwise) to all or substantially all of the business or
assets of the Company to assume, by a written agreement in form and
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<PAGE> 7
substance satisfactory to Director, all of the obligations of the Company under
this Agreement.
3.3 Amendments. Except as may be otherwise provided herein, this
Agreement may not be amended or modified except by subsequent written agreement
executed by both parties hereto.
3.4 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
3.5 Notices. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall
be deemed delivered only upon actual receipt.
If to the Company:
National Convenience Stores
100 Waugh Drive
Houston, Texas 77007
Attn: President
If to Director:
_____________________________
_____________________________
_____________________________
3.6 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any breach of
the same or any other term or condition of this Agreement.
3.7 Severability. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not effect the enforceability or validity of any other
provision of this Agreement.
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<PAGE> 8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
NATIONAL CONVENIENCE STORES
INCORPORATED
By: ______________________________
V. H. Van Horn
President
"COMPANY"
__________________________________
__________________
"DIRECTOR"
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<PAGE> 1
EXHIBIT 99.10
AGREEMENT AMENDING AND RESTATING
EMPLOYMENT AGREEMENT
THIS AGREEMENT AMENDING AND RESTATING EMPLOYMENT AGREEMENT (this
"Agreement") is executed as of August 31, 1995 (the "Execution Date"), but
effective as of July 1, 1995 (the "Effective Date"), by and between NATIONAL
CONVENIENCE STORES INCORPORATED, a Delaware corporation (the "Company"), and V.
H. VAN HORN ("Executive").
R E C I T A L S:
A. The Company is in the convenience store business in the State
of Texas.
B. Executive is recognized as having experience in the management
and operation of companies that are in the convenience store business.
C. The Company and Executive entered into that certain Employment
Contract effective as of July 1, 1995 (the "Employment Agreement"), which
superseded all prior agreements and understandings between the Company and
Executive relating to the subject matter of the Employment Agreement and such
prior agreements and understandings.
D. The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat, or occurrence of a Change in Control
(as defined in Section 4.6 hereof).
E. The Board believes it is imperative (i) to diminish the
inevitable and significant distractions of Executive and dilution of the time
of Executive, by virtue of the personal uncertainties and risks created by a
pending or threatened Change in Control, (ii) to encourage Executive's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change in Control, and (iii) to provide Executive with
compensation arrangements in the event of a Change in Control which provide
Executive with financial security, which are competitive with those of other
corporations, and which ensure that Executive receives the compensation and
benefits intended to be provided to Executive by the Company through this
Agreement and the Company's various employee benefit and compensation plans and
arrangements without regard to any Excise Tax (as defined in Section 4.10(a)
hereof).
F. In order to accomplish the objectives described in the two
immediately preceding recitals, the Board desires to cause the Company to enter
into this Agreement and amend and restate the Employment Agreement as set forth
herein.
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<PAGE> 2
G. Executive desires to enter into this Agreement and amend and
restate the Employment Agreement as set forth herein.
W I T N E S S E T H:
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING, TERM AND DUTIES
1.1 Employment. On the terms and subject to the conditions of
this Agreement, the Company hereby employs and engages the services of
Executive to serve as, and Executive agrees to diligently and competently serve
as and perform the functions of, President and Chief Executive Officer (the
"Office") of the Company for the term and for the compensation and benefits
stated herein.
1.2 Term. The term of employment under this Agreement shall
commence on the Effective Date and shall end on the first to occur of the
events set forth in Section 4.1(a), (b), and (c) (the "Term").
1.3 Major Responsibilities; Authority. Executive shall have the
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities usually associated with the Office of
corporations having assets similar in nature and value to the assets of the
Company and business similar to the business of the Company and at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day periods immediately
preceding each of the Effective Date and the Execution Date, and such other
duties as the Board shall determine from time to time.
1.4 Extent of Service. During the Term, and excluding any periods
of vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable time and energies to the business of the Company consistent
with past practice and shall not, during the Term, be engaged in any business
activity which would interfere or prevent Executive from carrying out his
duties under this Agreement; provided, however, that this Section 1.4 shall not
be construed as preventing Executive from investing his assets in such form or
manner as will not require services on the part of Executive in the operation
of the affairs of any company in which such investments are made.
1.5 Location. Executive shall not be required to move from
Executive's home in Houston, Texas.
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<PAGE> 3
ARTICLE II
COMPENSATION AND RELATED ITEMS
2.1 Compensation. As compensation and consideration for the
services to be rendered by Executive under this Agreement and for the
performance by Executive of the usual obligations of such employment, the
Company agrees to pay Executive, and Executive agrees to accept, the following
compensation and benefits during the Term:
(a) Salary. Executive shall be paid a minimum annual
salary of $420,000. Except as otherwise provided herein, the minimum
salary in effect for any period shall be payable in equal weekly
payments. Any earnings over the minimum salary in effect during any
period shall not be applied to the minimum salary for any subsequent
period. If this Agreement terminates on a date other than the last
day of any week, Executive shall be paid for the week that includes
the date of such termination a pro rata portion of the minimum salary
then in effect for such week in the ratio that the number of days of
employment during such week bears to the total number of business days
in such week.
(b) Bonus.
(i) In addition to the minimum salary provided
for in Section 2.1(a) hereof, and subject to the provisions of
Section 2.1(b)(vi) hereof, Executive shall be awarded, for
each fiscal year of the Company during the Term (or, in the
event of a Change in Control, a portion thereof as hereinafter
provided) commencing with the fiscal year of the Company
ending June 30, 1996, a bonus ("Bonus") calculated in
accordance with this Section 2.1(b).
(ii) For purposes of this Agreement, the following
terms shall have the meanings indicated:
(A) "Bonusable Earnings" shall mean the
consolidated earnings before reorganization expenses,
fresh start adjustments, income taxes, changes in
accounting method, extraordinary gains or losses, and
Takeover Expenses (as defined in the next sentence)
of the Company and its subsidiaries for any fiscal
year, or completed months thereof in the event of a
Change in Control, as the case may be, for which a
Bonus is being calculated, as determined in
conformity with generally accepted accounting
principles applied in a manner consistent with prior
periods. For purposes of the preceding sentence, the
term "Takeover Expenses" shall mean the aggregate
amount of the costs and expenses (including, but not
limited to, any accruals, reserves, or provisions for
such costs and expenses) related to any and all
transactions that arise in connection with a Change
in Control or a potential Change in Control (whether
or not any such transaction (I) is
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<PAGE> 4
consummated, (II) is solicited or unsolicited by the
Company, or (III) is undertaken to resist or
facilitate any such transaction or any other such
transaction), including, but not limited to, the fees
and costs of investment bankers, attorneys,
accountants, and other experts and advisors.
(B) "Threshold Amount" shall mean (I)
for the fiscal year of the Company ended June 30,
1996, an amount equal to $12,000,000, and (II) for
each subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
minimum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Threshold Amount
within thirty (30) days after the first day of such
fiscal year and which, taken together with the
Threshold Percentage for such fiscal year, will
provide Executive with a reasonable opportunity to
receive a Bonus for such fiscal year that is no less
than the Minimum Bonus Opportunity (as defined in
Section 2.1(b)(ii)(O) hereof).
(C) "Threshold Percentage" shall mean
(I) nineteen percent (19%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Threshold Amount for such fiscal year and which
the Board in good faith shall establish by resolution
as the Threshold Percentage within thirty (30) days
after the first day of such fiscal year and which,
taken together with the Threshold Amount for such
fiscal year, will provide Executive with a reasonable
opportunity to receive a Bonus for such fiscal year
that is no less than the Minimum Bonus Opportunity.
(D) "Threshold Applicable Percentage"
shall mean for any fiscal year of the Company during
the Term, a percentage calculated in accordance with
the following formula:
Threshold Applicable Percentage = Threshold
Percentage + [(Target Percentage -
Bonusable Earnings -
Threshold Amount
Threshold Percentage) x ---------------------].
Target Amount -
Threshold Amount
(E) "Target Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $14,500,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable
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<PAGE> 5
forecast of the expected amount of the Bonusable
Earnings for such fiscal year which the Board shall
in good faith establish by resolution as the Target
Amount within thirty (30) days after the first day of
such fiscal year and which, taken together with the
Target Percentage for such fiscal year, will provide
Executive with a reasonable opportunity to receive a
Bonus for such fiscal year that is no less than the
Minimum Bonus Opportunity.
(F) "Target Percentage" shall mean (I)
seventy-five percent (75%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Target Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Target Percentage within thirty (30) days after
the first day of such fiscal year and which, taken
together with the Target Amount for such fiscal year,
will provide Executive with a reasonable opportunity
to receive a Bonus for such fiscal year that is no
less than the Minimum Bonus Opportunity.
(G) "Target Applicable Percentage" shall
mean for any fiscal year of the Company during the
Term, a percentage calculated in accordance with the
following formula:
Target Applicable Percentage = Target
Percentage + [(Maximum Percentage -
Bonusable Earnings -
Target Amount
Target Percentage) x --------------------].
Maximum Amount -
Target Amount
(H) "Maximum Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $17,000,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
maximum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Maximum Amount within
thirty (30) days after the first day of such fiscal
year and which, taken together with the Maximum
Percentage for such fiscal year, will provide
Executive with a reasonable opportunity to receive a
Bonus for such fiscal year that is no less than the
Minimum Bonus Opportunity.
(I) "Maximum Percentage" shall mean (I)
one hundred fifty percent (150%) for the fiscal year
of the Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
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<PAGE> 6
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Maximum Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Maximum Percentage within thirty (30) days after
the first day of such fiscal year and which, taken
together with the Maximum Amount for such fiscal
year, will provide Executive with a reasonable
opportunity to receive a Bonus for such fiscal year
that is no less than the Minimum Bonus Opportunity.
(J) "Monthly Target Amount" shall mean
(I) for each month of the fiscal year of the Company
ended June 30, 1996, the following amount set forth
opposite such month:
<TABLE>
<CAPTION>
Monthly Target
Month Year Amount
----- ---- ------------------
<S> <C> <C>
July 1995 $ 2,857,903
August 1995 2,605,852
September 1995 1,835,830
October 1995 1,713,422
November 1995 204,494
December 1995 805,051
January 1996 (290,770)
February 1996 (513,025)
March 1996 504,432
April 1996 668,572
May 1996 1,454,238
June 1996 2,249,899
---------
Total $14,095,898
===========
</TABLE>
; and (II) for each month of each subsequent fiscal
year of the Company during the Term, an amount equal
to a reasonable forecast of the monthly expected
amount of the Bonusable Earnings for each month of
such fiscal year which the Board shall in good faith
establish by resolution as the Target Amount within
thirty (30) days after the first day of such fiscal
year and which shall, in the aggregate, equal the
Target Amount for such fiscal year.
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<PAGE> 7
(K) "Projected Bonusable Earnings" shall
mean for the fiscal year of the Company which
includes the date of a Change in Control, an amount
equal to the product obtained by multiplying (I) the
Target Amount for such fiscal year, by (II) the
quotient obtained by dividing the aggregate amount of
the Bonusable Earnings for the completed months of
such fiscal year that precede the date of such
termination or Change in Control, as the case may be,
by the aggregate amount of the Monthly Target Amounts
for such completed months.
(L) "Threshold Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
Threshold Projected Applicable Percentage =
Threshold Percentage + [(Target Percentage -
Projected Bonusable
Earnings - Threshold Amount
Threshold Percentage) x ----------------------------].
Target Amount -
Threshold Amount
(M) "Target Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
Threshold Projected Applicable Percentage =
Threshold Percentage + [(Target Percentage -
Projected Bonusable
Earnings - Threshold Amount
Threshold Percentage) x ----------------------------].
Maximum Amount -
Target Amount
(N) "Minimum Bonus Opportunity" shall
mean an amount equal to $200,000.
(iii) Except as otherwise provided in Section
2.1(b)(iv) hereof, for the fiscal year of the Company ended
June 30, 1996 and for each fiscal year of the Company
thereafter during the Term, the Bonus shall be an amount
calculated as follows:
(A) If the Bonusable Earnings for such
fiscal year are less than the Threshold Amount for
such fiscal year, the Bonus shall be zero ($-0-).
(B) If the Bonusable Earnings for such
fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I)
Executive's minimum salary under Section 2.1(a)
hereof as in effect on the last
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<PAGE> 8
day of such fiscal year, multiplied by (II) the
Threshold Applicable Percentage for such fiscal year.
(C) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Target
Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Target Applicable Percentage
for such fiscal year.
(D) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Maximum
Amount for such fiscal year, the Bonus shall be an
amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Maximum Percentage for such
fiscal year.
(iv) Notwithstanding anything contained in this
Agreement to the contrary, upon the occurrence of a Change in
Control, the amount of the Bonus for the fiscal year which
includes the date of such Change in Control shall be an amount
calculated as follows:
(A) If the Projected Bonusable Earnings
for such fiscal year are less than the Threshold
Amount for such fiscal year, the Bonus shall be zero
($-0-).
(B) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I) a
fraction, the numerator of which is the number of
completed months in such fiscal year that precede the
date of such Change in Control and the denominator of
which is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Threshold Projected
Applicable Percentage for such fiscal year.
(C) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Target Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date
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<PAGE> 9
of such Change in Control, multiplied by (III) the
Target Projected Applicable Percentage for such
fiscal year.
(D) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Maximum Percentage for such
fiscal year.
(v) Except as otherwise provided herein, any
Bonus payable to Executive under this Agreement shall be paid
by the Company to Executive no later than the sooner of (A)
forty-five (45) days after the last day of the fiscal year of
the Company with respect to which such Bonus is calculated, or
(B) thirty (30) days after a Change in Control.
(vi) Except as otherwise provided in this
Agreement, upon the occurrence of a Change in Control,
Executive shall not be entitled under this Section 2.1(b) to
any Bonus calculated or that would be calculated with respect
to any period beginning after the last day of the month
immediately preceding such date of Change in Control;
provided, however, that the Company shall, with Executive's
prior written consent and within thirty (30) days after such
occurrence, adopt a written bonus or incentive compensation
plan and/or a written amendment to this Agreement which
provide or provides Executive with a reasonable opportunity to
receive with respect to each annual period ending on June 30
during the portion of the Term remaining after such Change in
Control a bonus that is no less than the Minimum Bonus
Opportunity (any such opportunity being referred to herein as
a "Replacement Bonus Opportunity").
(c) Additional Compensation. In addition to the minimum
salary and Bonus provided for in Section 2.1(a) and (b), respectively,
Executive and/or Executive's family, as the case may be, shall be
entitled to:
(i) participate in, and shall receive all
benefits under:
(A) any and all welfare benefit and
similar employee benefit plans, programs,
arrangements, or policies that are generally made
available by the Company and its affiliates (as
defined in Section 4.10(l)) now or at any time in the
future to other key executive officers or retired key
executive officers, including, but not limited to,
any hospitalization, medical, prescription, dental,
disability, salary continuance, individual life
insurance,
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executive life insurance, group life insurance,
accidental death insurance, and travel accident
insurance plans, programs, arrangements, and
policies; and
(B) any and all bonus, incentive,
savings, retirement, profit sharing, pension, and
stock option plans, programs, arrangements, and
policies that are generally made available by the
Company and its affiliates now or at any time in the
future to other key executive officers, including,
but in no way limited to, that certain Amended and
Restated National Convenience Stores Incorporated
Officers' Retirement Plan effective as of August 31,
1995; and
(ii) annual vacations and sick leave in accordance
with the vacation and sick leave policies of the Company and
its affiliates as are now or at any time in the future in
effect with respect to other key executive officers, during
which time of such vacations and sick leave Executive's
compensation shall be paid in full; and
(iii) fringe benefits in accordance with the fringe
benefit policies of the Company and its affiliates as are now
or at any time in the future in effect with respect to other
key executive officers.
2.2 Expenses. The Company agrees that, during the Term, Executive
shall be allowed reasonable and necessary business expenses in connection with
the performance of his duties hereunder within guidelines established by the
Board as in effect at any time with respect to key executives ("Business
Expenses"), including, but not limited to, reasonable and necessary expenses
for food, travel, lodging, entertainment and other items in the promotion of
Company's business within such guidelines. Company will promptly reimburse
Executive for all Business Expenses incurred by Executive upon Executive's
presentation to the Company of an itemized account thereof, together with
receipts, vouchers, or other supporting documentation. After termination or
expiration of this Agreement, however such termination or expiration may come
about, Executive shall have ninety (90) days after the date of such termination
or expiration to submit Business Expenses incurred during the Term hereof to
the Company for reimbursement.
2.3 Working Facilities. Executive shall be furnished with offices
of a size and with other furnishings and appointments, administrative staff,
secretarial and other assistants, stenographic help, and such other facilities
and services as are suitable to Executive's position and adequate for the
performance of Executive's duties.
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ARTICLE III
EXCULPATION
Company agrees that Executive will not be liable for any losses,
expenses, costs or damages caused by or resulting from the recommendations,
suggestions, actions, errors, omissions or mistakes of Executive undertaken or
proposed by Executive if Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Executive's rights under this Article III shall not be deemed
exclusive of, but shall be cumulative with, any and all other rights
(including, but not limited to, rights of indemnification and advancement of
expenses) to which Executive may now or at any time in the future be entitled
under applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement (including, but not limited to, this Agreement), any vote
of stockholders, any resolution of directors, or otherwise.
ARTICLE IV
TERMINATION
4.1 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement shall terminate upon the first to occur of:
(a) Thirty (30) days after written notice of termination
is given by either party to the other; or
(b) Executive's death or, at the Company's option, upon
Executive's becoming Disabled (as defined in Section 4.8 hereof); or
(c) June 30, 2000 (the "Final Date").
Any notice of termination given by Executive to the Company under Section
4.1(a) above shall specify whether such termination is made with or without
Good Reason (as defined in Section 4.4 hereof) or Good Reason-Change in Control
(as defined in Section 4.5 hereof). Any notice of termination given by the
Company to Executive under Section 4.1(a) above shall specify whether such
termination is with or without Cause (as defined in Section 4.3 hereof).
4.2 Obligations of the Company Upon Termination.
(a) Cause; Other than for Good Reason and Other than for
Good Reason-Change in Control. If the Company terminates this
Agreement with Cause pursuant to Section 4.1(a) hereof, or if
Executive terminates this Agreement without Good Reason or without
Good Reason-Change in Control pursuant to Section 4.1(a) hereof, or if
this Agreement terminates pursuant to Section 4.1(c) hereof, this
Agreement shall terminate without further obligations to Executive,
other than those obligations owing or accrued to, vested in, or
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earned by Executive through the date of termination, including, but
not limited to:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination through the date of termination; and
(ii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company and any accrued vacation pay not yet paid by
the Company; and
(iii) all other amounts or benefits owing or
accrued to, vested in, earned by Executive through the date of
termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements or policies described in Section 2.1(c)
hereof;
such obligations owing or accrued to, vested in, or earned by
Executive through the date of termination, including, but not limited
to, such amounts and benefits specified in clauses (i), (ii), and
(iii) of this sentence, being hereinafter collectively referred to as
the "Accrued Obligations." The aggregate amount of such obligations
owing or accrued to, vested in, or earned by Executive through the
date of termination, including, but not limited to, the Accrued
Obligations, shall be paid by the Company to Executive in cash in one
lump sum within thirty (30) days after the date of termination.
(b) Good Reason; Other than for Cause Before a Change in
Control. If Executive terminates this Agreement with Good Reason
pursuant to Section 4.1(a) hereof, or if the Company terminates this
Agreement without Cause before the occurrence of a Change in Control
pursuant to Section 4.1(a) hereof:
(i) the Company shall pay to Executive cash in
one lump sum within thirty (30) days after the date of
termination the aggregate of the following amounts:
(A) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in
effect at the time of such termination (but prior to
giving effect to any reduction therein which
precipitated such termination) through the date of
termination; and
(B) in the case of compensation
previously deferred by Executive, all amounts
previously deferred (together with any
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accrued interest thereon) and not yet paid by the
Company, and any accrued vacation pay not yet paid by
the Company; and
(C) all other amounts or benefits owing
or accrued to, vested in, or earned by Executive
through the date of termination under the then
existing or applicable plans, programs, arrangements,
and policies of the Company and its affiliates,
including, but not limited to, any such plans,
programs, arrangements or policies described in
Section 2.1(c) hereof; and
(D) any and all other Accrued
Obligations not otherwise described in clause (A),
(B), or (C) of this Section 4.2(b)(i); and
(ii) the Company shall pay to Executive his
minimum salary at the annual rate in effect at the time of
such termination (but prior to giving effect to any reduction
therein which precipitated such termination) for the period
commencing on the date after the date of termination and
ending on the Final Date (such minimum salary to be paid in
accordance with the second and third sentences of Section
2.1(a)); and
(iii) the Company shall pay to Executive the
Adjusted Average Bonus (as defined in Section 4.14(a) hereof)
on the First Payment Date (as defined in Section 4.14(e)
hereof); and
(iv) on each of the Subsequent Payment Dates (as
defined in Section 4.14(f) hereof), if any, the Company shall
pay to Executive the Average Bonus (as defined in Section
4.14(b) hereof).
(c) Good Reason-Change in Control; Other than for Cause
On or After a Change in Control. If Executive terminates this
Agreement with Good Reason-Change in Control pursuant to Section
4.1(a) hereof, or if the Company terminates this Agreement without
Cause on or after the occurrence of a Change in Control pursuant to
Section 4.1(a) hereof:
(i) the Company shall pay to Executive cash in
one lump sum within thirty (30) days after the date of
termination the aggregate of the following amounts:
(A) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in
effect at the time of such termination (but prior to
giving effect to any reduction therein which
precipitated such termination) through the date of
termination; and
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(B) to the extent not theretofore paid
as required under Section 2.1(b)(v) hereof, any Bonus
through the date of such Change in Control; and
(C) in the case of compensation
previously deferred by Executive, all amounts
previously deferred (together with any accrued
interest thereon) and not yet paid by the Company,
and any accrued vacation pay not yet paid by the
Company; and
(D) all other amounts or benefits owing
or accrued to, vested in, or earned by Executive
through the date of termination under the then
existing or applicable plans, programs, arrangements,
and policies of the Company and its affiliates,
including, but not limited to, any such plans,
programs, arrangements, or policies described in
Section 2.1(c) hereof; and
(E) any and all other Accrued
Obligations not otherwise described in clause (A),
(B), (C) or (D) of this Section 4.2(c)(i); and
(ii) the Company shall pay to Executive his
minimum salary at the annual rate in effect at the time of
such termination (but prior to giving effect to any reduction
therein which precipitated such termination) for the period
commencing on the date after the date of termination and
ending on the Final Date (such minimum salary to be paid in
accordance with the second and third sentences of Section
2.1(a)); and
(iii) the Company shall pay to Executive the
Adjusted Average Bonus on the First Payment Date; and
(iv) on each of the Subsequent Payment Dates, if
any, the Company shall pay to Executive the Average Bonus.
(d) Death. If Executive's employment is terminated under
Section 4.1(b) hereof by reason of Executive's death, the Company
shall pay to Executive's legal representatives cash in one lump sum
within thirty (30) days after the date of Executive's death the full
amount of the obligations owing or accrued to, vested in, or earned by
Executive through the date of Executive's death, including, but not
limited to, the Accrued Obligations. Anything in this Agreement to
the contrary notwithstanding, Executive's family shall be entitled to
receive benefits provided by the Company and any of its affiliates to
surviving families under the then existing or applicable plans,
programs, or arrangements and policies of the Company and its
affiliates.
(e) Disability. If Executive's employment is terminated
under Section 4.1(b) hereof by reason of Executive becoming Disabled:
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(i) the Company shall pay to Executive cash in
one lump sum within thirty (30) days after the date of
termination the full amount of the obligations owing or
accrued to, vested in, or earned by Executive through the date
of termination, including, but not limited to, the Accrued
Obligations; and
(ii) the Company shall pay to Executive
seventy-five percent (75%) of Executive's minimum salary at
the annual rate in effect at the time of such termination for
the period commencing on the date after the date of
termination and ending on the Final Date (such minimum salary
to be paid in accordance with the second and third sentences
of Section 2.1(a)), reduced by the actual amount of benefits
paid to Executive during such period under any disability
insurance policy maintained by the Company for Executive.
4.3 Cause. As used in this Agreement, the term "Cause" means the
gross or willful neglect by Executive of his duties as an employee, officer or
director of the Company which continues for more than thirty (30) days after
written notice from the Company to Executive specifically identifying the gross
or willful negligence of Executive and directing Executive to discontinue same.
4.4 Good Reason. As used in this Agreement, the term "Good
Reason" means the occurrence of any of the following:
(a) a breach of any material provision of this Agreement
by the Company (other than any breach described in clause (b) or (c)
of this sentence), which is not cured within thirty (30) days after
written notice from Executive to the Company specifically identifying
such breach; or
(b) any removal of Executive, without Cause, from the
position of the Office during the Term; or
(c) Executive is in any manner (other than the manner
described in clause (b) of this sentence) relieved of his
responsibilities under this Agreement, without Cause, during the Term.
Notwithstanding anything contained in the immediately preceding sentence to the
contrary, the term "Good Reason" shall not include any breach of any provision
of this Agreement (including, but not limited to, any breach described in
clause (b) or (c) of the immediately preceding sentence) that occurs after the
occurrence of a Change in Control.
4.5 Good Reason-Change in Control. As used in this Agreement, the
term "Good Reason-Change in Control" means after the occurrence of a Change in
Control, a determination by Executive that any one or more of the following
events has occurred:
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(a) the assignment by the Company to Executive of duties
that are inconsistent with the Office at the time of such assignment,
or the removal by the Company from Executive of those duties usually
appertaining to the Office at the time of such removal; or
(b) a change by the Company, without Executive's prior
written consent, in Executive's responsibilities to the Company as
such responsibilities existed at the time of the occurrence of such
Change in Control (or as such responsibilities may thereafter exist
from time to time as a result of changes in such responsibilities made
with Executive's prior written consent); or
(c) any removal of Executive from, or any failure to
elect or reelect Executive to, the Office, except in connection with
Executive's promotion, with his prior written consent, to a higher
office (if any) with the Company; or
(d) the Company's direction that Executive discontinue
service (or not seek reelection or reappointment) as a director,
officer or member of any corporation or other entity of which
Executive is a director, officer or member at the time of the
occurrence of such Change in Control; or
(e) the failure of the Company to continue to provide
Executive with office space, related facilities and support personnel
(including, but not limited to, administrative and secretarial
assistance) that are both commensurate with the Office and Executive's
responsibilities to and position with the Company at the time of the
occurrence of such Change in Control and not materially dissimilar to
the office space, related facilities and support personnel provided to
other key executive officers of the Company; or
(f) a reduction by the Company in the amount of
Executive's minimum salary specified in Section 2.1(a) (or as
subsequently increased) and as in effect at the time of the occurrence
of such Change in Control, or a failure of the Company to pay such
minimum annual salary to the Employee at the time and in the manner
specified in Section 2.1(a) of this Employment Agreement; or
(g) in the event of any increase, at any time after the
occurrence of such Change in Control, in the minimum annual salary or
salaries of one or more members of the Executive Group (as defined in
Section 4.7 hereof) (the members or members of the Executive Group
whose minimum annual salary or salaries are increased at such time
being hereinafter called the "Increased Executives"), the failure of
the Company simultaneously to increase Executive's minimum annual
salary, as Executive's minimum annual salary is in effect immediately
prior to giving effect to such first-mentioned increase (the "Prior
Base Salary"), by an amount which equals or exceeds the product
obtained by multiplying the Prior Base Salary by a fraction, the
numerator of which is the sum of the amounts by which the respective
minimum annual salaries of the Increased Executives (other than
Executive) were increased at such time and the
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denominator of which is the sum of the respective minimum annual
salaries of the Increased Executives (other than Executive)
immediately prior to giving effect to such first-mentioned increase;
or
(h) the discontinuation or reduction by the Company of
Executive's participation in any bonus or other employee benefit plan,
program, arrangement, or policy (including, but not limited to, any
such plan, program, arrangement, or policy described in Section 2.1(c)
hereof) in which Executive is a participant at the time of the
occurrence of such Change in Control; or
(i) Executive's principal office space or the related
facilities or support space or the related facilities or support
personnel referred to in paragraph (e) of this Section 4.5 cease to be
located within the Company's principal executive offices, or for a
period of more than 45 consecutive days Executive is required by the
Company to perform a majority of his duties outside the Company's
principal executive offices; or
(j) the relocation, without Executive's prior written
consent, of the Company's principal executive offices to a location
outside the county in which such offices are located at the time of
the occurrence of such Change in Control; or
(k) the failure of the Company to provide Executive
annually with a number of paid vacation days and sick leave days at
least equal to the number of paid vacation days to which Executive is
entitled annually at the time of the occurrence of such Change in
Control; or
(l) the failure of the Company to obtain the assumption
by any successor to the Company of the obligations imposed upon the
Company under this Agreement, as required by Section 5.2 of this
Agreement; or
(m) the failure by the Company to promptly reimburse
Executive for any Business Expenses; or
(n) that because of the policies, decisions or actions of
the Board or the stockholders of the Company, Executive can no longer
perform his duties to the Company in a manner which is consistent with
the manner in which such duties were performed by Executive prior to
the occurrence of such Change in Control; or
(o) the employment of Executive under this Agreement is
terminated by the Company without Cause; or
(p) the Company notifies Executive of the Company's
intention not to observe or perform one or more of the obligations of
the Company under this Agreement; or
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(q) the Company breaches any provision of this Agreement.
4.6 Change in Control. As used herein, the term "Change in
Control" shall mean the occurrence with respect to the Company of any of the
following events:
(a) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(b) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(c) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 20
percent or more of the combined voting power of the then-outstanding
securities of the Company (as determined under paragraph (d) of Rule
13d-3 promulgated under the Exchange Act, in the case of rights to
acquire common stock);
(d) the stockholders of the Company shall approve:
(i) any merger, consolidation, or reorganization
of the Company:
(A) in which the Company is not the
continuing or surviving corporation,
(B) pursuant to which shares of common
stock of the Company would be converted into cash,
securities or other property,
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(C) with a corporation which prior to
such merger, consolidation, or reorganization owned
20 percent or more of the combined voting power of
the then- outstanding securities of the Company, or
(D) in which the Company will not
survive as an independent, publicly-owned
corporation;
(ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of
all or substantially all the assets of the Company, or
(iii) any liquidation or dissolution of the Company;
(e) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(f) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(g) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(h) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
cease for any reason to constitute a majority of the Board, unless the
election or nomination for election by the Company's stockholders of
each new director during any such two-year period was approved by the
vote of two-thirds of the directors then still in office who were
directors at the beginning of such two-year period.
4.7 Executive Group. As used herein, "Executive Group" shall mean
the officers of the Company; and each of such officers shall be deemed members
of the Executive Group.
4.8 Disabled. As used herein, "Disabled" shall mean a mental or
physical impairment which in the reasonable opinion of a qualified doctor
selected by the Company renders Executive unable to perform with reasonable
diligence the ordinary functions and duties of Executive on a full-time basis
in accordance with the terms of this Agreement, which inability will continue
in the reasonable opinion of such doctor for a period of not less than 180
days.
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4.9 Return of Materials; Confidential Information. In the event
of any termination of this Agreement, Executive shall promptly deliver to the
Company all lists, books, records, literature, products and any other materials
owned or provided by the Company in connection with Executive's employment
hereunder. Executive shall not at any time during or after the Term hereof use
for himself or others, or divulge to others, any secret or confidential
information, knowledge or data of the Company obtained by Executive as a result
of his employment unless authorized by a majority of the Board.
4.10 Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or any of its affiliates to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (any such payments or distributions
being individually referred to herein as a "Payment," and any two or more of
such payments or distributions being referred to herein as "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") (such excise tax, together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such excise tax, and any interest in respect of such penalties,
additions to tax or additional amounts, being collectively referred herein to
as the "Excise Tax"), then Executive shall be entitled to receive an additional
payment or payments (individually referred to herein as a "Gross-Up Payment"
and any two or more of such additional payments being referred to herein as
"Gross-Up Payments") in an amount such that after payment by Executive of all
taxes (as defined in Section 4.10(k)) imposed upon the Gross-Up Payment,
Executive retains an amount of such Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 4.10(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 4.10(b), including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall initially be made, at the
Company's expense, by nationally recognized tax counsel mutually acceptable to
the Company and Executive ("Tax Counsel"). Tax Counsel shall provide detailed
supporting legal authorities, calculations, and documentation both to the
Company and Executive within 15 business days of the termination of Executive's
employment, if applicable, or such other time or times as is reasonably
requested by the Company or Executive. If Tax Counsel makes the initial
Determination that no Excise Tax is payable by Executive with respect to a
Payment or Payments, it shall furnish Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to any
such Payment or Payments. Executive shall have the right to dispute any
Determination (a "Dispute") within 15 business days after delivery of Tax
Counsel's opinion with respect to such Determination. The Gross-Up Payment, if
any, as determined pursuant to such Determination shall, at the Company's
expense, be paid by the Company to Executive within five business days of
Executive's receipt of such Determination. The existence
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of a Dispute shall not in any way affect Executive's right to receive the
Gross-Up Payment in accordance with such Determination. If there is no
Dispute, such Determination shall be binding, final and conclusive upon the
Company and Executive, subject in all respects, however, to the provisions of
Section 4.10(c) through (i) below. As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, it is possible that Gross-Up
Payments (or portions thereof) which will not have been made by the Company
should have been made ("Underpayment"), and if upon any reasonable written
request from Executive or the Company to Tax Counsel, or upon Tax Counsel's own
initiative, Tax Counsel, at the Company's expense, thereafter determines that
Executive is required to make a payment of any Excise Tax or any additional
Excise Tax, as the case may be, Tax Counsel shall, at the Company's expense,
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to Executive.
(c) The Company shall defend, hold harmless, and
indemnify Executive on a fully grossed-up after tax basis from and against any
and all claims, losses, liabilities, obligations, damages, impositions,
assessments, demands, judgements, settlements, costs and expenses (including
reasonable attorneys', accountants', and experts' fees and expenses) with
respect to any tax liability of Executive resulting from any Final
Determination (as defined in Section 4.10(j)) that any Payment is subject to
the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending
or threatened audit, examination, investigation or administrative, court or
other proceeding which, if pursued successfully, could result in or give rise
to a claim by Executive against the Company under this Section 4.10(d)
("Claim"), including, but not limited to, a claim for indemnification of
Executive by the Company under Section 4.10(c), then such party shall promptly
notify the other party hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Executive ("Executive
Claim"), Executive shall take or cause to be taken such action in connection
with contesting such Executive Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide
that the Company shall be solely responsible for the payment of any and all
fees and disbursements of such counsel and any experts) and the execution of
powers of attorney, provided that:
(i) within 30 calendar days after the Company
receives or delivers, as the case may be, the Tax Claim Notice
relating to such Executive Claim (or such earlier date that any
payment of the taxes claimed is due from Executive, but in no event
sooner than five calendar days after the Company receives or delivers
such Tax Claim Notice), the Company shall have notified Executive in
writing ("Election Notice") that the Company does not dispute its
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obligations (including, but not limited to, its indemnity obligations)
under this Agreement and that the Company elects to contest, and to
control the defense or prosecution of, such Executive Claim at the
Company's sole risk and sole cost and expense; and
(ii) the Company shall have advanced to Executive
on an interest-free basis, the total amount of the tax claimed in
order for Executive, at the Company's request, to pay or cause to be
paid the tax claimed, file a claim for refund of such tax and, subject
to the provisions of the last sentence of Section 4.10(g), sue for a
refund of such tax if such claim for refund is disallowed by the
appropriate taxing authority (it being understood and agreed by the
parties hereto that the Company shall only be entitled to sue for a
refund and the Company shall not be entitled to initiate any
proceeding in, for example, United States Tax Court) and shall
indemnify and hold Executive harmless, on a fully grossed-up after tax
basis, from any tax imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
(iii) the Company shall reimburse Executive for any
and all costs and expenses resulting from any such request by the
Company and shall indemnify and hold Executive harmless, on fully
grossed-up after-tax basis, from any tax imposed as a result of such
reimbursement.
(f) Subject to the provisions of Section 4.10(e) hereof,
the Company shall have the right to defend or prosecute, at the sole cost,
expense and risk of the Company, such Executive Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
the Company to a Final Determination; provided, however, that (i) the Company
shall not, without Executive's prior written consent, enter into any compromise
or settlement of such Executive Claim that would adversely affect Executive,
(ii) any request from the Company to Executive regarding any extension of the
statute of limitations relating to assessment, payment, or collection of taxes
for the taxable year of Executive with respect to which the contested issues
involved in, and amount of, the Executive Claim relate is limited solely to
such contested issues and amount, and (iii) the Company's control of any
contest or proceeding shall be limited to issues with respect to the Executive
Claim and Executive shall be entitled to settle or contest, in his sole and
absolute discretion, any other issue raised by the Internal Revenue Service or
any other taxing authority. So long as the Company is diligently defending or
prosecuting such Executive Claim, Executive shall provide or cause to be
provided to the Company any information reasonably requested by the Company
that relates to such Executive Claim, and shall otherwise cooperate with the
Company and its representatives in good faith in order to contest effectively
such Executive Claim. The Company shall keep Executive informed of all
developments and events relating to any such Executive Claim (including,
without limitation, providing to Executive copies of all written materials
pertaining to any such Executive Claim), and Executive or his authorized
representatives shall be entitled, at Executive's
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<PAGE> 23
expense, to participate in all conferences, meetings and proceedings relating
to any such Executive Claim.
(g) If, after actual receipt by Executive of an amount of
a tax claimed (pursuant to an Executive Claim) that has been advanced by the
Company pursuant to Section 4.10(e)(ii) hereof, the extent of the liability of
the Company hereunder with respect to such tax claimed has been established by
a Final Determination, Executive shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, Executive
with respect to such tax (together with any interest paid or credited thereon
by the taxing authority and any recovery of legal fees from such taxing
authority related thereto), except to the extent that any amounts are then due
and payable by the Company to Executive, whether under the provisions of this
Agreement or otherwise. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 4.10(e)(ii), a determination is
made by the Internal Revenue Service or other appropriate taxing authority that
Executive shall not be entitled to any refund with respect to such tax claimed
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of any Gross-Up Payments and other payments required to be paid
hereunder.
(h) With respect to any Executive Claim, if the Company
fails to deliver an Election Notice to Executive within the period provided in
Section 4.10(e)(i) hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Section 4.10(e)(ii) and (iii)
and (f) hereof, then Executive shall at any time thereafter have the right (but
not the obligation), at his election and in his sole and absolute discretion,
to defend or prosecute, at the sole cost, expense and risk of the Company, such
Executive Claim. Executive shall have full control of such defense or
prosecution and such proceedings, including any settlement or compromise
thereof. If requested by Executive, the Company shall cooperate, and shall
cause its affiliates to cooperate, in good faith with Executive and his
authorized representatives in order to contest effectively such Executive
Claim. The Company may attend, but not participate in or control, any defense,
prosecution, settlement or compromise of any Executive Claim controlled by
Executive pursuant to this Section 4.10(h) and shall bear its own costs and
expenses with respect thereto. In the case of any Executive Claim that is
defended or prosecuted by Executive, Executive shall, from time to time, be
entitled to current payment, on a fully grossed-up after tax basis, from the
Company with respect to costs and expenses incurred by Executive in connection
with such defense or prosecution.
(i) In the case of any Executive Claim that is defended
or prosecuted to a Final Determination pursuant to the terms of this Section
4.10(i), the Company shall pay, on a fully grossed-up after tax basis, to
Executive in immediately available funds the full amount of any taxes arising
or resulting from or incurred in connection with such Executive Claim that have
not theretofore been paid by the Company to
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<PAGE> 24
Executive, together with the costs and expenses, on a fully grossed-up after
tax basis, incurred in connection therewith that have not theretofore been paid
by the Company to Executive, within ten calendar days after such Final
Determination. In the case of any Executive Claim not covered by the preceding
sentence, the Company shall pay, on a fully grossed-up after tax basis, to
Executive in immediately available funds the full amount of any taxes arising
or resulting from or incurred in connection with such Executive Claim at least
ten calendar days before the date payment of such taxes is due from Executive,
except where payment of such taxes is sooner required under the provisions of
this Section 4.10(i), in which case payment of such taxes (and payment, on a
fully grossed-up after tax basis, of any costs and expenses required to be paid
under this Section 4.10(i) shall be made within the time and in the manner
otherwise provided in this Section 4.10(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including, but not
limited to, any and all Excise Taxes, income taxes, and employment taxes),
together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such taxes and any interest in respect of
such penalties, additions to tax, or additional amounts.
(l) For purposes of this Agreement, the terms "affiliate"
and "affiliates" mean, when used with respect to any entity, individual, or
other person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by,
or is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to
direct or cause the direction of the management and policies of such entity or
other person, whether through the ownership of voting securities, by contract
or otherwise.
4.11 Legal Fees and Expenses. The Company shall defend, hold
harmless, and indemnify Executive on a fully grossed-up after tax basis from
and against any and all costs and expenses (including reasonable attorneys',
accountants' and experts' fees and expenses) incurred by Executive from time to
time as a result of any contest (regardless of the outcome) by the Company or
others contesting the validity or enforcement of, or liability under, any term
or provision of this Agreement, plus in each case interest at the applicable
federal rate provided for in Section 7872(f)(2)(B) of the Code.
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<PAGE> 25
4.12 Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan, program, arrangement or policy provided by the
Company or any of its affiliates (including, but not limited to, any plan,
program, arrangement or policy described in Section 2.1(c) hereof) and for
which Executive and/or Executive's family may qualify, nor shall anything
herein limit or otherwise affect such rights as Executive and/or Executive's
family may have under any other agreements with the Company or any of its
affiliates. Amounts which are vested benefits or which Executive and/or
Executive's family is otherwise entitled to receive under any plan, program,
arrangement, or policy of the Company or any of its affiliates (including, but
not limited to, any plan, program, arrangement or policy described in Section
2.1(c) hereof) at or subsequent to the date of termination of this Agreement
shall be payable in accordance with such plan, program, arrangement or policy.
4.13 Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement.
4.14 Certain Definitions. As used in this Agreement, the following
terms shall have the meanings indicated:
(a) "Adjusted Average Bonus" shall mean an amount equal
to (i) the Average Bonus, reduced (but not below zero) by (ii) the
Bonus under Section 2.1(b) hereof, if any, actually received by
Executive with respect to the fiscal year of the Company in which the
Cut-off Date (as defined in Section 4.14(d) hereof) occurs.
(b) "Average Bonus" shall mean an amount equal to the
greater of the following amounts:
(i) an amount equal to the quotient obtained by
dividing the Prior Averageable Bonuses (as defined in Section
4.14(c) hereof) by two (2); and
(ii) an amount equal to the quotient obtained by
dividing (A) the aggregate amount of bonuses or other
incentive compensation received or earned by, or awarded to,
Executive in respect of the two (2) annual periods ending on
June 30 immediately preceding the Cut-off Date, including, but
not limited to, any Bonus in respect of such annual periods
and any bonus or other incentive compensation received or
earned by, or awarded to, in respect of such annual periods
under any Replacement
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<PAGE> 26
Bonus Opportunity (as hereinbefore defined in Section
2.1(b)(vi) hereof), by (B) two (2).
(c) "Prior Averageable Bonuses" shall mean an amount
equal to the sum of the Bonuses received or earned by, or awarded to,
Executive in respect of the two (2) fiscal years of the Company
immediately preceding the first fiscal year of the Company in which a
Change in Control or a Cut-off Date occurs; provided, however, that
notwithstanding anything contained in this Agreement to the contrary
(i) if one of such two (2) fiscal years of the Company immediately
preceding the first fiscal year of the Company in which a Change in
Control or a Cut-off Date occurs is the fiscal year of the Company
ended June 30, 1994, an amount equal to $133,000 shall be used as the
Bonus in respect of the fiscal year of the Company ended June 30,
1994, and (ii) if one of such two (2) fiscal years of the Company
immediately preceding the first fiscal year of the Company in which a
Change in Control or a Cut-off Date occurs is the fiscal year of the
Company ended June 30, 1995, an amount equal to $504,000 shall be used
as the Bonus in respect of the fiscal year of the Company ended June
30, 1995.
(d) "Cut-off Date" shall mean the date of the first to
occur of the following:
(i) termination of this Agreement by the Company
without Cause pursuant to Section 4.1(a) hereof; and
(ii) termination of this Agreement by Executive
with Good Reason or with Good Reason-Change in Control
pursuant to Section 4.1(a) hereof.
(e) "First Payment Date" shall mean the first June 30 to
occur after the Cut-off Date.
(f) "Subsequent Payment Date" shall mean, if any, the
first June 30 to occur after the First Payment Date and each June 30
thereafter until and including the Final Date.
ARTICLE V
GENERAL PROVISIONS
5.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
5.2 Assignability. This Agreement is personal to Executive and
without the prior written consent of the Company shall not be assignable by
Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives and heirs. This Agreement shall inure to the benefit of and be
binding upon the Company and its
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<PAGE> 27
successors and assigns. The Company shall require any corporation, entity,
individual or other person who is the successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization, or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform, by a written agreement in form and substance satisfactory
to Executive, all of the obligations of the Company under this Agreement. As
used in this Agreement, the term "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, written agreement, or otherwise.
5.3 Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
5.4 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between Executive and the Company and supersedes
any prior agreements or understandings, whether written or oral, with respect
to the subject matter hereof. Except as may be otherwise provided herein, this
Agreement may not be amended or modified except by subsequent written agreement
executed by both parties hereto.
5.5 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
5.6 Notices. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall
be deemed delivered only upon actual receipt.
If to the Company:
National Convenience Stores Incorporated
100 Waugh Drive
Houston, Texas 77007
Attention: General Counsel
If to Executive:
V. H. Van Horn
3662 Olympia Drive
Houston, Texas 77019
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<PAGE> 28
5.7 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any breach of
the same or any other term or condition of this Agreement.
5.8 Severability. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not effect the enforceability or validity of any other
provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Execution Date, but effective as of the Effective Date.
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A. J. GALLERANO
-----------------------------------
A. J. Gallerano
Senior Vice President -
General Counsel and Secretary
"COMPANY"
/S/ V. H. VAN HORN
-----------------------------------
V. H. Van Horn
"EXECUTIVE"
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<PAGE> 1
EXHIBIT 99.11
AGREEMENT AMENDING AND RESTATING
EMPLOYMENT AGREEMENT
THIS AGREEMENT AMENDING AND RESTATING EMPLOYMENT AGREEMENT (this
"Agreement") is executed as of August 31, 1995 (the "Execution Date"), but
effective as of May 18, 1993 (the "Effective Date"), by and between NATIONAL
CONVENIENCE STORES INCORPORATED, a Delaware corporation (the "Company"), and A.
J. GALLERANO ("Executive").
R E C I T A L S:
A. The Company filed a case under Chapter 11 of the Bankruptcy
Code on December 9, 1991 in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division (the "Court"), Case No. 91-49819-H2-11 (the
"Case"). The Company filed its Fourth Amended and Restated Plan of
Reorganization under Chapter 11 of the United States Bankruptcy Code (the
"Plan") in the Case, which Plan has been confirmed by the Court pursuant to an
Order confirming the Plan (the "Order") entered in the Case on February 25,
1993.
B. The Company is in the convenience store business in the State
of Texas.
C. Executive is recognized as having experience in the management
and operation of companies that are in the convenience store business.
D. As contemplated in the Plan, the Company and Executive entered
into that certain Employment Agreement effective as of May 18, 1993 (the
"Original Employment Agreement").
E. Subsequently, the Company and Executive entered into that
certain Amendment to Employment Agreement effective as of August 1, 1994 (the
"First Amendment"), and that certain Second Amendment to Employment Agreement
effective as of July 1, 1995 (the "Second Amendment") (the Original Employment
Agreement, the First Amendment, and the Second Amendment being collectively
referred to herein as the "Employment Agreement").
F. The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat, or occurrence of a Change in Control
(as defined in Section 4.6 hereof).
G. The Board believes it is imperative (i) to diminish the
inevitable and significant distractions of Executive and dilution of the time
of Executive, by virtue of the personal uncertainties and risks created by a
pending or threatened Change in Control, (ii) to encourage Executive's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change in Control, and (iii) to provide Executive with
compensation arrangements in the event of a Change in
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<PAGE> 2
Control which provide Executive with financial security, which are competitive
with those of other corporations, and which ensure that Executive receives the
compensation and benefits intended to be provided to Executive by the Company
through this Agreement and the Company's various employee benefit and
compensation plans and arrangements without regard to any Excise Tax (as
defined in Section 4.10(a) hereof).
H. In order to accomplish the objectives described in the two
immediately preceding recitals, the Board desires to cause the Company to enter
into this Agreement and amend and restate the Employment Agreement as set forth
herein.
I. Executive desires to enter into this Agreement and amend and
restate the Employment Agreement as set forth herein.
W I T N E S S E T H:
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING, TERM AND DUTIES
1.1 Employment. On the terms and subject to the conditions of
this Agreement, the Company hereby employs and engages the services of
Executive to serve as, and Executive agrees to diligently and competently serve
as and perform the functions of, Senior Vice President, General Counsel and
Secretary (the "Office") of the Company for the term and for the compensation
and benefits stated herein.
1.2 Term. The term of employment under this Agreement shall
commence on the Effective Date and shall end on the first to occur of the
events set forth in Section 4.1(a), (b), and (c) (the "Term").
1.3 Major Responsibilities; Authority. Executive shall have the
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities usually associated with the Office of
corporations having assets similar in nature and value to the assets of the
Company and business similar to the business of the Company and at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day periods immediately
preceding each of the Effective Date and the Execution Date, and such other
duties as the Board shall determine from time to time.
1.4 Extent of Service. During the Term, and excluding any periods
of vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable time and energies to the business of the Company consistent
with past practice and shall not, during the Term, be engaged in any business
activity which would interfere or prevent Executive from carrying out his
duties under this Agreement; provided,
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<PAGE> 3
however, that this Section 1.4 shall not be construed as preventing Executive
from investing his assets in such form or manner as will not require services
on the part of Executive in the operation of the affairs of any company in
which such investments are made.
1.5 Location. Executive shall not be required to move from
Executive's home in Houston, Texas.
ARTICLE II
COMPENSATION AND RELATED ITEMS
2.1 Compensation. As compensation and consideration for the
services to be rendered by Executive under this Agreement and for the
performance by Executive of the usual obligations of such employment, the
Company agrees to pay Executive, and Executive agrees to accept, the following
compensation and benefits during the Term:
(a) Salary. Executive shall be paid a minimum salary at
the following annual rates for the periods indicated:
(i) $182,000 for the period May 18, 1993, through
July 31, 1994;
(ii) $191,100 for the period August 1, 1994,
through June 30, 1995; and
(iii) $200,000 for the period July 1, 1995, through
the end of the Term.
Except as otherwise provided herein, the minimum salary in effect for
any period shall be payable in equal weekly payments. Any earnings
over the minimum salary in effect during any period shall not be
applied to the minimum salary for any subsequent period. If this
Agreement terminates on a date other than the last day of any week,
Executive shall be paid for the week that includes the date of such
termination a pro rata portion of the minimum salary then in effect
for such week in the ratio that the number of days of employment
during such week bears to the total number of business days in such
week.
(b) Bonus.
(i) In addition to the minimum salary provided
for in Section 2.1(a) hereof, and subject to the provisions of
Section 2.1(b)(vi) hereof, Executive shall be awarded, for
each fiscal year of the Company during the Term (or, in the
event of a Change in Control, a portion thereof as hereinafter
provided) commencing with the fiscal year of the Company
ending June 30, 1996, a bonus ("Bonus") calculated in
accordance with this Section 2.1(b).
(ii) For purposes of this Section 2.1(b), the
following terms shall have the meanings indicated:
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<PAGE> 4
(A) "Bonusable Earnings" shall mean the
consolidated earnings before reorganization expenses,
fresh start adjustments, income taxes, changes in
accounting method, extraordinary gains or losses, and
Takeover Expenses (as defined in the next sentence)
of the Company and its subsidiaries for any fiscal
year, or completed months thereof in the event of a
Change in Control, as the case may be, for which a
Bonus is being calculated, as determined in
conformity with generally accepted accounting
principles applied in a manner consistent with prior
periods. For purposes of the preceding sentence, the
term "Takeover Expenses" shall mean the aggregate
amount of the costs and expenses (including, but not
limited to, any accruals, reserves, or provisions for
such costs and expenses) related to any and all
transactions that arise in connection with a Change
in Control or a potential Change in Control (whether
or not any such transaction (I) is consummated, (II)
is solicited or unsolicited by the Company, or (III)
is undertaken to resist or facilitate any such
transaction or any other such transaction),
including, but not limited to, the fees and costs of
investment bankers, attorneys, accountants, and other
experts and advisors.
(B) "Threshold Amount" shall mean (I)
for the fiscal year of the Company ended June 30,
1996, an amount equal to $12,000,000, and (II) for
each subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
minimum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Threshold Amount
within thirty (30) days after the first day of such
fiscal year.
(C) "Threshold Percentage" shall mean
(I) fifteen percent (15%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Threshold Amount for such fiscal year and which
the Board in good faith shall establish by resolution
as the Threshold Percentage within thirty (30) days
after the first day of such fiscal year.
(D) "Threshold Applicable Percentage"
shall mean for any fiscal year of the Company during
the Term, a percentage calculated in accordance with
the following formula:
Threshold Applicable Percentage = Threshold
Percentage + [(Target Percentage -
Bonusable Earnings -
Threshold Amount
Threshold Percentage) x ---------------------].
Target Amount -
Threshold Amount
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<PAGE> 5
(E) "Target Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $14,500,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
expected amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Target Amount within
thirty (30) days after the first day of such fiscal
year.
(F) "Target Percentage" shall mean (I)
thirty percent (30%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Target Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Target Percentage within thirty (30) days after
the first day of such fiscal year.
(G) "Target Applicable Percentage" shall
mean for any fiscal year of the Company during the
Term, a percentage calculated in accordance with the
following formula:
Target Applicable Percentage = Target Percentage +
[(Maximum Percentage -
Bonusable Earnings -
Target Amount
Target Percentage) x ----------------------].
Maximum Amount -
Target Amount
(H) "Maximum Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $17,000,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
maximum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Maximum Amount within
thirty (30) days after the first day of such fiscal
year.
(I) "Maximum Percentage" shall mean (I)
sixty percent (60%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Maximum Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Maximum Percentage within thirty (30) days after
the first day of such fiscal year.
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<PAGE> 6
(J) "Monthly Target Amount" shall mean
(I) for each month of the fiscal year of the Company
ended June 30, 1996, the following amount set forth
opposite such month:
<TABLE>
<CAPTION>
Monthly Target
Month Year Amount
----- ---- ------------------
<S> <C> <C>
July 1995 $ 2,857,903
August 1995 2,605,852
September 1995 1,835,830
October 1995 1,713,422
November 1995 204,494
December 1995 805,051
January 1996 (290,770)
February 1996 (513,025)
March 1996 504,432
April 1996 668,572
May 1996 1,454,238
June 1996 2,249,899
---------
Total $14,095,898
===========
</TABLE>
; and (II) for each month of each subsequent fiscal
year of the Company during the Term, an amount equal
to a reasonable forecast of the monthly expected
amount of the Bonusable Earnings for each month of
such fiscal year which the Board shall in good faith
establish by resolution as the Target Amount within
thirty (30) days after the first day of such fiscal
year and which shall, in the aggregate, equal the
Target Amount for such fiscal year.
(K) "Projected Bonusable Earnings" shall
mean for the fiscal year of the Company which
includes the date of a Change in Control, an amount
equal to the product obtained by multiplying (I) the
Target Amount for such fiscal year, by (II) the
quotient obtained by dividing the aggregate amount of
the Bonusable Earnings for the completed months of
such fiscal year that precede the date of such
termination or Change in Control, as the case may be,
by the aggregate amount of the Monthly Target Amounts
for such completed months.
(L) "Threshold Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of
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<PAGE> 7
a Change in Control, a percentage calculated in
accordance with the following formula:
Threshold Projected Applicable Percentage =
Threshold Percentage + [(Target Percentage -
Projected Bonusable Earnings
- Threshold Amount
Threshold Percentage) x ---------------------------].
Target Amount
- Threshold Amoun
(M) "Target Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
Target Projected Applicable Percentage = Target
Percentage + [(Maximum Percentage -
Projected Bonusable Earnings
- Target Amount
Target Percentage) x ----------------------------].
Maximum Amount
- Target Amount
(iii) Except as otherwise provided in Section
2.1(b)(iv) hereof, for the fiscal year of the Company ended
June 30, 1996 and for each fiscal year of the Company
thereafter during the Term, the Bonus shall be an amount
calculated as follows:
(A) If the Bonusable Earnings for such
fiscal year are less than the Threshold Amount for
such fiscal year, the Bonus shall be zero ($-0-).
(B) If the Bonusable Earnings for such
fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I)
Executive's minimum salary under Section 2.1(a)
hereof as in effect on the last day of such fiscal
year, multiplied by (II) the Threshold Applicable
Percentage for such fiscal year.
(C) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Target
Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Target Applicable Percentage
for such fiscal year.
(D) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Maximum
Amount for such fiscal year, the Bonus shall be an
amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Maximum Percentage for such
fiscal year.
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(iv) Notwithstanding anything contained in this
Agreement to the contrary, upon the occurrence of a Change in
Control, the amount of the Bonus for the fiscal year which
includes the date of such Change in Control shall be an amount
calculated as follows:
(A) If the Projected Bonusable Earnings
for such fiscal year are less than the Threshold
Amount for such fiscal year, the Bonus shall be zero
($-0-).
(B) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I) a
fraction, the numerator of which is the number of
completed months in such fiscal year that precede the
date of such Change in Control and the denominator of
which is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Threshold Projected
Applicable Percentage for such fiscal year.
(C) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Target Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Target Projected Applicable
Percentage for such fiscal year.
(D) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Maximum Percentage for such
fiscal year.
(v) Except as otherwise provided herein, any
Bonus payable to Executive under this Agreement shall be paid
by the Company to Executive no later than the sooner of (A)
forty-five (45) days after the last day of the fiscal year of
the Company with respect to which such Bonus is calculated, or
(B) thirty (30) days after a Change in Control.
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(vi) Except as otherwise provided in this
Agreement, upon the occurrence of a Change in Control,
Executive shall not be entitled under this Section 2.1(b) to
any Bonus calculated or that would be calculated with respect
to any period beginning after the last day of the month
immediately preceding such date of Change in Control;
provided, however, that nothing contained in this Section
2.1(b)(vi) shall prevent or limit Executive's continuing or
future participation in, or limit or otherwise affect such
rights as Executive may have under, any other bonus or
incentive plan, program, arrangement or policy provided by the
Company or any of its affiliates and for which Executive may
qualify.
(c) Additional Compensation. In addition to the minimum
salary and Bonus provided for in Section 2.1(a) and (b), respectively,
Executive and/or Executive's family, as the case may be, shall be
entitled to:
(i) participate in, and shall receive all
benefits under:
(A) any and all welfare benefit and
similar employee benefit plans, programs,
arrangements, or policies that are generally made
available by the Company and its affiliates (as
defined in Section 4.10(l)) now or at any time in the
future to other key executive officers or retired key
executive officers, including, but not limited to,
any hospitalization, medical, prescription, dental,
disability, salary continuance, individual life
insurance, executive life insurance, group life
insurance, accidental death insurance, and travel
accident insurance plans, programs, arrangements, and
policies; and
(B) any and all bonus, incentive,
savings, retirement, profit sharing, pension, and
stock option plans, programs, arrangements, and
policies that are generally made available by the
Company and its affiliates now or at any time in the
future to other key executive officers, including,
but in no way limited to, that certain Amended and
Restated National Convenience Stores Incorporated
Officers' Retirement Plan effective as of August 31,
1995; and
(ii) annual vacations and sick leave in accordance
with the vacation and sick leave policies of the Company and
its affiliates as are now or at any time in the future in
effect with respect to other key executive officers, during
which time of such vacations and sick leave Executive's
compensation shall be paid in full; and
(iii) fringe benefits in accordance with the fringe
benefit policies of the Company and its affiliates as are now
or at any time in the future in effect with respect to other
key executive officers.
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2.2 Expenses. The Company agrees that, during the Term, Executive
shall be allowed reasonable and necessary business expenses in connection with
the performance of his duties hereunder within guidelines established by the
Board as in effect at any time with respect to key executives ("Business
Expenses"), including, but not limited to, reasonable and necessary expenses
for food, travel, lodging, entertainment and other items in the promotion of
Company's business within such guidelines. Company will promptly reimburse
Executive for all Business Expenses incurred by Executive upon Executive's
presentation to the Company of an itemized account thereof, together with
receipts, vouchers, or other supporting documentation. After termination or
expiration of this Agreement, however such termination or expiration may come
about, Executive shall have ninety (90) days after the date of such termination
or expiration to submit Business Expenses incurred during the Term hereof to
the Company for reimbursement.
2.3 Working Facilities. Executive shall be furnished with offices
of a size and with other furnishings and appointments, administrative staff,
secretarial and other assistants, stenographic help, and such other facilities
and services as are suitable to Executive's position and adequate for the
performance of Executive's duties.
ARTICLE III
EXCULPATION
Company agrees that Executive will not be liable for any losses,
expenses, costs or damages caused by or resulting from the recommendations,
suggestions, actions, errors, omissions or mistakes of Executive undertaken or
proposed by Executive if Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Executive's rights under this Article III shall not be deemed
exclusive of, but shall be cumulative with, any and all other rights
(including, but not limited to, rights of indemnification and advancement of
expenses) to which Executive may now or at any time in the future be entitled
under applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement (including, but not limited to, this Agreement), any vote
of stockholders, any resolution of directors, or otherwise.
ARTICLE IV
TERMINATION
4.1 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement shall terminate upon the first to occur of:
(a) Thirty (30) days after written notice of termination
is given by either party to the other; or
(b) Executive's death or, at the Company's option, upon
Executive's becoming Disabled (as defined in Section 4.8 hereof); or
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(c) August 31, 1998 (the "Final Date").
Any notice of termination given by Executive to the Company under Section
4.1(a) above shall specify whether such termination is made with or without
Good Reason (as defined in Section 4.4 hereof) or Good Reason-Change in Control
(as defined in Section 4.5 hereof). Any notice of termination given by the
Company to Executive under Section 4.1(a) above shall specify whether such
termination is with or without Cause (as defined in Section 4.3 hereof).
4.2 Obligations of the Company Upon Termination.
(a) Cause; Other than for Good Reason and Other than for
Good Reason-Change in Control. If the Company terminates this
Agreement with Cause pursuant to Section 4.1(a) hereof, or if
Executive terminates this Agreement without Good Reason or without
Good Reason-Change in Control pursuant to Section 4.1(a) hereof, or if
this Agreement terminates pursuant to Section 4.1(c) hereof, this
Agreement shall terminate without further obligations to Executive,
other than those obligations owing or accrued to, vested in, or earned
by Executive through the date of termination, including, but not
limited to:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination through the date of termination; and
(ii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company and any accrued vacation pay not yet paid by
the Company; and
(iii) all other amounts or benefits owing or
accrued to, vested in, earned by Executive through the date of
termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof;
such obligations owing or accrued to, vested in, or earned by
Executive through the date of termination, including, but not limited
to, such amounts and benefits specified in clauses (i), (ii), and
(iii) of this sentence, being hereinafter collectively referred to as
the "Accrued Obligations." The aggregate amount of such obligations
owing or accrued to, vested in, or earned by Executive through the
date of termination, including, but not limited to, the Accrued
Obligations, shall be paid by the Company to Executive in cash in one
lump sum within thirty (30) days after the date of termination.
(b) Good Reason; Other than for Cause Before a Change in
Control. If Executive terminates this Agreement with Good Reason
pursuant to Section 4.1(a) hereof, or if the Company terminates this
Agreement without
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Cause before the occurrence of a Change in Control pursuant to Section
4.1(a) hereof, the Company shall pay to Executive cash in one lump sum
within thirty (30) days after the date of termination the aggregate of
the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but prior to giving effect to any
reduction therein which precipitated such termination) through
the date of termination; and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
(iii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company, and any accrued vacation pay not yet paid by
the Company; and
(iv) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(v) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), or (iv) of this
sentence.
(c) Good Reason-Change in Control; Other than for Cause
On or After a Change in Control. If Executive terminates this
Agreement with Good Reason-Change in Control pursuant to Section
4.1(a) hereof, or if the Company terminates this Agreement without
Cause on or after the occurrence of a Change in Control pursuant to
Section 4.1(a) hereof the Company shall pay to Executive cash in one
lump sum within thirty (30) days after the date of termination the
aggregate of the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but prior to giving effect to any
reduction therein which precipitated such termination) through
the date of termination; and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
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(iii) to the extent not theretofore paid as
required under Section 2.1(b)(v) hereof, any Bonus through the
date of such Change in Control; and
(iv) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company, and any accrued vacation pay not yet paid by
the Company; and
(v) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(vi) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), (iv), or (v) of this
sentence.
(d) Death. If Executive's employment is terminated under
Section 4.1(b) hereof by reason of Executive's death, the Company
shall pay to Executive's legal representatives cash in one lump sum
within thirty (30) days after the date of Executive's death the full
amount of the obligations owing or accrued to, vested in, or earned by
Executive through the date of Executive's death, including, but not
limited to, the Accrued Obligations. Anything in this Agreement to
the contrary notwithstanding, Executive's family shall be entitled to
receive benefits provided by the Company and any of its affiliates to
surviving families under the then existing or applicable plans,
programs, or arrangements and policies of the Company and its
affiliates.
(e) Disability. If Executive's employment is terminated
under Section 4.1(b) hereof by reason of Executive becoming Disabled:
(i) the Company shall pay to Executive cash in
one lump sum within thirty (30) days after the date of
termination the full amount of the obligations owing or
accrued to, vested in, or earned by Executive through the date
of termination, including, but not limited to, the Accrued
Obligations; and
(ii) the Company shall pay to Executive
seventy-five percent (75%) of Executive's minimum salary at
the annual rate in effect at the time of such termination for
the period commencing on the date after the date of
termination and ending on the Final Date (such minimum salary
to be paid in accordance with the second and third sentences
of Section 2.1(a)), reduced by the actual amount of benefits
paid to Executive during such period under any disability
insurance policy maintained by the Company for Executive.
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4.3 Cause. As used in this Agreement, the term "Cause" means (i)
willful misconduct by Executive, (ii) the gross neglect by Executive of his
duties as an employee, officer or director of the Company which continues for
more than thirty (30) days after written notice from the Company to Executive
specifically identifying the gross negligence of Executive and directing
Executive to discontinue same, (iii) the commission by Executive of a crime
constituting a felony, or (iv) the commission by Executive of an act, other
than an act taken in good faith within the course and scope of Executive's
employment, which is directly detrimental to the Company and which act exposes
the Company to material liability.
4.4 Good Reason. As used in this Agreement, the term "Good
Reason" means the breach of any material provision of this Agreement by the
Company (including, but in no way limited to, any removal of Executive, without
Cause, from the position of the Office during the Term) which is not cured
within thirty (30) days after written notice from Executive to the Company
specifically identifying such breach; provided, however, that the term "Good
Reason" shall not include any breach of any provision of this Agreement that
occurs after the occurrence of a Change in Control.
4.5 Good Reason-Change in Control. As used in this Agreement, the
term "Good Reason-Change in Control" means after the occurrence of a Change in
Control, a determination by Executive that any one or more of the following
events has occurred:
(a) the assignment by the Company to Executive of duties
that are inconsistent with the Office at the time of such assignment,
or the removal by the Company from Executive of those duties usually
appertaining to the Office at the time of such removal; or
(b) a change by the Company, without Executive's prior
written consent, in Executive's responsibilities to the Company as
such responsibilities existed at the time of the occurrence of such
Change in Control (or as such responsibilities may thereafter exist
from time to time as a result of changes in such responsibilities made
with Executive's prior written consent); or
(c) any removal of Executive from, or any failure to
elect or reelect Executive to, the Office, except in connection with
Executive's promotion, with his prior written consent, to a higher
office (if any) with the Company; or
(d) the Company's direction that Executive discontinue
service (or not seek reelection or reappointment) as a director,
officer or member of any corporation or other entity of which
Executive is a director, officer or member at the time of the
occurrence of such Change in Control; or
(e) the failure of the Company to continue to provide
Executive with office space, related facilities and support personnel
(including, but not limited to, administrative and secretarial
assistance) that are both commensurate with the Office and Executive's
responsibilities to and position with the Company at the time of the
occurrence of such Change in Control and not materially
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<PAGE> 15
dissimilar to the office space, related facilities and support
personnel provided to other key executive officers of the Company; or
(f) a reduction by the Company in the amount of
Executive's minimum salary specified in Section 2.1(a) (or as
subsequently increased) and as in effect at the time of the occurrence
of such Change in Control, or a failure of the Company to pay such
minimum annual salary to the Employee at the time and in the manner
specified in Section 2.1(a) of this Employment Agreement; or
(g) in the event of any increase, at any time after the
occurrence of such Change in Control, in the minimum annual salary or
salaries of one or more members of the Executive Group (as defined in
Section 4.7 hereof) (the members or members of the Executive Group
whose minimum annual salary or salaries are increased at such time
being hereinafter called the "Increased Executives"), the failure of
the Company simultaneously to increase Executive's minimum annual
salary, as Executive's minimum annual salary is in effect immediately
prior to giving effect to such first-mentioned increase (the "Prior
Base Salary"), by an amount which equals or exceeds the product
obtained by multiplying the Prior Base Salary by a fraction, the
numerator of which is the sum of the amounts by which the respective
minimum annual salaries of the Increased Executives (other than
Executive) were increased at such time and the denominator of which is
the sum of the respective minimum annual salaries of the Increased
Executives (other than Executive) immediately prior to giving effect
to such first- mentioned increase; or
(h) the discontinuation or reduction by the Company of
Executive's participation in any bonus or other employee benefit plan,
program, arrangement, or policy (including, but not limited to, any
such plan, program, arrangement, or policy described in Section 2.1(c)
hereof) in which Executive is a participant at the time of the
occurrence of such Change in Control; or
(i) Executive's principal office space or the related
facilities or support space or the related facilities or support
personnel referred to in paragraph (e) of this Section 4.5 cease to be
located within the Company's principal executive offices, or for a
period of more than 45 consecutive days Executive is required by the
Company to perform a majority of his duties outside the Company's
principal executive offices; or
(j) the relocation, without Executive's prior written
consent, of the Company's principal executive offices to a location
outside the county in which such offices are located at the time of
the occurrence of such Change in Control; or
(k) the failure of the Company to provide Executive
annually with a number of paid vacation days and sick leave days at
least equal to the number of paid vacation days to which Executive is
entitled annually at the time of the occurrence of such Change in
Control; or
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(l) the failure of the Company to obtain the assumption
by any successor to the Company of the obligations imposed upon the
Company under this Agreement, as required by Section 5.2 of this
Agreement; or
(m) the failure by the Company to promptly reimburse
Executive for any Business Expenses; or
(n) that because of the policies, decisions or actions of
the Board or the stockholders of the Company, Executive can no longer
perform his duties to the Company in a manner which is consistent with
the manner in which such duties were performed by Executive prior to
the occurrence of such Change in Control; or
(o) the employment of Executive under this Agreement is
terminated by the Company without Cause; or
(p) the Company notifies Executive of the Company's
intention not to observe or perform one or more of the obligations of
the Company under this Agreement; or
(q) the Company breaches any provision of this Agreement.
4.6 Change in Control. As used herein, the term "Change in
Control" shall mean the occurrence with respect to the Company of any of the
following events:
(a) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(b) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(c) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the
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beneficial owner (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of 20 percent or more
of the combined voting power of the then-outstanding securities of the
Company (as determined under paragraph (d) of Rule 13d-3 promulgated
under the Exchange Act, in the case of rights to acquire common
stock);
(d) the stockholders of the Company shall approve:
(i) any merger, consolidation, or reorganization
of the Company:
(A) in which the Company is not the
continuing or surviving corporation,
(B) pursuant to which shares of common
stock of the Company would be converted into cash,
securities or other property,
(C) with a corporation which prior to
such merger, consolidation, or reorganization owned
20 percent or more of the combined voting power of
the then- outstanding securities of the Company, or
(D) in which the Company will not
survive as an independent, publicly-owned
corporation;
(ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of
all or substantially all the assets of the Company, or
(iii) any liquidation or dissolution of the Company;
(e) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(f) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(g) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(h) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
cease for any reason to constitute a majority of the Board, unless the
election or nomination for election
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by the Company's stockholders of each new director during any such
two-year period was approved by the vote of two-thirds of the
directors then still in office who were directors at the beginning of
such two-year period.
4.7 Executive Group. As used herein, "Executive Group" shall mean
the officers of the Company; and each of such officers shall be deemed members
of the Executive Group.
4.8 Disabled. As used herein, "Disabled" shall mean a mental or
physical impairment which in the reasonable opinion of a qualified doctor
selected by the Company renders Executive unable to perform with reasonable
diligence the ordinary functions and duties of Executive on a full-time basis
in accordance with the terms of this Agreement, which inability will continue
in the reasonable opinion of such doctor for a period of not less than 180
days.
4.9 Return of Materials; Confidential Information. In the event
of any termination of this Agreement, Executive shall promptly deliver to the
Company all lists, books, records, literature, products and any other materials
owned or provided by the Company in connection with Executive's employment
hereunder. Executive shall not at any time during or after the Term hereof use
for himself or others, or divulge to others, any secret or confidential
information, knowledge or data of the Company obtained by Executive as a result
of his employment unless authorized by a majority of the Board.
4.10 Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or any of its affiliates to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (any such payments or distributions
being individually referred to herein as a "Payment," and any two or more of
such payments or distributions being referred to herein as "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") (such excise tax, together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such excise tax, and any interest in respect of such penalties,
additions to tax or additional amounts, being collectively referred herein to
as the "Excise Tax"), then Executive shall be entitled to receive an additional
payment or payments (individually referred to herein as a "Gross-Up Payment"
and any two or more of such additional payments being referred to herein as
"Gross-Up Payments") in an amount such that after payment by Executive of all
taxes (as defined in Section 4.10(k)) imposed upon the Gross-Up Payment,
Executive retains an amount of such Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 4.10(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 4.10(b), including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall initially be made, at the
Company's expense, by
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nationally recognized tax counsel mutually acceptable to the Company and
Executive ("Tax Counsel"). Tax Counsel shall provide detailed supporting legal
authorities, calculations, and documentation both to the Company and Executive
within 15 business days of the termination of Executive's employment, if
applicable, or such other time or times as is reasonably requested by the
Company or Executive. If Tax Counsel makes the initial Determination that no
Excise Tax is payable by Executive with respect to a Payment or Payments, it
shall furnish Executive with an opinion reasonably acceptable to Executive that
no Excise Tax will be imposed with respect to any such Payment or Payments.
Executive shall have the right to dispute any Determination (a "Dispute")
within 15 business days after delivery of Tax Counsel's opinion with respect to
such Determination. The Gross-Up Payment, if any, as determined pursuant to
such Determination shall, at the Company's expense, be paid by the Company to
Executive within five business days of Executive's receipt of such
Determination. The existence of a Dispute shall not in any way affect
Executive's right to receive the Gross-Up Payment in accordance with such
Determination. If there is no Dispute, such Determination shall be binding,
final and conclusive upon the Company and Executive, subject in all respects,
however, to the provisions of Section 4.10(c) through (i) below. As a result
of the uncertainty in the application of Sections 4999 and 280G of the Code, it
is possible that Gross-Up Payments (or portions thereof) which will not have
been made by the Company should have been made ("Underpayment"), and if upon
any reasonable written request from Executive or the Company to Tax Counsel, or
upon Tax Counsel's own initiative, Tax Counsel, at the Company's expense,
thereafter determines that Executive is required to make a payment of any
Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall,
at the Company's expense, determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to
Executive.
(c) The Company shall defend, hold harmless, and
indemnify Executive on a fully grossed-up after tax basis from and against any
and all claims, losses, liabilities, obligations, damages, impositions,
assessments, demands, judgements, settlements, costs and expenses (including
reasonable attorneys', accountants', and experts' fees and expenses) with
respect to any tax liability of Executive resulting from any Final
Determination (as defined in Section 4.10(j)) that any Payment is subject to
the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending
or threatened audit, examination, investigation or administrative, court or
other proceeding which, if pursued successfully, could result in or give rise
to a claim by Executive against the Company under this Section 4.10(d)
("Claim"), including, but not limited to, a claim for indemnification of
Executive by the Company under Section 4.10(c), then such party shall promptly
notify the other party hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Executive ("Executive
Claim"), Executive shall take or cause to be taken such action in connection
with contesting such Executive Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the
-19-
<PAGE> 20
Company (it being understood and agreed by the parties hereto that the terms of
any such retention shall expressly provide that the Company shall be solely
responsible for the payment of any and all fees and disbursements of such
counsel and any experts) and the execution of powers of attorney, provided
that:
(i) within 30 calendar days after the Company
receives or delivers, as the case may be, the Tax Claim Notice
relating to such Executive Claim (or such earlier date that any
payment of the taxes claimed is due from Executive, but in no event
sooner than five calendar days after the Company receives or delivers
such Tax Claim Notice), the Company shall have notified Executive in
writing ("Election Notice") that the Company does not dispute its
obligations (including, but not limited to, its indemnity obligations)
under this Agreement and that the Company elects to contest, and to
control the defense or prosecution of, such Executive Claim at the
Company's sole risk and sole cost and expense; and
(ii) the Company shall have advanced to Executive
on an interest-free basis, the total amount of the tax claimed in
order for Executive, at the Company's request, to pay or cause to be
paid the tax claimed, file a claim for refund of such tax and, subject
to the provisions of the last sentence of Section 4.10(g), sue for a
refund of such tax if such claim for refund is disallowed by the
appropriate taxing authority (it being understood and agreed by the
parties hereto that the Company shall only be entitled to sue for a
refund and the Company shall not be entitled to initiate any
proceeding in, for example, United States Tax Court) and shall
indemnify and hold Executive harmless, on a fully grossed-up after tax
basis, from any tax imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
(iii) the Company shall reimburse Executive for any
and all costs and expenses resulting from any such request by the
Company and shall indemnify and hold Executive harmless, on fully
grossed-up after-tax basis, from any tax imposed as a result of such
reimbursement.
(f) Subject to the provisions of Section 4.10(e) hereof,
the Company shall have the right to defend or prosecute, at the sole cost,
expense and risk of the Company, such Executive Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
the Company to a Final Determination; provided, however, that (i) the Company
shall not, without Executive's prior written consent, enter into any compromise
or settlement of such Executive Claim that would adversely affect Executive,
(ii) any request from the Company to Executive regarding any extension of the
statute of limitations relating to assessment, payment, or collection of taxes
for the taxable year of Executive with respect to which the contested issues
involved in, and amount of, the Executive Claim relate is limited solely to
such contested issues and amount, and (iii) the Company's control of any
contest or proceeding shall be limited to issues with respect to the Executive
Claim and Executive shall be entitled to settle or contest, in his sole and
absolute discretion, any other issue raised by the Internal Revenue Service or
any other taxing authority. So long as the
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<PAGE> 21
Company is diligently defending or prosecuting such Executive Claim, Executive
shall provide or cause to be provided to the Company any information reasonably
requested by the Company that relates to such Executive Claim, and shall
otherwise cooperate with the Company and its representatives in good faith in
order to contest effectively such Executive Claim. The Company shall keep
Executive informed of all developments and events relating to any such
Executive Claim (including, without limitation, providing to Executive copies
of all written materials pertaining to any such Executive Claim), and Executive
or his authorized representatives shall be entitled, at Executive's expense, to
participate in all conferences, meetings and proceedings relating to any such
Executive Claim.
(g) If, after actual receipt by Executive of an amount of
a tax claimed (pursuant to an Executive Claim) that has been advanced by the
Company pursuant to Section 4.10(e)(ii) hereof, the extent of the liability of
the Company hereunder with respect to such tax claimed has been established by
a Final Determination, Executive shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, Executive
with respect to such tax (together with any interest paid or credited thereon
by the taxing authority and any recovery of legal fees from such taxing
authority related thereto), except to the extent that any amounts are then due
and payable by the Company to Executive, whether under the provisions of this
Agreement or otherwise. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 4.10(e)(ii), a determination is
made by the Internal Revenue Service or other appropriate taxing authority that
Executive shall not be entitled to any refund with respect to such tax claimed
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of any Gross-Up Payments and other payments required to be paid
hereunder.
(h) With respect to any Executive Claim, if the Company
fails to deliver an Election Notice to Executive within the period provided in
Section 4.10(e)(i) hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Section 4.10(e)(ii) and (iii)
and (f) hereof, then Executive shall at any time thereafter have the right (but
not the obligation), at his election and in his sole and absolute discretion,
to defend or prosecute, at the sole cost, expense and risk of the Company, such
Executive Claim. Executive shall have full control of such defense or
prosecution and such proceedings, including any settlement or compromise
thereof. If requested by Executive, the Company shall cooperate, and shall
cause its affiliates to cooperate, in good faith with Executive and his
authorized representatives in order to contest effectively such Executive
Claim. The Company may attend, but not participate in or control, any defense,
prosecution, settlement or compromise of any Executive Claim controlled by
Executive pursuant to this Section 4.10(h) and shall bear its own costs and
expenses with respect thereto. In the case of any Executive Claim that is
defended or prosecuted by Executive, Executive shall, from time to time, be
entitled to current payment, on a fully grossed-up after tax basis, from the
Company with respect to costs and expenses incurred by Executive in connection
with such defense or prosecution.
-21-
<PAGE> 22
(i) In the case of any Executive Claim that is defended
or prosecuted to a Final Determination pursuant to the terms of this Section
4.10(i), the Company shall pay, on a fully grossed-up after tax basis, to
Executive in immediately available funds the full amount of any taxes arising
or resulting from or incurred in connection with such Executive Claim that have
not theretofore been paid by the Company to Executive, together with the costs
and expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by the Company to Executive,
within ten calendar days after such Final Determination. In the case of any
Executive Claim not covered by the preceding sentence, the Company shall pay,
on a fully grossed-up after tax basis, to Executive in immediately available
funds the full amount of any taxes arising or resulting from or incurred in
connection with such Executive Claim at least ten calendar days before the date
payment of such taxes is due from Executive, except where payment of such taxes
is sooner required under the provisions of this Section 4.10(i), in which case
payment of such taxes (and payment, on a fully grossed-up after tax basis, of
any costs and expenses required to be paid under this Section 4.10(i) shall be
made within the time and in the manner otherwise provided in this Section
4.10(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including, but not
limited to, any and all Excise Taxes, income taxes, and employment taxes),
together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such taxes and any interest in respect of
such penalties, additions to tax, or additional amounts.
(l) For purposes of this Agreement, the terms "affiliate"
and "affiliates" mean, when used with respect to any entity, individual, or
other person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by,
or is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to
direct or cause the direction of the management and policies of such entity or
other person, whether through the ownership of voting securities, by contract
or otherwise.
4.11 Legal Fees and Expenses. The Company shall defend, hold
harmless, and indemnify Executive on a fully grossed-up after tax basis from
and against any and all costs and expenses (including reasonable attorneys',
accountants' and experts' fees and expenses) incurred by Executive from time to
time as a result of any contest (regardless of the outcome) by the Company or
others contesting the validity or enforcement of, or
-22-
<PAGE> 23
liability under, any term or provision of this Agreement, plus in each case
interest at the applicable federal rate provided for in Section 7872(f)(2)(B)
of the Code.
4.12 Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan, program, arrangement or policy provided by the
Company or any of its affiliates (including, but not limited to, any plan,
program, arrangement or policy described in Section 2.1(c) hereof) and for
which Executive and/or Executive's family may qualify, nor shall anything
herein limit or otherwise affect such rights as Executive and/or Executive's
family may have under any other agreements with the Company or any of its
affiliates. Amounts which are vested benefits or which Executive and/or
Executive's family is otherwise entitled to receive under any plan, program,
arrangement, or policy of the Company or any of its affiliates (including, but
not limited to, any plan, program, arrangement or policy described in Section
2.1(c) hereof) at or subsequent to the date of termination of this Agreement
shall be payable in accordance with such plan, program, arrangement or policy.
4.13 Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement.
ARTICLE V
GENERAL PROVISIONS
5.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
5.2 Assignability. This Agreement is personal to Executive and
without the prior written consent of the Company shall not be assignable by
Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives and heirs. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Company shall
require any corporation, entity, individual or other person who is the
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization, or otherwise) to all or substantially all of the business or
assets of the Company to expressly assume and agree to perform, by a written
agreement in form and substance satisfactory to Executive, all of the
obligations of the Company under this Agreement. As used in this Agreement,
the term "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, written agreement, or otherwise.
-23-
<PAGE> 24
5.3 Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
5.4 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between Executive and the Company and supersedes
any prior agreements or understandings, whether written or oral, with respect
to the subject matter hereof. Except as may be otherwise provided herein, this
Agreement may not be amended or modified except by subsequent written agreement
executed by both parties hereto.
5.5 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
5.6 Notices. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall
be deemed delivered only upon actual receipt.
If to the Company:
National Convenience Stores Incorporated
100 Waugh Drive
Houston, Texas 77007
Attention: President
If to Executive:
A. J. Gallerano
13515 St. Mary's Lane
Houston, Texas 77079
5.7 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any breach of
the same or any other term or condition of this Agreement.
5.8 Severability. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not effect the enforceability or validity of any other
provision of this Agreement.
-24-
<PAGE> 25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Execution Date, but effective as of the Effective Date.
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ V. H. VAN HORN
-----------------------------------
V. H. Van Horn
President
"COMPANY"
/s/ A.J. GALLERANO
---------------------------------------
A. J. Gallerano
"EXECUTIVE"
-25-
<PAGE> 1
EXHIBIT 99.12
AGREEMENT AMENDING AND RESTATING
EMPLOYMENT AGREEMENT
THIS AGREEMENT AMENDING AND RESTATING EMPLOYMENT AGREEMENT (this
"Agreement") is executed as of August 31, 1995 (the "Execution Date"), but
effective as of May 18, 1993 (the "Effective Date"), by and between NATIONAL
CONVENIENCE STORES INCORPORATED, a Delaware corporation (the "Company"), and
ARNOLD VAN ZANTEN ("Executive").
R E C I T A L S:
A. The Company filed a case under Chapter 11 of the Bankruptcy
Code on December 9, 1991 in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division (the "Court"), Case No. 91-49819-H2-11 (the
"Case"). The Company filed its Fourth Amended and Restated Plan of
Reorganization under Chapter 11 of the United States Bankruptcy Code (the
"Plan") in the Case, which Plan has been confirmed by the Court pursuant to an
Order confirming the Plan (the "Order") entered in the Case on February 25,
1993.
B. The Company is in the convenience store business in the State
of Texas.
C. Executive is recognized as having experience in the management
and operation of companies that are in the convenience store business.
D. As contemplated in the Plan, the Company and Executive entered
into that certain Employment Agreement effective as of May 18, 1993 (the
"Original Employment Agreement").
E. Subsequently, the Company and Executive entered into that
certain Amendment to Employment Agreement effective as of August 1, 1994 (the
"First Amendment"), and that certain Second Amendment to Employment Agreement
effective as of July 1, 1995 (the "Second Amendment") (the Original Employment
Agreement, the First Amendment, and the Second Amendment being collectively
referred to herein as the "Employment Agreement").
F. The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat, or occurrence of a Change in Control
(as defined in Section 4.6 hereof).
G. The Board believes it is imperative (i) to diminish the
inevitable and significant distractions of Executive and dilution of the time
of Executive, by virtue of the personal uncertainties and risks created by a
pending or threatened Change in Control, (ii) to encourage Executive's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change in Control, and (iii) to provide Executive with
compensation arrangements in the event of a Change in
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<PAGE> 2
Control which provide Executive with financial security, which are competitive
with those of other corporations, and which ensure that Executive receives the
compensation and benefits intended to be provided to Executive by the Company
through this Agreement and the Company's various employee benefit and
compensation plans and arrangements without regard to any Excise Tax (as
defined in Section 4.10(a) hereof).
H. In order to accomplish the objectives described in the two
immediately preceding recitals, the Board desires to cause the Company to enter
into this Agreement and amend and restate the Employment Agreement as set forth
herein.
I. Executive desires to enter into this Agreement and amend and
restate the Employment Agreement as set forth herein.
W I T N E S S E T H:
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING, TERM AND DUTIES
1.1 Employment. On the terms and subject to the conditions of
this Agreement, the Company hereby employs and engages the services of
Executive to serve as, and Executive agrees to diligently and competently serve
as and perform the functions of, Senior Vice President - Administration (the
"Office") of the Company for the term and for the compensation and benefits
stated herein.
1.2 Term. The term of employment under this Agreement shall
commence on the Effective Date and shall end on the first to occur of the
events set forth in Section 4.1(a), (b), and (c) (the "Term").
1.3 Major Responsibilities; Authority. Executive shall have the
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities usually associated with the Office of
corporations having assets similar in nature and value to the assets of the
Company and business similar to the business of the Company and at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day periods immediately
preceding each of the Effective Date and the Execution Date, and such other
duties as the Board shall determine from time to time.
1.4 Extent of Service. During the Term, and excluding any periods
of vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable time and energies to the business of the Company consistent
with past practice and shall not, during the Term, be engaged in any business
activity which would interfere or prevent Executive from carrying out his
duties under this Agreement; provided,
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<PAGE> 3
however, that this Section 1.4 shall not be construed as preventing Executive
from investing his assets in such form or manner as will not require services
on the part of Executive in the operation of the affairs of any company in
which such investments are made.
1.5 Location. Executive shall not be required to move from
Executive's home in Montgomery County, Texas.
ARTICLE II
COMPENSATION AND RELATED ITEMS
2.1 Compensation. As compensation and consideration for the
services to be rendered by Executive under this Agreement and for the
performance by Executive of the usual obligations of such employment, the
Company agrees to pay Executive, and Executive agrees to accept, the following
compensation and benefits during the Term:
(a) Salary. Executive shall be paid a minimum salary at
the following annual rates for the periods indicated:
(i) $155,000 for the period May 18, 1993, through
July 31, 1994;
(ii) $162,750 for the period August 1, 1994,
through June 30, 1995; and
(iii) $170,000 for the period July 1, 1995, through
the end of the Term.
Except as otherwise provided herein, the minimum salary in effect for
any period shall be payable in equal weekly payments. Any earnings
over the minimum salary in effect during any period shall not be
applied to the minimum salary for any subsequent period. If this
Agreement terminates on a date other than the last day of any week,
Executive shall be paid for the week that includes the date of such
termination a pro rata portion of the minimum salary then in effect
for such week in the ratio that the number of days of employment
during such week bears to the total number of business days in such
week.
(b) Bonus.
(i) In addition to the minimum salary provided
for in Section 2.1(a) hereof, and subject to the provisions of
Section 2.1(b)(vi) hereof, Executive shall be awarded, for
each fiscal year of the Company during the Term (or, in the
event of a Change in Control, a portion thereof as hereinafter
provided) commencing with the fiscal year of the Company
ending June 30, 1996, a bonus ("Bonus") calculated in
accordance with this Section 2.1(b).
(ii) For purposes of this Section 2.1(b), the
following terms shall have the meanings indicated:
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<PAGE> 4
(A) "Bonusable Earnings" shall mean the
consolidated earnings before reorganization expenses,
fresh start adjustments, income taxes, changes in
accounting method, extraordinary gains or losses, and
Takeover Expenses (as defined in the next sentence)
of the Company and its subsidiaries for any fiscal
year, or completed months thereof in the event of a
Change in Control, as the case may be, for which a
Bonus is being calculated, as determined in
conformity with generally accepted accounting
principles applied in a manner consistent with prior
periods. For purposes of the preceding sentence, the
term "Takeover Expenses" shall mean the aggregate
amount of the costs and expenses (including, but not
limited to, any accruals, reserves, or provisions for
such costs and expenses) related to any and all
transactions that arise in connection with a Change
in Control or a potential Change in Control (whether
or not any such transaction (I) is consummated, (II)
is solicited or unsolicited by the Company, or (III)
is undertaken to resist or facilitate any such
transaction or any other such transaction),
including, but not limited to, the fees and costs of
investment bankers, attorneys, accountants, and other
experts and advisors.
(B) "Threshold Amount" shall mean (I)
for the fiscal year of the Company ended June 30,
1996, an amount equal to $12,000,000, and (II) for
each subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
minimum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Threshold Amount
within thirty (30) days after the first day of such
fiscal year.
(C) "Threshold Percentage" shall mean
(I) fifteen percent (15%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Threshold Amount for such fiscal year and which
the Board in good faith shall establish by resolution
as the Threshold Percentage within thirty (30) days
after the first day of such fiscal year.
(D) "Threshold Applicable Percentage"
shall mean for any fiscal year of the Company during
the Term, a percentage calculated in accordance with
the following formula:
Threshold Applicable Percentage = Threshold
Percentage + [(Target Percentage -
Bonusable Earnings -
Threshold Amount
Threshold Percentage) x ----------------------].
Target Amount -
Threshold Amount
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<PAGE> 5
(E) "Target Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $14,500,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
expected amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Target Amount within
thirty (30) days after the first day of such fiscal
year.
(F) "Target Percentage" shall mean (I)
sixty percent (60%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Target Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Target Percentage within thirty (30) days after
the first day of such fiscal year.
(G) "Target Applicable Percentage" shall
mean for any fiscal year of the Company during the
Term, a percentage calculated in accordance with the
following formula:
Target Applicable Percentage = Target Percentage +
[(Maximum Percentage -
Bonusable Earnings -
Target Amount
Target Percentage) x ---------------------].
Maximum Amount -
Target Amount
(H) "Maximum Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $17,000,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
maximum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Maximum Amount within
thirty (30) days after the first day of such fiscal
year.
(I) "Maximum Percentage" shall mean (I)
one hundred twenty percent (120%) for the fiscal year
of the Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Maximum Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Maximum Percentage within thirty (30) days after
the first day of such fiscal year.
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<PAGE> 6
(J) "Monthly Target Amount" shall mean
(I) for each month of the fiscal year of the Company
ended June 30, 1996, the following amount set forth
opposite such month:
<TABLE>
<CAPTION>
Monthly Target
Month Year Amount
----- ---- ------------------
<S> <C> <C>
July 1995 $ 2,857,903
August 1995 2,605,852
September 1995 1,835,830
October 1995 1,713,422
November 1995 204,494
December 1995 805,051
January 1996 (290,770)
February 1996 (513,025)
March 1996 504,432
April 1996 668,572
May 1996 1,454,238
June 1996 2,249,899
---------
Total $14,095,898
===========
</TABLE>
; and (II) for each month of each subsequent fiscal
year of the Company during the Term, an amount equal
to a reasonable forecast of the monthly expected
amount of the Bonusable Earnings for each month of
such fiscal year which the Board shall in good faith
establish by resolution as the Target Amount within
thirty (30) days after the first day of such fiscal
year and which shall, in the aggregate, equal the
Target Amount for such fiscal year.
(K) "Projected Bonusable Earnings" shall
mean for the fiscal year of the Company which
includes the date of a Change in Control, an amount
equal to the product obtained by multiplying (I) the
Target Amount for such fiscal year, by (II) the
quotient obtained by dividing the aggregate amount of
the Bonusable Earnings for the completed months of
such fiscal year that precede the date of such
termination or Change in Control, as the case may be,
by the aggregate amount of the Monthly Target Amounts
for such completed months.
(L) "Threshold Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of
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<PAGE> 7
a Change in Control, a percentage calculated in
accordance with the following formula:
Threshold Projected Applicable Percentage
= Threshold Percentage + [(Target Percentage -
Projected Bonusable
Earnings - Threshold Amount
Threshold Percentage) x ----------------------------].
Target Amount -
Threshold Amount
(M) "Target Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
Target Projected Applicable Percentage
= Target Percentage + [(Maximum Percentage -
Projected Bonusable
Earnings - Target Amount
Target Percentage) x ------------------------].
Maximum Amount -
Target Amount
(iii) Except as otherwise provided in Section
2.1(b)(iv) hereof, for the fiscal year of the Company ended
June 30, 1996 and for each fiscal year of the Company
thereafter during the Term, the Bonus shall be an amount
calculated as follows:
(A) If the Bonusable Earnings for such
fiscal year are less than the Threshold Amount for
such fiscal year, the Bonus shall be zero ($-0-).
(B) If the Bonusable Earnings for such
fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I)
Executive's minimum salary under Section 2.1(a)
hereof as in effect on the last day of such fiscal
year, multiplied by (II) the Threshold Applicable
Percentage for such fiscal year.
(C) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Target
Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Target Applicable Percentage
for such fiscal year.
(D) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Maximum
Amount for such fiscal year, the Bonus shall be an
amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Maximum Percentage for such
fiscal year.
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(iv) Notwithstanding anything contained in this
Agreement to the contrary, upon the occurrence of a Change in
Control, the amount of the Bonus for the fiscal year which
includes the date of such Change in Control shall be an amount
calculated as follows:
(A) If the Projected Bonusable Earnings
for such fiscal year are less than the Threshold
Amount for such fiscal year, the Bonus shall be zero
($-0-).
(B) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I) a
fraction, the numerator of which is the number of
completed months in such fiscal year that precede the
date of such Change in Control and the denominator of
which is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Threshold Projected
Applicable Percentage for such fiscal year.
(C) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Target Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Target Projected Applicable
Percentage for such fiscal year.
(D) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Maximum Percentage for such
fiscal year.
(v) Except as otherwise provided herein, any
Bonus payable to Executive under this Agreement shall be paid
by the Company to Executive no later than the sooner of (A)
forty-five (45) days after the last day of the fiscal year of
the Company with respect to which such Bonus is calculated, or
(B) thirty (30) days after a Change in Control.
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(vi) Except as otherwise provided in this
Agreement, upon the occurrence of a Change in Control,
Executive shall not be entitled under this Section 2.1(b) to
any Bonus calculated or that would be calculated with respect
to any period beginning after the last day of the month
immediately preceding such date of Change in Control;
provided, however, that nothing contained in this Section
2.1(b)(vi) shall prevent or limit Executive's continuing or
future participation in, or limit or otherwise affect such
rights as Executive may have under, any other bonus or
incentive plan, program, arrangement or policy provided by the
Company or any of its affiliates and for which Executive may
qualify.
(c) Additional Compensation. In addition to the minimum
salary and Bonus provided for in Section 2.1(a) and (b), respectively,
Executive and/or Executive's family, as the case may be, shall be
entitled to:
(i) participate in, and shall receive all
benefits under:
(A) any and all welfare benefit and
similar employee benefit plans, programs,
arrangements, or policies that are generally made
available by the Company and its affiliates (as
defined in Section 4.10(l)) now or at any time in the
future to other key executive officers or retired key
executive officers, including, but not limited to,
any hospitalization, medical, prescription, dental,
disability, salary continuance, individual life
insurance, executive life insurance, group life
insurance, accidental death insurance, and travel
accident insurance plans, programs, arrangements, and
policies; and
(B) any and all bonus, incentive,
savings, retirement, profit sharing, pension, and
stock option plans, programs, arrangements, and
policies that are generally made available by the
Company and its affiliates now or at any time in the
future to other key executive officers, including,
but in no way limited to, that certain Amended and
Restated National Convenience Stores Incorporated
Officers' Retirement Plan effective as of August 31,
1995; and
(ii) annual vacations and sick leave in accordance
with the vacation and sick leave policies of the Company and
its affiliates as are now or at any time in the future in
effect with respect to other key executive officers, during
which time of such vacations and sick leave Executive's
compensation shall be paid in full; and
(iii) fringe benefits in accordance with the fringe
benefit policies of the Company and its affiliates as are now
or at any time in the future in effect with respect to other
key executive officers.
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2.2 Expenses. The Company agrees that, during the Term, Executive
shall be allowed reasonable and necessary business expenses in connection with
the performance of his duties hereunder within guidelines established by the
Board as in effect at any time with respect to key executives ("Business
Expenses"), including, but not limited to, reasonable and necessary expenses
for food, travel, lodging, entertainment and other items in the promotion of
Company's business within such guidelines. Company will promptly reimburse
Executive for all Business Expenses incurred by Executive upon Executive's
presentation to the Company of an itemized account thereof, together with
receipts, vouchers, or other supporting documentation. After termination or
expiration of this Agreement, however such termination or expiration may come
about, Executive shall have ninety (90) days after the date of such termination
or expiration to submit Business Expenses incurred during the Term hereof to
the Company for reimbursement.
2.3 Working Facilities. Executive shall be furnished with offices
of a size and with other furnishings and appointments, administrative staff,
secretarial and other assistants, stenographic help, and such other facilities
and services as are suitable to Executive's position and adequate for the
performance of Executive's duties.
ARTICLE III
EXCULPATION
Company agrees that Executive will not be liable for any losses,
expenses, costs or damages caused by or resulting from the recommendations,
suggestions, actions, errors, omissions or mistakes of Executive undertaken or
proposed by Executive if Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Executive's rights under this Article III shall not be deemed
exclusive of, but shall be cumulative with, any and all other rights
(including, but not limited to, rights of indemnification and advancement of
expenses) to which Executive may now or at any time in the future be entitled
under applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement (including, but not limited to, this Agreement), any vote
of stockholders, any resolution of directors, or otherwise.
ARTICLE IV
TERMINATION
4.1 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement shall terminate upon the first to occur of:
(a) Thirty (30) days after written notice of termination
is given by either party to the other; or
(b) Executive's death or, at the Company's option, upon
Executive's becoming Disabled (as defined in Section 4.8 hereof); or
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(c) August 31, 1998 (the "Final Date").
Any notice of termination given by Executive to the Company under Section
4.1(a) above shall specify whether such termination is made with or without
Good Reason (as defined in Section 4.4 hereof) or Good Reason-Change in Control
(as defined in Section 4.5 hereof). Any notice of termination given by the
Company to Executive under Section 4.1(a) above shall specify whether such
termination is with or without Cause (as defined in Section 4.3 hereof).
4.2 Obligations of the Company Upon Termination.
(a) Cause; Other than for Good Reason and Other than for
Good Reason-Change in Control. If the Company terminates this
Agreement with Cause pursuant to Section 4.1(a) hereof, or if
Executive terminates this Agreement without Good Reason or without
Good Reason-Change in Control pursuant to Section 4.1(a) hereof, or if
this Agreement terminates pursuant to Section 4.1(c) hereof, this
Agreement shall terminate without further obligations to Executive,
other than those obligations owing or accrued to, vested in, or earned
by Executive through the date of termination, including, but not
limited to:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination through the date of termination; and
(ii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company and any accrued vacation pay not yet paid by
the Company; and
(iii) all other amounts or benefits owing or
accrued to, vested in, earned by Executive through the date of
termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof;
such obligations owing or accrued to, vested in, or earned by
Executive through the date of termination, including, but not limited
to, such amounts and benefits specified in clauses (i), (ii), and
(iii) of this sentence, being hereinafter collectively referred to as
the "Accrued Obligations." The aggregate amount of such obligations
owing or accrued to, vested in, or earned by Executive through the
date of termination, including, but not limited to, the Accrued
Obligations, shall be paid by the Company to Executive in cash in one
lump sum within thirty (30) days after the date of termination.
(b) Good Reason; Other than for Cause Before a Change in
Control. If Executive terminates this Agreement with Good Reason
pursuant to Section 4.1(a) hereof, or if the Company terminates this
Agreement without
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Cause before the occurrence of a Change in Control pursuant to Section
4.1(a) hereof, the Company shall pay to Executive cash in one lump sum
within thirty (30) days after the date of termination the aggregate of
the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but prior to giving effect to any
reduction therein which precipitated such termination) through
the date of termination; and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
(iii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company, and any accrued vacation pay not yet paid by
the Company; and
(iv) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(v) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), or (iv) of this
sentence.
(c) Good Reason-Change in Control; Other than for Cause
On or After a Change in Control. If Executive terminates this
Agreement with Good Reason-Change in Control pursuant to Section
4.1(a) hereof, or if the Company terminates this Agreement without
Cause on or after the occurrence of a Change in Control pursuant to
Section 4.1(a) hereof the Company shall pay to Executive cash in one
lump sum within thirty (30) days after the date of termination the
aggregate of the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but prior to giving effect to any
reduction therein which precipitated such termination) through
the date of termination; and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
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(iii) to the extent not theretofore paid as
required under Section 2.1(b)(v) hereof, any Bonus through the
date of such Change in Control; and
(iv) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company, and any accrued vacation pay not yet paid by
the Company; and
(v) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(vi) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), (iv), or (v) of this
sentence.
(d) Death. If Executive's employment is terminated under
Section 4.1(b) hereof by reason of Executive's death, the Company
shall pay to Executive's legal representatives cash in one lump sum
within thirty (30) days after the date of Executive's death the full
amount of the obligations owing or accrued to, vested in, or earned by
Executive through the date of Executive's death, including, but not
limited to, the Accrued Obligations. Anything in this Agreement to
the contrary notwithstanding, Executive's family shall be entitled to
receive benefits provided by the Company and any of its affiliates to
surviving families under the then existing or applicable plans,
programs, or arrangements and policies of the Company and its
affiliates.
(e) Disability. If Executive's employment is terminated
under Section 4.1(b) hereof by reason of Executive becoming Disabled:
(i) the Company shall pay to Executive cash in
one lump sum within thirty (30) days after the date of
termination the full amount of the obligations owing or
accrued to, vested in, or earned by Executive through the date
of termination, including, but not limited to, the Accrued
Obligations; and
(ii) the Company shall pay to Executive
seventy-five percent (75%) of Executive's minimum salary at
the annual rate in effect at the time of such termination for
the period commencing on the date after the date of
termination and ending on the Final Date (such minimum salary
to be paid in accordance with the second and third sentences
of Section 2.1(a)), reduced by the actual amount of benefits
paid to Executive during such period under any disability
insurance policy maintained by the Company for Executive.
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4.3 Cause. As used in this Agreement, the term "Cause" means (i)
willful misconduct by Executive, (ii) the gross neglect by Executive of his
duties as an employee, officer or director of the Company which continues for
more than thirty (30) days after written notice from the Company to Executive
specifically identifying the gross negligence of Executive and directing
Executive to discontinue same, (iii) the commission by Executive of a crime
constituting a felony, or (iv) the commission by Executive of an act, other
than an act taken in good faith within the course and scope of Executive's
employment, which is directly detrimental to the Company and which act exposes
the Company to material liability.
4.4 Good Reason. As used in this Agreement, the term "Good
Reason" means the breach of any material provision of this Agreement by the
Company (including, but in no way limited to, any removal of Executive, without
Cause, from the position of the Office during the Term) which is not cured
within thirty (30) days after written notice from Executive to the Company
specifically identifying such breach; provided, however, that the term "Good
Reason" shall not include any breach of any provision of this Agreement that
occurs after the occurrence of a Change in Control.
4.5 Good Reason-Change in Control. As used in this Agreement, the
term "Good Reason-Change in Control" means after the occurrence of a Change in
Control, a determination by Executive that any one or more of the following
events has occurred:
(a) the assignment by the Company to Executive of duties
that are inconsistent with the Office at the time of such assignment,
or the removal by the Company from Executive of those duties usually
appertaining to the Office at the time of such removal; or
(b) a change by the Company, without Executive's prior
written consent, in Executive's responsibilities to the Company as
such responsibilities existed at the time of the occurrence of such
Change in Control (or as such responsibilities may thereafter exist
from time to time as a result of changes in such responsibilities made
with Executive's prior written consent); or
(c) any removal of Executive from, or any failure to
elect or reelect Executive to, the Office, except in connection with
Executive's promotion, with his prior written consent, to a higher
office (if any) with the Company; or
(d) the Company's direction that Executive discontinue
service (or not seek reelection or reappointment) as a director,
officer or member of any corporation or other entity of which
Executive is a director, officer or member at the time of the
occurrence of such Change in Control; or
(e) the failure of the Company to continue to provide
Executive with office space, related facilities and support personnel
(including, but not limited to, administrative and secretarial
assistance) that are both commensurate with the Office and Executive's
responsibilities to and position with the Company at the time of the
occurrence of such Change in Control and not materially
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<PAGE> 15
dissimilar to the office space, related facilities and support
personnel provided to other key executive officers of the Company; or
(f) a reduction by the Company in the amount of
Executive's minimum salary specified in Section 2.1(a) (or as
subsequently increased) and as in effect at the time of the occurrence
of such Change in Control, or a failure of the Company to pay such
minimum annual salary to the Employee at the time and in the manner
specified in Section 2.1(a) of this Employment Agreement; or
(g) in the event of any increase, at any time after the
occurrence of such Change in Control, in the minimum annual salary or
salaries of one or more members of the Executive Group (as defined in
Section 4.7 hereof) (the members or members of the Executive Group
whose minimum annual salary or salaries are increased at such time
being hereinafter called the "Increased Executives"), the failure of
the Company simultaneously to increase Executive's minimum annual
salary, as Executive's minimum annual salary is in effect immediately
prior to giving effect to such first-mentioned increase (the "Prior
Base Salary"), by an amount which equals or exceeds the product
obtained by multiplying the Prior Base Salary by a fraction, the
numerator of which is the sum of the amounts by which the respective
minimum annual salaries of the Increased Executives (other than
Executive) were increased at such time and the denominator of which is
the sum of the respective minimum annual salaries of the Increased
Executives (other than Executive) immediately prior to giving effect
to such first- mentioned increase; or
(h) the discontinuation or reduction by the Company of
Executive's participation in any bonus or other employee benefit plan,
program, arrangement, or policy (including, but not limited to, any
such plan, program, arrangement, or policy described in Section 2.1(c)
hereof) in which Executive is a participant at the time of the
occurrence of such Change in Control; or
(i) Executive's principal office space or the related
facilities or support space or the related facilities or support
personnel referred to in paragraph (e) of this Section 4.5 cease to be
located within the Company's principal executive offices, or for a
period of more than 45 consecutive days Executive is required by the
Company to perform a majority of his duties outside the Company's
principal executive offices; or
(j) the relocation, without Executive's prior written
consent, of the Company's principal executive offices to a location
outside the county in which such offices are located at the time of
the occurrence of such Change in Control; or
(k) the failure of the Company to provide Executive
annually with a number of paid vacation days and sick leave days at
least equal to the number of paid vacation days to which Executive is
entitled annually at the time of the occurrence of such Change in
Control; or
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(l) the failure of the Company to obtain the assumption
by any successor to the Company of the obligations imposed upon the
Company under this Agreement, as required by Section 5.2 of this
Agreement; or
(m) the failure by the Company to promptly reimburse
Executive for any Business Expenses; or
(n) that because of the policies, decisions or actions of
the Board or the stockholders of the Company, Executive can no longer
perform his duties to the Company in a manner which is consistent with
the manner in which such duties were performed by Executive prior to
the occurrence of such Change in Control; or
(o) the employment of Executive under this Agreement is
terminated by the Company without Cause; or
(p) the Company notifies Executive of the Company's
intention not to observe or perform one or more of the obligations of
the Company under this Agreement; or
(q) the Company breaches any provision of this Agreement.
4.6 Change in Control. As used herein, the term "Change in
Control" shall mean the occurrence with respect to the Company of any of the
following events:
(a) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(b) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(c) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the
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beneficial owner (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of 20 percent or more
of the combined voting power of the then-outstanding securities of the
Company (as determined under paragraph (d) of Rule 13d-3 promulgated
under the Exchange Act, in the case of rights to acquire common
stock);
(d) the stockholders of the Company shall approve:
(i) any merger, consolidation, or reorganization
of the Company:
(A) in which the Company is not the
continuing or surviving corporation,
(B) pursuant to which shares of common
stock of the Company would be converted into cash,
securities or other property,
(C) with a corporation which prior to
such merger, consolidation, or reorganization owned
20 percent or more of the combined voting power of
the then- outstanding securities of the Company, or
(D) in which the Company will not
survive as an independent, publicly-owned
corporation;
(ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of
all or substantially all the assets of the Company, or
(iii) any liquidation or dissolution of the Company;
(e) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(f) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(g) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(h) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
cease for any reason to constitute a majority of the Board, unless the
election or nomination for election
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by the Company's stockholders of each new director during any such
two-year period was approved by the vote of two-thirds of the
directors then still in office who were directors at the beginning of
such two-year period.
4.7 Executive Group. As used herein, "Executive Group" shall mean
the officers of the Company; and each of such officers shall be deemed members
of the Executive Group.
4.8 Disabled. As used herein, "Disabled" shall mean a mental or
physical impairment which in the reasonable opinion of a qualified doctor
selected by the Company renders Executive unable to perform with reasonable
diligence the ordinary functions and duties of Executive on a full-time basis
in accordance with the terms of this Agreement, which inability will continue
in the reasonable opinion of such doctor for a period of not less than 180
days.
4.9 Return of Materials; Confidential Information. In the event
of any termination of this Agreement, Executive shall promptly deliver to the
Company all lists, books, records, literature, products and any other materials
owned or provided by the Company in connection with Executive's employment
hereunder. Executive shall not at any time during or after the Term hereof use
for himself or others, or divulge to others, any secret or confidential
information, knowledge or data of the Company obtained by Executive as a result
of his employment unless authorized by a majority of the Board.
4.10 Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or any of its affiliates to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (any such payments or distributions
being individually referred to herein as a "Payment," and any two or more of
such payments or distributions being referred to herein as "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") (such excise tax, together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such excise tax, and any interest in respect of such penalties,
additions to tax or additional amounts, being collectively referred herein to
as the "Excise Tax"), then Executive shall be entitled to receive an additional
payment or payments (individually referred to herein as a "Gross-Up Payment"
and any two or more of such additional payments being referred to herein as
"Gross-Up Payments") in an amount such that after payment by Executive of all
taxes (as defined in Section 4.10(k)) imposed upon the Gross-Up Payment,
Executive retains an amount of such Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 4.10(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 4.10(b), including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall initially be made, at the
Company's expense, by
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nationally recognized tax counsel mutually acceptable to the Company and
Executive ("Tax Counsel"). Tax Counsel shall provide detailed supporting legal
authorities, calculations, and documentation both to the Company and Executive
within 15 business days of the termination of Executive's employment, if
applicable, or such other time or times as is reasonably requested by the
Company or Executive. If Tax Counsel makes the initial Determination that no
Excise Tax is payable by Executive with respect to a Payment or Payments, it
shall furnish Executive with an opinion reasonably acceptable to Executive that
no Excise Tax will be imposed with respect to any such Payment or Payments.
Executive shall have the right to dispute any Determination (a "Dispute")
within 15 business days after delivery of Tax Counsel's opinion with respect to
such Determination. The Gross-Up Payment, if any, as determined pursuant to
such Determination shall, at the Company's expense, be paid by the Company to
Executive within five business days of Executive's receipt of such
Determination. The existence of a Dispute shall not in any way affect
Executive's right to receive the Gross-Up Payment in accordance with such
Determination. If there is no Dispute, such Determination shall be binding,
final and conclusive upon the Company and Executive, subject in all respects,
however, to the provisions of Section 4.10(c) through (i) below. As a result
of the uncertainty in the application of Sections 4999 and 280G of the Code, it
is possible that Gross-Up Payments (or portions thereof) which will not have
been made by the Company should have been made ("Underpayment"), and if upon
any reasonable written request from Executive or the Company to Tax Counsel, or
upon Tax Counsel's own initiative, Tax Counsel, at the Company's expense,
thereafter determines that Executive is required to make a payment of any
Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall,
at the Company's expense, determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to
Executive.
(c) The Company shall defend, hold harmless, and
indemnify Executive on a fully grossed-up after tax basis from and against any
and all claims, losses, liabilities, obligations, damages, impositions,
assessments, demands, judgements, settlements, costs and expenses (including
reasonable attorneys', accountants', and experts' fees and expenses) with
respect to any tax liability of Executive resulting from any Final
Determination (as defined in Section 4.10(j)) that any Payment is subject to
the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending
or threatened audit, examination, investigation or administrative, court or
other proceeding which, if pursued successfully, could result in or give rise
to a claim by Executive against the Company under this Section 4.10(d)
("Claim"), including, but not limited to, a claim for indemnification of
Executive by the Company under Section 4.10(c), then such party shall promptly
notify the other party hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Executive ("Executive
Claim"), Executive shall take or cause to be taken such action in connection
with contesting such Executive Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the
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<PAGE> 20
Company (it being understood and agreed by the parties hereto that the terms of
any such retention shall expressly provide that the Company shall be solely
responsible for the payment of any and all fees and disbursements of such
counsel and any experts) and the execution of powers of attorney, provided
that:
(i) within 30 calendar days after the Company
receives or delivers, as the case may be, the Tax Claim Notice
relating to such Executive Claim (or such earlier date that any
payment of the taxes claimed is due from Executive, but in no event
sooner than five calendar days after the Company receives or delivers
such Tax Claim Notice), the Company shall have notified Executive in
writing ("Election Notice") that the Company does not dispute its
obligations (including, but not limited to, its indemnity obligations)
under this Agreement and that the Company elects to contest, and to
control the defense or prosecution of, such Executive Claim at the
Company's sole risk and sole cost and expense; and
(ii) the Company shall have advanced to Executive
on an interest-free basis, the total amount of the tax claimed in
order for Executive, at the Company's request, to pay or cause to be
paid the tax claimed, file a claim for refund of such tax and, subject
to the provisions of the last sentence of Section 4.10(g), sue for a
refund of such tax if such claim for refund is disallowed by the
appropriate taxing authority (it being understood and agreed by the
parties hereto that the Company shall only be entitled to sue for a
refund and the Company shall not be entitled to initiate any
proceeding in, for example, United States Tax Court) and shall
indemnify and hold Executive harmless, on a fully grossed-up after tax
basis, from any tax imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
(iii) the Company shall reimburse Executive for any
and all costs and expenses resulting from any such request by the
Company and shall indemnify and hold Executive harmless, on fully
grossed-up after-tax basis, from any tax imposed as a result of such
reimbursement.
(f) Subject to the provisions of Section 4.10(e) hereof,
the Company shall have the right to defend or prosecute, at the sole cost,
expense and risk of the Company, such Executive Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
the Company to a Final Determination; provided, however, that (i) the Company
shall not, without Executive's prior written consent, enter into any compromise
or settlement of such Executive Claim that would adversely affect Executive,
(ii) any request from the Company to Executive regarding any extension of the
statute of limitations relating to assessment, payment, or collection of taxes
for the taxable year of Executive with respect to which the contested issues
involved in, and amount of, the Executive Claim relate is limited solely to
such contested issues and amount, and (iii) the Company's control of any
contest or proceeding shall be limited to issues with respect to the Executive
Claim and Executive shall be entitled to settle or contest, in his sole and
absolute discretion, any other issue raised by the Internal Revenue Service or
any other taxing authority. So long as the
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<PAGE> 21
Company is diligently defending or prosecuting such Executive Claim, Executive
shall provide or cause to be provided to the Company any information reasonably
requested by the Company that relates to such Executive Claim, and shall
otherwise cooperate with the Company and its representatives in good faith in
order to contest effectively such Executive Claim. The Company shall keep
Executive informed of all developments and events relating to any such
Executive Claim (including, without limitation, providing to Executive copies
of all written materials pertaining to any such Executive Claim), and Executive
or his authorized representatives shall be entitled, at Executive's expense, to
participate in all conferences, meetings and proceedings relating to any such
Executive Claim.
(g) If, after actual receipt by Executive of an amount of
a tax claimed (pursuant to an Executive Claim) that has been advanced by the
Company pursuant to Section 4.10(e)(ii) hereof, the extent of the liability of
the Company hereunder with respect to such tax claimed has been established by
a Final Determination, Executive shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, Executive
with respect to such tax (together with any interest paid or credited thereon
by the taxing authority and any recovery of legal fees from such taxing
authority related thereto), except to the extent that any amounts are then due
and payable by the Company to Executive, whether under the provisions of this
Agreement or otherwise. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 4.10(e)(ii), a determination is
made by the Internal Revenue Service or other appropriate taxing authority that
Executive shall not be entitled to any refund with respect to such tax claimed
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of any Gross-Up Payments and other payments required to be paid
hereunder.
(h) With respect to any Executive Claim, if the Company
fails to deliver an Election Notice to Executive within the period provided in
Section 4.10(e)(i) hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Section 4.10(e)(ii) and (iii)
and (f) hereof, then Executive shall at any time thereafter have the right (but
not the obligation), at his election and in his sole and absolute discretion,
to defend or prosecute, at the sole cost, expense and risk of the Company, such
Executive Claim. Executive shall have full control of such defense or
prosecution and such proceedings, including any settlement or compromise
thereof. If requested by Executive, the Company shall cooperate, and shall
cause its affiliates to cooperate, in good faith with Executive and his
authorized representatives in order to contest effectively such Executive
Claim. The Company may attend, but not participate in or control, any defense,
prosecution, settlement or compromise of any Executive Claim controlled by
Executive pursuant to this Section 4.10(h) and shall bear its own costs and
expenses with respect thereto. In the case of any Executive Claim that is
defended or prosecuted by Executive, Executive shall, from time to time, be
entitled to current payment, on a fully grossed-up after tax basis, from the
Company with respect to costs and expenses incurred by Executive in connection
with such defense or prosecution.
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<PAGE> 22
(i) In the case of any Executive Claim that is defended
or prosecuted to a Final Determination pursuant to the terms of this Section
4.10(i), the Company shall pay, on a fully grossed-up after tax basis, to
Executive in immediately available funds the full amount of any taxes arising
or resulting from or incurred in connection with such Executive Claim that have
not theretofore been paid by the Company to Executive, together with the costs
and expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by the Company to Executive,
within ten calendar days after such Final Determination. In the case of any
Executive Claim not covered by the preceding sentence, the Company shall pay,
on a fully grossed-up after tax basis, to Executive in immediately available
funds the full amount of any taxes arising or resulting from or incurred in
connection with such Executive Claim at least ten calendar days before the date
payment of such taxes is due from Executive, except where payment of such taxes
is sooner required under the provisions of this Section 4.10(i), in which case
payment of such taxes (and payment, on a fully grossed-up after tax basis, of
any costs and expenses required to be paid under this Section 4.10(i) shall be
made within the time and in the manner otherwise provided in this Section
4.10(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including, but not
limited to, any and all Excise Taxes, income taxes, and employment taxes),
together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such taxes and any interest in respect of
such penalties, additions to tax, or additional amounts.
(l) For purposes of this Agreement, the terms "affiliate"
and "affiliates" mean, when used with respect to any entity, individual, or
other person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by,
or is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to
direct or cause the direction of the management and policies of such entity or
other person, whether through the ownership of voting securities, by contract
or otherwise.
4.11 Legal Fees and Expenses. The Company shall defend, hold
harmless, and indemnify Executive on a fully grossed-up after tax basis from
and against any and all costs and expenses (including reasonable attorneys',
accountants' and experts' fees and expenses) incurred by Executive from time to
time as a result of any contest (regardless of the outcome) by the Company or
others contesting the validity or enforcement of, or
-22-
<PAGE> 23
liability under, any term or provision of this Agreement, plus in each case
interest at the applicable federal rate provided for in Section 7872(f)(2)(B)
of the Code.
4.12 Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan, program, arrangement or policy provided by the
Company or any of its affiliates (including, but not limited to, any plan,
program, arrangement or policy described in Section 2.1(c) hereof) and for
which Executive and/or Executive's family may qualify, nor shall anything
herein limit or otherwise affect such rights as Executive and/or Executive's
family may have under any other agreements with the Company or any of its
affiliates. Amounts which are vested benefits or which Executive and/or
Executive's family is otherwise entitled to receive under any plan, program,
arrangement, or policy of the Company or any of its affiliates (including, but
not limited to, any plan, program, arrangement or policy described in Section
2.1(c) hereof) at or subsequent to the date of termination of this Agreement
shall be payable in accordance with such plan, program, arrangement or policy.
4.13 Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement.
ARTICLE V
GENERAL PROVISIONS
5.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
5.2 Assignability. This Agreement is personal to Executive and
without the prior written consent of the Company shall not be assignable by
Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives and heirs. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Company shall
require any corporation, entity, individual or other person who is the
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization, or otherwise) to all or substantially all of the business or
assets of the Company to expressly assume and agree to perform, by a written
agreement in form and substance satisfactory to Executive, all of the
obligations of the Company under this Agreement. As used in this Agreement,
the term "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, written agreement, or otherwise.
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<PAGE> 24
5.3 Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
5.4 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between Executive and the Company and supersedes
any prior agreements or understandings, whether written or oral, with respect
to the subject matter hereof. Except as may be otherwise provided herein, this
Agreement may not be amended or modified except by subsequent written agreement
executed by both parties hereto.
5.5 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
5.6 Notices. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall
be deemed delivered only upon actual receipt.
If to the Company:
National Convenience Stores Incorporated
100 Waugh Drive
Houston, Texas 77007
Attention: General Counsel
If to Executive:
Arnold Van Zanten
37 Cascade Springs Place
The Woodlands, Texas 77381
5.7 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any breach of
the same or any other term or condition of this Agreement.
5.8 Severability. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not effect the enforceability or validity of any other
provision of this Agreement.
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<PAGE> 25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Execution Date, but effective as of the Effective Date.
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A. J. GALLERANO
-----------------------------------
A. J. Gallerano
Senior Vice President -
General Counsel and Secretary
"COMPANY"
/s/ ARNOLD VAN ZANTEN
------------------------------------
Arnold Van Zanten
"EXECUTIVE"
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<PAGE> 1
EXHIBIT 99.13
AGREEMENT AMENDING AND RESTATING
EMPLOYMENT AGREEMENT
THIS AGREEMENT AMENDING AND RESTATING EMPLOYMENT AGREEMENT (this
"Agreement") is executed as of August 31, 1995 (the "Execution Date"), but
effective as of May 18, 1993 (the "Effective Date"), by and between NATIONAL
CONVENIENCE STORES INCORPORATED, a Delaware corporation (the "Company"), and C.
R. WORTHAM ("Executive").
R E C I T A L S:
A. The Company filed a case under Chapter 11 of the Bankruptcy
Code on December 9, 1991 in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division (the "Court"), Case No. 91-49819-H2-11 (the
"Case"). The Company filed its Fourth Amended and Restated Plan of
Reorganization under Chapter 11 of the United States Bankruptcy Code (the
"Plan") in the Case, which Plan has been confirmed by the Court pursuant to an
Order confirming the Plan (the "Order") entered in the Case on February 25,
1993.
B. The Company is in the convenience store business in the State
of Texas.
C. Executive is recognized as having experience in the management
and operation of companies that are in the convenience store business.
D. As contemplated in the Plan, the Company and Executive entered
into that certain Employment Agreement effective as of May 18, 1993 (the
"Original Employment Agreement").
E. Subsequently, the Company and Executive entered into that
certain Amendment to Employment Agreement effective as of August 1, 1994 (the
"First Amendment") (the Original Employment Agreement and the First Amendment
being collectively referred to herein as the "Employment Agreement").
F. The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat, or occurrence of a Change in Control
(as defined in Section 4.6 hereof).
G. The Board believes it is imperative (i) to diminish the
inevitable and significant distractions of Executive and dilution of the time
of Executive, by virtue of the personal uncertainties and risks created by a
pending or threatened Change in Control, (ii) to encourage Executive's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change in Control, and (iii) to provide Executive with
compensation arrangements in the event of a Change in Control which provide
Executive with financial security, which are competitive with those of other
corporations, and which ensure that Executive receives the compensation
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<PAGE> 2
and benefits intended to be provided to Executive by the Company through this
Agreement and the Company's various employee benefit and compensation plans and
arrangements without regard to any Excise Tax (as defined in Section 4.10(a)
hereof).
H. In order to accomplish the objectives described in the two
immediately preceding recitals, the Board desires to cause the Company to enter
into this Agreement and amend and restate the Employment Agreement as set forth
herein.
I. Executive desires to enter into this Agreement and amend and
restate the Employment Agreement as set forth herein.
W I T N E S S E T H:
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING, TERM AND DUTIES
1.1 Employment. On the terms and subject to the conditions of
this Agreement, the Company hereby employs and engages the services of
Executive to serve as, and Executive agrees to diligently and competently serve
as and perform the functions of, Senior Vice President - Real Estate/Gasoline
(the "Office") of the Company for the term and for the compensation and
benefits stated herein.
1.2 Term. The term of employment under this Agreement shall
commence on the Effective Date and shall end on the first to occur of the
events set forth in Section 4.1(a), (b), and (c) (the "Term").
1.3 Major Responsibilities; Authority. Executive shall have the
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities usually associated with the Office of
corporations having assets similar in nature and value to the assets of the
Company and business similar to the business of the Company and at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day periods immediately
preceding each of the Effective Date and the Execution Date, and such other
duties as the Board shall determine from time to time.
1.4 Extent of Service. During the Term, and excluding any periods
of vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable time and energies to the business of the Company consistent
with past practice and shall not, during the Term, be engaged in any business
activity which would interfere or prevent Executive from carrying out his
duties under this Agreement; provided, however, that this Section 1.4 shall not
be construed as preventing Executive from investing his assets in such form or
manner as will not require services on the part of
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<PAGE> 3
Executive in the operation of the affairs of any company in which such
investments are made.
1.5 Location. Executive shall not be required to move from
Executive's home in Montgomery County, Texas.
ARTICLE II
COMPENSATION AND RELATED ITEMS
2.1 Compensation. As compensation and consideration for the
services to be rendered by Executive under this Agreement and for the
performance by Executive of the usual obligations of such employment, the
Company agrees to pay Executive, and Executive agrees to accept, the following
compensation and benefits during the Term:
(a) Salary. Executive shall be paid a minimum salary at
the following annual rates for the periods indicated:
(i) $175,000 for the period May 18, 1993,
through July 31, 1994; and
(ii) $183,750 for the period August 1, 1994,
through the end of the Term.
Except as otherwise provided herein, the minimum salary in effect for
any period shall be payable in equal weekly payments. Any earnings
over the minimum salary in effect during any period shall not be
applied to the minimum salary for any subsequent period. If this
Agreement terminates on a date other than the last day of any week,
Executive shall be paid for the week that includes the date of such
termination a pro rata portion of the minimum salary then in effect
for such week in the ratio that the number of days of employment
during such week bears to the total number of business days in such
week.
(b) Bonus.
(i) In addition to the minimum salary provided
for in Section 2.1(a) hereof, and subject to the provisions of
Section 2.1(b)(vi) hereof, Executive shall be awarded, for
each fiscal year of the Company during the Term (or, in the
event of a Change in Control, a portion thereof as hereinafter
provided) commencing with the fiscal year of the Company
ending June 30, 1996, a bonus ("Bonus") calculated in
accordance with this Section 2.1(b).
(ii) For purposes of this Section 2.1(b), the
following terms shall have the meanings indicated:
(A) "Bonusable Earnings" shall mean the
consolidated earnings before reorganization expenses,
fresh start adjustments, income taxes, changes in
accounting method, extraordinary gains
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<PAGE> 4
or losses, and Takeover Expenses (as defined in the
next sentence) of the Company and its subsidiaries
for any fiscal year, or completed months thereof in
the event of a Change in Control, as the case may be,
for which a Bonus is being calculated, as determined
in conformity with generally accepted accounting
principles applied in a manner consistent with prior
periods. For purposes of the preceding sentence, the
term "Takeover Expenses" shall mean the aggregate
amount of the costs and expenses (including, but not
limited to, any accruals, reserves, or provisions for
such costs and expenses) related to any and all
transactions that arise in connection with a Change
in Control or a potential Change in Control (whether
or not any such transaction (I) is consummated,
(II) is solicited or unsolicited by the Company, or
(III) is undertaken to resist or facilitate any such
transaction or any other such transaction),
including, but not limited to, the fees and costs of
investment bankers, attorneys, accountants, and other
experts and advisors.
(B) "Threshold Amount" shall mean (I)
for the fiscal year of the Company ended June 30,
1996, an amount equal to $12,000,000, and (II) for
each subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
minimum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Threshold Amount
within thirty (30) days after the first day of such
fiscal year.
(C) "Threshold Percentage" shall mean
(I) fifteen percent (15%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Threshold Amount for such fiscal year and which
the Board in good faith shall establish by resolution
as the Threshold Percentage within thirty (30) days
after the first day of such fiscal year.
(D) "Threshold Applicable Percentage"
shall mean for any fiscal year of the Company during
the Term, a percentage calculated in accordance with
the following formula:
<TABLE>
<S> <C>
Threshold Applicable Percentage = Threshold Percentage + [(Target Percentage -
Bonusabe Earnings - Threshold Amount
Threshold Percentage) x ------------------------------------].
Target Amount - Threshold Amount
</TABLE>
(E) "Target Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to
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<PAGE> 5
$14,500,000, and (II) for each subsequent fiscal year
of the Company during the Term, an amount equal
to a reasonable forecast of the expected amount of the
Bonusable Earnings for such fiscal year which the
Board shall in good faith establish by resolution as
the Target Amount within thirty (30) days after the
first day of such fiscal year.
(F) "Target Percentage" shall mean (I)
sixty percent (60%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Target Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Target Percentage within thirty (30) days after
the first day of such fiscal year.
(G) "Target Applicable Percentage" shall
mean for any fiscal year of the Company during the
Term, a percentage calculated in accordance with the
following formula:
<TABLE>
<S> <C>
Target Applicable Percentage = Target Percentage + [(Maximum Percentage -
Bonusable Earnings - Target Amount
Target Percentage) x ---------------------------------------------].
Maximum Amount - Target Amount
</TABLE>
(H) "Maximum Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $17,000,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
maximum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Maximum Amount within
thirty (30) days after the first day of such fiscal
year.
(I) "Maximum Percentage" shall mean (I)
one hundred twenty percent (120%) for the fiscal year
of the Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Maximum Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Maximum Percentage within thirty (30) days after
the first day of such fiscal year.
(J) "Monthly Target Amount" shall mean
(I) for each month of the fiscal year of the Company
ended June 30, 1996, the following amount set forth
opposite such month:
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<PAGE> 6
<TABLE>
<CAPTION>
Monthly Target
Month Year Amount
----- ---- --------------
<S> <C> <C>
July 1995 $ 2,857,903
August 1995 2,605,852
September 1995 1,835,830
October 1995 1,713,422
November 1995 204,494
December 1995 805,051
January 1996 (290,770)
February 1996 (513,025)
March 1996 504,432
April 1996 668,572
May 1996 1,454,238
June 1996 2,249,899
---------
Total $14,095,898
===========
</TABLE>
; and (II) for each month of each subsequent fiscal
year of the Company during the Term, an amount equal
to a reasonable forecast of the monthly expected
amount of the Bonusable Earnings for each month of
such fiscal year which the Board shall in good faith
establish by resolution as the Target Amount within
thirty (30) days after the first day of such fiscal
year and which shall, in the aggregate, equal the
Target Amount for such fiscal year.
(K) "Projected Bonusable Earnings" shall
mean for the fiscal year of the Company which
includes the date of a Change in Control, an amount
equal to the product obtained by multiplying (I) the
Target Amount for such fiscal year, by (II) the
quotient obtained by dividing the aggregate amount of
the Bonusable Earnings for the completed months of
such fiscal year that precede the date of such
termination or Change in Control, as the case may be,
by the aggregate amount of the Monthly Target Amounts
for such completed months.
(L) "Threshold Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
<TABLE>
<S> <C>
Threshold Projected Applicable Percentage = Threshold Percentage + [(Target Percentage -
</TABLE>
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<PAGE> 7
<TABLE>
<S> <C>
Projected Bonusable Earnings - Threshold Amount
Threshold Percentage) x --------------------------------------------------------].
Target Amount - Threshold Amount
</TABLE>
(M) "Target Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
<TABLE>
<S> <C>
Target Projected Applicable Percentage = Target Percentage + [(Maximum Percentage -
Projected Bonusable Earnings - Target Amount
Target Percentage) x ------------------------------------------------].
Maximum Amount - Target Amount
</TABLE>
(iii) Except as otherwise provided in Section
2.1(b)(iv) hereof, for the fiscal year of the Company ended
June 30, 1996 and for each fiscal year of the Company
thereafter during the Term, the Bonus shall be an amount
calculated as follows:
(A) If the Bonusable Earnings for such
fiscal year are less than the Threshold Amount for
such fiscal year, the Bonus shall be zero ($-0-).
(B) If the Bonusable Earnings for such
fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I)
Executive's minimum salary under Section 2.1(a)
hereof as in effect on the last day of such fiscal
year, multiplied by (II) the Threshold Applicable
Percentage for such fiscal year.
(C) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Target
Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Target Applicable Percentage
for such fiscal year.
(D) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Maximum
Amount for such fiscal year, the Bonus shall be an
amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Maximum Percentage for such
fiscal year.
(iv) Notwithstanding anything contained in this
Agreement to the contrary, upon the occurrence of a Change in
Control, the amount of the Bonus for the fiscal year which
includes the date of such Change in Control shall be an amount
calculated as follows:
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(A) If the Projected Bonusable Earnings
for such fiscal year are less than the Threshold
Amount for such fiscal year, the Bonus shall be zero
($-0-).
(B) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I) a
fraction, the numerator of which is the number of
completed months in such fiscal year that precede the
date of such Change in Control and the denominator of
which is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Threshold Projected
Applicable Percentage for such fiscal year.
(C) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Target Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Target Projected Applicable
Percentage for such fiscal year.
(D) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Maximum Percentage for such
fiscal year.
(v) Except as otherwise provided herein, any
Bonus payable to Executive under this Agreement shall be paid
by the Company to Executive no later than the sooner of (A)
forty-five (45) days after the last day of the fiscal year of
the Company with respect to which such Bonus is calculated, or
(B) thirty (30) days after a Change in Control.
(vi) Except as otherwise provided in this
Agreement, upon the occurrence of a Change in Control,
Executive shall not be entitled under this Section 2.1(b) to
any Bonus calculated or that would be calculated with respect
to any period beginning after the last day of the month
immediately preceding such date of Change in Control;
provided, however, that nothing contained in this Section
2.1(b)(vi) shall prevent or limit
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Executive's continuing or future participation in, or limit or
otherwise affect such rights as Executive may have under, any
other bonus or incentive plan, program, arrangement or policy
provided by the Company or any of its affiliates and for which
Executive may qualify.
(c) Additional Compensation. In addition to the minimum
salary and Bonus provided for in Section 2.1(a) and (b), respectively,
Executive and/or Executive's family, as the case may be, shall be
entitled to:
(i) participate in, and shall receive all
benefits under:
(A) any and all welfare benefit and
similar employee benefit plans, programs,
arrangements, or policies that are generally made
available by the Company and its affiliates (as
defined in Section 4.10(l)) now or at any time in the
future to other key executive officers or retired key
executive officers, including, but not limited to,
any hospitalization, medical, prescription, dental,
disability, salary continuance, individual life
insurance, executive life insurance, group life
insurance, accidental death insurance, and travel
accident insurance plans, programs, arrangements, and
policies; and
(B) any and all bonus, incentive,
savings, retirement, profit sharing, pension, and
stock option plans, programs, arrangements, and
policies that are generally made available by the
Company and its affiliates now or at any time in the
future to other key executive officers, including,
but in no way limited to, that certain Amended and
Restated National Convenience Stores Incorporated
Officers' Retirement Plan effective as of August 31,
1995; and
(ii) annual vacations and sick leave in accordance
with the vacation and sick leave policies of the Company and
its affiliates as are now or at any time in the future in
effect with respect to other key executive officers, during
which time of such vacations and sick leave Executive's
compensation shall be paid in full; and
(iii) fringe benefits in accordance with the fringe
benefit policies of the Company and its affiliates as are now
or at any time in the future in effect with respect to other
key executive officers.
2.2 Expenses. The Company agrees that, during the Term, Executive
shall be allowed reasonable and necessary business expenses in connection with
the performance of his duties hereunder within guidelines established by the
Board as in effect at any time with respect to key executives ("Business
Expenses"), including, but not limited to, reasonable and necessary expenses
for food, travel, lodging, entertainment and other items in the promotion of
Company's business within such guidelines. Company will promptly reimburse
Executive for all Business Expenses
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incurred by Executive upon Executive's presentation to the Company of an
itemized account thereof, together with receipts, vouchers, or other supporting
documentation. After termination or expiration of this Agreement, however such
termination or expiration may come about, Executive shall have ninety (90) days
after the date of such termination or expiration to submit Business Expenses
incurred during the Term hereof to the Company for reimbursement.
2.3 Working Facilities. Executive shall be furnished with offices
of a size and with other furnishings and appointments, administrative staff,
secretarial and other assistants, stenographic help, and such other facilities
and services as are suitable to Executive's position and adequate for the
performance of Executive's duties.
ARTICLE III
EXCULPATION
Company agrees that Executive will not be liable for any losses,
expenses, costs or damages caused by or resulting from the recommendations,
suggestions, actions, errors, omissions or mistakes of Executive undertaken or
proposed by Executive if Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Executive's rights under this Article III shall not be deemed
exclusive of, but shall be cumulative with, any and all other rights
(including, but not limited to, rights of indemnification and advancement of
expenses) to which Executive may now or at any time in the future be entitled
under applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement (including, but not limited to, this Agreement), any vote
of stockholders, any resolution of directors, or otherwise.
ARTICLE IV
TERMINATION
4.1 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement shall terminate upon the first to occur of:
(a) Thirty (30) days after written notice of termination
is given by either party to the other; or
(b) Executive's death or, at the Company's option, upon
Executive's becoming Disabled (as defined in Section 4.8 hereof); or
(c) August 31, 1998 (the "Final Date").
Any notice of termination given by Executive to the Company under Section
4.1(a) above shall specify whether such termination is made with or without
Good Reason (as defined in Section 4.4 hereof) or Good Reason-Change in Control
(as defined in Section 4.5 hereof). Any notice of termination given by the
Company to Executive
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under Section 4.1(a) above shall specify whether such termination is with or
without Cause (as defined in Section 4.3 hereof).
4.2 Obligations of the Company Upon Termination.
(a) Cause; Other than for Good Reason and Other than for
Good Reason-Change in Control. If the Company terminates this
Agreement with Cause pursuant to Section 4.1(a) hereof, or if
Executive terminates this Agreement without Good Reason or without
Good Reason-Change in Control pursuant to Section 4.1(a) hereof, or if
this Agreement terminates pursuant to Section 4.1(c) hereof, this
Agreement shall terminate without further obligations to Executive,
other than those obligations owing or accrued to, vested in, or earned
by Executive through the date of termination, including, but not
limited to:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination through the date of termination; and
(ii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company and any accrued vacation pay not yet paid by
the Company; and
(iii) all other amounts or benefits owing or
accrued to, vested in, earned by Executive through the date of
termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof;
such obligations owing or accrued to, vested in, or earned by
Executive through the date of termination, including, but not limited
to, such amounts and benefits specified in clauses (i), (ii), and
(iii) of this sentence, being hereinafter collectively referred to as
the "Accrued Obligations." The aggregate amount of such obligations
owing or accrued to, vested in, or earned by Executive through the
date of termination, including, but not limited to, the Accrued
Obligations, shall be paid by the Company to Executive in cash in one
lump sum within thirty (30) days after the date of termination.
(b) Good Reason; Other than for Cause Before a Change in
Control. If Executive terminates this Agreement with Good Reason
pursuant to Section 4.1(a) hereof, or if the Company terminates this
Agreement without Cause before the occurrence of a Change in Control
pursuant to Section 4.1(a) hereof, the Company shall pay to Executive
cash in one lump sum within thirty (30) days after the date of
termination the aggregate of the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but
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prior to giving effect to any reduction therein which
precipitated such termination) through the date of termination;
and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
(iii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company, and any accrued vacation pay not yet paid by
the Company; and
(iv) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(v) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), or (iv) of this
sentence.
(c) Good Reason-Change in Control; Other than for Cause
On or After a Change in Control. If Executive terminates this
Agreement with Good Reason-Change in Control pursuant to Section
4.1(a) hereof, or if the Company terminates this Agreement without
Cause on or after the occurrence of a Change in Control pursuant to
Section 4.1(a) hereof the Company shall pay to Executive cash in one
lump sum within thirty (30) days after the date of termination the
aggregate of the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but prior to giving effect to any
reduction therein which precipitated such termination) through
the date of termination; and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
(iii) to the extent not theretofore paid as
required under Section 2.1(b)(v) hereof, any Bonus through the
date of such Change in Control; and
(iv) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest
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thereon) and not yet paid by the Company, and any accrued
vacation pay not yet paid by the Company; and
(v) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(vi) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), (iv), or (v) of this
sentence.
(d) Death. If Executive's employment is terminated under
Section 4.1(b) hereof by reason of Executive's death, the Company
shall pay to Executive's legal representatives cash in one lump sum
within thirty (30) days after the date of Executive's death the full
amount of the obligations owing or accrued to, vested in, or earned by
Executive through the date of Executive's death, including, but not
limited to, the Accrued Obligations. Anything in this Agreement to
the contrary notwithstanding, Executive's family shall be entitled to
receive benefits provided by the Company and any of its affiliates to
surviving families under the then existing or applicable plans,
programs, or arrangements and policies of the Company and its
affiliates.
(e) Disability. If Executive's employment is terminated
under Section 4.1(b) hereof by reason of Executive becoming Disabled:
(i) the Company shall pay to Executive cash in
one lump sum within thirty (30) days after the date of
termination the full amount of the obligations owing or
accrued to, vested in, or earned by Executive through the date
of termination, including, but not limited to, the Accrued
Obligations; and
(ii) the Company shall pay to Executive
seventy-five percent (75%) of Executive's minimum salary at
the annual rate in effect at the time of such termination for
the period commencing on the date after the date of
termination and ending on the Final Date (such minimum salary
to be paid in accordance with the second and third sentences
of Section 2.1(a)), reduced by the actual amount of benefits
paid to Executive during such period under any disability
insurance policy maintained by the Company for Executive.
4.3 Cause. As used in this Agreement, the term "Cause" means (i)
willful misconduct by Executive, (ii) the gross neglect by Executive of his
duties as an employee, officer or director of the Company which continues for
more than thirty (30) days after written notice from the Company to Executive
specifically identifying the gross negligence of Executive and directing
Executive to discontinue same, (iii) the commission by Executive of a crime
constituting a felony, or (iv) the commission by Executive of an act, other
than an act taken in good faith within the course and scope
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of Executive's employment, which is directly detrimental to the Company and
which act exposes the Company to material liability.
4.4 Good Reason. As used in this Agreement, the term "Good
Reason" means the breach of any material provision of this Agreement by the
Company (including, but in no way limited to, any removal of Executive, without
Cause, from the position of the Office during the Term) which is not cured
within thirty (30) days after written notice from Executive to the Company
specifically identifying such breach; provided, however, that the term "Good
Reason" shall not include any breach of any provision of this Agreement that
occurs after the occurrence of a Change in Control.
4.5 Good Reason-Change in Control. As used in this Agreement, the
term "Good Reason-Change in Control" means after the occurrence of a Change in
Control, a determination by Executive that any one or more of the following
events has occurred:
(a) the assignment by the Company to Executive of duties
that are inconsistent with the Office at the time of such assignment,
or the removal by the Company from Executive of those duties usually
appertaining to the Office at the time of such removal; or
(b) a change by the Company, without Executive's prior
written consent, in Executive's responsibilities to the Company as
such responsibilities existed at the time of the occurrence of such
Change in Control (or as such responsibilities may thereafter exist
from time to time as a result of changes in such responsibilities made
with Executive's prior written consent); or
(c) any removal of Executive from, or any failure to
elect or reelect Executive to, the Office, except in connection with
Executive's promotion, with his prior written consent, to a higher
office (if any) with the Company; or
(d) the Company's direction that Executive discontinue
service (or not seek reelection or reappointment) as a director,
officer or member of any corporation or other entity of which
Executive is a director, officer or member at the time of the
occurrence of such Change in Control; or
(e) the failure of the Company to continue to provide
Executive with office space, related facilities and support personnel
(including, but not limited to, administrative and secretarial
assistance) that are both commensurate with the Office and Executive's
responsibilities to and position with the Company at the time of the
occurrence of such Change in Control and not materially dissimilar to
the office space, related facilities and support personnel provided to
other key executive officers of the Company; or
(f) a reduction by the Company in the amount of
Executive's minimum salary specified in Section 2.1(a) (or as
subsequently increased) and as in effect at the time of the occurrence
of such Change in Control, or a failure of the
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Company to pay such minimum annual salary to the Employee at the time
and in the manner specified in Section 2.1(a) of this Employment
Agreement; or
(g) in the event of any increase, at any time after the
occurrence of such Change in Control, in the minimum annual salary or
salaries of one or more members of the Executive Group (as defined in
Section 4.7 hereof) (the members or members of the Executive Group
whose minimum annual salary or salaries are increased at such time
being hereinafter called the "Increased Executives"), the failure of
the Company simultaneously to increase Executive's minimum annual
salary, as Executive's minimum annual salary is in effect immediately
prior to giving effect to such first-mentioned increase (the "Prior
Base Salary"), by an amount which equals or exceeds the product
obtained by multiplying the Prior Base Salary by a fraction, the
numerator of which is the sum of the amounts by which the respective
minimum annual salaries of the Increased Executives (other than
Executive) were increased at such time and the denominator of which is
the sum of the respective minimum annual salaries of the Increased
Executives (other than Executive) immediately prior to giving effect
to such first- mentioned increase; or
(h) the discontinuation or reduction by the Company of
Executive's participation in any bonus or other employee benefit plan,
program, arrangement, or policy (including, but not limited to, any
such plan, program, arrangement, or policy described in Section 2.1(c)
hereof) in which Executive is a participant at the time of the
occurrence of such Change in Control; or
(i) Executive's principal office space or the related
facilities or support space or the related facilities or support
personnel referred to in paragraph (e) of this Section 4.5 cease to be
located within the Company's principal executive offices, or for a
period of more than 45 consecutive days Executive is required by the
Company to perform a majority of his duties outside the Company's
principal executive offices; or
(j) the relocation, without Executive's prior written
consent, of the Company's principal executive offices to a location
outside the county in which such offices are located at the time of
the occurrence of such Change in Control; or
(k) the failure of the Company to provide Executive
annually with a number of paid vacation days and sick leave days at
least equal to the number of paid vacation days to which Executive is
entitled annually at the time of the occurrence of such Change in
Control; or
(l) the failure of the Company to obtain the assumption
by any successor to the Company of the obligations imposed upon the
Company under this Agreement, as required by Section 5.2 of this
Agreement; or
(m) the failure by the Company to promptly reimburse
Executive for any Business Expenses; or
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(n) that because of the policies, decisions or actions of
the Board or the stockholders of the Company, Executive can no longer
perform his duties to the Company in a manner which is consistent with
the manner in which such duties were performed by Executive prior to
the occurrence of such Change in Control; or
(o) the employment of Executive under this Agreement is
terminated by the Company without Cause; or
(p) the Company notifies Executive of the Company's
intention not to observe or perform one or more of the obligations of
the Company under this Agreement; or
(q) the Company breaches any provision of this Agreement.
4.6 Change in Control. As used herein, the term "Change in
Control" shall mean the occurrence with respect to the Company of any of the
following events:
(a) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(b) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(c) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 20
percent or more of the combined voting power of the then-outstanding
securities of the Company (as determined under paragraph (d) of Rule
13d-3 promulgated under the Exchange Act, in the case of rights to
acquire common stock);
(d) the stockholders of the Company shall approve:
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(i) any merger, consolidation, or reorganization
of the Company:
(A) in which the Company is not the
continuing or surviving corporation,
(B) pursuant to which shares of common
stock of the Company would be converted into cash,
securities or other property,
(C) with a corporation which prior to
such merger, consolidation, or reorganization owned
20 percent or more of the combined voting power of
the then- outstanding securities of the Company, or
(D) in which the Company will not
survive as an independent, publicly-owned
corporation;
(ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of
all or substantially all the assets of the Company, or
(iii) any liquidation or dissolution of the Company;
(e) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(f) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(g) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(h) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
cease for any reason to constitute a majority of the Board, unless the
election or nomination for election by the Company's stockholders of
each new director during any such two-year period was approved by the
vote of two-thirds of the directors then still in office who were
directors at the beginning of such two-year period.
4.7 Executive Group. As used herein, "Executive Group" shall mean
the officers of the Company; and each of such officers shall be deemed members
of the Executive Group.
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4.8 Disabled. As used herein, "Disabled" shall mean a mental or
physical impairment which in the reasonable opinion of a qualified doctor
selected by the Company renders Executive unable to perform with reasonable
diligence the ordinary functions and duties of Executive on a full-time basis
in accordance with the terms of this Agreement, which inability will continue
in the reasonable opinion of such doctor for a period of not less than 180
days.
4.9 Return of Materials; Confidential Information. In the event
of any termination of this Agreement, Executive shall promptly deliver to the
Company all lists, books, records, literature, products and any other materials
owned or provided by the Company in connection with Executive's employment
hereunder. Executive shall not at any time during or after the Term hereof use
for himself or others, or divulge to others, any secret or confidential
information, knowledge or data of the Company obtained by Executive as a result
of his employment unless authorized by a majority of the Board.
4.10 Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or any of its affiliates to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (any such payments or distributions
being individually referred to herein as a "Payment," and any two or more of
such payments or distributions being referred to herein as "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") (such excise tax, together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such excise tax, and any interest in respect of such penalties,
additions to tax or additional amounts, being collectively referred herein to
as the "Excise Tax"), then Executive shall be entitled to receive an additional
payment or payments (individually referred to herein as a "Gross-Up Payment"
and any two or more of such additional payments being referred to herein as
"Gross-Up Payments") in an amount such that after payment by Executive of all
taxes (as defined in Section 4.10(k)) imposed upon the Gross-Up Payment,
Executive retains an amount of such Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 4.10(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 4.10(b), including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall initially be made, at the
Company's expense, by nationally recognized tax counsel mutually acceptable to
the Company and Executive ("Tax Counsel"). Tax Counsel shall provide detailed
supporting legal authorities, calculations, and documentation both to the
Company and Executive within 15 business days of the termination of Executive's
employment, if applicable, or such other time or times as is reasonably
requested by the Company or Executive. If Tax Counsel makes the initial
Determination that no Excise Tax is payable by Executive with respect to a
Payment or Payments, it shall furnish Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to any
such Payment or
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Payments. Executive shall have the right to dispute any Determination (a
"Dispute") within 15 business days after delivery of Tax Counsel's opinion with
respect to such Determination. The Gross-Up Payment, if any, as determined
pursuant to such Determination shall, at the Company's expense, be paid by the
Company to Executive within five business days of Executive's receipt of such
Determination. The existence of a Dispute shall not in any way affect
Executive's right to receive the Gross-Up Payment in accordance with such
Determination. If there is no Dispute, such Determination shall be binding,
final and conclusive upon the Company and Executive, subject in all respects,
however, to the provisions of Section 4.10(c) through (i) below. As a result
of the uncertainty in the application of Sections 4999 and 280G of the Code, it
is possible that Gross-Up Payments (or portions thereof) which will not have
been made by the Company should have been made ("Underpayment"), and if upon
any reasonable written request from Executive or the Company to Tax Counsel, or
upon Tax Counsel's own initiative, Tax Counsel, at the Company's expense,
thereafter determines that Executive is required to make a payment of any
Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall,
at the Company's expense, determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to
Executive.
(c) The Company shall defend, hold harmless, and
indemnify Executive on a fully grossed-up after tax basis from and against any
and all claims, losses, liabilities, obligations, damages, impositions,
assessments, demands, judgements, settlements, costs and expenses (including
reasonable attorneys', accountants', and experts' fees and expenses) with
respect to any tax liability of Executive resulting from any Final
Determination (as defined in Section 4.10(j)) that any Payment is subject to
the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending
or threatened audit, examination, investigation or administrative, court or
other proceeding which, if pursued successfully, could result in or give rise
to a claim by Executive against the Company under this Section 4.10(d)
("Claim"), including, but not limited to, a claim for indemnification of
Executive by the Company under Section 4.10(c), then such party shall promptly
notify the other party hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Executive ("Executive
Claim"), Executive shall take or cause to be taken such action in connection
with contesting such Executive Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide
that the Company shall be solely responsible for the payment of any and all
fees and disbursements of such counsel and any experts) and the execution of
powers of attorney, provided that:
(i) within 30 calendar days after the Company
receives or delivers, as the case may be, the Tax Claim Notice
relating to such Executive Claim (or such earlier date that any
payment of the taxes claimed is due from
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<PAGE> 20
Executive, but in no event sooner than five calendar days after the
Company receives or delivers such Tax Claim Notice), the Company shall
have notified Executive in writing ("Election Notice") that the
Company does not dispute its obligations (including, but not limited
to, its indemnity obligations) under this Agreement and that the
Company elects to contest, and to control the defense or prosecution
of, such Executive Claim at the Company's sole risk and sole cost and
expense; and
(ii) the Company shall have advanced to Executive
on an interest-free basis, the total amount of the tax claimed in
order for Executive, at the Company's request, to pay or cause to be
paid the tax claimed, file a claim for refund of such tax and, subject
to the provisions of the last sentence of Section 4.10(g), sue for a
refund of such tax if such claim for refund is disallowed by the
appropriate taxing authority (it being understood and agreed by the
parties hereto that the Company shall only be entitled to sue for a
refund and the Company shall not be entitled to initiate any
proceeding in, for example, United States Tax Court) and shall
indemnify and hold Executive harmless, on a fully grossed-up after tax
basis, from any tax imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
(iii) the Company shall reimburse Executive for any
and all costs and expenses resulting from any such request by the
Company and shall indemnify and hold Executive harmless, on fully
grossed-up after-tax basis, from any tax imposed as a result of such
reimbursement.
(f) Subject to the provisions of Section 4.10(e) hereof,
the Company shall have the right to defend or prosecute, at the sole cost,
expense and risk of the Company, such Executive Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
the Company to a Final Determination; provided, however, that (i) the Company
shall not, without Executive's prior written consent, enter into any compromise
or settlement of such Executive Claim that would adversely affect Executive,
(ii) any request from the Company to Executive regarding any extension of the
statute of limitations relating to assessment, payment, or collection of taxes
for the taxable year of Executive with respect to which the contested issues
involved in, and amount of, the Executive Claim relate is limited solely to
such contested issues and amount, and (iii) the Company's control of any
contest or proceeding shall be limited to issues with respect to the Executive
Claim and Executive shall be entitled to settle or contest, in his sole and
absolute discretion, any other issue raised by the Internal Revenue Service or
any other taxing authority. So long as the Company is diligently defending or
prosecuting such Executive Claim, Executive shall provide or cause to be
provided to the Company any information reasonably requested by the Company
that relates to such Executive Claim, and shall otherwise cooperate with the
Company and its representatives in good faith in order to contest effectively
such Executive Claim. The Company shall keep Executive informed of all
developments and events relating to any such Executive Claim (including,
without limitation, providing to Executive copies of all written materials
pertaining to any such Executive Claim), and Executive or his authorized
representatives shall be entitled, at Executive's
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<PAGE> 21
expense, to participate in all conferences, meetings and proceedings relating
to any such Executive Claim.
(g) If, after actual receipt by Executive of an amount of
a tax claimed (pursuant to an Executive Claim) that has been advanced by the
Company pursuant to Section 4.10(e)(ii) hereof, the extent of the liability of
the Company hereunder with respect to such tax claimed has been established by
a Final Determination, Executive shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, Executive
with respect to such tax (together with any interest paid or credited thereon
by the taxing authority and any recovery of legal fees from such taxing
authority related thereto), except to the extent that any amounts are then due
and payable by the Company to Executive, whether under the provisions of this
Agreement or otherwise. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 4.10(e)(ii), a determination is
made by the Internal Revenue Service or other appropriate taxing authority that
Executive shall not be entitled to any refund with respect to such tax claimed
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of any Gross-Up Payments and other payments required to be paid
hereunder.
(h) With respect to any Executive Claim, if the Company
fails to deliver an Election Notice to Executive within the period provided in
Section 4.10(e)(i) hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Section 4.10(e)(ii) and (iii)
and (f) hereof, then Executive shall at any time thereafter have the right (but
not the obligation), at his election and in his sole and absolute discretion,
to defend or prosecute, at the sole cost, expense and risk of the Company, such
Executive Claim. Executive shall have full control of such defense or
prosecution and such proceedings, including any settlement or compromise
thereof. If requested by Executive, the Company shall cooperate, and shall
cause its affiliates to cooperate, in good faith with Executive and his
authorized representatives in order to contest effectively such Executive
Claim. The Company may attend, but not participate in or control, any defense,
prosecution, settlement or compromise of any Executive Claim controlled by
Executive pursuant to this Section 4.10(h) and shall bear its own costs and
expenses with respect thereto. In the case of any Executive Claim that is
defended or prosecuted by Executive, Executive shall, from time to time, be
entitled to current payment, on a fully grossed-up after tax basis, from the
Company with respect to costs and expenses incurred by Executive in connection
with such defense or prosecution.
(i) In the case of any Executive Claim that is defended
or prosecuted to a Final Determination pursuant to the terms of this Section
4.10(i), the Company shall pay, on a fully grossed-up after tax basis, to
Executive in immediately available funds the full amount of any taxes arising
or resulting from or incurred in connection with such Executive Claim that have
not theretofore been paid by the Company to Executive, together with the costs
and expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by the Company
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<PAGE> 22
to Executive, within ten calendar days after such Final Determination. In the
case of any Executive Claim not covered by the preceding sentence, the Company
shall pay, on a fully grossed-up after tax basis, to Executive in immediately
available funds the full amount of any taxes arising or resulting from or
incurred in connection with such Executive Claim at least ten calendar days
before the date payment of such taxes is due from Executive, except where
payment of such taxes is sooner required under the provisions of this Section
4.10(i), in which case payment of such taxes (and payment, on a fully
grossed-up after tax basis, of any costs and expenses required to be paid under
this Section 4.10(i) shall be made within the time and in the manner otherwise
provided in this Section 4.10(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including, but not
limited to, any and all Excise Taxes, income taxes, and employment taxes),
together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such taxes and any interest in respect of
such penalties, additions to tax, or additional amounts.
(l) For purposes of this Agreement, the terms "affiliate"
and "affiliates" mean, when used with respect to any entity, individual, or
other person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by,
or is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to
direct or cause the direction of the management and policies of such entity or
other person, whether through the ownership of voting securities, by contract
or otherwise.
4.11 Legal Fees and Expenses. The Company shall defend, hold
harmless, and indemnify Executive on a fully grossed-up after tax basis from
and against any and all costs and expenses (including reasonable attorneys',
accountants' and experts' fees and expenses) incurred by Executive from time to
time as a result of any contest (regardless of the outcome) by the Company or
others contesting the validity or enforcement of, or liability under, any term
or provision of this Agreement, plus in each case interest at the applicable
federal rate provided for in Section 7872(f)(2)(B) of the Code.
4.12 Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan, program, arrangement or policy provided by the
Company or any of its affiliates (including, but not limited to, any plan,
program, arrangement or policy
-22-
<PAGE> 23
described in Section 2.1(c) hereof) and for which Executive and/or Executive's
family may qualify, nor shall anything herein limit or otherwise affect such
rights as Executive and/or Executive's family may have under any other
agreements with the Company or any of its affiliates. Amounts which are vested
benefits or which Executive and/or Executive's family is otherwise entitled to
receive under any plan, program, arrangement, or policy of the Company or any
of its affiliates (including, but not limited to, any plan, program,
arrangement or policy described in Section 2.1(c) hereof) at or subsequent to
the date of termination of this Agreement shall be payable in accordance with
such plan, program, arrangement or policy.
4.13 Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement.
ARTICLE V
GENERAL PROVISIONS
5.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
5.2 Assignability. This Agreement is personal to Executive and
without the prior written consent of the Company shall not be assignable by
Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives and heirs. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Company shall
require any corporation, entity, individual or other person who is the
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization, or otherwise) to all or substantially all of the business or
assets of the Company to expressly assume and agree to perform, by a written
agreement in form and substance satisfactory to Executive, all of the
obligations of the Company under this Agreement. As used in this Agreement,
the term "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, written agreement, or otherwise.
5.3 Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
5.4 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between Executive and the Company and supersedes
any prior agreements or understandings, whether written or oral, with respect
to the subject matter hereof. Except as may be otherwise provided herein, this
Agreement may not
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<PAGE> 24
be amended or modified except by subsequent written agreement executed by both
parties hereto.
5.5 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
5.6 Notices. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall
be deemed delivered only upon actual receipt.
If to the Company:
National Convenience Stores Incorporated
100 Waugh Drive
Houston, Texas 77007
Attention: General Counsel
If to Executive:
C. R. Wortham
167 Rutledge Circle
Conroe, Texas 77302
5.7 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any breach of
the same or any other term or condition of this Agreement.
5.8 Severability. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not effect the enforceability or validity of any other
provision of this Agreement.
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<PAGE> 25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Execution Date, but effective as of the Effective Date.
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A. J. GALLERANO
______________________________
A. J. Gallerano
Senior Vice President -
General Counsel and Secretary
"COMPANY"
/s/ C. R. WORTHAM
________________________________________
C. R. Wortham
"EXECUTIVE"
-25-
<PAGE> 1
EXHIBIT 99.14
AGREEMENT AMENDING AND RESTATING
EMPLOYMENT AGREEMENT
THIS AGREEMENT AMENDING AND RESTATING EMPLOYMENT AGREEMENT (this
"Agreement") is executed as of August 31, 1995 (the "Execution Date"), but
effective as of May 18, 1993 (the "Effective Date"), by and between NATIONAL
CONVENIENCE STORES INCORPORATED, a Delaware corporation (the "Company"), and
BRIAN FONTANA ("Executive").
R E C I T A L S:
A. The Company filed a case under Chapter 11 of the Bankruptcy
Code on December 9, 1991 in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division (the "Court"), Case No. 91-49819-H2-11 (the
"Case"). The Company filed its Fourth Amended and Restated Plan of
Reorganization under Chapter 11 of the United States Bankruptcy Code (the
"Plan") in the Case, which Plan has been confirmed by the Court pursuant to an
Order confirming the Plan (the "Order") entered in the Case on February 25,
1993.
B. The Company is in the convenience store business in the State
of Texas.
C. Executive is recognized as having experience in the management
and operation of companies that are in the convenience store business.
D. As contemplated in the Plan, the Company and Executive entered
into that certain Employment Agreement effective as of May 18, 1993 (the
"Original Employment Agreement").
E. Subsequently, the Company and Executive entered into that
certain Amendment to Employment Agreement effective as of July 19, 1993 (the
"First Amendment"), that certain Second Amendment to Employment Agreement
effective as of December 1, 1993 (the "Second Amendment"), that certain Third
Amendment to Employment Agreement effective as of August 1, 1994 (the "Third
Amendment"), and that certain Fourth Amendment to Employment Agreement
effective as of July 1, 1995 (the "Fourth Amendment") (the Original Employment
Agreement, the First Amendment, the Second Amendment, the Third Amendment, and
the Fourth Amendment being collectively referred to herein as the "Employment
Agreement").
F. The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat, or occurrence of a Change in Control
(as defined in Section 4.6 hereof).
G. The Board believes it is imperative (i) to diminish the
inevitable and significant distractions of Executive and dilution of the time
of Executive, by virtue of the personal uncertainties and risks created by a
pending or threatened Change in
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<PAGE> 2
Control, (ii) to encourage Executive's full attention and dedication to the
Company currently and in the event of any threatened or pending Change in
Control, and (iii) to provide Executive with compensation arrangements in the
event of a Change in Control which provide Executive with financial security,
which are competitive with those of other corporations, and which ensure that
Executive receives the compensation and benefits intended to be provided to
Executive by the Company through this Agreement and the Company's various
employee benefit and compensation plans and arrangements without regard to any
Excise Tax (as defined in Section 4.10(a) hereof).
H. In order to accomplish the objectives described in the two
immediately preceding recitals, the Board desires to cause the Company to enter
into this Agreement and amend and restate the Employment Agreement as set forth
herein.
I. Executive desires to enter into this Agreement and amend and
restate the Employment Agreement as set forth herein.
W I T N E S S E T H:
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING, TERM AND DUTIES
1.1 Employment. On the terms and subject to the conditions of
this Agreement, the Company hereby employs and engages the services of
Executive to serve as, and Executive agrees to diligently and competently serve
as and perform the functions of, the following offices (individually, the
"Office") for the following periods and for the compensation and benefits
stated herein:
(a) Treasurer for the period May 18, 1993, through July
18, 1993;
(b) Vice President and Treasurer for the period July 19,
1993, through November 30, 1993; and
(c) Vice President - Chief Financial Officer for the
period December 1, 1993, through the end of the Term.
1.2 Term. The term of employment under this Agreement shall
commence on the Effective Date and shall end on the first to occur of the
events set forth in Section 4.1(a), (b), and (c) (the "Term").
1.3 Major Responsibilities; Authority. Executive shall have the
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities usually associated with the Office then
in effect of corporations having
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<PAGE> 3
assets similar in nature and value to the assets of the Company and business
similar to the business of the Company and at least commensurate in all
material respects with the most significant of those held, exercised and
assigned at any time during the 90-day periods immediately preceding each of
the Effective Date and the Execution Date, and such other duties as the Board
shall determine from time to time.
1.4 Extent of Service. During the Term, and excluding any periods
of vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable time and energies to the business of the Company consistent
with past practice and shall not, during the Term, be engaged in any business
activity which would interfere or prevent Executive from carrying out his
duties under this Agreement; provided, however, that this Section 1.4 shall not
be construed as preventing Executive from investing his assets in such form or
manner as will not require services on the part of Executive in the operation
of the affairs of any company in which such investments are made.
1.5 Location. Executive shall not be required to move from
Executive's home in Harris County, Texas.
ARTICLE II
COMPENSATION AND RELATED ITEMS
2.1 Compensation. As compensation and consideration for the
services to be rendered by Executive under this Agreement and for the
performance by Executive of the usual obligations of such employment, the
Company agrees to pay Executive, and Executive agrees to accept, the following
compensation and benefits during the Term:
(a) Salary. Executive shall be paid a minimum salary at
the following annual rates for the periods indicated:
(i) $90,000 for the period May 18, 1993, through
July 18, 1993;
(ii) $105,000 for the period July 19, 1993,
through November 30, 1993;
(iii) $125,000 for the period December 1, 1993,
through July 31, 1994;
(iv) $131,250 for the period August 1, 1994,
through June 30, 1995; and
(v) $150,000 for the period July 1, 1995, through
the end of the Term.
Except as otherwise provided herein, the minimum salary in effect for
any period shall be payable in equal weekly payments. Any earnings
over the minimum salary in effect during any period shall not be
applied to the minimum salary for any subsequent period. If this
Agreement terminates on a date other than the
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<PAGE> 4
last day of any week, Executive shall be paid for the week that
includes the date of such termination a pro rata portion of the
minimum salary then in effect for such week in the ratio that the
number of days of employment during such week bears to the total
number of business days in such week.
(b) Bonus.
(i) In addition to the minimum salary provided
for in Section 2.1(a) hereof, and subject to the provisions of
Section 2.1(b)(vi) hereof, Executive shall be awarded, for
each fiscal year of the Company during the Term (or, in the
event of a Change in Control, a portion thereof as hereinafter
provided) commencing with the fiscal year of the Company
ending June 30, 1996, a bonus ("Bonus") calculated in
accordance with this Section 2.1(b).
(ii) For purposes of this Section 2.1(b), the
following terms shall have the meanings indicated:
(A) "Bonusable Earnings" shall mean the
consolidated earnings before reorganization expenses,
fresh start adjustments, income taxes, changes in
accounting method, extraordinary gains or losses, and
Takeover Expenses (as defined in the next sentence)
of the Company and its subsidiaries for any fiscal
year, or completed months thereof in the event of a
Change in Control, as the case may be, for which a
Bonus is being calculated, as determined in
conformity with generally accepted accounting
principles applied in a manner consistent with prior
periods. For purposes of the preceding sentence, the
term "Takeover Expenses" shall mean the aggregate
amount of the costs and expenses (including, but not
limited to, any accruals, reserves, or provisions for
such costs and expenses) related to any and all
transactions that arise in connection with a Change
in Control or a potential Change in Control (whether
or not any such transaction (I) is consummated, (II)
is solicited or unsolicited by the Company, or (III)
is undertaken to resist or facilitate any such
transaction or any other such transaction),
including, but not limited to, the fees and costs of
investment bankers, attorneys, accountants, and other
experts and advisors.
(B) "Threshold Amount" shall mean (I)
for the fiscal year of the Company ended June 30,
1996, an amount equal to $12,000,000, and (II) for
each subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
minimum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Threshold Amount
within thirty (30) days after the first day of such
fiscal year.
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<PAGE> 5
(C) "Threshold Percentage" shall mean
(I) thirteen percent (13%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Threshold Amount for such fiscal year and which
the Board in good faith shall establish by resolution
as the Threshold Percentage within thirty (30) days
after the first day of such fiscal year.
(D) "Threshold Applicable Percentage"
shall mean for any fiscal year of the Company during
the Term, a percentage calculated in accordance with
the following formula:
<TABLE>
<S> <C>
Threshold Applicable Percentage = Threshold Percentage + [(Target Percentage -
Bonusable Earnings - Threshold Amount
Threshold Percentage) x ------------------------------------------------].
Target Amount - Threshold Amount
</TABLE>
(E) "Target Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $14,500,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
expected amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Target Amount within
thirty (30) days after the first day of such fiscal
year.
(F) "Target Percentage" shall mean (I)
fifty percent (50%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Target Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Target Percentage within thirty (30) days after
the first day of such fiscal year.
(G) "Target Applicable Percentage" shall
mean for any fiscal year of the Company during the
Term, a percentage calculated in accordance with the
following formula:
<TABLE>
<S> <C>
Target Applicable Percentage = Target Percentage + [(Maximum Percentage -
Bonusable Earnings - Target Amount
Target Percentage) x -------------------------------------------].
Maximum Amount - Target Amount
</TABLE>
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<PAGE> 6
(H) "Maximum Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $17,000,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
maximum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Maximum Amount within
thirty (30) days after the first day of such fiscal
year.
(I) "Maximum Percentage" shall mean (I)
one hundred percent (100%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Maximum Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Maximum Percentage within thirty (30) days after
the first day of such fiscal year.
(J) "Monthly Target Amount" shall mean
(I) for each month of the fiscal year of the Company
ended June 30, 1996, the following amount set forth
opposite such month:
<TABLE>
<CAPTION>
Monthly Target
Month Year Amount
----- ---- ------------------
<S> <C> <C>
July 1995 $ 2,857,903
August 1995 2,605,852
September 1995 1,835,830
October 1995 1,713,422
November 1995 204,494
December 1995 805,051
January 1996 (290,770)
February 1996 (513,025)
March 1996 504,432
April 1996 668,572
May 1996 1,454,238
June 1996 2,249,899
---------
Total $14,095,898
===========
</TABLE>
; and (II) for each month of each subsequent fiscal
year of the Company during the Term, an amount equal
to a reasonable
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<PAGE> 7
forecast of the monthly expected amount of the
Bonusable Earnings for each month of such fiscal year
which the Board shall in good faith establish by
resolution as the Target Amount within thirty (30)
days after the first day of such fiscal year and which
shall, in the aggregate, equal the Target Amount for
such fiscal year.
(K) "Projected Bonusable Earnings" shall
mean for the fiscal year of the Company which
includes the date of a Change in Control, an amount
equal to the product obtained by multiplying (I) the
Target Amount for such fiscal year, by (II) the
quotient obtained by dividing the aggregate amount of
the Bonusable Earnings for the completed months of
such fiscal year that precede the date of such
termination or Change in Control, as the case may be,
by the aggregate amount of the Monthly Target Amounts
for such completed months.
(L) "Threshold Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
<TABLE>
<S> <C>
Threshold Projected Applicable Percentage = Threshold Percentage + [(Target Percentage -
Projected Bonusable Earnings - Threshold Amount
Threshold Percentage) x ------------------------------------------------].
Target Amount - Threshold Amount
</TABLE>
(M) "Target Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
<TABLE>
<S> <C>
Target Projected Applicable Percentage = Target Percentage + [(Maximum Percentage -
Projected Bonusable Earnings - Target Amount
Target Percentage) x -----------------------------------------------].
Maximum Amount - Target Amount
</TABLE>
(iii) Except as otherwise provided in Section
2.1(b)(iv) hereof, for the fiscal year of the Company ended
June 30, 1996 and for each fiscal year of the Company
thereafter during the Term, the Bonus shall be an amount
calculated as follows:
(A) If the Bonusable Earnings for such
fiscal year are less than the Threshold Amount for
such fiscal year, the Bonus shall be zero ($-0-).
(B) If the Bonusable Earnings for such
fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I)
Executive's
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<PAGE> 8
minimum salary under Section 2.1(a) hereof as in effect on the last
day of such fiscal year, multiplied by (II) the Threshold Applicable
Percentage for such fiscal year.
(C) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Target
Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Target Applicable Percentage
for such fiscal year.
(D) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Maximum
Amount for such fiscal year, the Bonus shall be an
amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Maximum Percentage for such
fiscal year.
(iv) Notwithstanding anything contained in this
Agreement to the contrary, upon the occurrence of a Change in
Control, the amount of the Bonus for the fiscal year which
includes the date of such Change in Control shall be an amount
calculated as follows:
(A) If the Projected Bonusable Earnings
for such fiscal year are less than the Threshold
Amount for such fiscal year, the Bonus shall be zero
($-0-).
(B) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I) a
fraction, the numerator of which is the number of
completed months in such fiscal year that precede the
date of such Change in Control and the denominator of
which is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Threshold Projected
Applicable Percentage for such fiscal year.
(C) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Target Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date
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<PAGE> 9
of such Change in Control, multiplied by (III) the Target
Projected Applicable Percentage for such fiscal year.
(D) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Maximum Percentage for such
fiscal year.
(v) Except as otherwise provided herein, any
Bonus payable to Executive under this Agreement shall be paid
by the Company to Executive no later than the sooner of (A)
forty-five (45) days after the last day of the fiscal year of
the Company with respect to which such Bonus is calculated, or
(B) thirty (30) days after a Change in Control.
(vi) Except as otherwise provided in this
Agreement, upon the occurrence of a Change in Control,
Executive shall not be entitled under this Section 2.1(b) to
any Bonus calculated or that would be calculated with respect
to any period beginning after the last day of the month
immediately preceding such date of Change in Control;
provided, however, that nothing contained in this Section
2.1(b)(vi) shall prevent or limit Executive's continuing or
future participation in, or limit or otherwise affect such
rights as Executive may have under, any other bonus or
incentive plan, program, arrangement or policy provided by the
Company or any of its affiliates and for which Executive may
qualify.
(c) Additional Compensation. In addition to the minimum
salary and Bonus provided for in Section 2.1(a) and (b), respectively,
Executive and/or Executive's family, as the case may be, shall be
entitled to:
(i) participate in, and shall receive all benefits under:
(A) any and all welfare benefit and
similar employee benefit plans, programs,
arrangements, or policies that are generally made
available by the Company and its affiliates (as
defined in Section 4.10(l)) now or at any time in the
future to other key executive officers or retired key
executive officers, including, but not limited to,
any hospitalization, medical, prescription, dental,
disability, salary continuance, individual life
insurance, executive life insurance, group life
insurance, accidental death insurance, and travel
accident insurance plans, programs, arrangements, and
policies; and
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<PAGE> 10
(B) any and all bonus, incentive,
savings, retirement, profit sharing, pension, and
stock option plans, programs, arrangements, and
policies that are generally made available by the
Company and its affiliates now or at any time in the
future to other key executive officers, including,
but in no way limited to, that certain Amended and
Restated National Convenience Stores Incorporated
Officers' Retirement Plan effective as of August 31,
1995; and
(ii) annual vacations and sick leave in accordance
with the vacation and sick leave policies of the Company and
its affiliates as are now or at any time in the future in
effect with respect to other key executive officers, during
which time of such vacations and sick leave Executive's
compensation shall be paid in full; and
(iii) fringe benefits in accordance with the fringe
benefit policies of the Company and its affiliates as are now
or at any time in the future in effect with respect to other
key executive officers.
2.2 Expenses. The Company agrees that, during the Term, Executive
shall be allowed reasonable and necessary business expenses in connection with
the performance of his duties hereunder within guidelines established by the
Board as in effect at any time with respect to key executives ("Business
Expenses"), including, but not limited to, reasonable and necessary expenses
for food, travel, lodging, entertainment and other items in the promotion of
Company's business within such guidelines. Company will promptly reimburse
Executive for all Business Expenses incurred by Executive upon Executive's
presentation to the Company of an itemized account thereof, together with
receipts, vouchers, or other supporting documentation. After termination or
expiration of this Agreement, however such termination or expiration may come
about, Executive shall have ninety (90) days after the date of such termination
or expiration to submit Business Expenses incurred during the Term hereof to
the Company for reimbursement.
2.3 Working Facilities. Executive shall be furnished with offices
of a size and with other furnishings and appointments, administrative staff,
secretarial and other assistants, stenographic help, and such other facilities
and services as are suitable to Executive's position and adequate for the
performance of Executive's duties.
ARTICLE III
EXCULPATION
Company agrees that Executive will not be liable for any losses,
expenses, costs or damages caused by or resulting from the recommendations,
suggestions, actions, errors, omissions or mistakes of Executive undertaken or
proposed by Executive if Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Executive's rights under this Article III shall not be deemed
exclusive of, but shall be cumulative with, any and all other rights
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<PAGE> 11
(including, but not limited to, rights of indemnification and advancement of
expenses) to which Executive may now or at any time in the future be entitled
under applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement (including, but not limited to, this Agreement), any vote
of stockholders, any resolution of directors, or otherwise.
ARTICLE IV
TERMINATION
4.1 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement shall terminate upon the first to occur of:
(a) Thirty (30) days after written notice of termination
is given by either party to the other; or
(b) Executive's death or, at the Company's option, upon
Executive's becoming Disabled (as defined in Section 4.8 hereof); or
(c) August 31, 1998 (the "Final Date").
Any notice of termination given by Executive to the Company under Section
4.1(a) above shall specify whether such termination is made with or without
Good Reason (as defined in Section 4.4 hereof) or Good Reason-Change in Control
(as defined in Section 4.5 hereof). Any notice of termination given by the
Company to Executive under Section 4.1(a) above shall specify whether such
termination is with or without Cause (as defined in Section 4.3 hereof).
4.2 Obligations of the Company Upon Termination.
(a) Cause; Other than for Good Reason and Other than for
Good Reason-Change in Control. If the Company terminates this
Agreement with Cause pursuant to Section 4.1(a) hereof, or if
Executive terminates this Agreement without Good Reason or without
Good Reason-Change in Control pursuant to Section 4.1(a) hereof, or if
this Agreement terminates pursuant to Section 4.1(c) hereof, this
Agreement shall terminate without further obligations to Executive,
other than those obligations owing or accrued to, vested in, or earned
by Executive through the date of termination, including, but not
limited to:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination through the date of termination; and
(ii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company and any accrued vacation pay not yet paid by
the Company; and
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<PAGE> 12
(iii) all other amounts or benefits owing or
accrued to, vested in, earned by Executive through the date of
termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof;
such obligations owing or accrued to, vested in, or earned by
Executive through the date of termination, including, but not limited
to, such amounts and benefits specified in clauses (i), (ii), and
(iii) of this sentence, being hereinafter collectively referred to as
the "Accrued Obligations." The aggregate amount of such obligations
owing or accrued to, vested in, or earned by Executive through the
date of termination, including, but not limited to, the Accrued
Obligations, shall be paid by the Company to Executive in cash in one
lump sum within thirty (30) days after the date of termination.
(b) Good Reason; Other than for Cause Before a Change in
Control. If Executive terminates this Agreement with Good Reason
pursuant to Section 4.1(a) hereof, or if the Company terminates this
Agreement without Cause before the occurrence of a Change in Control
pursuant to Section 4.1(a) hereof, the Company shall pay to Executive
cash in one lump sum within thirty (30) days after the date of
termination the aggregate of the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but prior to giving effect to any
reduction therein which precipitated such termination) through
the date of termination; and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
(iii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company, and any accrued vacation pay not yet paid by
the Company; and
(iv) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(v) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), or (iv) of this
sentence.
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<PAGE> 13
(c) Good Reason-Change in Control; Other than for Cause
On or After a Change in Control. If Executive terminates this
Agreement with Good Reason-Change in Control pursuant to Section
4.1(a) hereof, or if the Company terminates this Agreement without
Cause on or after the occurrence of a Change in Control pursuant to
Section 4.1(a) hereof the Company shall pay to Executive cash in one
lump sum within thirty (30) days after the date of termination the
aggregate of the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but prior to giving effect to any
reduction therein which precipitated such termination) through
the date of termination; and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
(iii) to the extent not theretofore paid as
required under Section 2.1(b)(v) hereof, any Bonus through the
date of such Change in Control; and
(iv) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company, and any accrued vacation pay not yet paid by
the Company; and
(v) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(vi) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), (iv), or (v) of this
sentence.
(d) Death. If Executive's employment is terminated under
Section 4.1(b) hereof by reason of Executive's death, the Company
shall pay to Executive's legal representatives cash in one lump sum
within thirty (30) days after the date of Executive's death the full
amount of the obligations owing or accrued to, vested in, or earned by
Executive through the date of Executive's death, including, but not
limited to, the Accrued Obligations. Anything in this Agreement to
the contrary notwithstanding, Executive's family shall be entitled to
receive benefits provided by the Company and any of its affiliates to
surviving families under the then existing or applicable plans,
programs, or arrangements and policies of the Company and its
affiliates.
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<PAGE> 14
(e) Disability. If Executive's employment is terminated
under Section 4.1(b) hereof by reason of Executive becoming Disabled:
(i) the Company shall pay to Executive cash in
one lump sum within thirty (30) days after the date of
termination the full amount of the obligations owing or
accrued to, vested in, or earned by Executive through the date
of termination, including, but not limited to, the Accrued
Obligations; and
(ii) the Company shall pay to Executive
seventy-five percent (75%) of Executive's minimum salary at
the annual rate in effect at the time of such termination for
the period commencing on the date after the date of
termination and ending on the Final Date (such minimum salary
to be paid in accordance with the second and third sentences
of Section 2.1(a)), reduced by the actual amount of benefits
paid to Executive during such period under any disability
insurance policy maintained by the Company for Executive.
4.3 Cause. As used in this Agreement, the term "Cause" means (i)
willful misconduct by Executive, (ii) the gross neglect by Executive of his
duties as an employee, officer or director of the Company which continues for
more than thirty (30) days after written notice from the Company to Executive
specifically identifying the gross negligence of Executive and directing
Executive to discontinue same, (iii) the commission by Executive of a crime
constituting a felony, or (iv) the commission by Executive of an act, other
than an act taken in good faith within the course and scope of Executive's
employment, which is directly detrimental to the Company and which act exposes
the Company to material liability.
4.4 Good Reason. As used in this Agreement, the term "Good
Reason" means the breach of any material provision of this Agreement by the
Company (including, but in no way limited to, any removal of Executive, without
Cause, from the position of the Office during the Term) which is not cured
within thirty (30) days after written notice from Executive to the Company
specifically identifying such breach; provided, however, that the term "Good
Reason" shall not include any breach of any provision of this Agreement that
occurs after the occurrence of a Change in Control.
4.5 Good Reason-Change in Control. As used in this Agreement, the
term "Good Reason-Change in Control" means after the occurrence of a Change in
Control, a determination by Executive that any one or more of the following
events has occurred:
(a) the assignment by the Company to Executive of duties
that are inconsistent with the Office at the time of such assignment,
or the removal by the Company from Executive of those duties usually
appertaining to the Office at the time of such removal; or
(b) a change by the Company, without Executive's prior
written consent, in Executive's responsibilities to the Company as
such responsibilities
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<PAGE> 15
existed at the time of the occurrence of such Change in Control (or as
such responsibilities may thereafter exist from time to time as a
result of changes in such responsibilities made with Executive's prior
written consent); or
(c) any removal of Executive from, or any failure to
elect or reelect Executive to, the Office, except in connection with
Executive's promotion, with his prior written consent, to a higher
office (if any) with the Company; or
(d) the Company's direction that Executive discontinue
service (or not seek reelection or reappointment) as a director,
officer or member of any corporation or other entity of which
Executive is a director, officer or member at the time of the
occurrence of such Change in Control; or
(e) the failure of the Company to continue to provide
Executive with office space, related facilities and support personnel
(including, but not limited to, administrative and secretarial
assistance) that are both commensurate with the Office and Executive's
responsibilities to and position with the Company at the time of the
occurrence of such Change in Control and not materially dissimilar to
the office space, related facilities and support personnel provided to
other key executive officers of the Company; or
(f) a reduction by the Company in the amount of
Executive's minimum salary specified in Section 2.1(a) (or as
subsequently increased) and as in effect at the time of the occurrence
of such Change in Control, or a failure of the Company to pay such
minimum annual salary to the Employee at the time and in the manner
specified in Section 2.1(a) of this Employment Agreement; or
(g) in the event of any increase, at any time after the
occurrence of such Change in Control, in the minimum annual salary or
salaries of one or more members of the Executive Group (as defined in
Section 4.7 hereof) (the members or members of the Executive Group
whose minimum annual salary or salaries are increased at such time
being hereinafter called the "Increased Executives"), the failure of
the Company simultaneously to increase Executive's minimum annual
salary, as Executive's minimum annual salary is in effect immediately
prior to giving effect to such first-mentioned increase (the "Prior
Base Salary"), by an amount which equals or exceeds the product
obtained by multiplying the Prior Base Salary by a fraction, the
numerator of which is the sum of the amounts by which the respective
minimum annual salaries of the Increased Executives (other than
Executive) were increased at such time and the denominator of which is
the sum of the respective minimum annual salaries of the Increased
Executives (other than Executive) immediately prior to giving effect
to such first- mentioned increase; or
(h) the discontinuation or reduction by the Company of
Executive's participation in any bonus or other employee benefit plan,
program, arrangement, or policy (including, but not limited to, any
such plan, program, arrangement, or policy described in Section 2.1(c)
hereof) in which Executive is a participant at the time of the
occurrence of such Change in Control; or
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<PAGE> 16
(i) Executive's principal office space or the related
facilities or support space or the related facilities or support
personnel referred to in paragraph (e) of this Section 4.5 cease to be
located within the Company's principal executive offices, or for a
period of more than 45 consecutive days Executive is required by the
Company to perform a majority of his duties outside the Company's
principal executive offices; or
(j) the relocation, without Executive's prior written
consent, of the Company's principal executive offices to a location
outside the county in which such offices are located at the time of
the occurrence of such Change in Control; or
(k) the failure of the Company to provide Executive
annually with a number of paid vacation days and sick leave days at
least equal to the number of paid vacation days to which Executive is
entitled annually at the time of the occurrence of such Change in
Control; or
(l) the failure of the Company to obtain the assumption
by any successor to the Company of the obligations imposed upon the
Company under this Agreement, as required by Section 5.2 of this
Agreement; or
(m) the failure by the Company to promptly reimburse
Executive for any Business Expenses; or
(n) that because of the policies, decisions or actions of
the Board or the stockholders of the Company, Executive can no longer
perform his duties to the Company in a manner which is consistent with
the manner in which such duties were performed by Executive prior to
the occurrence of such Change in Control; or
(o) the employment of Executive under this Agreement is
terminated by the Company without Cause; or
(p) the Company notifies Executive of the Company's
intention not to observe or perform one or more of the obligations of
the Company under this Agreement; or
(q) the Company breaches any provision of this Agreement.
4.6 Change in Control. As used herein, the term "Change in
Control" shall mean the occurrence with respect to the Company of any of the
following events:
(a) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
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<PAGE> 17
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(b) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(c) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 20
percent or more of the combined voting power of the then-outstanding
securities of the Company (as determined under paragraph (d) of Rule
13d-3 promulgated under the Exchange Act, in the case of rights to
acquire common stock);
(d) the stockholders of the Company shall approve:
(i) any merger, consolidation, or reorganization
of the Company:
(A) in which the Company is not the
continuing or surviving corporation,
(B) pursuant to which shares of common
stock of the Company would be converted into cash,
securities or other property,
(C) with a corporation which prior to
such merger, consolidation, or reorganization owned
20 percent or more of the combined voting power of
the then- outstanding securities of the Company, or
(D) in which the Company will not
survive as an independent, publicly-owned
corporation;
(ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of
all or substantially all the assets of the Company, or
(iii) any liquidation or dissolution of the Company;
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<PAGE> 18
(e) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(f) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(g) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(h) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
cease for any reason to constitute a majority of the Board, unless the
election or nomination for election by the Company's stockholders of
each new director during any such two-year period was approved by the
vote of two-thirds of the directors then still in office who were
directors at the beginning of such two-year period.
4.7 Executive Group. As used herein, "Executive Group" shall mean
the officers of the Company; and each of such officers shall be deemed members
of the Executive Group.
4.8 Disabled. As used herein, "Disabled" shall mean a mental or
physical impairment which in the reasonable opinion of a qualified doctor
selected by the Company renders Executive unable to perform with reasonable
diligence the ordinary functions and duties of Executive on a full-time basis
in accordance with the terms of this Agreement, which inability will continue
in the reasonable opinion of such doctor for a period of not less than 180
days.
4.9 Return of Materials; Confidential Information. In the event
of any termination of this Agreement, Executive shall promptly deliver to the
Company all lists, books, records, literature, products and any other materials
owned or provided by the Company in connection with Executive's employment
hereunder. Executive shall not at any time during or after the Term hereof use
for himself or others, or divulge to others, any secret or confidential
information, knowledge or data of the Company obtained by Executive as a result
of his employment unless authorized by a majority of the Board.
4.10 Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or any of its affiliates to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (any such payments or distributions
being individually referred to herein as a "Payment," and any
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<PAGE> 19
two or more of such payments or distributions being referred to herein as
"Payments"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") (such excise tax,
together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such excise tax, and any interest in respect
of such penalties, additions to tax or additional amounts, being collectively
referred herein to as the "Excise Tax"), then Executive shall be entitled to
receive an additional payment or payments (individually referred to herein as a
"Gross-Up Payment" and any two or more of such additional payments being
referred to herein as "Gross-Up Payments") in an amount such that after payment
by Executive of all taxes (as defined in Section 4.10(k)) imposed upon the
Gross-Up Payment, Executive retains an amount of such Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 4.10(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 4.10(b), including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall initially be made, at the
Company's expense, by nationally recognized tax counsel mutually acceptable to
the Company and Executive ("Tax Counsel"). Tax Counsel shall provide detailed
supporting legal authorities, calculations, and documentation both to the
Company and Executive within 15 business days of the termination of Executive's
employment, if applicable, or such other time or times as is reasonably
requested by the Company or Executive. If Tax Counsel makes the initial
Determination that no Excise Tax is payable by Executive with respect to a
Payment or Payments, it shall furnish Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to any
such Payment or Payments. Executive shall have the right to dispute any
Determination (a "Dispute") within 15 business days after delivery of Tax
Counsel's opinion with respect to such Determination. The Gross-Up Payment, if
any, as determined pursuant to such Determination shall, at the Company's
expense, be paid by the Company to Executive within five business days of
Executive's receipt of such Determination. The existence of a Dispute shall
not in any way affect Executive's right to receive the Gross-Up Payment in
accordance with such Determination. If there is no Dispute, such Determination
shall be binding, final and conclusive upon the Company and Executive, subject
in all respects, however, to the provisions of Section 4.10(c) through (i)
below. As a result of the uncertainty in the application of Sections 4999 and
280G of the Code, it is possible that Gross-Up Payments (or portions thereof)
which will not have been made by the Company should have been made
("Underpayment"), and if upon any reasonable written request from Executive or
the Company to Tax Counsel, or upon Tax Counsel's own initiative, Tax Counsel,
at the Company's expense, thereafter determines that Executive is required to
make a payment of any Excise Tax or any additional Excise Tax, as the case may
be, Tax Counsel shall, at the Company's expense, determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to Executive.
(c) The Company shall defend, hold harmless, and
indemnify Executive on a fully grossed-up after tax basis from and against any
and all claims, losses, liabilities, obligations, damages, impositions,
assessments, demands, judgements, settlements, costs and expenses (including
reasonable attorneys', accountants', and
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<PAGE> 20
experts' fees and expenses) with respect to any tax liability of Executive
resulting from any Final Determination (as defined in Section 4.10(j)) that any
Payment is subject to the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending
or threatened audit, examination, investigation or administrative, court or
other proceeding which, if pursued successfully, could result in or give rise
to a claim by Executive against the Company under this Section 4.10(d)
("Claim"), including, but not limited to, a claim for indemnification of
Executive by the Company under Section 4.10(c), then such party shall promptly
notify the other party hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Executive ("Executive
Claim"), Executive shall take or cause to be taken such action in connection
with contesting such Executive Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide
that the Company shall be solely responsible for the payment of any and all
fees and disbursements of such counsel and any experts) and the execution of
powers of attorney, provided that:
(i) within 30 calendar days after the Company
receives or delivers, as the case may be, the Tax Claim Notice
relating to such Executive Claim (or such earlier date that any
payment of the taxes claimed is due from Executive, but in no event
sooner than five calendar days after the Company receives or delivers
such Tax Claim Notice), the Company shall have notified Executive in
writing ("Election Notice") that the Company does not dispute its
obligations (including, but not limited to, its indemnity obligations)
under this Agreement and that the Company elects to contest, and to
control the defense or prosecution of, such Executive Claim at the
Company's sole risk and sole cost and expense; and
(ii) the Company shall have advanced to Executive
on an interest-free basis, the total amount of the tax claimed in
order for Executive, at the Company's request, to pay or cause to be
paid the tax claimed, file a claim for refund of such tax and, subject
to the provisions of the last sentence of Section 4.10(g), sue for a
refund of such tax if such claim for refund is disallowed by the
appropriate taxing authority (it being understood and agreed by the
parties hereto that the Company shall only be entitled to sue for a
refund and the Company shall not be entitled to initiate any
proceeding in, for example, United States Tax Court) and shall
indemnify and hold Executive harmless, on a fully grossed-up after tax
basis, from any tax imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
(iii) the Company shall reimburse Executive for any
and all costs and expenses resulting from any such request by the
Company and shall
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<PAGE> 21
indemnify and hold Executive harmless, on fully grossed-up after-tax
basis, from any tax imposed as a result of such reimbursement.
(f) Subject to the provisions of Section 4.10(e) hereof,
the Company shall have the right to defend or prosecute, at the sole cost,
expense and risk of the Company, such Executive Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
the Company to a Final Determination; provided, however, that (i) the Company
shall not, without Executive's prior written consent, enter into any compromise
or settlement of such Executive Claim that would adversely affect Executive,
(ii) any request from the Company to Executive regarding any extension of the
statute of limitations relating to assessment, payment, or collection of taxes
for the taxable year of Executive with respect to which the contested issues
involved in, and amount of, the Executive Claim relate is limited solely to
such contested issues and amount, and (iii) the Company's control of any
contest or proceeding shall be limited to issues with respect to the Executive
Claim and Executive shall be entitled to settle or contest, in his sole and
absolute discretion, any other issue raised by the Internal Revenue Service or
any other taxing authority. So long as the Company is diligently defending or
prosecuting such Executive Claim, Executive shall provide or cause to be
provided to the Company any information reasonably requested by the Company
that relates to such Executive Claim, and shall otherwise cooperate with the
Company and its representatives in good faith in order to contest effectively
such Executive Claim. The Company shall keep Executive informed of all
developments and events relating to any such Executive Claim (including,
without limitation, providing to Executive copies of all written materials
pertaining to any such Executive Claim), and Executive or his authorized
representatives shall be entitled, at Executive's expense, to participate in
all conferences, meetings and proceedings relating to any such Executive Claim.
(g) If, after actual receipt by Executive of an amount of
a tax claimed (pursuant to an Executive Claim) that has been advanced by the
Company pursuant to Section 4.10(e)(ii) hereof, the extent of the liability of
the Company hereunder with respect to such tax claimed has been established by
a Final Determination, Executive shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, Executive
with respect to such tax (together with any interest paid or credited thereon
by the taxing authority and any recovery of legal fees from such taxing
authority related thereto), except to the extent that any amounts are then due
and payable by the Company to Executive, whether under the provisions of this
Agreement or otherwise. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 4.10(e)(ii), a determination is
made by the Internal Revenue Service or other appropriate taxing authority that
Executive shall not be entitled to any refund with respect to such tax claimed
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of any Gross-Up Payments and other payments required to be paid
hereunder.
-21-
<PAGE> 22
(h) With respect to any Executive Claim, if the Company
fails to deliver an Election Notice to Executive within the period provided in
Section 4.10(e)(i) hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Section 4.10(e)(ii) and (iii)
and (f) hereof, then Executive shall at any time thereafter have the right (but
not the obligation), at his election and in his sole and absolute discretion,
to defend or prosecute, at the sole cost, expense and risk of the Company, such
Executive Claim. Executive shall have full control of such defense or
prosecution and such proceedings, including any settlement or compromise
thereof. If requested by Executive, the Company shall cooperate, and shall
cause its affiliates to cooperate, in good faith with Executive and his
authorized representatives in order to contest effectively such Executive
Claim. The Company may attend, but not participate in or control, any defense,
prosecution, settlement or compromise of any Executive Claim controlled by
Executive pursuant to this Section 4.10(h) and shall bear its own costs and
expenses with respect thereto. In the case of any Executive Claim that is
defended or prosecuted by Executive, Executive shall, from time to time, be
entitled to current payment, on a fully grossed-up after tax basis, from the
Company with respect to costs and expenses incurred by Executive in connection
with such defense or prosecution.
(i) In the case of any Executive Claim that is defended
or prosecuted to a Final Determination pursuant to the terms of this Section
4.10(i), the Company shall pay, on a fully grossed-up after tax basis, to
Executive in immediately available funds the full amount of any taxes arising
or resulting from or incurred in connection with such Executive Claim that have
not theretofore been paid by the Company to Executive, together with the costs
and expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by the Company to Executive,
within ten calendar days after such Final Determination. In the case of any
Executive Claim not covered by the preceding sentence, the Company shall pay,
on a fully grossed-up after tax basis, to Executive in immediately available
funds the full amount of any taxes arising or resulting from or incurred in
connection with such Executive Claim at least ten calendar days before the date
payment of such taxes is due from Executive, except where payment of such taxes
is sooner required under the provisions of this Section 4.10(i), in which case
payment of such taxes (and payment, on a fully grossed-up after tax basis, of
any costs and expenses required to be paid under this Section 4.10(i) shall be
made within the time and in the manner otherwise provided in this Section
4.10(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including, but not
limited to, any and all
-22-
<PAGE> 23
Excise Taxes, income taxes, and employment taxes), together with any interest
thereon, any penalties, additions to tax, or additional amounts with respect
to such taxes and any interest in respect of such penalties, additions to tax,
or additional amounts.
(l) For purposes of this Agreement, the terms "affiliate"
and "affiliates" mean, when used with respect to any entity, individual, or
other person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by,
or is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to
direct or cause the direction of the management and policies of such entity or
other person, whether through the ownership of voting securities, by contract
or otherwise.
4.11 Legal Fees and Expenses. The Company shall defend, hold
harmless, and indemnify Executive on a fully grossed-up after tax basis from
and against any and all costs and expenses (including reasonable attorneys',
accountants' and experts' fees and expenses) incurred by Executive from time to
time as a result of any contest (regardless of the outcome) by the Company or
others contesting the validity or enforcement of, or liability under, any term
or provision of this Agreement, plus in each case interest at the applicable
federal rate provided for in Section 7872(f)(2)(B) of the Code.
4.12 Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan, program, arrangement or policy provided by the
Company or any of its affiliates (including, but not limited to, any plan,
program, arrangement or policy described in Section 2.1(c) hereof) and for
which Executive and/or Executive's family may qualify, nor shall anything
herein limit or otherwise affect such rights as Executive and/or Executive's
family may have under any other agreements with the Company or any of its
affiliates. Amounts which are vested benefits or which Executive and/or
Executive's family is otherwise entitled to receive under any plan, program,
arrangement, or policy of the Company or any of its affiliates (including, but
not limited to, any plan, program, arrangement or policy described in Section
2.1(c) hereof) at or subsequent to the date of termination of this Agreement
shall be payable in accordance with such plan, program, arrangement or policy.
4.13 Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement.
ARTICLE V
GENERAL PROVISIONS
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<PAGE> 24
5.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
5.2 Assignability. This Agreement is personal to Executive and
without the prior written consent of the Company shall not be assignable by
Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives and heirs. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Company shall
require any corporation, entity, individual or other person who is the
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization, or otherwise) to all or substantially all of the business or
assets of the Company to expressly assume and agree to perform, by a written
agreement in form and substance satisfactory to Executive, all of the
obligations of the Company under this Agreement. As used in this Agreement,
the term "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, written agreement, or otherwise.
5.3 Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
5.4 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between Executive and the Company and supersedes
any prior agreements or understandings, whether written or oral, with respect
to the subject matter hereof. Except as may be otherwise provided herein, this
Agreement may not be amended or modified except by subsequent written agreement
executed by both parties hereto.
5.5 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
5.6 Notices. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall
be deemed delivered only upon actual receipt.
If to the Company:
National Convenience Stores Incorporated
100 Waugh Drive
Houston, Texas 77007
Attention: General Counsel
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<PAGE> 25
If to Executive:
Brian Fontana
5409 Braeburn Drive
Bellaire, Texas 77401
5.7 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any breach of
the same or any other term or condition of this Agreement.
5.8 Severability. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not effect the enforceability or validity of any other
provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Execution Date, but effective as of the Effective Date.
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A. J. GALLERANO
--------------------------------
A. J. Gallerano
Senior Vice President -
General Counsel and Secretary
"COMPANY"
/s/ BRIAN FONTANA
------------------------------------
Brian Fontana
"EXECUTIVE"
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<PAGE> 1
EXHIBIT 99.15
AGREEMENT AMENDING AND RESTATING
EMPLOYMENT AGREEMENT
THIS AGREEMENT AMENDING AND RESTATING EMPLOYMENT AGREEMENT (this
"Agreement") is executed as of August 31, 1995 (the "Execution Date"), but
effective as of October 31, 1994 (the "Effective Date"), by and between
NATIONAL CONVENIENCE STORES INCORPORATED, a Delaware corporation (the
"Company"), and DOUGLAS B. BINFORD ("Executive").
R E C I T A L S:
A. The Company is in the convenience store business in the State
of Texas.
B. Executive is recognized as having experience in the management
and operation of companies that are in the convenience store business.
C. The Company and Executive entered into that certain Employment
Agreement effective as of October 31, 1994 (the "Employment Agreement").
D. The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat, or occurrence of a Change in Control
(as defined in Section 4.6 hereof).
E. The Board believes it is imperative (i) to diminish the
inevitable and significant distractions of Executive and dilution of the time
of Executive, by virtue of the personal uncertainties and risks created by a
pending or threatened Change in Control, (ii) to encourage Executive's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change in Control, and (iii) to provide Executive with
compensation arrangements in the event of a Change in Control which provide
Executive with financial security, which are competitive with those of other
corporations, and which ensure that Executive receives the compensation and
benefits intended to be provided to Executive by the Company through this
Agreement and the Company's various employee benefit and compensation plans and
arrangements without regard to any Excise Tax (as defined in Section 4.10(a)
hereof).
F. In order to accomplish the objectives described in the two
immediately preceding recitals, the Board desires to cause the Company to enter
into this Agreement and amend and restate the Employment Agreement as set forth
herein.
G. Executive desires to enter into this Agreement and amend and
restate the Employment Agreement as set forth herein.
-1-
<PAGE> 2
W I T N E S S E T H:
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING, TERM AND DUTIES
1.1 Employment. On the terms and subject to the conditions of
this Agreement, the Company hereby employs and engages the services of
Executive to serve as, and Executive agrees to diligently and competently serve
as and perform the functions of, Vice President - Marketing (the "Office") of
the Company for the term and for the compensation and benefits stated herein.
1.2 Term. The term of employment under this Agreement shall
commence on the Effective Date and shall end on the first to occur of the
events set forth in Section 4.1(a), (b), and (c) (the "Term").
1.3 Major Responsibilities; Authority. Executive shall have the
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities usually associated with the Office of
corporations having assets similar in nature and value to the assets of the
Company and business similar to the business of the Company and at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day periods immediately
preceding each of the Effective Date and the Execution Date, and such other
duties as the Board shall determine from time to time.
1.4 Extent of Service. During the Term, and excluding any periods
of vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable time and energies to the business of the Company consistent
with past practice and shall not, during the Term, be engaged in any business
activity which would interfere or prevent Executive from carrying out his
duties under this Agreement; provided, however, that this Section 1.4 shall not
be construed as preventing Executive from investing his assets in such form or
manner as will not require services on the part of Executive in the operation
of the affairs of any company in which such investments are made.
1.5 Location. Executive shall not be required to move from
Executive's home in Montgomery County, Texas.
ARTICLE II
COMPENSATION AND RELATED ITEMS
2.1 Compensation. As compensation and consideration for the
services to be rendered by Executive under this Agreement and for the
performance by Executive of
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<PAGE> 3
the usual obligations of such employment, the Company agrees to pay Executive,
and Executive agrees to accept, the following compensation and benefits during
the Term:
(a) Salary. Executive shall be paid a minimum annual
salary in the amount of $150,000. Except as otherwise provided
herein, the minimum salary in effect for any period shall be payable
in equal weekly payments. Any earnings over the minimum salary in
effect during any period shall not be applied to the minimum salary
for any subsequent period. If this Agreement terminates on a date
other than the last day of any week, Executive shall be paid for the
week that includes the date of such termination a pro rata portion of
the minimum salary then in effect for such week in the ratio that the
number of days of employment during such week bears to the total
number of business days in such week.
(b) Bonus.
(i) In addition to the minimum salary provided
for in Section 2.1(a) hereof, and subject to the provisions of
Section 2.1(b)(vi) hereof, Executive shall be awarded, for
each fiscal year of the Company during the Term (or, in the
event of a Change in Control, a portion thereof as hereinafter
provided) commencing with the fiscal year of the Company
ending June 30, 1996, a bonus ("Bonus") calculated in
accordance with this Section 2.1(b).
(ii) For purposes of this Section 2.1(b), the
following terms shall have the meanings indicated:
(A) "Bonusable Earnings" shall mean the
consolidated earnings before reorganization expenses,
fresh start adjustments, income taxes, changes in
accounting method, extraordinary gains or losses, and
Takeover Expenses (as defined in the next sentence)
of the Company and its subsidiaries for any fiscal
year, or completed months thereof in the event of a
Change in Control, as the case may be, for which a
Bonus is being calculated, as determined in
conformity with generally accepted accounting
principles applied in a manner consistent with prior
periods. For purposes of the preceding sentence, the
term "Takeover Expenses" shall mean the aggregate
amount of the costs and expenses (including, but not
limited to, any accruals, reserves, or provisions for
such costs and expenses) related to any and all
transactions that arise in connection with a Change
in Control or a potential Change in Control (whether
or not any such transaction (I) is consummated, (II)
is solicited or unsolicited by the Company, or (III)
is undertaken to resist or facilitate any such
transaction or any other such transaction),
including, but not limited to, the fees and costs of
investment bankers, attorneys, accountants, and other
experts and advisors.
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<PAGE> 4
(B) "Threshold Amount" shall mean (I)
for the fiscal year of the Company ended June 30,
1996, an amount equal to $12,000,000, and (II) for
each subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
minimum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Threshold Amount
within thirty (30) days after the first day of such
fiscal year.
(C) "Threshold Percentage" shall mean
(I) thirteen percent (13%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Threshold Amount for such fiscal year and which
the Board in good faith shall establish by resolution
as the Threshold Percentage within thirty (30) days
after the first day of such fiscal year.
(D) "Threshold Applicable Percentage"
shall mean for any fiscal year of the Company during
the Term, a percentage calculated in accordance with
the following formula:
<TABLE>
<S> <C>
Threshold Applicable Percentage = Threshold Percentage + [(Target Percentage -
Bonusable Earnings - Threshold Amount
Threshold Percentage) x ---------------------------------------------].
Target Amount - Threshold Amount
</TABLE>
(E) "Target Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $14,500,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
expected amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Target Amount within
thirty (30) days after the first day of such fiscal
year.
(F) "Target Percentage" shall mean (I)
fifty percent (50%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Target Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Target Percentage within thirty (30) days after
the first day of such fiscal year.
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<PAGE> 5
(G) "Target Applicable Percentage" shall
mean for any fiscal year of the Company during the
Term, a percentage calculated in accordance with the
following formula:
<TABLE>
<S> <C>
Target Applicable Percentage = Target Percentage + [(Maximum Percentage -
Bonusable Earnings - Target Amount
Target Percentage) x ------------------------------------------].
Maximum Amount - Target Amount
</TABLE>
(H) "Maximum Amount" shall mean (I) for
the fiscal year of the Company ended June 30, 1996,
an amount equal to $17,000,000, and (II) for each
subsequent fiscal year of the Company during the
Term, an amount equal to a reasonable forecast of the
maximum amount of the Bonusable Earnings for such
fiscal year which the Board shall in good faith
establish by resolution as the Maximum Amount within
thirty (30) days after the first day of such fiscal
year.
(I) "Maximum Percentage" shall mean (I)
one hundred percent (100%) for the fiscal year of the
Company ended June 30, 1996, and (II) for each
subsequent fiscal year of the Company during the
Term, a percentage of Executive's minimum salary
which will provide Executive with a reasonable
compensation incentive for the Company's obtaining
the Maximum Amount for such fiscal year and which the
Board in good faith shall establish by resolution as
the Maximum Percentage within thirty (30) days after
the first day of such fiscal year.
(J) "Monthly Target Amount" shall mean
(I) for each month of the fiscal year of the Company
ended June 30, 1996, the following amount set forth
opposite such month:
-5-
<PAGE> 6
<TABLE>
<CAPTION>
Monthly Target
Month Year Amount
----- ---- ------------------
<S> <C> <C>
July 1995 $ 2,857,903
August 1995 2,605,852
September 1995 1,835,830
October 1995 1,713,422
November 1995 204,494
December 1995 805,051
January 1996 (290,770)
February 1996 (513,025)
March 1996 504,432
April 1996 668,572
May 1996 1,454,238
June 1996 2,249,899
---------
Total $14,095,898
===========
</TABLE>
; and (II) for each month of each subsequent fiscal
year of the Company during the Term, an amount equal
to a reasonable forecast of the monthly expected
amount of the Bonusable Earnings for each month of
such fiscal year which the Board shall in good faith
establish by resolution as the Target Amount within
thirty (30) days after the first day of such fiscal
year and which shall, in the aggregate, equal the
Target Amount for such fiscal year.
(K) "Projected Bonusable Earnings" shall
mean for the fiscal year of the Company which
includes the date of a Change in Control, an amount
equal to the product obtained by multiplying (I) the
Target Amount for such fiscal year, by (II) the
quotient obtained by dividing the aggregate amount of
the Bonusable Earnings for the completed months of
such fiscal year that precede the date of such
termination or Change in Control, as the case may be,
by the aggregate amount of the Monthly Target Amounts
for such completed months.
(L) "Threshold Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
<TABLE>
<S> <C>
Threshold Projected Applicable Percentage = Threshold Percentage + [(Target Percentage -
</TABLE>
-6-
<PAGE> 7
<TABLE>
<S> <C>
Projected Bonusable Earnings - Threshold Amount
Threshold Percentage) x -------------------------------------------------].
Target Amount - Threshold Amount
</TABLE>
(M) "Target Projected Applicable
Percentage" shall mean for the fiscal year of the
Company which includes the date of a Change in
Control, a percentage calculated in accordance with
the following formula:
<TABLE>
<S> <C>
Target Projected Applicable Percentage = Target Percentage + [(Maximum Percentage -
Projected Bonusable Earnings - Target Amount
Target Percentage) x -----------------------------------------------].
Maximum Amount - Target Amount
</TABLE>
(iii) Except as otherwise provided in Section
2.1(b)(iv) hereof, for the fiscal year of the Company ended
June 30, 1996 and for each fiscal year of the Company
thereafter during the Term, the Bonus shall be an amount
calculated as follows:
(A) If the Bonusable Earnings for such
fiscal year are less than the Threshold Amount for
such fiscal year, the Bonus shall be zero ($-0-).
(B) If the Bonusable Earnings for such
fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I)
Executive's minimum salary under Section 2.1(a)
hereof as in effect on the last day of such fiscal
year, multiplied by (II) the Threshold Applicable
Percentage for such fiscal year.
(C) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Target
Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Target Applicable Percentage
for such fiscal year.
(D) If the Bonusable Earnings for such
fiscal year are equal to or greater than the Maximum
Amount for such fiscal year, the Bonus shall be an
amount equal to the product of (I) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the last day of such fiscal year,
multiplied by (II) the Maximum Percentage for such
fiscal year.
(iv) Notwithstanding anything contained in this
Agreement to the contrary, upon the occurrence of a Change in
Control, the amount of the Bonus for the fiscal year which
includes the date of such Change in Control shall be an amount
calculated as follows:
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(A) If the Projected Bonusable Earnings
for such fiscal year are less than the Threshold
Amount for such fiscal year, the Bonus shall be zero
($-0-).
(B) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Threshold Amount for such fiscal year, but less than
the Target Amount for such fiscal year, the Bonus
shall be an amount equal to the product of (I) a
fraction, the numerator of which is the number of
completed months in such fiscal year that precede the
date of such Change in Control and the denominator of
which is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Threshold Projected
Applicable Percentage for such fiscal year.
(C) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Target Amount for such fiscal year, but less than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Target Projected Applicable
Percentage for such fiscal year.
(D) If the Projected Bonusable Earnings
for such fiscal year are equal to or greater than the
Maximum Amount for such fiscal year, the Bonus shall
be an amount equal to the product of (I) a fraction,
the numerator of which is the number of completed
months in such fiscal year that precede the date of
such Change in Control and the denominator of which
is twelve (12), multiplied by (II) Executive's
minimum salary under Section 2.1(a) hereof as in
effect on the date of such Change in Control,
multiplied by (III) the Maximum Percentage for such
fiscal year.
(v) Except as otherwise provided herein, any
Bonus payable to Executive under this Agreement shall be paid
by the Company to Executive no later than the sooner of (A)
forty-five (45) days after the last day of the fiscal year of
the Company with respect to which such Bonus is calculated, or
(B) thirty (30) days after a Change in Control.
(vi) Except as otherwise provided in this
Agreement, upon the occurrence of a Change in Control,
Executive shall not be entitled under this Section 2.1(b) to
any Bonus calculated or that would be calculated with respect
to any period beginning after the last day of the month
immediately preceding such date of Change in Control;
provided, however, that nothing contained in this Section
2.1(b)(vi) shall prevent or limit
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Executive's continuing or future participation in, or limit or
otherwise affect such rights as Executive may have under, any other
bonus or incentive plan, program, arrangement or policy provided by
the Company or any of its affiliates and for which Executive may
qualify.
(c) Additional Compensation. In addition to the minimum
salary and Bonus provided for in Section 2.1(a) and (b), respectively,
Executive and/or Executive's family, as the case may be, shall be
entitled to:
(i) participate in, and shall receive all benefits under:
(A) any and all welfare benefit and
similar employee benefit plans, programs,
arrangements, or policies that are generally made
available by the Company and its affiliates (as
defined in Section 4.10(l)) now or at any time in the
future to other key executive officers or retired key
executive officers, including, but not limited to,
any hospitalization, medical, prescription, dental,
disability, salary continuance, individual life
insurance, executive life insurance, group life
insurance, accidental death insurance, and travel
accident insurance plans, programs, arrangements, and
policies; and
(B) any and all bonus, incentive,
savings, retirement, profit sharing, pension, and
stock option plans, programs, arrangements, and
policies that are generally made available by the
Company and its affiliates now or at any time in the
future to other key executive officers, including,
but in no way limited to, that certain Amended and
Restated National Convenience Stores Incorporated
Officers' Retirement Plan effective as of August 31,
1995; and
(ii) annual vacations and sick leave in accordance
with the vacation and sick leave policies of the Company and
its affiliates as are now or at any time in the future in
effect with respect to other key executive officers, during
which time of such vacations and sick leave Executive's
compensation shall be paid in full; and
(iii) fringe benefits in accordance with the fringe
benefit policies of the Company and its affiliates as are now
or at any time in the future in effect with respect to other
key executive officers.
2.2 Expenses. The Company agrees that, during the Term, Executive
shall be allowed reasonable and necessary business expenses in connection with
the performance of his duties hereunder within guidelines established by the
Board as in effect at any time with respect to key executives ("Business
Expenses"), including, but not limited to, reasonable and necessary expenses
for food, travel, lodging, entertainment and other items in the promotion of
Company's business within such guidelines. Company will promptly reimburse
Executive for all Business Expenses
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incurred by Executive upon Executive's presentation to the Company of an
itemized account thereof, together with receipts, vouchers, or other supporting
documentation. After termination or expiration of this Agreement, however such
termination or expiration may come about, Executive shall have ninety (90) days
after the date of such termination or expiration to submit Business Expenses
incurred during the Term hereof to the Company for reimbursement.
2.3 Working Facilities. Executive shall be furnished with offices
of a size and with other furnishings and appointments, administrative staff,
secretarial and other assistants, stenographic help, and such other facilities
and services as are suitable to Executive's position and adequate for the
performance of Executive's duties.
ARTICLE III
EXCULPATION
Company agrees that Executive will not be liable for any losses,
expenses, costs or damages caused by or resulting from the recommendations,
suggestions, actions, errors, omissions or mistakes of Executive undertaken or
proposed by Executive if Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Executive's rights under this Article III shall not be deemed
exclusive of, but shall be cumulative with, any and all other rights
(including, but not limited to, rights of indemnification and advancement of
expenses) to which Executive may now or at any time in the future be entitled
under applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement (including, but not limited to, this Agreement), any vote
of stockholders, any resolution of directors, or otherwise.
ARTICLE IV
TERMINATION
4.1 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement shall terminate upon the first to occur of:
(a) Thirty (30) days after written notice of termination
is given by either party to the other; or
(b) Executive's death or, at the Company's option, upon
Executive's becoming Disabled (as defined in Section 4.8 hereof); or
(c) August 31, 1996 (the "Final Date").
Any notice of termination given by Executive to the Company under Section
4.1(a) above shall specify whether such termination is made with or without
Good Reason (as defined in Section 4.4 hereof) or Good Reason-Change in Control
(as defined in Section 4.5 hereof). Any notice of termination given by the
Company to Executive
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under Section 4.1(a) above shall specify whether such termination is with or
without Cause (as defined in Section 4.3 hereof).
4.2 Obligations of the Company Upon Termination.
(a) Cause; Other than for Good Reason and Other than for
Good Reason-Change in Control. If the Company terminates this
Agreement with Cause pursuant to Section 4.1(a) hereof, or if
Executive terminates this Agreement without Good Reason or without
Good Reason-Change in Control pursuant to Section 4.1(a) hereof, or if
this Agreement terminates pursuant to Section 4.1(c) hereof, this
Agreement shall terminate without further obligations to Executive,
other than those obligations owing or accrued to, vested in, or earned
by Executive through the date of termination, including, but not
limited to:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination through the date of termination; and
(ii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company and any accrued vacation pay not yet paid by
the Company; and
(iii) all other amounts or benefits owing or
accrued to, vested in, earned by Executive through the date of
termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof;
such obligations owing or accrued to, vested in, or earned by
Executive through the date of termination, including, but not limited
to, such amounts and benefits specified in clauses (i), (ii), and
(iii) of this sentence, being hereinafter collectively referred to as
the "Accrued Obligations." The aggregate amount of such obligations
owing or accrued to, vested in, or earned by Executive through the
date of termination, including, but not limited to, the Accrued
Obligations, shall be paid by the Company to Executive in cash in one
lump sum within thirty (30) days after the date of termination.
(b) Good Reason; Other than for Cause Before a Change in
Control. If Executive terminates this Agreement with Good Reason
pursuant to Section 4.1(a) hereof, or if the Company terminates this
Agreement without Cause before the occurrence of a Change in Control
pursuant to Section 4.1(a) hereof, the Company shall pay to Executive
cash in one lump sum within thirty (30) days after the date of
termination the aggregate of the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but
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prior to giving effect to any reduction therein which
precipitated such termination) through the date of
termination; and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
(iii) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet paid
by the Company, and any accrued vacation pay not yet paid by
the Company; and
(iv) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(v) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), or (iv) of this
sentence.
(c) Good Reason-Change in Control; Other than for Cause
On or After a Change in Control. If Executive terminates this
Agreement with Good Reason-Change in Control pursuant to Section
4.1(a) hereof, or if the Company terminates this Agreement without
Cause on or after the occurrence of a Change in Control pursuant to
Section 4.1(a) hereof the Company shall pay to Executive cash in one
lump sum within thirty (30) days after the date of termination the
aggregate of the following amounts:
(i) to the extent not theretofore paid,
Executive's minimum salary at the annual rate in effect at the
time of such termination (but prior to giving effect to any
reduction therein which precipitated such termination) through
the date of termination; and
(ii) Executive's minimum salary at the annual rate
in effect at the time of such termination (but prior to giving
effect to any reduction therein which precipitated such
termination) for the period commencing on the day after the
date of termination and ending on the Final Date; and
(iii) to the extent not theretofore paid as
required under Section 2.1(b)(v) hereof, any Bonus through the
date of such Change in Control; and
(iv) in the case of compensation previously
deferred by Executive, all amounts previously deferred
(together with any accrued interest
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thereon) and not yet paid by the Company, and any accrued
vacation pay not yet paid by the Company; and
(v) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements, and policies of the Company and its
affiliates, including, but not limited to, any such plans,
programs, arrangements, or policies described in Section
2.1(c) hereof; and
(vi) any and all other Accrued Obligations not
otherwise described in clause (i), (iii), (iv), or (v) of this
sentence.
(d) Death. If Executive's employment is terminated under
Section 4.1(b) hereof by reason of Executive's death, the Company
shall pay to Executive's legal representatives cash in one lump sum
within thirty (30) days after the date of Executive's death the full
amount of the obligations owing or accrued to, vested in, or earned by
Executive through the date of Executive's death, including, but not
limited to, the Accrued Obligations. Anything in this Agreement to
the contrary notwithstanding, Executive's family shall be entitled to
receive benefits provided by the Company and any of its affiliates to
surviving families under the then existing or applicable plans,
programs, or arrangements and policies of the Company and its
affiliates.
(e) Disability. If Executive's employment is terminated
under Section 4.1(b) hereof by reason of Executive becoming Disabled:
(i) the Company shall pay to Executive cash in
one lump sum within thirty (30) days after the date of
termination the full amount of the obligations owing or
accrued to, vested in, or earned by Executive through the date
of termination, including, but not limited to, the Accrued
Obligations; and
(ii) the Company shall pay to Executive
seventy-five percent (75%) of Executive's minimum salary at
the annual rate in effect at the time of such termination for
the period commencing on the date after the date of
termination and ending on the Final Date (such minimum salary
to be paid in accordance with the second and third sentences
of Section 2.1(a)), reduced by the actual amount of benefits
paid to Executive during such period under any disability
insurance policy maintained by the Company for Executive.
4.3 Cause. As used in this Agreement, the term "Cause" means (i)
willful misconduct by Executive, (ii) the gross neglect by Executive of his
duties as an employee, officer or director of the Company which continues for
more than thirty (30) days after written notice from the Company to Executive
specifically identifying the gross negligence of Executive and directing
Executive to discontinue same, (iii) the commission by Executive of a crime
constituting a felony, or (iv) the commission by Executive of an act, other
than an act taken in good faith within the course and scope
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of Executive's employment, which is directly detrimental to the Company and
which act exposes the Company to material liability.
4.4 Good Reason. As used in this Agreement, the term "Good
Reason" means the breach of any material provision of this Agreement by the
Company (including, but in no way limited to, any removal of Executive, without
Cause, from the position of the Office during the Term) which is not cured
within thirty (30) days after written notice from Executive to the Company
specifically identifying such breach; provided, however, that the term "Good
Reason" shall not include any breach of any provision of this Agreement that
occurs after the occurrence of a Change in Control.
4.5 Good Reason-Change in Control. As used in this Agreement, the
term "Good Reason-Change in Control" means after the occurrence of a Change in
Control, a determination by Executive that any one or more of the following
events has occurred:
(a) the assignment by the Company to Executive of duties
that are inconsistent with the Office at the time of such assignment,
or the removal by the Company from Executive of those duties usually
appertaining to the Office at the time of such removal; or
(b) a change by the Company, without Executive's prior
written consent, in Executive's responsibilities to the Company as
such responsibilities existed at the time of the occurrence of such
Change in Control (or as such responsibilities may thereafter exist
from time to time as a result of changes in such responsibilities made
with Executive's prior written consent); or
(c) any removal of Executive from, or any failure to
elect or reelect Executive to, the Office, except in connection with
Executive's promotion, with his prior written consent, to a higher
office (if any) with the Company; or
(d) the Company's direction that Executive discontinue
service (or not seek reelection or reappointment) as a director,
officer or member of any corporation or other entity of which
Executive is a director, officer or member at the time of the
occurrence of such Change in Control; or
(e) the failure of the Company to continue to provide
Executive with office space, related facilities and support personnel
(including, but not limited to, administrative and secretarial
assistance) that are both commensurate with the Office and Executive's
responsibilities to and position with the Company at the time of the
occurrence of such Change in Control and not materially dissimilar to
the office space, related facilities and support personnel provided to
other key executive officers of the Company; or
(f) a reduction by the Company in the amount of
Executive's minimum salary specified in Section 2.1(a) (or as
subsequently increased) and as in effect at the time of the occurrence
of such Change in Control, or a failure of the
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Company to pay such minimum annual salary to the Employee at the time
and in the manner specified in Section 2.1(a) of this Employment
Agreement; or
(g) in the event of any increase, at any time after the
occurrence of such Change in Control, in the minimum annual salary or
salaries of one or more members of the Executive Group (as defined in
Section 4.7 hereof) (the members or members of the Executive Group
whose minimum annual salary or salaries are increased at such time
being hereinafter called the "Increased Executives"), the failure of
the Company simultaneously to increase Executive's minimum annual
salary, as Executive's minimum annual salary is in effect immediately
prior to giving effect to such first-mentioned increase (the "Prior
Base Salary"), by an amount which equals or exceeds the product
obtained by multiplying the Prior Base Salary by a fraction, the
numerator of which is the sum of the amounts by which the respective
minimum annual salaries of the Increased Executives (other than
Executive) were increased at such time and the denominator of which is
the sum of the respective minimum annual salaries of the Increased
Executives (other than Executive) immediately prior to giving effect
to such first- mentioned increase; or
(h) the discontinuation or reduction by the Company of
Executive's participation in any bonus or other employee benefit plan,
program, arrangement, or policy (including, but not limited to, any
such plan, program, arrangement, or policy described in Section 2.1(c)
hereof) in which Executive is a participant at the time of the
occurrence of such Change in Control; or
(i) Executive's principal office space or the related
facilities or support space or the related facilities or support
personnel referred to in paragraph (e) of this Section 4.5 cease to be
located within the Company's principal executive offices, or for a
period of more than 45 consecutive days Executive is required by the
Company to perform a majority of his duties outside the Company's
principal executive offices; or
(j) the relocation, without Executive's prior written
consent, of the Company's principal executive offices to a location
outside the county in which such offices are located at the time of
the occurrence of such Change in Control; or
(k) the failure of the Company to provide Executive
annually with a number of paid vacation days and sick leave days at
least equal to the number of paid vacation days to which Executive is
entitled annually at the time of the occurrence of such Change in
Control; or
(l) the failure of the Company to obtain the assumption
by any successor to the Company of the obligations imposed upon the
Company under this Agreement, as required by Section 5.2 of this
Agreement; or
(m) the failure by the Company to promptly reimburse
Executive for any Business Expenses; or
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(n) that because of the policies, decisions or actions of
the Board or the stockholders of the Company, Executive can no longer
perform his duties to the Company in a manner which is consistent with
the manner in which such duties were performed by Executive prior to
the occurrence of such Change in Control; or
(o) the employment of Executive under this Agreement is
terminated by the Company without Cause; or
(p) the Company notifies Executive of the Company's
intention not to observe or perform one or more of the obligations of
the Company under this Agreement; or
(q) the Company breaches any provision of this Agreement.
4.6 Change in Control. As used herein, the term "Change in
Control" shall mean the occurrence with respect to the Company of any of the
following events:
(a) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
disclosing that any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 20 percent or more of the outstanding
shares of common stock of the Company or the combined voting power of
the then-outstanding securities of the Company;
(b) a report is filed by the Company disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the SEC;
(c) any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than the Company
(or one of its subsidiaries) or any employee benefit plan sponsored by
the Company (or one of its subsidiaries), shall purchase securities
pursuant to a tender offer or exchange offer to acquire any common
stock of the Company (or securities convertible into common stock) for
cash, securities or any other consideration, provided that after
consummation of the offer, the person, entity or group in question is
the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 20
percent or more of the combined voting power of the then-outstanding
securities of the Company (as determined under paragraph (d) of Rule
13d-3 promulgated under the Exchange Act, in the case of rights to
acquire common stock);
(d) the stockholders of the Company shall approve:
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(i) any merger, consolidation, or reorganization
of the Company:
(A) in which the Company is not the
continuing or surviving corporation,
(B) pursuant to which shares of common
stock of the Company would be converted into cash,
securities or other property,
(C) with a corporation which prior to
such merger, consolidation, or reorganization owned
20 percent or more of the combined voting power of
the then- outstanding securities of the Company, or
(D) in which the Company will not
survive as an independent, publicly-owned
corporation;
(ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of
all or substantially all the assets of the Company, or
(iii) any liquidation or dissolution of the Company;
(e) the stockholders of the Company shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the outstanding shares of common stock of the Company
or in excess of 50% of the combined voting power of the
then-outstanding securities of the Company;
(f) the Company's common stock ceases to be listed on the
New York Stock Exchange;
(g) the existence of a Distribution Date as defined in
the Rights Agreement of the Company dated August 31, 1995; or
(h) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
cease for any reason to constitute a majority of the Board, unless the
election or nomination for election by the Company's stockholders of
each new director during any such two-year period was approved by the
vote of two-thirds of the directors then still in office who were
directors at the beginning of such two-year period.
4.7 Executive Group. As used herein, "Executive Group" shall mean
the officers of the Company; and each of such officers shall be deemed members
of the Executive Group.
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4.8 Disabled. As used herein, "Disabled" shall mean a mental or
physical impairment which in the reasonable opinion of a qualified doctor
selected by the Company renders Executive unable to perform with reasonable
diligence the ordinary functions and duties of Executive on a full-time basis
in accordance with the terms of this Agreement, which inability will continue
in the reasonable opinion of such doctor for a period of not less than 180
days.
4.9 Return of Materials; Confidential Information. In the event
of any termination of this Agreement, Executive shall promptly deliver to the
Company all lists, books, records, literature, products and any other materials
owned or provided by the Company in connection with Executive's employment
hereunder. Executive shall not at any time during or after the Term hereof use
for himself or others, or divulge to others, any secret or confidential
information, knowledge or data of the Company obtained by Executive as a result
of his employment unless authorized by a majority of the Board.
4.10 Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or any of its affiliates to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (any such payments or distributions
being individually referred to herein as a "Payment," and any two or more of
such payments or distributions being referred to herein as "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") (such excise tax, together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such excise tax, and any interest in respect of such penalties,
additions to tax or additional amounts, being collectively referred herein to
as the "Excise Tax"), then Executive shall be entitled to receive an additional
payment or payments (individually referred to herein as a "Gross-Up Payment"
and any two or more of such additional payments being referred to herein as
"Gross-Up Payments") in an amount such that after payment by Executive of all
taxes (as defined in Section 4.10(k)) imposed upon the Gross-Up Payment,
Executive retains an amount of such Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 4.10(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 4.10(b), including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall initially be made, at the
Company's expense, by nationally recognized tax counsel mutually acceptable to
the Company and Executive ("Tax Counsel"). Tax Counsel shall provide detailed
supporting legal authorities, calculations, and documentation both to the
Company and Executive within 15 business days of the termination of Executive's
employment, if applicable, or such other time or times as is reasonably
requested by the Company or Executive. If Tax Counsel makes the initial
Determination that no Excise Tax is payable by Executive with respect to a
Payment or Payments, it shall furnish Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to any
such Payment or
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Payments. Executive shall have the right to dispute any Determination (a
"Dispute") within 15 business days after delivery of Tax Counsel's opinion with
respect to such Determination. The Gross-Up Payment, if any, as determined
pursuant to such Determination shall, at the Company's expense, be paid by the
Company to Executive within five business days of Executive's receipt of such
Determination. The existence of a Dispute shall not in any way affect
Executive's right to receive the Gross-Up Payment in accordance with such
Determination. If there is no Dispute, such Determination shall be binding,
final and conclusive upon the Company and Executive, subject in all respects,
however, to the provisions of Section 4.10(c) through (i) below. As a result
of the uncertainty in the application of Sections 4999 and 280G of the Code, it
is possible that Gross-Up Payments (or portions thereof) which will not have
been made by the Company should have been made ("Underpayment"), and if upon
any reasonable written request from Executive or the Company to Tax Counsel, or
upon Tax Counsel's own initiative, Tax Counsel, at the Company's expense,
thereafter determines that Executive is required to make a payment of any
Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall,
at the Company's expense, determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to
Executive.
(c) The Company shall defend, hold harmless, and
indemnify Executive on a fully grossed-up after tax basis from and against any
and all claims, losses, liabilities, obligations, damages, impositions,
assessments, demands, judgements, settlements, costs and expenses (including
reasonable attorneys', accountants', and experts' fees and expenses) with
respect to any tax liability of Executive resulting from any Final
Determination (as defined in Section 4.10(j)) that any Payment is subject to
the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending
or threatened audit, examination, investigation or administrative, court or
other proceeding which, if pursued successfully, could result in or give rise
to a claim by Executive against the Company under this Section 4.10(d)
("Claim"), including, but not limited to, a claim for indemnification of
Executive by the Company under Section 4.10(c), then such party shall promptly
notify the other party hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Executive ("Executive
Claim"), Executive shall take or cause to be taken such action in connection
with contesting such Executive Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as
are reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide
that the Company shall be solely responsible for the payment of any and all
fees and disbursements of such counsel and any experts) and the execution of
powers of attorney, provided that:
(i) within 30 calendar days after the Company
receives or delivers, as the case may be, the Tax Claim Notice
relating to such Executive Claim (or such earlier date that any
payment of the taxes claimed is due from
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<PAGE> 20
Executive, but in no event sooner than five calendar days after the
Company receives or delivers such Tax Claim Notice), the Company shall
have notified Executive in writing ("Election Notice") that the
Company does not dispute its obligations (including, but not limited
to, its indemnity obligations) under this Agreement and that the
Company elects to contest, and to control the defense or prosecution
of, such Executive Claim at the Company's sole risk and sole cost and
expense; and
(ii) the Company shall have advanced to Executive
on an interest-free basis, the total amount of the tax claimed in
order for Executive, at the Company's request, to pay or cause to be
paid the tax claimed, file a claim for refund of such tax and, subject
to the provisions of the last sentence of Section 4.10(g), sue for a
refund of such tax if such claim for refund is disallowed by the
appropriate taxing authority (it being understood and agreed by the
parties hereto that the Company shall only be entitled to sue for a
refund and the Company shall not be entitled to initiate any
proceeding in, for example, United States Tax Court) and shall
indemnify and hold Executive harmless, on a fully grossed-up after tax
basis, from any tax imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
(iii) the Company shall reimburse Executive for any
and all costs and expenses resulting from any such request by the
Company and shall indemnify and hold Executive harmless, on fully
grossed-up after-tax basis, from any tax imposed as a result of such
reimbursement.
(f) Subject to the provisions of Section 4.10(e) hereof,
the Company shall have the right to defend or prosecute, at the sole cost,
expense and risk of the Company, such Executive Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
the Company to a Final Determination; provided, however, that (i) the Company
shall not, without Executive's prior written consent, enter into any compromise
or settlement of such Executive Claim that would adversely affect Executive,
(ii) any request from the Company to Executive regarding any extension of the
statute of limitations relating to assessment, payment, or collection of taxes
for the taxable year of Executive with respect to which the contested issues
involved in, and amount of, the Executive Claim relate is limited solely to
such contested issues and amount, and (iii) the Company's control of any
contest or proceeding shall be limited to issues with respect to the Executive
Claim and Executive shall be entitled to settle or contest, in his sole and
absolute discretion, any other issue raised by the Internal Revenue Service or
any other taxing authority. So long as the Company is diligently defending or
prosecuting such Executive Claim, Executive shall provide or cause to be
provided to the Company any information reasonably requested by the Company
that relates to such Executive Claim, and shall otherwise cooperate with the
Company and its representatives in good faith in order to contest effectively
such Executive Claim. The Company shall keep Executive informed of all
developments and events relating to any such Executive Claim (including,
without limitation, providing to Executive copies of all written materials
pertaining to any such Executive Claim), and Executive or his authorized
representatives shall be entitled, at Executive's
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expense, to participate in all conferences, meetings and proceedings relating
to any such Executive Claim.
(g) If, after actual receipt by Executive of an amount of
a tax claimed (pursuant to an Executive Claim) that has been advanced by the
Company pursuant to Section 4.10(e)(ii) hereof, the extent of the liability of
the Company hereunder with respect to such tax claimed has been established by
a Final Determination, Executive shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, Executive
with respect to such tax (together with any interest paid or credited thereon
by the taxing authority and any recovery of legal fees from such taxing
authority related thereto), except to the extent that any amounts are then due
and payable by the Company to Executive, whether under the provisions of this
Agreement or otherwise. If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 4.10(e)(ii), a determination is
made by the Internal Revenue Service or other appropriate taxing authority that
Executive shall not be entitled to any refund with respect to such tax claimed
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of any Gross-Up Payments and other payments required to be paid
hereunder.
(h) With respect to any Executive Claim, if the Company
fails to deliver an Election Notice to Executive within the period provided in
Section 4.10(e)(i) hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Section 4.10(e)(ii) and (iii)
and (f) hereof, then Executive shall at any time thereafter have the right (but
not the obligation), at his election and in his sole and absolute discretion,
to defend or prosecute, at the sole cost, expense and risk of the Company, such
Executive Claim. Executive shall have full control of such defense or
prosecution and such proceedings, including any settlement or compromise
thereof. If requested by Executive, the Company shall cooperate, and shall
cause its affiliates to cooperate, in good faith with Executive and his
authorized representatives in order to contest effectively such Executive
Claim. The Company may attend, but not participate in or control, any defense,
prosecution, settlement or compromise of any Executive Claim controlled by
Executive pursuant to this Section 4.10(h) and shall bear its own costs and
expenses with respect thereto. In the case of any Executive Claim that is
defended or prosecuted by Executive, Executive shall, from time to time, be
entitled to current payment, on a fully grossed-up after tax basis, from the
Company with respect to costs and expenses incurred by Executive in connection
with such defense or prosecution.
(i) In the case of any Executive Claim that is defended
or prosecuted to a Final Determination pursuant to the terms of this Section
4.10(i), the Company shall pay, on a fully grossed-up after tax basis, to
Executive in immediately available funds the full amount of any taxes arising
or resulting from or incurred in connection with such Executive Claim that have
not theretofore been paid by the Company to Executive, together with the costs
and expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by the Company
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<PAGE> 22
to Executive, within ten calendar days after such Final Determination. In the
case of any Executive Claim not covered by the preceding sentence, the Company
shall pay, on a fully grossed-up after tax basis, to Executive in immediately
available funds the full amount of any taxes arising or resulting from or
incurred in connection with such Executive Claim at least ten calendar days
before the date payment of such taxes is due from Executive, except where
payment of such taxes is sooner required under the provisions of this Section
4.10(i), in which case payment of such taxes (and payment, on a fully
grossed-up after tax basis, of any costs and expenses required to be paid under
this Section 4.10(i) shall be made within the time and in the manner otherwise
provided in this Section 4.10(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including, but not
limited to, any and all Excise Taxes, income taxes, and employment taxes),
together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such taxes and any interest in respect of
such penalties, additions to tax, or additional amounts.
(l) For purposes of this Agreement, the terms "affiliate"
and "affiliates" mean, when used with respect to any entity, individual, or
other person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by,
or is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to
direct or cause the direction of the management and policies of such entity or
other person, whether through the ownership of voting securities, by contract
or otherwise.
4.11 Legal Fees and Expenses. The Company shall defend, hold
harmless, and indemnify Executive on a fully grossed-up after tax basis from
and against any and all costs and expenses (including reasonable attorneys',
accountants' and experts' fees and expenses) incurred by Executive from time to
time as a result of any contest (regardless of the outcome) by the Company or
others contesting the validity or enforcement of, or liability under, any term
or provision of this Agreement, plus in each case interest at the applicable
federal rate provided for in Section 7872(f)(2)(B) of the Code.
4.12 Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan, program, arrangement or policy provided by the
Company or any of its affiliates (including, but not limited to, any plan,
program, arrangement or policy
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<PAGE> 23
described in Section 2.1(c) hereof) and for which Executive and/or Executive's
family may qualify, nor shall anything herein limit or otherwise affect such
rights as Executive and/or Executive's family may have under any other
agreements with the Company or any of its affiliates. Amounts which are vested
benefits or which Executive and/or Executive's family is otherwise entitled to
receive under any plan, program, arrangement, or policy of the Company or any
of its affiliates (including, but not limited to, any plan, program,
arrangement or policy described in Section 2.1(c) hereof) at or subsequent to
the date of termination of this Agreement shall be payable in accordance with
such plan, program, arrangement or policy.
4.13 Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement.
ARTICLE V
GENERAL PROVISIONS
5.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
5.2 Assignability. This Agreement is personal to Executive and
without the prior written consent of the Company shall not be assignable by
Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives and heirs. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Company shall
require any corporation, entity, individual or other person who is the
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization, or otherwise) to all or substantially all of the business or
assets of the Company to expressly assume and agree to perform, by a written
agreement in form and substance satisfactory to Executive, all of the
obligations of the Company under this Agreement. As used in this Agreement,
the term "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, written agreement, or otherwise.
5.3 Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
5.4 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between Executive and the Company and supersedes
any prior agreements or understandings, whether written or oral, with respect
to the subject matter hereof. Except as may be otherwise provided herein, this
Agreement may not
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<PAGE> 24
be amended or modified except by subsequent written agreement executed by both
parties hereto.
5.5 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
5.6 Notices. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall
be deemed delivered only upon actual receipt.
If to the Company:
National Convenience Stores Incorporated
100 Waugh Drive
Houston, Texas 77007
Attention: General Counsel
If to Executive:
Douglas B. Binford
18 Hillside View Place
The Woodlands, Texas 77381
5.7 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any breach of
the same or any other term or condition of this Agreement.
5.8 Severability. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not effect the enforceability or validity of any other
provision of this Agreement.
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<PAGE> 25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Execution Date, but effective as of the Effective Date.
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A. J. GALLERANO
--------------------------------------
A. J. Gallerano
Senior Vice President -
General Counsel and Secretary
"COMPANY"
/s/ DOUGLAS B. BINFORD
------------------------------------------
Douglas B. Binford
"EXECUTIVE"
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<PAGE> 1
EXHIBIT 99.16
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), effective from and after
February 1, 1995 (the "Effective Date"), is by and between NATIONAL CONVENIENCE
STORES INCORPORATED, a Delaware corporation (the "Company"), and Janice E.
Bryant ("Executive").
W I T N E S S E T H
For and in consideration of the premises, the mutual covenants and
agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING, TERM AND DUTIES
1.1 Employment. On the terms and subject to the conditions of
this Agreement,the Company hereby employs and engages the services of Executive
to serve as, and Executive agrees to diligently and competently serve as and
perform the functions of, Vice President - Controller (the "Office") of the
Company for the term and for the compensation and benefits stated herein.
1.2 Term. The term of employment under this Agreement shall
commence on February 1, 1995 and shall terminate on January 31, 1996 (the
"Term").
1.3 Major Responsibilities; Authority. Executive shall have the
responsibilities and authority usually associated with the Office of
corporations having assets similar in nature and value to the assets of the
Company and business similar to the business of the Company, and such other
duties as the Board of Directors of the Company shall determine from time to
time. The Company agrees that, except for removal with Cause (as defined in
Section 4.3 hereof), the removal of Executive from the position of the Office
during the Term of this Agreement shall constitute a material breach of this
Agreement.
1.4. Extent of Service. Executive agrees to devote her time and
energies to the business of the Company consistent with past practice and shall
not, during the Term of this Agreement, be engaged in any business activity
which would interfere or prevent Executive from carrying out her duties under
this Agreement; but this shall not be construed as preventing Executive from
investing her assets in such form or manner as will not require services on the
part of Executive in the operation of the affairs of any company in which such
investments are made.
1.5 Location. Executive shall not be required to move from the
metropolitan Houston, Texas area.
<PAGE> 2
ARTICLE II
COMPENSATION AND RELATED ITEMS
2.1 Compensation. As compensation and consideration for the
services to be rendered by Executive under this Agreement and for the
performance by Executive of the usual obligations of such employment, the
Company agrees to pay Executive, and Executive agrees to accept, the following
compensation and benefits during the Term hereof:
a. Salary. A minimum annual salary in the amount of
$145,000 payable in equal weekly payments, subject to normal
withholding of state and federal income, unemployment and FICA taxes.
Any earnings over this minimum in one year shall not be applied to the
minimum salary for any subsequent years. If this Agreement terminates
on a date other than the last day of any month, Executive shall be
paid a pro rata portion of such salary for such month in the ratio
that the number of days of employment bears to the total number of
days in such month.
b. Additional Compensation. As further compensation,
Executive shall be entitled to participate in any other bonuses,
profit sharing plans, stock option agreements, vacation, retirement
benefits, medical and dental insurance and individual or group life
insurance as are normally and customarily provided by the Company now
or in the future to its employees of similar experience and position.
2.2 Expenses. The Company agrees that, during the Term of this
Agreement, Executive shall be allowed reasonable and necessary business
expenses in connection with the performance of her duties hereunder within
guidelines established by the Board of Directors. Executive may incur
reasonable and necessary expenses for food, travel, lodging, entertainment and
other items in the promotion of Company's business within such guidelines
("Business Expenses"). Company will reimburse Executive for all Business
Expenses incurred by Executive upon Executive's presentation to the Company of
an itemized account thereof, together with receipts, vouchers, or other
supporting documentation. After termination or expiration of this Agreement,
however such termination or expiration may come about, Executive shall have
ninety (90) days to submit Business Expenses incurred during the Term hereof to
the Company for reimbursement.
2.3 Working Facilities. Executive shall be furnished with
offices, administrative staff, stenographic help and such other facilities and
services as are suitable to Executive's position and adequate for the
performance of Executive's duties.
ARTICLE III
EXCULPATION
Company agrees that Executive will not be liable for any losses,
expenses, costs or damages caused by or resulting from the recommendations,
suggestions, actions, errors, omissions or mistakes (collectively, the
"Management") of Executive undertaken or proposed by Executive if Executive
acted in good faith and in a manner she reasonably believed to be in or not
opposed to the best interests of the Company.
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<PAGE> 3
ARTICLE IV
TERMINATION AND SEVERANCE
4.1 Termination of Agreement. Except as may otherwise be provided
herein, this Agreement and the employment, compensation and benefit
arrangements hereunder shall be terminated upon the occurrence of the first to
occur of any of the following events:
a. Thirty (30) days after written notice of termination
is given by either party to the other; or
b. Executive's death or, at the Company's option, upon
Executive's becoming Disabled (hereinafter defined); or
c. January 31, 1996.
Any notice of termination given by Executive to the Company or by the
Company to Executive under Section 4.1(a) above shall specify whether such
termination is made with or without Cause (as defined below) and, if not
specified, shall be deemed to be without Cause. Any notice of termination
given by Executive to the Company within ninety (90) days after a Change in
Control (as defined below) shall be deemed to be with Cause ("Cause-Change in
Control").
4.2 Severance Upon Termination. As to a termination pursuant to
Section 4.1(a) hereof, if Executive terminates this Agreement without Cause, or
the Company terminates this Agreement with Cause, Executive shall not be
entitled to any severance payment upon termination of this Agreement. If
Executive terminates this Agreement with Cause-Change in Control, the Company
shall pay to Executive within ten (10) days after termination a severance
payment equal to one (1) week's salary for each year of employment of Executive
plus all accrued benefits including vacation compensation. If Executive
terminates this Agreement with Cause (other than Cause-Change in Control) or
the Company terminates this Agreement without Cause, the Company shall pay to
Executive within ten (10) days after termination a severance payment equal to
the full amount of compensation which would have otherwise been paid to such
Executive for the remaining portion of the Term.
4.3 Cause. As used in this Agreement, with respect to a
termination of this Agreement by Executive, the term "Cause" means (i) the
breach of any material provision of this Agreement by the Company which is not
cured within thirty (30) days after written notice from Executive to the
Company specifically identifying such breach, or (ii) the occurrence of any
"Change in Control." As used in this Agreement, with respect to a termination
of this Agreement by the Company, the term "Cause" means (i) willful misconduct
by Executive, (ii) the gross neglect by Executive of her duties as an employee,
officer or director of the Company which continues for more than thirty (30)
days after written notice from the Company to Executive specifically
identifying the gross negligence of Executive and directing Executive to
discontinue same, (iii) the commission by Executive of a crime constituting a
felony or (iv) the commission by Executive of an act, other than an act taken
in good faith within the course and scope of Executive's employment, which is
directly detrimental to the Company and which act exposes the Company to
material liability. As used in this Agreement, the term "Change in Control"
means when the individuals who were directors of the Company immediately prior
to February 1, 1995 cease to constitute a majority of the Board of Directors.
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<PAGE> 4
4.4 Return of Materials; Confidential Information. In the event
of any termination of this Agreement, with or without Cause, Executive shall
promptly deliver to the Company all lists, books, records, literature, products
and any other materials owned or provided by the Company in connection with
Executive's employment hereunder. Executive shall not at any time during or
after the Term hereof use for herself or others, or divulge to others, any
secret or confidential information, knowledge or data of the Company obtained
by Executive as a result of her employment unless authorized by a majority of
the Board of Directors.
4.5 Death and Disability. If this Agreement is terminated by the
death of Executive pursuant to Section 4.1(b), the Company shall pay all
accrued salary and benefits through the date of death to Executive's estate
within thirty (30) days after the date of death. If this Agreement is
terminated upon Executive's becoming Disabled pursuant to Section 4.1(b), the
Company shall pay to Executive seventy-five percent (75%) of all unaccrued
annual salary and benefits over the remaining Term less the actual amount of
any benefits paid to Executive during such period from any disability insurance
policy maintained by the Company for Executive. As used herein, "Disabled"
shall mean a mental or physical impairment which in the opinion of a qualified
doctor selected by the Company renders Executive unable to perform with
reasonable diligence the ordinary functions and duties of Executive on a
full-time basis in accordance with the terms of this Agreement, which inability
will continue in the opinion of such doctor for a period of not less than 180
days.
ARTICLE V
GENERAL PROVISIONS
5.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas and the State of
Delaware.
5.2 Assignability. This Agreement is a personal services
agreement which, except as provided in this Agreement, may not be assigned or
transferred by Executive or the Company. This Agreement shall be binding upon
Executive and the Company, their respective heirs, successors and assigns.
5.3 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between Executive and the Company and supersedes
any prior agreements or understanding, whether written or oral, with respect to
the employment of Executive by the Company. Except as may be otherwise
provided herein, this Agreement may not be amended or modified except by
subsequent written agreement executed by both parties hereto.
5.4 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
5.5 Notices. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall
be deemed delivered only upon actual receipt.
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<PAGE> 5
If to the Company:
National Convenience Stores
100 Waugh Drive
Houston, Texas 77007
Attn: General Counsel
If to Executive:
Janice E. Bryant
100 Waugh Drive
Houston, Texas 77007
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
21st day of March, 1995.
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A. J. GALLERANO
----------------------------------------
A.J. Gallerano
Senior Vice President, General Counsel
and Secretary
EXECUTIVE
/s/ JANICE E. BRYANT
----------------------------------------
Janice E. Bryant
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<PAGE> 1
EXHIBIT 99.17
**OMITTED INFORMATION
DENOTED BY ASTERISKS (* * * *)
HAS BEEN FILED SEPARATELY
WITH THE COMMISSION AND IS
THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST**
MASTER AGREEMENT FOR ATM FACILITIES
This Master Agreement for ATM Facilities ("Agreement") is between National
Convenience Stores Incorporated, a Delaware corporation ("Licensor") and
NationsBank of Texas, N.A., a national banking association ("Licensee"). For
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1 - INTRODUCTORY PROVISIONS
1.1 DEFINITIONS. The following terms used in this Agreement shall
have the following meanings. Other terms may be defined elsewhere in this
Agreement.
(a) "AGREEMENT TERM" means the term of this Agreement as specified
in Section 1.4.
(b) "ATM" means an automated teller machine or similar machine and
its related container, interior and exterior signage, and equipment operated by
Licensee.
(c) "ATM SITE" means the location of an ATM within a particular
Store.
(d) "BANKING PRESENCE" means a Market Area in which Licensee has a
banking center or branch as of the date of this Agreement, and any Market Area
in which Licensee establishes a banking center or branch after the date of this
Agreement.
(e) "CARD" means an automated teller machine card, debit card
and/or credit card with a magnetic stripe or any other device or medium that
when used with or without a personal identification number (PIN), can access an
ATM.
(f) "COMMUNITY MARKET STORE" means a Store located in a Market
Area outside the Market Areas specified in Exhibit "B". The initial list of
Community Market Stores is set forth in Exhibit C.
(g) "PREVIOUS PROVIDER" means the previous provider of automated
teller machines to Licensor's Stores in Texas.
(h) "PREVIOUS PROVIDER'S MACHINES" means the automated teller
machines, signage, and related equipment operated at Licensor's Stores in Texas
by the Previous Provider.
1
<PAGE> 2
(i) "CURRENTLY PROVIDED TRANSACTION" is defined in Section 1.2.
(j) "EFFECTIVE DATE" is defined in Section 1.4.
(k) "ELECTRONIC BENEFITS TRANSFER TRANSACTIONS" means
transactions related to governmental transfer payment programs such as food
stamps and welfare, including any administered by or contracted to
non-governmental entities.
(l) "EXCLUDED STORE" means a store facility owned or leased and
operated by Licensor, (including the building and other improvements and
surrounding grounds related to Licensor's operations at that facility) that is
acquired by Licensor after the date of this Agreement, and that is subject to a
contract not made or procured by Licensor (i) requiring a third party ATM to be
installed in that store facility or (ii) prohibiting the installation of
Licensee's ATM in that store facility.
(m) "FOREIGN TRANSACTION" means a Transaction using a Card not
issued by Licensee.
(n) "FIRST SUPPLEMENT" means Exhibit "A," listing the Initial
Texas Stores.
(o) "INITIAL TEXAS STORES" means the 661 Stores listed in the First
Supplement.
(p) "INSTALLATION DATE" means December 2, 1995, which is the date
scheduled for completion of the installation of the first ATM in the first of
the Initial Texas Stores, regardless of the actual completion date.
(q) "LICENSE" is defined in Section 1.3.
(r) "LICENSE FEE" is defined in Section 3.2(a).
(s) "LICENSE TERM" means a period of time commencing on (i)
December 2, 1995 for the Initial Texas Stores; and (ii) for any subsequent
Stores, the date of the applicable Supplement (unless otherwise specified in
that Supplement) and ending on the date this Agreement terminates, unless an
earlier termination date is specified in the Supplement or the License is
earlier terminated in accordance with this Agreement.
(t) "MARKET AREA" means a county in the State of Texas.
(u) "MINIMUM REVENUE GUARANTEE" has the meaning given in Section
3.2.
(v) "NATIONSBANK TRANSACTION" means a Transaction using a Card
issued by Licensee.
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(w) "SITE SURVEY" means a sketch or other drawing of a Store
provided by Licensor and initialled by the parties showing the ATM Site that
does not necessarily show other details of the Store and is not necessarily
drawn to scale, based upon a walkthrough of a Store by representatives of each
party for the purpose of the parties mutually agreeing upon the location of
the ATM in that Store.
(x) "STORE" means a store facility (other than an Excluded Store)
owned or leased and operated by Licensor, including the building and other
improvements and surrounding access ways, parking areas and other grounds
related to Licensor's operations at a given location. Licensor's Stores are
currently operated under the trade name Stop-N-Go.
(y) "SUBSEQUENTLY PROVIDED TRANSACTION" means a Transaction type,
other than a Currently Provided Transaction, added to the capability of an ATM
at a Store after the date of this Agreement and agreed upon by the parties in
accordance with Section 4.4 of this Agreement.
(z) "SUPPLEMENT" means a supplement to this Agreement pursuant to
which Licensor grants a License to Licensee.
(aa) "TRACKING PERIOD" means * * * * as defined in Section 3.2. In
the event that the Agreement is terminated prior to November 30, 2001, the * *
* * Tracking Period will be the period commencing on December 2, 1995 and
ending upon the termination of the Agreement.
(bb) "TRANSACTION" means a cash withdrawal or advance, deposit,
transfer (including transfer between accounts or Cards), balance or other
inquiry, payment, and/or * * * * by the Card issuing institution or its agent,
using an ATM located in a Store pursuant to this Agreement and shall include
each Currently Provided Transaction and each Subsequently Provided Transaction.
1.2 ATMS IN LICENSOR'S STORES. This Agreement states the procedure
and terms upon which Licensor will grant from time to time a license to
Licensee to locate ATMs and upon which Licensee will install and operate ATMs,
in the Initial Texas Stores and additional Stores. Each ATM Site location
shall be readily apparent upon entry to a Store either by location or interior
signage. Licensor will keep the ATM area free of obstructions that would
hinder servicing of the ATM. Unless otherwise mutually agreed, each ATM will be
* * * * or its substantial equivalent. An ATM will be capable of handling cash
withdrawals, transfers between accounts, balance inquiries, and credit card
cash withdrawals using VISA or MasterCard (together, "Currently Provided
Transactions"). Subject to Section 4.4, Licensee may elect from time to time
to provide other services as
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the states provide and/or share ATM services at Community Market
Stores; however, each ATM and Store exterior will have a sign which displays
the Licensee's logo.
1.3 MASTER AGREEMENT FOR SEPARATE LICENSES. To create a license
under this Agreement, the parties will execute a Supplement to this Agreement
identifying the applicable Store or Stores. With respect to each ATM Site,
this Agreement, together with the applicable Supplement shall constitute a
separate and independent license agreement (each such separate license
agreement being herein called "this License" or "the License") between Licensor
and Licensee with respect to that ATM Site, upon the special terms and
conditions, if any, stated for that ATM Site in the Supplement and also upon
all of the terms and conditions of this Agreement. Any particular License may
be amended, terminated or otherwise dealt with without affecting any other
License; however, all Licenses will terminate upon the termination of this
Agreement. Each ATM Site will be mutually agreed on and identified by the
parties through a Site Survey. A License may also be terminated by agreement
of the parties through execution of an addendum to the applicable Supplement.
1.4 AGREEMENT TERM. The Agreement Term shall commence on December
2, 1995 (the "Effective Date") and, unless sooner terminated or extended, shall
end on November 30, 2001; provided that each party may rely on the
representations, warranties and indemnities of the other party in Article 2 as
of the execution of this Agreement.
1.5 EXCLUSIVITY.
(a) Throughout the Agreement Term, Licensee shall have the
exclusive right to place ATMs in Licensor's Stores in the State of Texas, and
shall be required to place and maintain ATMs in all of Licensor's Stores in the
State of Texas subject to and in accordance with paragraph (b) below and
Section 4.1. The First Supplement to this Agreement will include all existing
Stores of Licensor in the State of Texas. Unless the parties otherwise
mutually agree, each additional Store opened by Licensor in the State of Texas
will be added to this Agreement by a Supplement before an ATM is installed in
that Store. Throughout the Agreement Term, Licensor agrees that it will not
allow any portion of any Store in Texas to be used or leased for operation of
an ATM, excepting Licensee's use of the ATM Site therein. This provision is
not intended to restrict Licensor's continued acceptance of Electronic Benefits
Transfer Transactions or other transactions normally processed by retailers, at
its cash registers and its offer of point-of-sale "cash back" to its Customers
at its Stores through the use of magnetic or electronic cards or other devices,
so long as the latter is not aggressively promoted so as to adversely impact
usage of the ATM. Licensor also agrees that throughout the Agreement Term no
bank or other financial institution, other than Licensee, will be referred to
by name regarding deposit, loan or ATM products in connection with any external
signage at any Store.
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(b) * * * *
(c) Notwithstanding anything to the contrary in this
Agreement, Licensor may permit its Previous Provider to maintain and operate
the Previous Provider's Machines in Stores in which those Machines are
currently located until those Machines are replaced by Licensee in accordance
with Section 4.1(b).
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES
Each party makes the following representations and warranties to the other.
2.1 ORGANIZATION. Each party is duly organized under its
respective jurisdiction of organization, is in good standing in such
jurisdiction, and has full power and authority to conduct its business as
presently conducted and as contemplated to be conducted by this Agreement.
2.2 AUTHORIZATION. Each party has authorized this Agreement by
all necessary corporation action and has the full and unrestricted right and
authority to make and perform this Agreement with the other party.
2.3 NO VIOLATION. The execution, delivery, and performance of
this Agreement will not violate any law, rule, regulation, agreement, or
restriction by which the party or its property is bound or to which the party
or its property is subject.
2.4 CERTAIN FACTS. The transactions contemplated by this
Agreement are predicated on the following factual representations and
warranties:
(a) Licensor represents and warrants that the Initial Texas Stores
comprise 661 Stores.
(b) Licensee represents and warrants the following:
(i) Licensee has approximately 1.2 million ATM or Debit
Cards outstanding in Texas;
(ii) Licensee has over 136 banking centers and 34 motor
banks in the Market Areas in which Licensee has a Banking Presence;
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(iii) Licensee has * * * * mailed to its customers in Texas
on a monthly basis;
(iv) Licensee has over 130 banking center ATMs;
(v) Licensee issues over * * * * per month;
(vi) Licensee issues over * * * * per month in banking
centers in Market Areas in which Licensor has Stores in Texas;
(vii) Licensee's banking centers located in Market Areas in
which Licensor has a Store presence, had customer deposits aggregating
approximately $15 billion reported in the Licensee's call report dated as of
June 30, 1994.
(viii) Licensee maintains a time and temperature telephone
system that has an audience of over 2 million calls per month; and
(ix) Licensee has more than 2,000 banking personnel that
can be involved in sales promotions.
2.5 HOLD HARMLESS. Each party agrees to indemnify and hold
harmless the other party, and the other party's affiliates (including any
parent or subsidiary corporation), and the directors, officers, employees and
agents of each of them, with respect to any claim, loss, cost, liability or
expense (including reasonable attorneys' fees) arising out of any breach of a
representation or warranty made by the indemnifying party in this Article 2.
ARTICLE 3 - GRANT AND FEES
3.1 GRANT OF LICENSE. Licensor hereby grants to Licensee a
separate License for the applicable License Term to install and operate an ATM
at the ATM Site in (i) each Store in the First Supplement and (ii) effective on
the date provided in any subsequent Supplement, each Store identified in that
Supplement. The License includes the nonexclusive rights to use the parking
and restroom facilities that are open to the general public at the Store,
subject to the provisions of the License. Unrestricted access to the ATM shall
be provided to Licensee and Licensee's employees, agents, ATM service
contractors, customers and other users of the ATM during the Store's hours of
operation.
3.2 LICENSE FEES; MINIMUM GUARANTEED REVENUE; REPORTS.
(a) For each ATM installed under this Agreement, Licensee
shall pay to Licensor a License Fee ("License Fee"), based on the Transactions
occurring through the ATM during the License Term, as follows:
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(1) for Currently Provided Transactions
(excluding ATMs at Community Market Stores except as provided in paragraph
(iii) below):
(i) $ * * * * per * * * * Transaction;
(ii) $ * * * * per * * * * Transaction; and
(iii) $ * * * * per Transaction * * * *; and
(2) for Subsequently Provided Transactions:
(i) $ * * * * per * * * * Transaction; and
(ii) all other Subsequently Provided Transactions
shall be at License Fees mutually agreed upon by the parties.
* * * *
* * * * Licensee agrees to pay to Licensor, on or before
January 25, 2002, the amount, if any, by which the Minimum Revenue Guarantee
for the period from December 2, 1995 through November 30, 2001 (the "* * * *
Tracking Period"), exceeds
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the sum of (i) the total of all License Fees generated by Transactions during
the Tracking Period plus (ii) the sum of the amounts, if any, of the Minimum
Revenue Guarantee payments made by Licensee to Licensor for * * * * pursuant
to the above provisions.
* * * * The term "Minimum Revenue Guarantee" as used in this
Agreement means, subject to adjustment as provided below, * * * * $16.5 million
for the * * * * Tracking Period. The dollar amounts of the Minimum Revenue
Guarantee stated in the preceding sentence are based on assumptions that ATMs
will be operated by Licensee in at least * * * * Stores for * * * * during the
* * * * Tracking Period. Excluding in each of the following cases ATMs in
Community Market Stores, to the extent, if any, that the number of ATM months
in any of the Tracking Periods is less than the assumed number, the amount of
the Minimum Revenue Guarantee for that Tracking Period will be proportionately
reduced and to the extent, if any, that the number of ATM months in any of the
Tracking Periods is greater than the assumed number, the amount of the Minimum
Revenue Guarantee for that Tracking Period will be proportionately increased.
For the purposes of this paragraph, the * * * * related to the * * * *
Tracking Period will not be adjusted.
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* * * * The License Fees shall be paid, by electronic funds
transfer [ACH], by direct deposit or by another method desired by Licensor and
consented to by Licensee, on or before the fifth business day following the
20th day of the month following the month in which earned. Licensor may charge
interest on amounts of the License Fees or the Minimum Revenue Guarantee
payments more than ten (10) days past due, at the lesser of the following
interest rates per annum: (i) the * * * * rate plus * * * * percent or (ii) the
* * * * rate * * * *.
* * * * Licensee shall submit to Licensor, electronically or
by other agreed means, on or before the twentieth (20th) day of each month, a
report that states the total number of Transactions for each individual ATM
during the preceding calendar month. The report will categorize the
Transactions per ATM by Transaction type, will distinguish Currently Provided
Transactions from Subsequently Provided Transactions, and will distinguish
Transactions as NationsBank Transactions, Foreign Transactions, or Transactions
involving the Community Market Stores. The report will calculate the
applicable License Fees for that month. On or before the 45th day following a
Tracking Period, Licensee shall submit to Licensor a report for that Tracking
Period in the same manner as the monthly reports, summarizing the information
in the monthly reports for that Tracking Period, and reconciling the effect of
the applicable Minimum Revenue Guarantee.
* * * * In the event that Licensee fails to install an ATM on
or before the 30th day after the date for installation required by this
Agreement, Licensee shall pay to Licensor, as liquidated damages and not as a
penalty, the amount of $ * * * * per * * * * until the ATM is installed in the
Store. For purposes of calculating the Minimum Revenue Guarantee, each ATM
shall be assumed to be installed in a Store as of the date required for that
ATM under this Agreement. Therefore, the Minimum Revenue Guarantee shall be
unaffected by any payments made under this subsection.
* * * * Licensor's acceptance of any License Fee or report
will not be an admission of its accuracy. Licensee agrees to maintain during
the License Term and for two (2) years thereafter its records required to
establish the number and type of Transactions through each ATM during the
applicable License Term, and to allow Licensor and its designated
representatives (if any) to review or audit these records during that period,
at Licensee's office where they are kept, at reasonable times during Licensee's
business hours, and on reasonable advance notice to Licensee. Licensee shall
notify Licensor of the location of these records and of any changes in the
location. In the event that a review or audit by Licensor reveals a shortfall
in payments required to be made under this Agreement of more than 5%, Licensee
will bear the reasonable cost of the review or audit; otherwise, the review or
audit will be at Licensor's expense.
ARTICLE 4 - OPERATIONS
4.1 INSTALLATION OF THE ATMS.
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(a) Promptly after the grant of the License or as
otherwise agreed, Licensee shall at its expense proceed with reasonable
diligence to install the ATM together with all communications lines necessary
for its operation and any security devices which Licensee deems desirable with
respect to the ATM. The ATM will comply with the Americans with Disabilities
Act of 1990 and other applicable law. Licensee will complete the installation
of the ATM by the date required by this Agreement, subject to acts of God and
other circumstances beyond the reasonable control of Licensee including,
without limitation, in the case of the Initial Texas Stores in Licensor's
Previous Provider's Machines are installed, the cooperation of Licensor's
Previous Provider.
(b) Licensee shall first commence installation of ATMs in
the Initial Texas Stores in which Licensor's Previous Provider's Machines are
not then installed. Commencing on February 1, 1996, Licensee shall commence
installing ATMs in the remaining Initial Texas Stores. Licensee is required to
complete installation of all ATMs in the Initial Texas Stores on or before June
1, 1996, subject to the provisions of paragraph (a) above.
(c) Licensor agrees to give Licensee as much advance
notice as possible of Store openings. Licensee shall be required to install an
ATM in each Store that is opened, within 90 days after Licensee has received
this notice, but not earlier than 30 days prior to the actual Store opening
unless Licensee otherwise agrees, at the ATM Site agreed pursuant to the
License grant, subject to the provisions of paragraph (a) above.
4.2 OWNERSHIP AND ALTERATION OF ATMS. Each ATM installed in a
Store is and shall remain Licensee's property, and Licensor shall have no right
or interest therein. With Licensor's prior written consent, Licensee may from
time to time modify an ATM or replace it with another. Notwithstanding Section
7.3, if the modification or replacement would reduce the ATM's Transaction
capabilities below those agreed herein or would materially change the exterior
appearance of the ATM, Licensor may withhold its consent to the modification
or replacement in Licensor's sole discretion.
4.3 SIGNAGE AND PROMOTIONAL ACTIVITIES.
(a) The ATM will prominently bear Licensee's customary
corporate signage and graphics. Licensee shall place and maintain, at
Licensee's expense, a sign using Licensee's customary corporate graphics as
provided in Exhibit "E," on the exterior of the Store building or in another
mutually agreeable exterior location. The size and energy usage, respectively,
of the sign shall be subject to Licensor's consent if greater than those of
Licensor's Previous Provider at Licensor's Stores. The sign shall be placed in
accordance with and shall comply with all applicable deed or zoning
restrictions and requirements. Licensee may also elect from time to time, at
Licensee's expense, to place a brochure rack or similar feature on the ATM to
advertise NationsBank products, and to have NationsBank personnel present at
the Store during promotional periods to greet customers who use the ATM.
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(b) NationsBank cardholders shall be entitled to use
Licensee's ATMs at Licensor's Stores free of charge for Currently Provided
Transactions, * * * * . * * * *, Foreign (non-NationsBank) cardholders will be
charged a convenience fee * * * * per Transaction for Transactions through the
Pulse network. Subject to the foregoing sentence, Licensee will price the fees
to * * * * cardholders * * * *. * * * *, Licensee shall determine the pricing
for the Transactions specified in the first two sentences of this paragraph
(b), * * * *, but * * * *.
(c) Licensee shall provide the marketing and advertising
identified in Exhibit "D" hereto, at Licensee's cost and in accordance with the
schedule set forth in Exhibit "D."
4.4 ADDITIONAL PRODUCTS AND SERVICES. Licensee shall offer the
services provided by the Currently Provided Transactions, and may offer such
additional products and services through the ATM as the parties may mutually
agree.
4.5 OPERATION OF THE ATM. When the ATM is installed and ready for
ATM customer use, Licensee will at its expense:
(a) Maintain and service the ATM between the hours of
8:00 a.m. and 8:00 p.m. daily and use all other reasonable efforts to
ensure that the ATM will remain fully operational during hours in
which the Store is open during the License Term, subject to downtime
from necessary maintenance, equipment or network malfunction, and
other causes beyond Licensee's reasonable control; and
(b) Provide cash replenishment services for the ATM
between the hours of 7:00 a.m. to 11:00 p.m., in accordance with
Licensee's usual practices. Licensee shall bear all risk of loss of
such cash.
4.6 REMOVAL OF THE ATM. Upon termination of a License for any
reason, Licensee shall at * * * * expense remove the ATM subject to the License
from the ATM Site, but Licensee shall not be required to remove them at a rate
exceeding * * * * ATMs per business day and during this transition period all
terms and conditions of this Agreement shall continue to apply to the ATM's to
be removed except the exclusivity provisions (if the License is terminated by
the termination of the Agreement) and the Minimum Revenue Guarantee. Licensor
will notify Licensee of a Store closing at the time that the closing is
publicly announced, but in all events at least 7 days before the actual
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closing, and will give Licensee up to fourteen (14) days after the actual
closing to remove the ATM from the Store. The previous sentence
notwithstanding, provided Licensor has given Licensee 30 days' notice, Licensor
agrees that the time for removal of the ATM will include the time reasonably
necessary for Licensee to comply with any statutory or regulatory requirements
that prior notice be given of the removal of the ATM. Licensee will notify
Licensor of any changes in these notice periods. Additionally, Licensee will,
at Licensee's expense, move the ATM to another agreed ATM Site at the Store to
accommodate remodeling the Store or temporarily remove the ATM from the Store,
if requested by Licensor as a result of the remodeling, provided that Licensor
gives Licensee at least 30 days' prior notice of the proposed remodeling.
4.7 LICENSOR'S OBLIGATIONS. Commencing with the installation of
the ATM, Licensor will:
(a) Maintain, at its expense, the ATM Site and its
surrounding area and lighting in good order and condition.
Maintenance and repair of the ATM itself shall be Licensee's
responsibility; and
(b) Provide an adequate electrical power source at the
ATM Site for the ATM, and pay all charges for electricity used by the
ATM and by all of Licensee's signs at the Store.
ARTICLE 5 - TERMINATION RIGHTS
5.1 BY EITHER PARTY. Any one of the following will constitute an
Event of Default:
(a) Failure on the part of either party to observe or
perform in any material respect any of the covenants in this License,
which failure continues unremedied for a period of sixty (60) days
after the date on which written notice of the failure, requiring the
same to be remedied, has been given to the defaulting party (subject
to a reasonable extension, in any case other than failure to pay
money, of up to sixty (60) additional days where the failure was due
to act of God or other cause beyond the control of the party, and the
party has so notified the other party with an estimate of the time
required to perform);
(b) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding up or liquidation of its affairs, has been entered against
either party if the decree or order shall have remained in force
undischarged or unstayed for a period of sixty (60) days; or
(c) Either party has consented to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets
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and liabilities or similar proceedings of or relating to that party
or of or relating to all or substantially all of that party's
property; or
(d) Either party has admitted in writing its inability to
pay its debts generally as they become due, filed a petition to take
advantage of any applicable insolvency or reorganization statute, made
an assignment for the benefit of its creditors, or voluntarily
suspended payment of its obligations.
In each and every such case, so long as an Event of Default shall not have been
remedied, the non-defaulting party shall have the right (i) for an Event of
Default under paragraph (a) above, to terminate this License for the specific
ATM Site by notice to the defaulting party, or with respect to an Event of
Default which is a payment default, terminate this Agreement and all Licenses
by notice to the defaulting party; and (ii) for an Event of Default under
paragraphs (b), (c) or (d) above, to terminate this Agreement and all Licenses
by notice to the defaulting party.
5.2 BY LICENSOR. Licensor may terminate this License for th
specific ATM Site:
(a) upon not less than seven (7) days advance notice to
Licensee, if Licensor permanently closes the Store (subject to the
provision regarding Licensee's time period for removal of the ATM as
set forth in Section 4.6); or
(b) by notice to Licensee within thirty (30) days after
damage to the Store of such extent that Licensor has decided to close
the Store permanently rather than to restore it.
5.3 BY LICENSEE. Licensee may terminate this License for the
specific ATM Site:
(a) by notice to Licensor within 180 days after Licensee
receives notice that Licensor has sold or transferred the Store to a third
party, except a sale involving an assignment of this Agreement in accordance
with Section 6.1; or
(b) by at least 30 days' advance notice to Licensor
following a casualty or condemnation affecting the Store to such an extent that
a significant reduction in use of the ATM for more than 120 days may reasonably
be expected.
5.4 EFFECT OF TERMINATION. The indemnity obligations set forth in
Articles 2, 5 and 7 shall survive the termination, and any liability or
obligation which arose before the termination shall (to the extent not fully
performed) survive the termination.
5.5 ADDITIONAL REMEDIES. A party's right to terminate this
Agreement or a License upon an Event of Default shall be in addition to all
other rights and remedies that the party may have in law or in equity. A party
may elect to pursue its other remedies without terminating a License or this
Agreement.
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ARTICLE 6 - CASUALTY AND INSURANCE
6.1 CASUALTY DAMAGE. Neither Licensor nor Licensee shall be
obligated to insure the ATM Site for property loss or damage or any property of
Licensor or Licensee at the ATM Site.
6.2 WAIVER OF RECOVERY.
(a) Anything in this Agreement to the contrary
notwithstanding, except as provided in Section 6.2(b) below, Licensor and
Licensee severally waive any claim in its favor against the other or any member
of the other's "Group," as defined below (REGARDLESS OF CAUSE INCLUDING
NEGLIGENCE OF THE OTHER OR ITS AGENTS OR EMPLOYEES, AND STRICT LIABILITY OF ANY
KIND) for loss or damage to any of its or any member of its Group's property
located in or constituting a part of the Store or the ATM Site, by reason of
fire or the elements, or any other cause, whether or not insurable, regardless
of the amount of the proceeds, if any, payable under such insurance. EXCEPT AS
PROVIDED IN SECTION 6.2(b) BELOW, EACH PARTY EXPRESSLY RELEASES THE OTHER PARTY
AND THE MEMBERS OF THE OTHER PARTY'S GROUP FROM ANY CLAIM OF LOSS OR DAMAGE TO
ITS OR ITS GROUP'S PROPERTY ARISING OUT OF THE OTHER PARTY'S OR A MEMBER OF
THAT PARTY'S GROUP'S NEGLIGENCE.
(B) Section 6.2(a) does not release a party's unaffiliated
independent contractors or subcontractors from claims based on negligence or
strict liability.
6.3 INDEMNIFICATION AND HOLD HARMLESS
(a) The following are defined terms used in this Article. These
terms are used for the convenience of the parties in allocating certain risks
and do not mean that the parties have admitted or determined the legal status
of persons on Store premises under applicable law.
* * * *
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"Licensee Group" will be comprised of the directors, officers,
employees, servants, agents, contractors, subcontractors, independent
contractors and representatives of Licensee and its affiliated companies. A
member of the Licensor Group shall not be deemed to be a member of the Licensee
Group as a result of this Agreement or any related contract.
* * * *
"Licensor Group" will be comprised of the directors, officers,
employees, servants, agents, contractors, subcontractors, independent
contractors and representatives of Licensor and its affiliated companies. A
member of the Licensee Group shall not be deemed to be a member of the Licensor
Group as a result of this Agreement or any related contract.
"Licensee Indemnified Claims" means all claims, demands, causes of
action, losses, and damages of every kind and character, without limitation,
including all judgments flowing from, settlements of, and expenses of
litigation, and attorney's fees arising from or on account of (i) * * * *
and/or (ii) * * * *.
* * * *
"Licensor Indemnified Claims" means all claims, demands, causes of
action, losses, and damages of every kind and character, without limitation,
including all judgments flowing from, settlements of, and expenses of
litigation, and attorney's fees arising from or on account of * * * *, EXCEPT
FOR AND EXCLUDING * * * *.
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"Group" refers to the Licensee Group or the Licensor Group, as the
context indicates.
"* * * * Claims" means all claims, demands, causes of action, losses,
and damages of every kind and character, without limitation, including all
judgments flowing from, settlements of, and expenses of litigation, and
attorney's fees arising from or on account of * * * *, EXCEPT FOR AND EXCLUDING
* * * *.
(b) Licensee agrees to and shall defend, indemnify and hold each
member of the Licensor Group harmless from and against all Licensee Indemnified
Claims * * * *. THIS INDEMNITY IS EXPRESSLY INTENDED TO RELEASE AND INDEMNIFY
LICENSOR AND THE OTHER MEMBERS OF THE LICENSOR GROUP FROM AND AGAINST ANY
LICENSEE INDEMNIFIED CLAIMS * * * * ARISING OR ALLEGED TO ARISE IN WHOLE OR IN
PART FROM * * * *. If however, a court determines in a final nonappealable
judgment that * * * *, Licensee does not release and assumes no such liability
to Licensor or any member of the Licensor Group.
(c) Licensor agrees to and shall defend, indemnify and hold each
member of the Licensee Group harmless from and against all Licensor Indemnified
Claims * * * *. THIS INDEMNITY IS EXPRESSLY INTENDED TO RELEASE AND INDEMNIFY
LICENSEE AND THE OTHER MEMBERS OF THE LICENSEE GROUP FROM AND AGAINST ANY
LICENSOR INDEMNIFIED CLAIMS * * * *. If, however, a court determines in a
final nonappealable judgment that * * * *, Licensor does not release and
assumes no such liability to Licensee or any member of the Licensee Group.
(d) Each party shall notify the other promptly of any claim for
indemnity under this Article. The indemnifying party shall have the right to
control any lawsuit or other proceeding and the right to settle any indemnified
claim. Any such claim will not be settled without the consent of the
indemnified party, whose consent shall not be unreasonably withheld. The
indemnified party shall have the right to participate in the defense of any
such claim with legal counsel of its own choice at its own expense.
(e) In the event that a party fails or refuses to undertake the
defense of a claim for which that party has an indemnity obligation under this
Article, the other party may
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elect to defend any lawsuit or other proceeding resulting from the claim and
may settle any such claim, without waiving its right to be indemnified under
this Article.
6.4 LIABILITY INSURANCE. Each party is responsible for its own
insurance of its own choosing and may be self-insured.
ARTICLE 7 - MISCELLANEOUS
7.1 SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of Licensor and Licensee and their respective heirs, personal
representatives, successors and assigns. However, except as provided in this
Section 7.1, (i) neither party may assign its rights and duties under this
Agreement or any License without the prior written consent of the other party
and (ii) no assignment (whether or not consented to) shall release the
assignor from any obligation or liability under this Agreement or any License
unless otherwise specifically agreed. Notwithstanding the foregoing, either
party shall assign its rights and obligations under this Agreement to a
successor to all or substantially all of its business in Texas, whether the
successor has acquired this business by sale, merger, consolidation, or
otherwise.
7.2 NOTICES. Whenever this Agreement requires or permits any
consent, approval, notice, request or demand from one party to the other
(collectively, "Notice"), unless otherwise specified such Notice must be in
writing to be effective and shall be effective on the date of actual receipt of
such Notice by the addressee or when the attempted initial delivery is refused
or when it cannot be made because of a change of address of which the sending
party has not been notified. Each party's address for delivery of any Notice
shall be as set forth below its signature on this Agreement, or such other
address within the continental United States as that party may designate by
Notice to the other. Notices given by facsimile transmission or other
means of electronic communication shall be effective upon receipt, provided
that a confirmation copy is promptly mailed by certified mail, returned receipt
requested, or hand delivered.
7.3 REASONABLE ACTIONS. Each party shall act reasonably and
promptly in connection with giving or withholding any consent, approval or
similar action under this Agreement.
7.4 COMMISSIONS. Except for obligations of a party under a
commission agreement, Licensor and Licensee hereby indemnify and hold each
other harmless against any loss, claim, expense or liability with respect to
any commissions or brokerage fees claimed on account of the execution and/or
renewal of this License due to any action of the indemnifying party.
7.5 NEGATION OF LIEN FOR RENT. Licensor hereby waives all liens
and security interests for rent arising by statute or otherwise by operation of
law (except for any
17
<PAGE> 18
judgment lien that may hereafter arise in favor of Licensor) against property
of Licensee now or hereafter placed in the ATM Site or the Store.
7.6 REMOVAL OF EXISTING ATMS. Licensor will to the extent of
Licensor's rights permit Licensee to control the removal of the Previous
Provider's Machines from Licensor's Stores. * * * *
7.7 APPLICABLE LAW. This Agreement shall be governed by Texas
law and applicable United States federal law.
7.8 CONFIDENTIALITY. (a) Licensor and Licensee agree to hold
confidential this Agreement, subject to paragraph (c) below. Neither party
shall issue a publicity or press release regarding its contractual relations
with the other party concerning this Agreement and will refrain from making any
reference to this Agreement or to the other party in the solicitation of
business, or in conducting business, without obtaining the other party's prior
written consent to such action.
(b) In the performance of this Agreement, each party may be
exposed to proprietary or confidential information or trade secrets of the
other party identified as such by the other party. No party may disclose or
use any such confidential information or trade secrets without, in each
instance, obtaining the express prior written consent of the owner thereof
except as provided in paragraph (c) below. Confidential information will
include the financial reports and records related to transactions through the
ATMs.
(c) Notwithstanding paragraphs (a) and (b) above, a party shall
not be prohibited from disclosing this Agreement or any such confidential
information (i) to its employees, auditors or attorneys, financial consultants,
or other consultants who need to know it and who are directed by the party to
comply with this confidentiality agreement, (ii) to the extent that disclosure
is required by regulatory requirement or judicial or administrative process or
other requirement of law, (iii) in connection with any action or proceeding to
enforce or interpret this Agreement or any provision hereof, (iv) to the extent
that the information is in the public domain through no fault of the party's,
or (v) to the extent otherwise permitted by this Agreement.
7.9 ENTIRE AGREEMENT; EXHIBITS. This Agreement is the entire
agreement of the parties regarding its subject matter, and may not be changed
or amended except by an instrument in writing signed by Licensor and Licensee.
The following exhibits are attached hereto and incorporated into this Agreement
by this reference:
EXHIBIT "A" - The First Supplement
18
<PAGE> 19
EXHIBIT "B" - Market Areas
EXHIBIT "C" - Initial List of Community Market Stores
EXHIBIT "D" - Marketing/Advertising
EXHIBIT "E" - Licensee Signage
The parties are signing this Agreement as of August 31, 1995, to be
effective on the Effective Date as provided in Section 1.4.
LICENSOR: LICENSEE:
NATIONAL CONVENIENCE STORES NATIONSBANK OF TEXAS, N.A.
INCORPORATED
By: /s/ ARNOLD VAN ZANTEN By: /s/ ROB JOHNSTON
--------------------------------- -------------------------
Name: Arnold Van Zanten Name: Rob Johnston
Title: Senior Vice President of Administration Title: VP of Banking
Center Development
Licensor's Address for Notices: Licensee's Address for
Notices:
National Convenience Stores Incorporated NationsBank of Texas, N.A.
P.O. Box 758 Banking Center Development
100 Waugh Drive 901 Main Street, Eleventh
Houston, Texas 77007-5827 Floor
Dallas, Texas 75202
Attention: Mr. Arnold Van Zanten, Senior Attention: Rob Johnston, Vice
Vice President of President
Administration Facsimile Number:
(214) 508-0337
With Copy to: Mr. A. J. Gallerano
Senior Vice President Legal
Facsimile Number: (713) 880-0579
19
<PAGE> 20
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1182 4095 BROOKHAVEN CLUB ADDISON TX 75001 2142418786
2 3714 12350 HWY 6 @ HWY 646 ALTA LOMA TX 77510 4099251679 A504-4587
3 2850 2000 EAST HWY 6 ALVIN TX 77511 7133311124
4 3538 1702 S GORDON @ SOUTH ST ALVIN TX 77511 7135852115 A504-4580
5 3572 114 N GORDON @ HWY 8 ALVIN TX 77511 7135855079
6 3665 SEALY @ SECOND ST ALVIN TX 77511 7135853220
7 2848 808 S. VELASCO ANGLETON TX 77515 4098491620
8 2851 728 W. MULBERRY ON HWY 3 ANGLETON TX 77515 4098491443
9 3535 1201 E CEDAR @ HWY 35 ANGLETON TX 77515 4098493302
10 3569 528 S ANDERSON @ KIBER ANGLETON TX 77515 4098496028 A504-4589
11 3584 3402 E MULBERRY @ HOSPITAL ANGLETON TX 77515 4098496885 A504-4590
12 3653 100 N VELASCO @ E WILKINS ANGLETON TX 77515 4098492981 A504-4591
13 3655 DOWNING @ HENDERSON ANGLETON TX 77515 4098494023 A504-4592
14 3 2517225 BROWN BLVD. ARLINGTON TX 76011 8176498299 A106-4916
15 304 615 W. ABRAM ARLINGTON TX 76010 8172755305 A108-4927
16 435 3200 E PARK ROW ARLINGTON TX 76011 8176491471
17 480 2525 E PARK ROW ARLINGTON TX 76010 8172745198
18 498 2395 N. COLLINS ARLINGTON TX 76011 8172775024 A106-4918
19 749 2215 N COLLINS ARLINGTON TX 76011 8172756211
20 1008 2501 E ARKANSAS LN ARLINGTON TX 76011 8172778710
21 1210 2425 NE GREEN OAKS BLVD ARLINGTON TX 76006 8176495331
22 1732 4359 GREEN ACRES CIRCLE ARLINGTON TX 76017 8174787821
23 1885 1800 BAIRD FARM ARLINGTON TX 76011 8178614019
24 2120 3360 MATLOCK RD ARLINGTON TX 76014 8174651436
25 2378 2501 S E GREENOAKS ARLINGTON TX 76006 8174653480
26 2911 1300 S. COOPER STREET ARLINGTON TX 76013 8178602382
27 373 539 WEST OLTORF AUSTIN TX 78704 5124438399
28 377 620 WEST 29TH ST AUSTIN TX 78705 5124777965 A201-4935
29 378 3310 NORTHLAND AUSTIN TX 78731 5124536127
30 379 704 E ST JOHNS ST AUSTIN TX 78752 5124533134 A201-4933
31 380 160 E RIVERSIDE AUSTIN TX 78704 5124414192 A201-4934
32 390 933-A E. RUNDBERG LN AUSTIN TX 78753 5128350873 A201-4936
33 417 628 E OLTORF AUSTIN TX 78704 5124430734
34 440 500 EAST 51ST ST AUSTIN TX 78751 5124533890
35 518 3419 RIDDLE AUSTIN TX 78745 5122802533
36 524 7845 SHOAL CREEK AUSTIN TX 78757 5124530928
37 526 2213 JUSTIN LANE AUSTIN TX 78757 5124535797
</TABLE>
Page 1
<PAGE> 21
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
38 646 2321 W NORTH LOOP AUSTIN TX 78751 5124532901
39 647 1516 TINNIN FORD AUSTIN TX 78741 5124438396
40 767 1742 COLONY CREEK AUSTIN TX 78758 5128369761
41 780 9433 PARKFIELD AUSTIN TX 78758 5128363357 A201-4932
42 915 102 W POWELL LN AUSTIN TX 78753 5128364900
43 918 8143 MESA AUSTIN TX 78759 5123458463
44 961 3842 AIRPORT BLVD AUSTIN TX 78722 5124724397
45 1028 4602 E. STASSNEY AUSTIN TX 78744 5124454666
46 1143 1706 E WILLIAM CANNON AUSTIN TX 78745 5124440405
47 1188 4429 DUVAL AUSTIN TX 78751 5124515376
48 1190 2107 BOCA RATON AUSTIN TX 78747 5122823255
49 1191 1500 SPYGLASS AUSTIN TX 78746 5123275145 A201-4937
50 1194 3708 SOUTHRIDGE AUSTIN TX 78704 5124426617
51 2102 1779 WELLS BRANCH PKYW SUITE A AUSTIN TX 78728 5129902815
52 2103 11139 NORTH 135, SUITE 130 AUSTIN TX 78753 5128325731
53 2110 12915 POND SPRINGS ROAD AUSTIN TX 78729 5123357277
54 2420 1405 WEST WILLIAM CANNON AUSTIN TX 78745 5124477799
55 1389 4301 FREDERICKSBURG RD BALCONES HEIG TX 78201 2107363426
56 2801 4206 7TH STREET BAY CITY TX 77414 4092452885
57 3573 1417 @ 7 TH STREET BAY CITY TX 77415 4092450030 A504-4602
58 807 3202 HWY 146 BAYCLIFF TX 77518 660-H 7133392481
59 2830 4515 HWY 146 BAYCLIFF TX 77518 7133393329
60 10 2219 HWY 201 BAYTOWN TX 77520 540-H 7134279691
61 32 3520 NORTH MAIN BAYTOWN TX 77520 501-Q 7134203355
62 436 1516 ALEXANDER BAYTOWN TX 77520 501-Z 7134203392
63 1173 3000 BAKER RD BAYTOWN TX 77520 501-J 7134243645
64 1222 3312 DECKER DR BAYTOWN TX 77520 500-F 7134271255
65 1256 220 WEST MAIN BAYTOWN TX 77520 541-B 7134270048
66 3587 1701 N MAIN BAYTOWN TX 77520 501-U 7134228542
67 3627 4221 BAKER BAYTOWN TX 77520 500-L 7134244681
68 3743 3525 GARTH BAYTOWN TX 77520 501-P 7134226779 A504-4809
69 754 1501 E PIPELINE BEDFORD TX 76021 8172837491
70 2855 4439 BISSONNET BELLAIRE TX 77401 7136681340
71 3554 7821 COOK RD @ CORONA BELLAIRE TX 77072 529-J 7134988068 A503-4416
72 1250 1234 SHELDON RD CHANNELVIEW TX 77530 458-X 7134526167
73 1615 14710 STERLING GREEN CHANNELVIEW TX 77530 457-Y 7134524758
74 772 16602 EL CAMINO REAL CLEAR LAKE TX 77062 618-P 7134801463 A503-3045
75 1243 610 CORLEY CTR CLEVELAND TX 77327 7135927123
76 1258 905 N WASHINGTON CLEVELAND TX 77327 7135925540
</TABLE>
Page 2
<PAGE> 22
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
77 2394 445 SOUTHLINE CLEVELAND TX 77327 7135922609
78 3583 101 S HWY 288 @ STATTON RIDGE RD CLUTE TX 77531 4092653957 A504-4595
79 3685 101 E MAIN CLUTE TX 77531 4092651102 A504-4596
80 1145 10851 HWY 105 WEST CONROE TX 77356 4094471131 A501-3046
81 1382 145 ROBINSON RD CONROE TX 77373 252-J 7133633279
82 1903 100 SCARBOROUGH CONROE TX 77304 4094411143 A501-3070
83 3596 1700 N FRAZIER @ WILSON CONROE TX 77304 4094411142 A501-4483
84 2329 8005 FM 78 CONVERSE TX 78109 2106610175
85 3232 8026 KITTYHAWK DR @ TOPPERWEIN RD CONVERSE TX 78109 2106592823 A202-4713
86 464 1000 E SANDY LAKE RD COPPELL TX 75019 2143930379
87 1242 16103 FM 2100 CROSBY TX 77532 379-Y 7133281011
88 1698 12028 FM 2100 @ FOLEY CROSBY TX 77532 379-P 7133283464
89 4 5518 ALPHA RD DALLAS TX 75240 2142391100 A101-4931
90 27 11424 AUDELIA DALLAS TX 75243 2143485763
91 141 8188 SPRING VALLEY DALLAS TX 75240 2142342531
92 174 7950 WEST CAMP WISDOM DALLAS TX 75233 2142969604
93 274 4040 CEDAR SPRINGS DALLAS TX 75219 2145265191
94 299 18611 MARSH LN DALLAS TX 75234 2143060112
95 312 3301 FORT WORTH AVE DALLAS TX 75208 2143372032
96 655 2923 NORTHWEST HWY DALLAS TX 75220 2149020673 A101-4929
97 794 3810 CONGRESS DALLAS TX 75219 2145212562
98 1012 5907 BELTLINE ROAD DALLAS TX 75240 2142393799
99 1060 9761 WALNUT DALLAS TX 75243 2142316462
100 1141 14444 NORTH DALLAS PKWY DALLAS TX 75240 2143868590
101 1299 10061 WHITEHURST DALLAS TX 75243 2143419807
102 1449 10102 LAKE JUNE RD DALLAS TX 75217 2142867635
103 1462 4421 MAPLE AVE DALLAS TX 75219 2145285578
104 1465 3434 WEBBS CHAPEL EXTENSION DALLAS TX 75220 2143522685
105 1527 2523 S.HAMPTON RD DALLAS TX 75223 2143333952
106 1682 19019 MIDWAY RD DALLAS TX 75252 2143067384
107 1855 820 N FITZHUGH DALLAS TX 75214 2148278721
108 1869 1406 GREENVILLE DALLAS TX 75206 2148218120
109 1893 9595 SYCENE DALLAS TX 75227 2143884978
110 2068 8380 MEADOW RD DALLAS TX 75231 2143734503 A102-4924
111 2117 19019 PRESTON DALLAS TX 75252 2142506661
112 2904 4402 W. JEFFERSON DALLAS TX 75211 2143390338
113 2907 2449 S. BELT LINE ROAD DALLAS TX 75253 2142862196
114 2917 7887 MCCALLUM DALLAS TX 75252 2147330675
115 2918 4712 HAVERWOOD LANE DALLAS TX 75252 2142502301
</TABLE>
Page 3
<PAGE> 23
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
116 3518 812 CENTER @ 7TH DEER PARK TX 77536 538-F 7134795011 A504-4528
117 3600 101 SAN AUGUSTINE DEER PARK TX 77536 538-P 7134797679 A504-4529
118 2081 1501 N.HAMPTON DESOTO TX 75115 2142962386
119 2411 5614 EAST R. L. THORNTON DESOTO TX 75223 2148267243
120 567 1052 SOUTH CLARK DUNCANVILLE TX 75137 2142962629
121 2902 454 E HIGHWAY 67 DUNCANVILLE TX 75137 2142980618
122 239 1091 FULLER WISER EULESS TX 76039 8173549143
123 1894 2501 N MAIN EULESS TX 76039 8173549036
124 1088 14714 WEBBS CHAPEL FARMERS BRANC TX 75006 2142415568
125 3758 15902 SO POST OAK FORT BEND TX 77053 571-U 7134378594 A503-4818
126 2847 331 S. AVE A FREEPORT TX 77541 4092337413
127 3539 903 SECOND ST @ CEDAR FREEPORT TX 77541 4092333931
128 3684 1922 FOURTH ST @ HWY 288 FREEPORT TX 77451 4092331254 A504-4599
129 361 522 FM 518 FRIENDSWOOD TX 77546 616-Y 7134822421
130 1713 700 W PARKWOOD FRIENDSWOOD TX 77546 656-X 7139968380 A503-3101
131 3576 3860 FRIENDSWOOD LINK RD FRIENDSWOOD TX 77546 657-A 7134821749 A504-4558
132 3652 2505 W BAY AREA BLVE FRIENDSWOOD TX 77546 657-C 7133382650 A504-4556
133 3732 SWC FM 528 @ SUN MEADOW FRIENDSWOOD TX 77456 656-T 7135855064
134 5 6621 N BEACH FT WORTH TX 76111 8172328242
135 285 3850 ALTAMESA BLVD FT WORTH TX 76133 8173463179
136 384 9836 WHITE SETTLEMENT RD FT WORTH TX 76108 8172460972
137 434 4150 BRYANT IRVIN RD FT WORTH TX 76109 8177378948 A107-4917
138 733 8601 BOAT CLUB RD FT WORTH TX 76179 8172368401
139 850 6144 S. HULEN FT WORTH TX 76132 8173468722 A107-4928
140 1308 6700 CROWLEY RD FT WORTH TX 76134 8172933719
141 1756 9101 MEADOWBROOK DR FT WORTH TX 76112 8178606934 A108-4925
142 2098 13900 TRINITY BLVD #1616 FT WORTH TX 76039 8172839158
143 2325 4450 FLEETWOOD FT WORTH TX 76155 8176859529
144 2900 2500 NE 28TH STREET FT WORTH TX 76106 8176243010
145 2909 5221 CAMP BOWIE BLVD. FT WORTH TX 76107 8177379874
146 2905 3950 E. LANCASTER FT. WORTH TX 76103 8175350634
147 1224 1901 CLINTON DR GALENA PARK TX 77547 496-W 7136746385
148 105 628 BROADWAY GALVESTON TX 77550 4097636196 A504-3099
149 349 710 4TH ST GALVESTON TX 77550 4097630952
150 2826 5626 SEAWALL BLVD. GALVESTON TX 77550 4097445332
151 2831 6902 SEAWALL BLVD. GALVESTON TX 77551 4097445032 A504-3119
152 3540 2525 BROADWAY GALVESTON TX 77550 4097628451 A504-4575
153 3542 5027 BOARDWAY GALVESTON TX 77550 4097628627 A504-4569
154 3543 7627 STEWART RD GALVESTON TX 77554 4097448178
</TABLE>
Page 4
<PAGE> 24
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
155 3579 2427 53RD ST @ AVE S GALVESTON TX 77550 4097402560
156 3689 3902 BROADWAY GALVESTON TX 77550 4097630343
157 3700 16710 SAN LUIS PASS @ B SMITH GALVESTON TX 77550 4097374223 A504-8448
158 3720 1927 81ST STREET @ HEARD LN GALVESTON TX 77550 4097403723 A504-4570
159 3750 3228 SEAWALL BLVD GALVESTON TX 77550 4097628160 A504-4813
160 954 2430 W WALNUT GARLAND TX 75042 2142722305
161 1049 825 WEST WALNUT GARLAND TX 75041 2142718959
162 1441 1502 E I-30 GARLAND TX 75042 2142266021
163 2051 1426 BELTLINE GARLAND TX 75042 2144140068
164 2914 1931 N. JUPITER ROAD GARLAND TX 75042 2142723208
165 308 2475 W. TARRANT GRAND PRAIRIE TX 75050 2146412863 A101-4926
166 445 1610 NW 19TH ST GRAND PRAIRIE TX 75050 2146416361
167 1063 1622 STATE HWY 360 GRAND PRAIRIE TX 75051 2146411091 A103-4923
168 1185 1729 POLO RD GRAND PRAIRIE TX 75052 2146414166 A103-4921
169 1409 4002 GREAT S.W. PKWY GRAND PRAIRIE TX 75052 2146601450 A103-4920
170 1656 2901 ARKANSAS GRAND PRAIRIE TX 75051 2146603507
171 2079 2495 W HWY 303 GRAND PRAIRIE TX 75051 2146416236
172 2000 4060 WESTERN CENTER BLVD HALTOM CITY TX 76127 8175819810
173 2112 4901 DENTON HWY HALTOM CITY TX 76127 8175811659
174 1429 13006 HWY 16 N HELOTES TX 78023 2106959629
175 3586 1105 13TH @ WASHINGTON HEMPSTEAD TX 77445 4098266339
176 3675 946 AUSTIN ST @ HWY 290 HEMPSTEAD TX 77445 4098266046
177 529 8916 HWY 6 HITCHCOCK TX 77563 4099866030 A504-3041
178 3530 3120 HWY 6 HITCHCOCK TX 77563 4099356379 A504-4568
179 11 6275 W AIRPORT HOUSTON TX 77071 570-H 7137284529
180 28 414 GREENS RD HOUSTON TX 77067 372-Q 7138726840 A501-4905
181 76 1102 S MASON RD HOUSTON TX 77019 485-H 7133924990
182 89 15961 WESTHEIMER HOUSTON TX 77098 487-Y 7135317486
183 117 8614 MEMORIAL HOUSTON TX 77024 491-H 7136826130 A501-4962
184 158 1036 GESSNER HOUSTON TX 77055 490-A 7134687591
185 210 8650 CE KING PKWY HOUSTON TX 77044 456-C 7134581726 A502-4880
186 231 2203 N GESSNER HOUSTON TX 77055 450-N 7139842475 A501-4898
187 238 5206 BUFFALO SPDWY HOUSTON TX 77005 492-X 7136690740
188 244 3760 RICHMOND HOUSTON TX 77027 492-W 7136268509 A503-4975
189 246 7028 LAWNDALE HOUSTON TX 77023 534-D 7139266404
190 247 9065 GAYLORD @ CORBINDALE HOUSTON TX 77024 490-C 7134651292
191 254 919 WIRT HOUSTON TX 77024 491-B 7136824548
192 260 869 DAIRY-ASHFORD HOUSTON TX 77079 488-D 7134963010
193 263 3501 W DALLAS HOUSTON TX 77019 492-R 7125283953
</TABLE>
Page 5
<PAGE> 25
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
194 330 2607 S. RICHEY HOUSTON TX 77058 536-T 7139413459 A504-3103
195 421 1503 WEST GREENS RD HOUSTON TX 77067 372-N 7138755422 A501-4902
196 441 9342 WESTVIEW HOUSTON TX 77055 450-Y 7134680626
197 448 1051 SILBER @ I-10 HOUSTON TX 77055 491-C 7136824765
198 453 5511 RICHMOND HOUSTON TX 77057 491-X 7137817815 A503-8441
199 463 1903 S SHEPHERD HOUSTON TX 77019 492-Q 7135287334 A503-4887
200 468 9986 BISSONNET HOUSTON TX 77036 529-V 7137747009 A503-4888
201 490 8301 KNIGHT RD HOUSTON TX 77054 532-R 7137979521 A503 3068
202 494 7702 BELLAIRE HOUSTON TX 77036 530-G 7137716070 A503-4892
203 510 11701 FUQUA HOUSTON TX 77034 576-U 7134819621
204 527 2904 FOUNTAINVIEW HOUSTON TX 77057 491-T 7137844590 A503 3066
205 545 17930 W LITTLE YORK HOUSTON TX 77084 407-T 7138594090 A501-3044
206 576 740 WILCREST HOUSTON TX 77042 489-K 7137812490
207 581 7604 CLAREWOOD HOUSTON TX 77036 530-G 7137721613
208 586 999 LOCKWOOD HOUSTON TX 77020 494-L 7136710656
209 601 5902 GULFTON HOUSTON TX 77081 531-B 7136658424 A503-3031
210 752 2902 MANGUM HOUSTON TX 77092 451-R 7136865220
211 753 15030 BELLAIRE BLVD HOUSTON TX 77083 527-H 7139337370
212 874 926 WESTHEIMER HOUSTON TX 77006 493-S 7135280902 A503-4915
213 890 9401 HARWIN HOUSTON TX 77036 530-B 7137834319
214 900 6601 S GESSNER HOUSTON TX 77036 530-E 7137722499 A503-4897
215 913 16200 HICKORY KNOLL HOUSTON TX 77059 618-C 7134887959
216 936 9830 MEADOWGLEN HOUSTON TX 77042 490-W 7137835184 A503-4889
217 975 14409 W MONTGOMERY @ FALLBROOK HOUSTON TX 77086 371-W 7134441579 A502-3106
218 1004 8800 BROADWAY HOUSTON TX 77061 535-X 7136454864 A504-4911
219 1010 3770 S GESSNER HOUSTON TX 77063 530-A 7137836045 A503-4894
220 1051 2000 W 18TH @ SEASPRAY HOUSTON TX 77008 452-T 7138628331 A501-4890
221 1059 11730 WESTHEIMER HOUSTON TX 77077 489-T 7134976620 A503-4910
222 1071 16305 STUEBNER AIRLINE HOUSTON TX 77069 330-Q 7133765804
223 1083 4202 SAN FELIPE @ BRIAR HOLLOW HOUSTON TX 77027 491-R 7139638611 A503-4881
224 1115 10330 CHAMPION FOREST DR HOUSTON TX 77086 371-W 7138204645
225 1119 9202 NATHANIEL HOUSTON TX 77075 576-J 7139417091
226 1125 13703 CEDAR POINT @ GRANT RD HOUSTON TX 77070 369-A 7133762677
227 1132 7350 JACKRABBIT RD @ FELDSTONE HOUSTON TX 77095 408-Q 7134631046
228 1138 11499 BEAMER HOUSTON TX 77089 576-X 7134841185
229 1166 10555 WILCREST HOUSTON TX 77099 529-Y 7134983974
230 1181 1203 BAY AREA BLVD HOUSTON TX 77058 618-Q 7134888950
231 1199 703 NORMANDY HOUSTON TX 77015 496-D 7134538052 A502-4912
232 1221 1701 MCCARTY DR HOUSTON TX 77013 495-K 7136746379
</TABLE>
Page 6
<PAGE> 26
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
233 1226 4974 HWY 6 NORTH HOUSTON TX 77084 448-A 7138550716 A501-4913
234 1239 11606 ALDINE WESTFIELD HOUSTON TX 77039 413-R 7134427261
235 1249 1708 N WAYSIDE HOUSTON TX 77029 495-E 7136761711
236 1251 315 LOCKWOOD HOUSTON TX 77011 494-T 7139263333
237 1253 7444 CANAL HOUSTON TX 77011 495-W 7139212739
238 1265 7000 WOODRIDGE HOUSTON TX 77089 535-J 7136412985
239 1291 2901 WALNUT BEND HOUSTON TX 77042 489-Y 7137842237 A503-4884
240 1295 7800 ALMEDA HOUSTON TX 77054 533-N 7137999051 A503-4900
241 1303 14200 WALLISVILLE ROAD HOUSTON TX 77049 457-S 7134588078
242 1380 706 GREENS RD HOUSTON TX 77060 373-N 7134470141 A502-4903
243 1388 6802 BISSONNET HOUSTON TX 77081 530-R 7139951187
244 1428 1177 GREENS RD HOUSTON TX 77032 373-P 7138763836 A502-4896
245 1432 4310 GESSNER HOUSTON TX 77041 450-E 7138958542 A501-4909
246 1437 15204 WEST RD @ HWY 6 NORTH HOUSTON TX 77095 408-F 7138594066 A502 3072
247 1439 WALTERS RD @ CORNERSTONE VILLAGE HOUSTON TX 77068 331-X 7135838184 A501 3069
248 1443 14121 ELLA BLVD HOUSTON TX 77038 372-F 7138728199 A501-4895
249 1446 15311 ELLA HOUSTON TX 77038 332-X 7138727760 A501-4974
250 1448 10502 JONES RD @ FALLBROOK HOUSTON TX 77065 369-X 7138900558
251 1450 3850 SYNOTT HOUSTON TX 77082 528-C 7134932534 A503-4906
252 1608 10150 WESTVIEW HOUSTON TX 77043 450-W 7139848379
253 1616 2301 YORKTOWN HOUSTON TX 77056 491-U 7136232239 A503-4908
254 1621 11595 FM 1960 HOUSTON TX 77065 369-W 7138903144 A501 3071
255 1628 9299 RICHMOND HOUSTON TX 77063 490-X 7139774620 A503-4914
256 1655 8303 WILCREST HOUSTON TX 77072 529-Q 7135610356 A503-4893
257 1657 5105 GULFTON HOUSTON TX 77081 531-C 7136645364 A503-4882
258 1658 8040 SOUTH LOOP EAST HOUSTON TX 77017 535-K 7136450812 A502-3104
259 1665 12702 WHITTINGTON DR HOUSTON TX 77077 488-R 7134977532 A503-4886
260 1677 10900 MYKAWA HOUSTON TX 77075 574-R 7139914566
261 1680 22030 FM 149 HOUSTON TX 77070 329-T 7133702951
262 1685 7230 LONGPOINT HOUSTON TX 77055 451-T 7136839540
263 1686 I-45 @ DUMBLE HOUSTON TX 77023 494-X 7139232259 A503 3073
264 1695 1816 SHEPHERD HOUSTON TX 77008 492-H 7138638206 A503-3047
265 1704 9096 JONES RD HOUSTON TX 77070 409-F 7139558660 A502-3048
266 1715 11200 WILCREST HOUSTON TX 77099 529-Y 7134980073 A503-4885
267 1777 9710 BEECHNUT HOUSTON TX 77036 529-M 7137781142 A503-4883
268 2334 7802 WESTHEIMER HOUSTON TX 77063 490-V 7137858933 A501-4963
269 2803 930 EDGEBROOK HOUSTON TX 77034 7139414476
270 2807 3519 S. SHEPHARD HOUSTON TX 77098 7135291640
271 2808 8111 W. TIDWELL HOUSTON TX 77040 7136902846
</TABLE>
Page 7
<PAGE> 27
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
272 2810 5802 MEMORIAL DRIVE HOUSTON TX 77007 7138612421 A503-8443
273 2811 16250 FM 529 HOUSTON TX 77095 7138552139
274 2812 1893 BARKER CYPRESS HOUSTON TX 77084 7135788610
275 2813 3117 MAIN STREET HOUSTON TX 77002 7135249504
276 2816 2132 BISSONNET HOUSTON TX 77005 7135299127
277 2818 634 ALLEN GENOA ROAD HOUSTON TX 77017 7136448346
278 2820 1446 SHERWOOD FOREST HOUSTON TX 77043 7139736076
279 2821 10218 WESTHEIMER HOUSTON TX 77042 7132660831
280 2823 2776 WEST TC JESTER HOUSTON TX 77018 7136866386
281 2824 3161 OLD SPANISH TRAIL HOUSTON TX 77054 7137418853
282 2834 11650 HEMPSTEAD HWY HOUSTON TX 77092 7136810188
283 2836 8235 WINDFERN HOUSTON TX 77040 7139371473
284 2837 8602 RICHMOND HOUSTON TX 77063 7132660257
285 2840 7402 FAIRBANKS N HOUSTON HOUSTON TX 77040 7139376713
286 2841 6450 W 43RD HOUSTON TX 77092 7136810189
287 2842 2323 WASHINGTON HOUSTON TX 77007 7138622237
288 2844 1514 WHITE OAK DRIVE HOUSTON TX 77009 7138615928
289 2846 4763 CALHOUN HOUSTON TX 77004 7137413546
290 2853 2404 BAY AREA BLVD. HOUSTON TX 77058 7134886626
291 2854 5121 N. SHEPHERD HOUSTON TX 77018 7136920905
292 2856 2850 WILCREST HOUSTON TX 77042 7137826422
293 2857 1003 RICHMOND HOUSTON TX 77006 7135290553
294 2860 5838 WESTHEIMER HOUSTON TX 77057 7137854891 A503-8445
295 2861 5330 N. BRAESWOOD HOUSTON TX 77096 7137239859
296 2862 7015 FANNIN HOUSTON TX 77030 7137970902
297 2864 3150 S. DAIRY ASHFORD HOUSTON TX 77082 7134973584
298 2866 7100 BELLAIRE HOUSTON TX 77074 7132709847
299 2867 8003 HOWARD DRIVE HOUSTON TX 77017 7136401300
300 2868 3903 REVEILLE HOUSTON TX 77087 7136402302
301 3501 819 ANTOINE @ KATY FWY HOUSTON TX 77055 491-B 7136817299 A503-4440
302 3502 1401 HEIGHTS @ 14TH HOUSTON TX 77008 453-W 7138686237 A501-4346
303 3506 5711 IRVINGTON @ AVE OF OAK HOUSTON TX 77009 453-U 7136914710 A502-4343
304 3507 2815 BINGLE @ KEMPWOOD HOUSTON TX 77055 451-N 7134679508 A501-4444
305 3510 1421 W 11TH @ DURHAM HOUSTON TX 77008 452-Y 7138685983 A501-4350
306 3514 1202 ALLEN GENOA HOUSTON TX 77017 577-J 7136415784 A504-4368
307 3516 1048 UVALDE @ VICKSBURG HOUSTON TX 77015 497-E 7134530177 A504-4517
308 3522 5825 BELLAIRE @ RENWICK HOUSTON TX 77081 531-F 7136645041 A503-4431
309 3524 8010 BEECHNUT HOUSTON TX 77036 530-J 7137747445 A503-4422
310 3526 1326 DAIRY ASHFORD HOUSTON TX 77079 488-M 7134973992 A503-4455
</TABLE>
Page 8
<PAGE> 28
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
311 3528 6436 BELLAIRE @ ROOKIN HOUSTON TX 77081 531-E 7137745324 A503-4429
312 3544 2302 WHITE OAK @ USENER HOUSTON TX 77009 493-A 7138688908 A503-4340
313 3545 11402 HUGES @ SAGEGLEN HOUSTON TX 77089 576-Y 7134810923 A504-4373
314 3546 1430 TELEPHONE @ LAWNDALE HOUSTON TX 77023 494-X 7139282761 A504-4361
315 3547 2004 EVERGREEN @ LINDEN HOUSTON TX 77087 535-E 7139267664
316 3548 8815 WINKLER @ JULIABORA HOUSTON TX 77017 535-Y 7139449581 A504-4380
317 3555 627 LITTLE YORK @ BAUMAN HOUSTON TX 77076 413-U 7136927933 A502-4503
318 3562 9202 AIRPORT @ MOSLEY HOUSTON TX 77061 575-D 7139466981 A504-4379
319 3577 6412 N MAIN @ 25TH HOUSTON TX 77009 453-S 7138685064
320 3581 6721 TELEPHONE RD @ DROVET HOUSTON TX 77061 535-W 7136498182 A504-4384
321 3585 11435 HALL RD @ BEAMER HOUSTON TX 77089 576-X 7134811102 A504-4374
322 3588 744 FM 1960 W HOUSTON TX 77070 332-N 7138939092 A501-4478
323 3594 610 S MASON RD @ KINGSLAND HOUSTON TX 77450 485-H 7133926300 A503-4437
324 3597 2302 TIDWELL @ ACORN HOUSTON TX 77016 453-D 7136920411
325 3598 4302 HICKORY DOWNS @ CLAY HOUSTON TX 77084 448-E 7134630830 A501-4457
326 3606 5718 W 34TH @ ANTOINE HOUSTON TX 77092 451-Q 7136816211 A501-4445
327 3610 2950 GREENS RD @ WALTERS RD HOUSTON TX 77067 371-R 7138937755 A501-4470
328 3611 9503 CHAMPION FOREST @ SILENTWOOD HOUSTON TX 77086 411-A 7134459519 A501-4468
329 3612 760 W GULFBANK @ I45 NORTH HOUSTON TX 77088 412-L 7138201642 A502-4498
330 3616 4302 TELEPHONE RD @ GOLFCREST HOUSTON TX 77087 534-M 7136430181 A504-4364
331 3617 3543 OAK FOREST @ JUDIWAY HOUSTON TX 77018 452-P 7136816399 A501-4351
332 3619 6452 HWY 6 NORTH @ KINGSFIELD HOUSTON TX 77058 408-S 7134630956 A501-4459
333 3621 2104 BAY AREA BLVD HOUSTON TX 77058 618-L 7132808270 A504-4783
334 3626 15742 OLD HUMBLE RD HOUSTON TX 77338 335-U 7134412371 A502-4492
335 3632 10103 BAMMEL N HOUSTON @ FM 149 HOUSTON TX 77086 371-W 7134440661 A501-4469
336 3635 5796 BINGLE @ TIDWELL HOUSTON TX 77092 451-A 7136813840 A501-4447
337 3636 10109 BISSONNET @ FORUM PARK HOUSTON TX 77036 529-V 7139811177 A503-4421
338 3637 8011 NORTH BELT @ MESA HOUSTON TX 77396 375-U 7134412506 A502-4779
339 3638 2050 BINGLE @ HAMMERLY HOUSTON TX 77055 450-R 7134679659 A501-4443
340 3639 KUYKENDAHL @ WESTFIELD LANDING HOUSTON TX 77090 331-V 7138937757 A501-4477
341 3640 11050 S. POST OAK @ WILLOW HOUSTON TX 77053 571-C 7137218357 A503-4405
342 3643 10640 KINGSPOINT @ SABO HOUSTON TX 77075 576-P 7139432154 A504-4376
343 3645 20096 GESSNER @ GUSTINE HOUSTON TX 77071 530-T 7139883205 A503-4397
344 3647 11580 CHIMMEY ROCK @ BURDINE HOUSTON TX 77035 571-B 7137231248 A503-4403
345 3648 9365 S MAIN @ WESTRIDGE HOUSTON TX 77025 534-R 7136640232 A503-4389
346 3649 1903 DAIRY ASHFORD HOUSTON TX 77077 488-R 7134934095 A503-4454
347 3650 10290 FORUM PARK W @ ROARK HOUSTON TX 77036 529-V 7139880485 A503-4420
348 3656 3825 MANGUM HOUSTON TX 77092 451-M 7136811061 A501-4354
349 3657 2222 PARKER @ ALDINE WESTFIELD HOUSTON TX 77093 413-Z 7136911200
</TABLE>
Page 9
<PAGE> 29
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
350 3658 4620 N MAIN @ AIRLINE HOUSTON TX 77009 453-X 7138625338 A501-4344
351 3659 7433 1\2 BISSONNETT @ BONHOMME HOUSTON TX 77069 530-Q 7132701147 A503-4395
352 3660 2901 WESTRIDGE @ BARTELL HOUSTON TX 77054 532-P 7136686265 A503-4761
353 3662 4401 IRVINGTON @ WEISS HOUSTON TX 77009 453-Y 7136915641 A502-4342
354 3666 6100 W LITTLE YORK @ ALBONSON HOUSTON TX 77091 411-T 7139374411 A501-4463
355 3669 11402 MARTIN LUTHER KING HOUSTON TX 77048 574-J 7137338461 A502-3102
356 3670 9403 FM 1960 @ PERRY RD HOUSTON TX 77070 369-R 7134698349 A501-4471
357 3671 6333 SAN FELIPE @ WINROCK HOUSTON TX 77057 491-N 7132665220 A503-4436
358 3674 5738 TELEPHONE @ DIXIE HOUSTON TX 77087 535-S 7136493703 A504-4366
359 3676 1544 N SHEPHERD @ W 18TH HOUSTON TX 77008 452-Z 7138615044
360 3680 7016 FM 1960 W HOUSTON TX 77069 370-F 7135837085 A501-4473
361 3681 1909 ALDINE BENDER HOUSTON TX 77039 373-Z 7134426078 A502-4494
362 3682 1301 FEDERAL HOUSTON TX 77015 496-L 7134538414 A504-4516
363 3683 1050 STUDEWOOD @ 11TH HOUSTON TX 77008 453-W 7138640399 A501-4345
364 3686 1406 WIRT RD @ WESTVIEW HOUSTON TX 77055 451-X 7136836264 A501-4442
365 3688 803 EDGEBROOK HOUSTON TX 77034 576-E 7139462039 A504-4378
366 3690 11575 BISSONNET @ COURT GLEN HOUSTON TX 77099 529-T 7138791952 A503-4418
367 3693 5699 BEECHNUT HOUSTON TX 77096 531-N 7132715577 A503-4394
368 3694 13215 W LITTLE YORK @ ELDRIDGE HOUSTON TX 77041 408-Z 7134664060 A501-4461
369 3698 10602 FUQUA @ BEAMER HOUSTON TX 77089 576-T 7134841285 A504-4375
370 3701 5415 KIRBY @ SUNSET HOUSTON TX 77005 532-C 7135287498 A503-4392
371 3703 6459 HILLCROFT @ WESTWARD HOUSTON TX 77081 531-E 7132706287 A503-4771
372 3704 195 ALDINE BENDER HOUSTON TX 77060 372-Z 7134487347 A502-4780
373 3705 10304-A HARWIN HOUSTON TX 77036 529-D 7132706308 A503-4772
374 3712 2001 WAYSIDE @ SYLVAN HOUSTON TX 77023 534-C 7139267094 A504-4362
375 3716 11101 BRIAR FOREST @ WILCREST HOUSTON TX 77042 489-Q 7139740118 A503-4452
376 3718 5750 W GULFBANK @ ANTOINE HOUSTON TX 77088 411-Q 7139996017 A501-4466
377 3719 5130 WOODWAY @ SAGE HOUSTON TX 77027 491-L 7136264379 A503-4812
378 3721 1025 ALABAMA @ FANNIN HOUSTON TX 77004 493-T 7135206503 A503-4338
379 3722 8380 FAIRBANKS N HOUSTON @ WENT HOUSTON TX 77040 410-G 7138967817 A501-4467
380 3724 3635 HILLCROFT @ WINDSWEPT HOUSTON TX 77057 490-Z 7137825167 A503-4435
381 3728 2555 HOLCOMB HOUSTON TX 77030 532-G 7136644590 A503-4391
382 3729 2403 FM 1960 W @ BAMMEL VILLAGE HOUSTON TX 77068 331-U 7135832269 A501-4476
383 3730 5585 WESLAYAN @ BISSONNET HOUSTON TX 77005 532-A 7136653728 A503-4393
384 3731 3400 W LITTLE YORK @ T C JESTER HOUSTON TX 77091 411-V 7134450819 A501-4465
385 3733 6142 LONG DR @ WAYSIDE HOUSTON TX 77087 534-Q 7136401785 A504-4760
386 3735 7902 LONG POINT @ WIRT HOUSTON TX 77005 451-T 7139739040 A501-4767
387 3737 5301 ANTOINE @ PINEMONT HOUSTON TX 77091 451-G 7136800119 A503-3034
388 3738 3750 ADDICKS-CLODINE HOUSTON TX 77082 527-C 7134960774 A503-4833
</TABLE>
Page 10
<PAGE> 30
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
389 3739 17654 KEITH HARROW @ QUEENSTON HOUSTON TX 77084 447-C 7138594153 A501-4768
390 3740 11651 W BELFORT @ KIRKWOOD HOUSTON TX 77099 529-X 7134981715 A503-4765
391 3741 14915 BISSONNET @ SUGARLAND-HOWELL HOUSTON TX 77478 528-S 7135619205 A503-4766
392 3742 14821 WOODFOREST @ STERLING GREEN HOUSTON TX 77530 497-D 7134529648 A502-4769
393 3746 13360 NORTHBOROUGH @ RUSHCREEK HOUSTON TX 77067 372-L 7138724554 A501-4838
394 3747 9880 ALAMEDA GENOA HOUSTON TX 77075 576-N 7139437319 A503-4811
395 3748 1807 W 43RD @ ROSSLYN HOUSTON TX 77018 452-J 7136803335 A501-3035
396 3751 13050 FM 529 @ ELDRIDGE HOUSTON TX 77011 408-R 7138961608 A501-4810
397 3753 16630 CLAY RD @ JURA HOUSTON TX 77084 447-H 7138551170 A501-4848
398 3755 475 FM 1960 @ CYPRESS STATION HOUSTON TX 77090 332-K 7135377919 A501-4847
399 3759 221 UVALDE HOUSTON TX 77105 457-X 7134530178 A502-4703
400 3761 12375 SCARSDALE @ SAGEGLEN HOUSTON TX 77089 616-C 7134810443 A503 3074
401 3762 11150 HUFFMEISTER HOUSTON TX 77065 368-T 7138940339
402 3763 12251 JONES @ HOUSTON N CYPRESS HOUSTON TX 77070 369-K 7138901047
403 3766 10096 VETS MEMORIAL @ WEST RD HOUSTON TX 77038 412-A 7139314962
404 3767 12050 1/2 GEAMER RD @ HUGHES HOUSTON TX 77089 616-B 7134814203
405 3771 9531 FALLBROOK @ PERRY HOUSTON TX 77064 369-Y 7138942204 A502-3049
406 3772 8600 BROADWAY @ ROCKHILL HOUSTON TX 77061 535-X 7136415652 A504-4852
407 1211 25705 FM 2100 HUFFMAN TX 77336 339-A 7133247050
408 1381 5103 EAST FM 1960 HUMBLE TX 77339 337-W 7138527676
409 3559 228 CHARLES @ FM 1960 HUMBLE TX 77338 335-V 7134469757
410 3764 8010 FM 1960 EAST HUMBLE TX 77338 337-V 7138523330
411 1054 607 S SAM HOUSTON HUNTSVILLE TX 77340 4092953971
412 311 3950 VALLEYVIEW LN IRVING TX 75602 2142527866
413 623 1915 S STORY RD IRVING TX 75060 2149865168
414 875 4002 N BELTLINE IRVING TX 75062 2142585944 A101-4922
415 2913 1401 N. BELTLINE IRVING TX 75061 2147903885
416 2919 5401 MAC ARTHUR BLVD. IRVING TX 75038 2145500161
417 3756 10302 I-10 SERVICE RD @ MERCURY JACINTO CITY TX 77029 495-H 7136760009 A504-4850
418 3726 17342 HWY 290 JERSEY VILLAGE TX 77040 409-K 7138961920 A501-4462
419 140 2230 FRY RD @ SAUMS KATY TX 77450 446-U 7134927868
420 1197 20203 KATY FWY KATY TX 77450 486-B 7135788234
421 1464 19202 CLAY RD @ GREENHOUSE KATY TX 77450 446-H 7138591169
422 2805 20250 PARK ROW KATY TX 77449 7134921900
423 2809 22500 FRANZ ROAD KATY TX 77449 7133471504 A501-8442
424 1322 1201 N LITTLE SCHOOL RD KENNENDALE TX 76060 8174835013
425 237 3020 NORTHPARK KINGWOOD TX 77339 297-S 7133608754
426 852 3001 WOODLAND HILLS DR KINGWOOD TX 77339 296-Z 7133584932
427 3736 4003 RUSTIC WOODS DR KINGWOOD TX 77345 297-X 7133601396 A502-4490
</TABLE>
Page 11
<PAGE> 31
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
428 3620 2430 W. MAIN LA MARQUE TX 77568 4099387757 A504-3040
429 3519 521 W MAIN @ 5TH LA PORTE TX 77571 540-X 7134719301
430 3745 10339 FAIRMONT PKWY @ FARRINGTON LA PORTE TX 77571 579-F 7134718766 A504-4840
431 1690 502 FM 332 @ BASSWOOD LAKE JACKSON TX 77566 4092979721 A504-3100
432 3536 102 PLATATION DR LAKE JACKSON TX 77566 4092977137 A504-4593
433 3537 40 CIRCLE WAY @ THAT WAY LAKE JACKSON TX 77566 4092991043 A504-4594
434 2903 8825 JACKSBORO HWY LAKESIDE TX 76135 8172377335
435 136 2705 N DALLAS AVE LANCASTER TX 75134 2142273398
436 2815 101 MEADOW PKWY LEAGUE CITY TX 77573 7133341431
437 3607 5980 FM 518 @ FM 528 LEAGUE CITY TX 77573 657-Q 7135544313
438 2806 6303 HWY 6 MISSOURI CITY TX 77459 7134999521
439 3624 3703 FM 2234 @ QUAIL PK RD MISSOURI CITY TX 77489 610-G 7134377709 A503-4408
440 3757 2203 FM 2234 @ W FUQUA MISSOURI CITY TX 77489 570-Z 7134996353
441 1693 HWY 149 & 105 MONTGOMERY TX 77357 4094494255
442 2852 CAPE CONROE MONTGOMERY TX 77356 4094484349
443 3515 903 EL DORADO NASSUA BAY TX 77058 618-J 7132808588 A504-4553
444 3623 435 EL DORADO @ ZABOLIO NASSUA BAY TX 77058 617-R 7134886669 A504-4552
445 3725 2330 NASA RD 1 NASSUA BAY TX 77058 619-S 7133331277 A504-4555
446 13 FM 725 @ ZIPP RD NEW BRAUNFELS TX 78130 2106290701
447 1696 HWY 75 N & GIBBS NEW WAVERLY TX 77353 4093446953
448 2814 INT S\E CORNER HWY 35\FM 529 OLD OCEAN TX 77463 4096474956
449 3240 4302 MCCULLOUGH @ EL PRADO OLMOS PARK TX 78212 2108226637 A202-4704
450 731 504 S RICHEY PASADENA TX 77506 536-G 7134727141
451 833 4401 BURKE PASADENA TX 77504 577-F 7134875569
452 1100 6335 SPENCER HWY PASADENA TX 77505 538-W 7134870420 A504 3067
453 1241 2520 LAFFERTY PASADENA TX 77502 536-V 7139460970
454 1438 3510 BURKE PASADENA TX 77504 577-A 7139448024
455 2838 3926 COUNTRY ROAD #A PASADENA TX 77505 7139987155
456 3517 901 W HARRIS PASADENA TX 77506 536-L 7134721702 A504-4545
457 3551 3344 SPENCER HWY @ STRAWBERRY PASADENA TX 77506 537-W 7139469280 A504-4782
458 3564 4739 STRAWBERRY PASADENA TX 77507 577-J 7134871466
459 3567 5010 RED BLUFF PASADENA TX 77503 538-W 7134870166 A504-4531
460 3578 632 TATAR PASADENA TX 77506 536-M 7134721832
461 3601 921 E PASADENA FWY PASADENA TX 77502 536-H 7134721838 A504-4537
462 3603 1621 RED BLUFF PASADENA TX 77506 537-J 7134777635 A504-4538
463 3641 2008 SHAVER @ ALLENDALE PASADENA TX 77502 536-U 7134720329 A504-4546
464 3651 3500 FAIRMONT PASADENA TX 77504 577-E 7134870875 A504-4550
465 3654 2204 RED BLUFF @ GRAND PASADENA TX 77506 537-K 7134731725 A504-4539
466 3663 1702 S TATER @ HOUSTON PASADENA TX 77502 536-R 7134752612 A504-4547
</TABLE>
Page 12
<PAGE> 32
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
467 3678 1421 E BELTWAY @ SAN AUGUSTINE PASADENA TX 77503 537-R 7134793460 A504-4535
468 3699 NEC 2201 E SOUTHMORE @ BURKE PASADENA TX 77502 537-N 7134751611 A504-4540
469 3749 550 EAST BELT & GREENSHADOW PASADENA TX 77503 537-M 7134722981 A504-4808
470 1994 3502 E BROADWAY PEARLAND TX 77581 615-K 7134854848
471 2372 826 LEGACY PLANO TX 75252 2145170337
472 2915 2201 LEGENCY DRIVE PLANO TX 75023 2146180688
473 2916 3001 W. SPRING CREEK PKWY PLANO TX 75023 2146180269
474 3213 1318 2ND ST @ COMMERCE PLEASANTON TX 78064 2105694032
475 1679 FM 1314 @ SHORTERS RD PORTER TX 77365 295-D 7133545311
476 2863 3035 PLANTATION DRIVE RICHMOND TX 77469 7133415769 A503-8446
477 3570 1700 FM 1640 @ LAMAR RICHMOND TX 77469 7133415044
478 3609 STATE HWY 227 @ FM 2004 RICHMOND TX 77531 4092653929 A504-4605
479 3634 970 HWY 288 NORTH @ TIMBER DRIVE RICHMOND TX 77531 4092654043
480 1669 5052 AVE H ROSENBERG TX 77441 7133428223
481 2825 1717 AVE H ROSENBERG TX 77471 7132325997
482 2845 3001 AVE H ROSENBERG TX 77471 7133416025
483 3618 2623 1ST ST @ MONSAY ROSENBERG TX 77471 7133415050 A503-4413
484 1391 3601 ROWLETT RD ROWLETT TX 75088 2144755556
485 738 101 LONGHORN RD SAGINAW TX 76148 8172322541
486 2912 1101 N. SAGINAW BLVD. SAGINAW TX 76179 8172321542
487 9 9523 FREDERICKSBURG SAN ANTONIO TX 78240 2106921206 A202-4940
488 24 10347 NACOGDOCHES SAN ANTONIO TX 78217 2106544735
489 44 6720 MONTGOMERY SAN ANTONIO TX 78239 2106541077
490 69 2502 AUSTIN HWY SAN ANTONIO TX 78218 2106539439
491 153 1514 S NEW BRAUNFELS SAN ANTONIO TX 78210 2105321181
492 161 1515 N. WALNUT SAN ANTONIO TX 78130 2106252739
493 167 9209 ZARZAMORA SAN ANTONIO TX 78224 2109231970
494 172 803 WEST AVE SAN ANTONIO TX 78201 2107349911
495 179 2502 S. GEN. MCMULLEN SAN ANTONIO TX 78228 2104326322
496 183 3503 WURZBACH SAN ANTONIO TX 78238 2106803544 A202-4939
497 207 10402 IH 35 NORTH SAN ANTONIO TX 78233 2106556124
498 208 10029 SAN PEDRO SAN ANTONIO TX 78216 2103427522
499 215 5995 CALLAGHAN RD SAN ANTONIO TX 78228 2105230239
500 218 3255 HARRY WURZBACH SAN ANTONIO TX 78209 2108264586
501 219 3309 HILLCREST SAN ANTONIO TX 78201 2107327716
502 221 1616 MCCULLOUGH SAN ANTONIO TX 78212 2102236123
503 328 8620 FREDERICKSBURG SAN ANTONIO TX 78240 2106910103 A202-4951
504 422 8342 BROADWAY SAN ANTONIO TX 78209 2108262061
505 467 10155 FM 471 WEST SAN ANTONIO TX 78238 2105230324 A202-4953
</TABLE>
Page 13
<PAGE> 33
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
506 495 103 BANDERA SAN ANTONIO TX 78228 2107326170
507 520 3945 EISENHAUER SAN ANTONIO TX 78217 2106561373
508 556 5935 RITTIMAN SAN ANTONIO TX 78218 2106546375
509 559 6735 MEDINA BASE RD SAN ANTONIO TX 78242 2106731049
510 566 2523 OAKGATE SAN ANTONIO TX 78230 2106969811
511 619 2400 THOUSAND OAKS SAN ANTONIO TX 78232 2104901590 A202-4952
512 620 707 FRIO CITY RD SAN ANTONIO TX 78207 2102231276
513 621 1303 CALLAGHAN SAN ANTONIO TX 78228 2106846155
514 667 1763 S. GEN MCMULLEN SAN ANTONIO TX 78228 2104324225
515 726 2409 NW 36TH ST SAN ANTONIO TX 78228 2104323050
516 765 1902 RIGSBY SAN ANTONIO TX 78210 2103336556
517 776 2001 BROADWAY SAN ANTONIO TX 78215 2102299811
518 816 17750 JUDSON SAN ANTONIO TX 78247 2106370848
519 919 1302 GARDINA SAN ANTONIO TX 78201 2107329451
520 920 10008 BROADWAY SAN ANTONIO TX 78217 2108227370
521 953 7203 BLANCO SAN ANTONIO TX 78216 2103405562 A202-4941
522 1009 841 BITTERS SAN ANTONIO TX 78216 2104948425 A202-4938
523 1011 7802 CALLAGHAN RD SAN ANTONIO TX 78229 2103425064 A202-4942
524 1046 6543 CALLAGHAN SAN ANTONIO TX 78229 2106144597
525 1074 7526 BANDERA SAN ANTONIO TX 78228 2106473992
526 1085 900 W. HILDEBRAND SAN ANTONIO TX 78201 2107328017
527 1103 12011 WEST AVE SAN ANTONIO TX 78216 2103419180
528 1139 2562 JACKSON KELLER SAN ANTONIO TX 78230 2103415268
529 1147 506 AUSTIN HWY SAN ANTONIO TX 78209 2108227486
530 1155 6480 BABCOCK SAN ANTONIO TX 78238 2106978059 A202-4945
531 1174 12070 BLANCO SAN ANTONIO TX 78216 2103423190
532 1184 5050 SW MILITARY DR SAN ANTONIO TX 78242 2106751030 A202-4943
533 1189 5980 PEARSALL RD SAN ANTONIO TX 78242 2106234490
534 1305 8011 MIDCROWN SAN ANTONIO TX 78218 2106539498
535 1318 4070 PERRIN CENTRAL SAN ANTONIO TX 78230 2106547652 A202-4950
536 1386 5494 BABCOCK RD SAN ANTONIO TX 78240 2106910128
537 1411 3943 THOUSAND OAKS SAN ANTONIO TX 78217 2106539641
538 1426 2444 BABCOCK SAN ANTONIO TX 78229 2106145038
539 1427 8309 BANDERA SAN ANTONIO TX 78228 2106840760
540 1436 8303 MCCULLOUGH SAN ANTONIO TX 78216 2103491391
541 1467 9022 MARBACH RD SAN ANTONIO TX 78245 2106744120
542 1468 3003 BROADWAY SAN ANTONIO TX 78209 2108283867 A202-4944
543 1505 7979 FREDERICKSBURG SAN ANTONIO TX 78229 2106142949 A202-4946
544 1516 5775 RAY ELLISON DR SAN ANTONIO TX 78242 2106730880
</TABLE>
Page 14
<PAGE> 34
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
545 1520 303 S. SANTA ROSA BLVD SAN ANTONIO TX 78207 2102275125
546 1522 4251 PLEASANTON SAN ANTONIO TX 78221 2109230074
547 1530 4739 RAYBON SAN ANTONIO TX 78213 2106551244
548 1532 9126 PERRIN BEITEL SAN ANTONIO TX 78217 2106550498
549 1533 8511 STARCREST SAN ANTONIO TX 78217 2106551140
550 1542 2023 MCCULLOUGH SAN ANTONIO TX 78212 2107329959
551 1549 8748 WURZBACH SAN ANTONIO TX 78240 2106143709
552 1553 14103 BLANCO RD SAN ANTONIO TX 78284 2104926475
553 1554 10393 SAHARA SAN ANTONIO TX 78216 2103444380
554 1561 9200 BROADWAY SAN ANTONIO TX 78217 2108229440
555 1564 11050 US HWY 181 S SAN ANTONIO TX 78221 2106332649
556 1569 11606 PARLIAMENT SAN ANTONIO TX 78213 2103447150 A202-4948
557 1574 1743 FREDERICKSBURG SAN ANTONIO TX 78201 2107358760
558 1580 3098 E. COMMERCE SAN ANTONIO TX 78220 2102267413
559 1581 5439 EVERS RD SAN ANTONIO TX 78238 2106801210 A202-4947
560 1583 11050 IH 35 NORTH SAN ANTONIO TX 78233 2106535042
561 1586 606 OLD HWY 90 W SAN ANTONIO TX 78237 2104323289
562 1600 3151 S. WW WHITE RD SAN ANTONIO TX 78222 2103332201
563 1601 3603 S.E. MILITARY DR SAN ANTONIO TX 78223 2103332423
564 1626 2903 E. SOUTHCROSS SAN ANTONIO TX 78223 2105323025
565 1644 4698 SEGUIN RD SAN ANTONIO TX 78219 2106612224
566 1806 1115 SAN PEDRO AVE SAN ANTONIO TX 78212 2102299442 A202-4954
567 1900 11902 STARCREST DR SAN ANTONIO TX 78247 2104944529
568 2001 3003 GOLIAD SAN ANTONIO TX 78223 2103332438
569 2086 5811 SAN PEDRO AVE SAN ANTONIO TX 78212 2107328546
570 2113 9685 MARBACH ROAD SAN ANTONIO TX 78245 2106744721
571 2115 9350 FARM ROAD 471 WEST SAN ANTONIO TX 78251 2105217333
572 2327 1203 AUSTIN HIGHWAY SAN ANTONIO TX 78209 2108267728
573 2358 8214 CULEBRA SAN ANTONIO TX 78251 2105235111
574 2377 9865 POTRANCO SAN ANTONIO TX 78251 2106806666
575 3201 2347 VANCE JACKSON @ MINK SAN ANTONIO TX 78213 2103413500 A202-4735
576 3203 382 VALLEY HI @ SPRINGVALE SAN ANTONIO TX 78227 2106740630
577 3206 1822 CINCINATI @ WILSON SAN ANTONIO TX 78201 2107329060
578 3207 4214 BRIARGLEN @ PERRIN-BIETEL SAN ANTONIO TX 78218 2106566427 A202-4710
579 3210 202 S TRINITY ST @ BUENA VISTA SAN ANTONIO TX 78207 2102231196
580 3211 7714 ZARZAMORA SAN ANTONIO TX 78224 2109238947
581 3212 619 W MALONE @ THEO @ I-35 SAN ANTONIO TX 78225 2105328493
582 3214 571 ELEANOR @ NEW BRAUNFELS SAN ANTONIO TX 78209 2108269509
583 3217 1538 BROADWAY @ NACOGDOCHES SAN ANTONIO TX 78209 2108285385
</TABLE>
Page 15
<PAGE> 35
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
584 3221 3440 ST MARY'S @ MULBERRY ST SAN ANTONIO TX 78212 2107338977 A202-4687
585 3222 533 HACKBERRY @ NEVADA SAN ANTONIO TX 78203 2105337047
586 3224 531 ISOM RD SAN ANTONIO TX 78216 2103424759 A202-4706
587 3226 3119 COMMERCIAL SAN ANTONIO TX 78221 2109248904
588 3227 451 HOT WELLS SAN ANTONIO TX 78223 2105331091
589 3229 11930 VANCE JACKSON SAN ANTONIO TX 78230 2106990312 A202-4749
590 3230 2908 S NEW BRAUNFELS @ STEVES SAN ANTONIO TX 78210 2105337046
591 3231 4712 SAN PEDRO @ CLOWER SAN ANTONIO TX 78212 2108261973
592 3234 5108 RANDOLPH BLVD @ CRESTWAY SAN ANTONIO TX 78233 2106538553 A202-4711
593 3235 1439 SOUTHCROSS @ HACKBERRY SAN ANTONIO TX 78223 2105321093
594 3238 3643 SW MILITARY @ BYNUM SAN ANTONIO TX 78211 2109249231
595 3239 15184 JUDSON RD @ STAHL SAN ANTONIO TX 78247 2106539398 A202-4716
596 3241 4069 MEDICAL DR @ FAIRHAVEN DR SAN ANTONIO TX 78229 2106921102 A202-4748
597 3242 BLANCO @ JACKSON-KELLER SAN ANTONIO TX 78216 2103401663 A202-4736
598 3244 15311 O'CONNOR @ STAHL SAN ANTONIO TX 78247 2106548425
599 3246 ULIBEAU @ OLD TEZEL SAN ANTONIO TX 78250 2106809593 A202-4745
600 3247 3216 SW MILITARY @ SOMERSET SAN ANTONIO TX 78221 2109232468
601 3248 2448 HARRY WURZBACK @ CORINNE SAN ANTONIO TX 78209 2108284486 A202-4709
602 3249 7103 W MARTIN @ ZARZAMORA SAN ANTONIO TX 78207 2104322602
603 3250 12201 TOEPPERWEIN RD @ WILDERNESS SAN ANTONIO TX 78233 2105908442
604 3251 SWC ROOSEVELT @ SOUTHCROSS SAN ANTONIO TX 78214 2105344188 A202-4697
605 3252 107 BABCOCK @ FREDERICKSBURG RD SAN ANTONIO TX 78201 2107321290
606 3253 5524 SW MILITARY @ FIVE PALMS SAN ANTONIO TX 78242 2106743590 A202-4729
607 3256 6067 DEZAVALA RD @ AUTUMN VISTA SAN ANTONIO TX 78249 2106967496
608 3257 8565 BABCOCK RD @ SUNSET HAVEN SAN ANTONIO TX 78249 2106908644 A202-4752
609 3258 12303 WETMORE RD @ RIDGE COUNTRY SAN ANTONIO TX 78247 2104946164 A202-4718
610 3261 8318 JONES-MALTSBERGER @ CHULIE SAN ANTONIO TX 78216 2103424909 A202-4707
611 3263 5214 CALLAGHAN RD @ BANDERA RD SAN ANTONIO TX 78228 2104320136 A202-4334
612 3265 7575 CULEBRA RD @ INGRAM SAN ANTONIO TX 78251 2105209646
613 3266 FM 78 @ RITTIMAN RD SAN ANTONIO TX 78218 2106619655
614 3268 17030 NEW BRAUNFELS @ I-35 SAN ANTONIO TX 78208 2102235503
615 3269 WALZEN RD @ GIBBS SPRAWL SAN ANTONIO TX 78219 2106370208
616 3270 12802 JONES MALTBERGER @ BUDDING SAN ANTONIO TX 78247 2104962873
617 3274 1503 MILITARY @ COMMERCIAL SAN ANTONIO TX 78221 2109246655
618 3275 5411 GRISSOM @ TIMBERHILL SAN ANTONIO TX 78238 2106478743 A202-4820
619 3277 8108 FREDERICKSBURG @ DATA POINT SAN ANTONIO TX 78229 2106143714 A202-4855
620 3608 13405 HWY 6 AVE @ AVE T SANTA FE TX 77510 4099251023
621 213 17599 IH-35 NORTH SCHERTZ TX 78154 2106519536
622 2858 1802 SECOND STREET SEABROOK TX 77586 7134745658
</TABLE>
Page 16
<PAGE> 36
Exhibit "A"
The First Supplement
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Phone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
623 3667 3324 NASA RD 1 SEABROOK TX 77586 620-N 7133263177 A504-4559
624 3571 320 N CIRCLE @ HWY 36 SEALY TX 77474 4098857291
625 1269 HWY 59 AND SHOEMAKER SHEPHERD TX 77371 4096286345
626 3512 902 ALLEN GENOA SOUTH HOUSTON TX 77587 576-C 7139472824 A504-4371
627 632 3130 SAWDUST RD SPRING TX 77373 7133674703
628 1694 28727 HWY 75 N SPRING TX 77373 252-A 7133672298
629 3604 3232 SPRING STUBNER @ MEADOWHILL SPRING TX 77373 291-Q 7133501974 A501-4484
630 3628 25444 ALDINE WESTFIELD SPRING TX 77373 292-V 7133502066 A502-4485
631 3629 2848 TAILING VINE SPRING TX 77373 333-B 7133502035 A502-4486
632 3760 5626 TRESCHWIG @ CYPRESSWOOD SPRING TX 77373 334-A 7138214648 A501-4828
633 3633 2455 S MAIN @ KINGSWAY STAFFORD TX 77477 569-R 7134990887 A503-4411
634 2859 1050 ELDRIDGE SUGAR LAND TX 77478 7132402517 A503-8444
635 2865 3303 HWY 6 SUGAR LAND TX 77478 7139801153 A503-8447
636 1170 16303 BELLAIRE BLVD SUGARLAND TX 77478 527-F 7134980001
637 1602 13722 TOWN WEST SUGARLAND TX 77478 568-N 7134914833
638 3561 AVE A @ HWY 332 SURFSIDE TX 77541 4092331864 A504-4598
639 3668 204 MAIN (HWY 524) @ 2ND (HWY 1459) SWEENEY TX 77480 4095483266
640 1066 1321 TEXAS AVE TEXAS CITY TX 77590 4099458424
641 1470 2501 25TH AVENUE N TEXAS CITY TX 77590 4099455344 A504-3003
642 2843 8500 FM 1764 TEXAS CITY TX 77591 4099356281
643 3534 2904 PALMER HWY TEXAS CITY TX 77590 4099450301 A504-4563
644 3602 2502 TEXAS AVE @ LOGAN TEXAS CITY TX 77590 4099457399
645 1116 5208 S COLONY THE COLONY TX 75067 2146255652 A109-4930
646 2375 6801 MAIN THE COLONY TX 75056 2146250959
647 6 27110 GLENLOCH DR THE WOODLANDS TX 77380 251-J 7133677093
648 1080 1480 SAWDUST RD THE WOODLANDS TX 77380 251-U 7133671331
649 1167 25226 GROGANS MILL RD THE WOODLANDS TX 77380 251-V 7133674895
650 1277 29926 TOMBALL PKWY TOMBALL TX 77375 288-B 7133512613
651 1678 8435 FM 2920 TOMBALL TX 77375 290-N 7133705050
652 3558 615 W MAIN @ POPLAR TOMBALL TX 77373 288-G 7133515712
653 3692 28531 FM 149 @ FM 2920 TOMBALL TX 77375 288-K 7133516320 A501-4480
654 2114 7330 KITTY HAWK ROAD UNIVERSAL CIT TX 78239 2105904531
655 3225 821 PAT BOOKER UNIVERSAL CIT TX 78144 2106580272
656 2901 6871 RUFE SNOW WATAUGA TX 75137 8176569748
657 362 810 NASA ROAD 1 WEBSTER TX 77598 658-B 7133325931 A504-3052
658 489 502 EL DORADO WEBSTER TX 77598 617-R 7134883203 A504-4891
659 882 17310 HWY 3 WEBSTER TX 77598 618-X 7133321680 A504-3051
660 2849 2202 N. RICHMOND WHARTON TX 77488 4095321486
661 1232 100 N DANVILLE WILLIS TX 77378 4098562878 A501-3050
</TABLE>
Page 17
<PAGE> 37
EXHIBIT "B"
SPECIFIED MARKET AREAS
Bexar County
Collin County
Comal County
Dallas County
Denton County
Fort Bend County
Galveston County
Harris County
Hays County
Montgomery County
Tarrant County
Travis County
Williamson County
<PAGE> 38
Exhibit "C"
Initial List of Community
Market Stores
<TABLE>
<CAPTION>
Count Store Address City ST ZIP Key Map Telehone ATM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2848 808 S. VELASCO ANGLETON TX 77515 4098491620
2 2851 728 W. MULBERRY ON HWY 3 ANGLETON TX 77515 4098491443
3 3535 1201 E CEDAR @ HWY35 ANGLETON TX 77515 4098493302
4 3569 528 S ANDERSON @ KIBER ANGLETON TX 77515 4098496028 A504-4589
5 3584 3402 E MULBERRY @ HOSPITAL ANGLETON TX 77515 4098496885 A504-4590
6 3653 100 N VELASCO @ E WILKINS ANGLETON TX 77515 4098492981 A504-4591
7 3655 DOWNING @ HENDERSON ANGLETON TX 77515 4098494023 A504-4592
8 1243 610 CORLEY CTR CLEVELAND TX 77327 7135927123
9 1258 905 N WASHINGTON CLEVELAND TX 77327 7135925540
10 2394 445 SOUTHLINE CLEVELAND TX 77327 7135922609
11 3583 101 S HWY 288 @ STATTON RIDGE RD CLUTE TX 77531 4092653957 A504-4595
12 3685 101 E MAIN CLUTE TX 77531 4092651102 A504-4596
13 2847 331 S. AVE A FREEPORT TX 77541 4092337413
14 3539 903 SECOND ST @ CEDAR FREEPORT TX 77541 4092333931
15 3684 1922 FOURTH ST @ HWY 288 FREEPORT TX 77451 4092331254 A504-4599
16 3586 1105 13TH @ WASHINGTON HEMPSTEAD TX 77445 4098266339
17 3675 946 AUSTIN ST @ HWY 290 HEMPSTEAD TX 77445 4098266046
18 1690 502 FM 332 @ BASSWOOD LAKE JACKSON TX 77566 4092979721 A504-3100
19 3536 102 PLATATION DR LAKE JACKSON TX 77566 4092977137 A504-4593
20 3537 40 CIRCLE WAY @ THAT WAY LAKE JACKSON TX 77566 4092991043 A504-4594
21 3608 13405 HWY 6 AVE @ AVE T SANTA FE TX 77510 4099251023
22 3571 320 N CIRCLE @ HWY 36 SEALY TX 77474 4098857291
23 1269 HWY 59 AND SHOEMAKER SHEPHERD TX 77371 4096286345
24 3668 204 MAIN(HWY 524) @ 2ND (HWY 1459) SWEENEY TX 77480 4095483266
25 2849 2202 N. RICHMOND WHARTON TX 77488 4095321486
</TABLE>
Page 1
<PAGE> 39
EXHIBIT D
NationsBank Marketing Efforts
(See pages 2 and 3 of Exhibit D for further detail)
* * * *
<PAGE> 40
Exhibit "D"
(Page 2)
* * * *
<PAGE> 41
Exhibit "D"
(Page 3)
* * * *
<PAGE> 42
EXHIBIT "E"
<TABLE>
<S> <C> <C> <C>
48.75" 48.75"
|___________________| |________________________|
_ _____________________ __________________________
| | | | | AE 112/113 EXTRUDED ALUMINUM
| | | | | CABINETS (D/F OR S/F) PAINTED
| | | | | "NATIONS BANK" GREY - INTERNALLY
| | NationsBank | | NationsBank | ILLUMINATED WITH 800 M.A. LAMPS
30"| | | | |
| | 24 Hour | | ATM 24 Hour | FORMED LEXAN FACES WITH FLAT
| | Banking | | Banking | SECOND SURFACE COPT
| | | | |
| | | | | "NATIONS" - NB BLUE
- _____________________ __________________________
OPTION 1 OPTION 2 "BANK" - NB RED
ALL OTHER COPY AND GRAPHICS
TO BE BLACK
</TABLE>
ELEVATION 1" = 1'-0"
================================================
<PAGE> 1
EXHIBIT 99.18
CONFORMED ORDER
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: )
SCHEPPS FOOD STORES, INC. )
STOP N GO MARKETS )
OF GEORGIA, INC. )
NATIONAL CONVENIENCE )
STORES INCORPORATED )
STOP N GO MARKETS )
OF TEXAS, INC. )
SECOND NCS REALTY COMPANY )
THIRD NCS REALTY COMPANY )
FOURTH NCS REALTY COMPANY )
SIXTH NCS REALTY COMPANY )
SEVENTH NCS REALTY COMPANY ) CASE NOS. 91-49816-H2-11,
NINTH NCS REALTY COMPANY ) 91-49818-H3-11 THROUGH
EIGHTH NCS REALTY COMPANY ) 91-49835-H2-11
TENTH NCS REALTY COMPANY )
ELEVENTH NCS REALTY COMPANY ) JOINTLY ADMINISTERED UNDER
TWELFTH NCS REALTY COMPANY ) CASE NO. 91-49816-H4-11
THIRTEENTH NCS REALTY COMPANY ) (JUDGE GREENDYKE)
KEMPCO PETROLEUM COMPANY )
HOT STOP FOODS, INC. )
TEXAS SUPER DUPER MARKETS, INC. )
JAY'S WASHATERIAS, INC. )
--------------------------------
ORDER PROVIDING FOR CLOSING CHAPTER 11 CASES
At Houston, in said District, came on for consideration the entry of
an Order providing for final claim allowance and distribution procedures and
for closing the Chapter 11 Cases; and the Court, having reviewed this Order*,
and the representations and argument of counsel, is of the opinion that this
Order should be approved and these Cases closed; it is accordingly
ORDERED that, if and to the extent allowed, the proof of claim of
Phoenix Leasing Incorporated ("Phoenix") which was
__________________________________
*Nothing in this order is intended by me to modify the terms of the plan
or the confirmation order which, in the event of conflict with the terms
hereof, shall prevail.
<PAGE> 2
heretofore disallowed is hereafter allowed, such claim is classified as a Class
D-3-C Claim, and Debtors will make distributions to Phoenix pursuant to the
Debtors' Revised Fourth Amended and Restated Joint Plan of Reorganization (the
"Plan"), (The capitalized terms herein shall have the meanings stated in the
Plan.); and it is further
ORDERED that, upon the determination of the amounts of the Proofs of
Claim No. 5036 of Enrique Martinez, individually and as next friend of Prisella
Rangel (sometimes called "Gisela Rangel"), a minor, No. 1449 of Felix and Maria
Rangel, individually and as next friends of Prisella Rangel (sometimes called
"Gisela Rangel"), a minor, and No. 1465 of Felix and Maria Rangel,
individually and as next friends of Prisella Rangel (sometimes called "Gisela
Rangel"), a minor, such claims are classified as Class D-3-C Claims and Debtors
will make distributions under the Plan up to the total deductible amount of
$500,000.00, after such claims are resolved under the Settlement Procedures
provided for in the Order Granting Revised Debtors' Amended Motion to Establish
Procedure for (i) Settlement of Personal Injury and Property Damage Claims and
(ii) Filing Motions to Lift Stay by Such Claimants entered herein on November
6, 1992; and it is further
ORDERED that upon the determination of the amount, if any, of each of
the following claims in the state courts, Debtors
-2-
<PAGE> 3
will make distributions to such claimants of NCS stock as Class D-3-C creditors
pursuant to the Plan:
<TABLE>
<CAPTION>
Claimant SMK Claim Number
-------- ----------------
<S> <C>
Cathie Carbajal 1363
Bakhtiar Faridi 6205
Duong Nguyen 6227;
</TABLE>
and it is further
ORDERED that NCS shall make final distribution to the Class D-3-C
Creditors of all the stock to be issued to Class D-3-C without any provision
for issuing stock to the Claimants described in Exhibit "A" attached hereto,
since NCS, as stated in Section 17.3 of the Plan, presumes that such claims
will be paid by AIG insurance company and that Claimants will not make claims
in this case; and it is further
ORDERED that NCS shall make final distribution to the Class D-3-C
Creditors of all the stock to be issued to Class D-3-C without any provision
for issuing stock to the Claimants described in Exhibit "B" attached hereto for
the insured part of the claim, but NCS will make distributions to such
claimants to the extent of the deductible amount of the liquidated claim, since
NCS, as stated in Section 17.3 of the Plan, presumes that such claims, to the
extent each of them exceeds the deductible, shall be paid by Travelers and the
Claimants shall not make claims in this case for the insured part of the
claims; and it is further
-3-
<PAGE> 4
ORDERED that, as the remaining unresolved proofs of claim herein are
resolved, NCS shall cause the remaining stock allocated for Class D-3-C claims
under the Plan to be distributed to the Claimants holding the hereafter allowed
claims, and interim and a final distribution of the stock allocated to Class
D-3-C shall be made as provided in the Plan to the holders of Allowed Claims in
Class D-3-C; and it is further
ORDERED that the captioned Chapter 11 Cases are closed and that from
time to time, as additional matters, such as the protection of the tax loss
carryforwards of NCS as referred to in Section 29.2 of the Plan, may come up
that may require the reopening of one or more of the Debtors' cases and action
by this Court, one or more of the Debtors or other interested parties may ask
the Court to reopen its case, for cause, in order to resolve such matter; and
it is further
ORDERED that the attorneys for the Debtors shall serve by United
States mail a conformed copy of this Order within 24 hours after the signing of
this Order on the claimants and other parties described herein and on the
attached Service List at the addresses on such Service List and that this Order
shall become final and nonappealable as to all parties herein except as to any
party who may file and serve on Debtor's attorneys an objection (motion to
reconsider with cause to be shown) to this Order within ten (10) days from the
date this Order is signed, and as to such objection, this Order shall be set
down for hearing/reconsideration.
-4-
<PAGE> 5
SIGNED this 6th day of September, 1995.
/s/ WILLIAM GREENDYKE
------------------------------
UNITED STATES BANKRUPTCY JUDGE
APPROVED AS TO FORM:
SHEINFELD, MALEY & KAY, P.C.
By: /s/ ROBERT A. DEWITT
--------------------------------
Robert A. DeWitt
Texas Bar No. 05670000
Craig J. Litherland
Texas Bar No. 12415350
Edward L. Ripley
Texas Bar No. 16935950
1001 Fannin, Suite 3700
Houston, Texas 77002
(713) 658-8881
(713) 658-9756 (fax)
ATTORNEYS FOR DEBTORS
-5-
<PAGE> 6
SERVICE LIST
COUNSEL TO THE SOUTHLAND CORPORATION:
Todd S. Barton, Esq.
Carrington, Coleman, Sloman & Blumenthal
200 Crescent Court, Suite 1500
Dallas, Texas 75201
COUNSEL FOR THE AIG COMPANIES:
Peter S. Gold, Esq.
Zalkin, Rodin & Goodman
750 Third Avenue
New York, NY 10017
TEXAS COUNSEL FOR THE AIG COMPANIES:
Don F. Russell, Esq.
Hays, McConn, Rice & Pickering
1200 Smith Street, Suite 400
Houston, Texas 77002
COUNSEL FOR THE TRAVELERS INSURANCE COMPANY:
Harold S. Horwich, Esq.
Hebb & Gitlin, a Professional Corporation
One State Street
Hartford, CT 06103-3178
TEXAS COUNSEL FOR THE TRAVELERS INSURANCE COMPANY:
Matthew Hoffman, Esq.
Hoffman & Schrader, a Professional Corporation
4600 First City Tower
1001 Fannin
Houston, Texas 77002
AIG CLAIMANTS:
Kelly Blaylock
c/o Thomas J. Leibowitz, Esq.
Leibowitz & Leibowitz, L.L.P.
10555 Northwest Freeway, Suite 216
Houston, Texas 77092
<PAGE> 7
Robert Brooks
c/o George LeGrand
Flowers, Davis & LeGrand
2511 North St. Mary's Place
San Antonio, Texas 78212
Robert Brooks
c/o Robert P. Wilson
6655 First Park Ten
Suite 250
San Antonio, Texas 78213
Gustavo and Rosa Davilla
c/o Daniel Rutherford, Esq.
Law Office of Daniel Rutherford
825 S. St. Mary's Street
San Antonio, Texas 78205-3408
Ginger Annette Martin
c/o O. Glenn Weaver, Esq.
O. Glenn Weaver and Associates
5525 N. MacArthur Blvd.
Irving, Texas 75038
Ginger Annette Martin
c/o Chris Payne, Esq.
Law Office of Frank L. Branson
18th Floor, Highland Park Place
4514 Cole Avenue
Dallas, Texas 75205-4168
Robbie Jan McClurkan
c/o O. Glenn Weaver, Esq.
O. Glenn Weaver and Associates
5525 N. MacArthur Blvd.
Suite 510
Irving, Texas 75038
Robbie Jan McClurkan
c/o Chris Payne, Esq.
Law Office of Frank L. Branson
18th Floor, Highland Park Place
4514 Cole Avenue
Dallas, Texas 75205-4168
Patrick Miller
c/o William E. Ryan, Esq.
5311 Kirby Drive, Suite 210
Houston, Texas 77005-1348
<PAGE> 8
Michael Perry
13431 Casstillian
Houston, Texas 77015
Michael Perry
c/o Michael P. Morris, Esq.
Tekell, Book, Matthews & Limmer, L.L.P.
3600 Two Houston Center
909 Fannin Street
Houston, Texas 77010
Luis Rafael Ramos
c/o Thomas J. Leibowitz, Esq.
Leibowitz & Leibowitz, L.L.P.
10555 Northwest Freeway, Suite 216
Houston, Texas 77092
TRAVELERS CLAIMANTS:
Raul Victor Alvarado
c/o Christa Samaniego
Law Offices of Christa Samaniego
103 Ashby
San Antonio, Texas 78212
Loren Chapman
c/o James P. Thompson, Esq.
10909 Sabo Rd., S. 228
Houston, Texas 77089
Loren Chapmen
c/o John C. Allen, Esq.
1225 Two Houston Center
Houston, Texas 77010
Shawn Michael Donahue
c/o John Q. Adams, Esq.
200 E. Katella Avenue
Orange, CA 92667
Shawn Michael Donahue
c/o Barbara Rogers, Esq.
13430 N.W Expressway, Suite 205
Houston, Texas 77040
Shawn Michael Donahue
c/o Stephen D. Statham, Esq.
Thomas Clark & Associates
2323 S. Shepherd, #1004
Houston, Texas 77019
<PAGE> 9
Enrique Martinez
c/o Lennon C. Wright, Esq.
Hugh J. Howerton, Esq.
Law Offices of Lennon C. Wright
1150 Two Houston Center
Houston, Texas 77010
Felix and Maria Rangel
c/o Thomas K. Brown, Esq.
James Huguenard, Esq.
Fisher, Gallagher & Lewis, L.L.P.
1000 Louisiana
70th Floor, First Interstate Bank Plaza
Houston, Texas 77002
Felix and Maria Rangel
c/o Joseph M. Van Nest
Ross, Banks, May, Cron & Cavin, L.L.P.
2 Riverway, Suite 700
Houston, Texas 77056
Vera Sanford
c/o Gregory W. Canfield, Esq.
111 Soledad, Suite 850
San Antonio, Texas 78205
Mike Wilson
c/o Robert B. Scapa, Esq.
Law Offices of Scapa & Brown
16000 Ventura Blvd., Suite 1200
Encino, CA 91436
OTHER CLAIMANTS NAMED IN MOTION:
Phoenix Leasing Incorporated
c/o Larry M. Lesh, Esq.
Mark H. Ralston, Esq.
Locke Purnell Rain Harrell
2200 Ross Avenue, Suite 2200
Houston, Texas 75201-6776
Phoenix Leasing Incorporated
c/o Robert B. Kaplan
Karen E. Kerner
Frandzel & Share, a Law Corporation
100 Pine Street, 26th Floor
San Francisco, CA 94111-5212
Cathie Carbajal
c/o J. Vince Hightower
314 E. Commerce, Suite 600
San Antonio, Texas 78205
<PAGE> 10
Cathie Carbajal
c/o Scott Radke
411 South Presa
San Antonio, Texas 78205
Bakhtiar Faridi
c/o Spero Klonis
7322 SW Freeway, Suite 1100
Houston, Texas 77074
Duong Nguyen
c/o Alexander B. Klein, III
Stephens & Stephens, L.L.P.
520 Post Oak Blvd, Suite 600
Houston, Texas 77027
<PAGE> 11
EXHIBIT "A"
Proofs of Claim Covered by AIG Insurance
<TABLE>
<CAPTION>
SM&K Claim No. Claimant
-------------- --------
<S> <C>
6354 Blaylock, Kelly
0180 Brooks, Robert
0324 Davilla, Gustavo & Rosa
0766 Martin, Ginger Annette
0780 McClurkan, Robbie Jan
0810 Miller, Patrick
5954 Perry, Michael
6355 Ramos, Luis
</TABLE>
<PAGE> 12
EXHIBIT "B"
Proofs of Claim Covered by Travelers Insurance
<TABLE>
<CAPTION>
SM&K Claim No. Claimant
-------------- --------
<S> <C>
0038 Alvarado, Raul Victor
6318 Chapman, Loren
6295 Donahue, Shawn Michael
5036 Martinez, Enrique, individually and
as next friend of Prisella Rangel
(sometimes called "Gisela Rangel"),
a minor
1449 Rangel, Felix & Maria, individually
(May be duplicative and as next friends of Gisela Rangel
of SM&K Claim No. (sometimes called "Prisella Rangel"),
1465) a minor
1465 Rangel, Felix & Maria, individually
and as next friends of Gisela Rangel
(sometimes called "Prisella Rangel"),
a minor
6270 Sanford, Vera
1343 Wilson, Mike
</TABLE>
<PAGE> 1
EXHIBIT 99.19
$194,717.70 August 31, 1995
Houston, Texas
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, V. H. Van Horn ("Maker"),
unconditionally promises to pay to the order of National Convenience Stores
Incorporated, a Delaware corporation ("Payee"), at 100 Waugh Drive, Houston,
Texas 77007 ("Holder"), the principal sum of One Hundred Ninety-Four Thousand
Seven Hundred Seventeen and 70/100 ($194,717.70) Dollars in legal and lawful
money of the United States of America, with interest on the unpaid balance from
the date hereof until maturity at the rate of nine percent (9%) per annum. The
principal of this Promissory Note is payable on August 31, 1996. Earned
interest then accrued and unpaid is due and payable beginning October 1, 1995,
and thereafter on the first day of each month until the principal amount of
this Promissory Note is paid in full. All earned interest then accrued and
unpaid on, and all principal of, this Promissory Note shall be due and payable
in full on August 31, 1996.
Each payment shall be credited first to the payment of accrued and
unpaid interest and the remainder on the unpaid principal. Maker reserves the
right to repay without penalty the entire principal of this Promissory Note at
any time prior to maturity by paying the entire principal balance hereof with
accrued interest to the date of prepayment.
Should default be made in payment of any installment of interest or
the payment of principal as the same becomes due and payable, the entire
indebtedness evidenced hereby shall become immediately due and payable at the
option of the Holder of this Promissory Note. Failure to exercise said option
shall not constitute a waiver on the part of Holder to exercise the same at any
other time. If default is made in the payment of this Promissory Note and it
is placed in the hands of an attorney for collection, or collected through
probate or bankruptcy proceedings, or if suit is brought on this Promissory
Note, Maker agrees to pay all reasonable out-of-pocket expenses incurred by
Holder in connection therewith, including at least ten (10%) percent of
interest and principal then owing as reasonable attorney's fees, all of which
shall become part of the principal hereof.
All past due principal and interest on this Promissory Note shall bear
interest at the rate per annum on a year of 365 or 366 days, as the case may
be, which shall be equal to the maximum rate permitted by applicable law.
No provisions of this Promissory Note shall require the payment or
permit the collection of interest in excess of the maximum permitted by
applicable law.
Maker and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
notice of intention to accelerate, protest and notice of protest and diligence
in collecting and bringing of suit
PAGE 1 OF 3 PAGES
<PAGE> 2
against any party hereto, and agree to all renewals, extensions or partial
payments hereon and to any release or substitution of security heretofore in
whole or in part, with or without notice, before or after maturity.
This Promissory Note is in renewal, replacement and rearrangement of
(i) that certain Promissory Note dated April 20, 1994, in the original stated
principal amount of $225,000.00 executed by Maker and payable to the order of
Payee, as amended by that certain Amendment to Promissory Note dated May 2,
1994 (such Promissory Note, as amended, being referred to herein as the
$225,000 Note"), and (ii) that certain Promissory Note dated May 2, 1994, in
the original stated principal amount of $75,000.00 executed by Maker and
payable to the order of Payee (such Promissory Note being referred to herein as
the "$75,000 Note" and the $225,000 Note and the $75,000 Note being
collectively referred to herein as the "Prior Notes"). Payee acknowledges and
states that all amounts of principal and interest, and all other amounts, due
and owing under the Prior Notes are now evidenced by the principal amount of
this Promissory Note and that the Prior Notes have been paid and cancelled.
Executed effective the 31st day of August, 1995.
/s/ V. H. VAN HORN
________________________________________
V. H. Van Horn
"MAKER"
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A. J. GALLERANO
____________________________________
A. J. Gallerano
Senior Vice President -
General Counsel and Secretary
"PAYEE"
PAGE 2 OF 3 PAGES
<PAGE> 3
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned, a Notary Public, on this day personally
appeared V. H. Van Horn, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he executed the same
for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this ___ day of
_________________, 1995.
(SEAL)
________________________________________
Notary Public in and for
the State of Texas
My commission expires _________________
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared A. J. Gallerano, Senior Vice President - General Counsel
and Secretary of National Convenience Stores Incorporated, a Delaware
corporation, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity therein set
forth, and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this ___ day of
_________________, 1995.
(SEAL)
________________________________________
Notary Public in and for
the State of Texas
My commission expires _________________
PAGE 3 OF 3 PAGES
