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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) DECEMBER 14, 1995
NATIONAL CONVENIENCE STORES INCORPORATED
(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-7936 74-1361734
(State of (Commission (IRS Employer
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
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
INTRODUCTION
On November 8, 1995, the Registrant, National Convenience Stores
Incorporated (the "Company"), entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Diamond Shamrock, Inc. ("Diamond Shamrock") and
Shamrock Acquisition Corp., a wholly owned subsidiary of Diamond Shamrock
("SAC"). Pursuant to the Merger Agreement, SAC was merged with and into the
Company on December 18, 1995 (the "Merger").
MERGER AGREEMENT
The Offer. Pursuant to the Merger Agreement, on November 14, 1995 SAC
commenced a tender offer (the "Offer") for all outstanding shares of common
stock, par value $.01 per share (the "Shares"), of the Company at the purchase
price of $27.00 per Share and for all outstanding warrants to purchase Shares
(the "Warrants") issued pursuant to the Warrant Agreement, dated March 9, 1993,
between the Company and Boatmen's Trust Company as Warrant Agent (the "Warrant
Agreement") at the purchase price of $9.25 per Warrant, in each case, without
interest thereon, net to the tendering securityholder (pre-tax) in cash. The
Offer expired at 12:00 midnight, New York City time, on December 13, 1995,
promptly after which time SAC purchased 5,883,567 Shares and 1,097,855 Warrants
which were validly tendered and not withdrawn prior to the expiration of the
Offer. Following such purchase, Diamond Shamrock and SAC beneficially owned
approximately 93.5% of the outstanding Shares.
Pursuant to the Merger Agreement, upon SAC's acceptance for payment of
the Shares and Warrants tendered in the Offer, Diamond Shamrock was entitled to
designate at its option up to that number of members, rounded up to the nearest
whole number, of the Board of Directors of the Company (the "Board") as would
make the percentage of the Company's directors designated by Diamond Shamrock
equal to the percentage of outstanding Shares held by Diamond Shamrock and any
of its wholly owned subsidiaries, and the Company agreed that it would, upon
the request of SAC, promptly increase the size of the Board and/or use its
reasonable best efforts to secure the resignation of such number of directors
as is necessary to enable the persons designated by Diamond Shamrock to be so
elected, subject to Section 14(f) of the Securities Exchange Act of 1934, as
amended. On December 14, 1995, six of the eight directors of the Company
resigned from the Board and the remaining two directors elected six persons
designated by Diamond Shamrock (the "Diamond Shamrock Designees") to the Board.
As a result of its beneficial ownership of the Shares acquired
pursuant to the Offer and the election of the six Diamond Shamrock Designees to
the Board, Diamond Shamrock acquired control of the Company on December 14,
1995. Following completion of the Offer, the Merger was effected on December
18, 1995 as a "short-form" merger under Delaware law. As a result of the
Merger, Diamond Shamrock presently owns all of the outstanding Shares. Diamond
Shamrock has sole voting and dispositive power with respect to the Shares.
Effect of the Merger. As a result of the Merger, (i) each previously
outstanding Share, other than Shares owned by Diamond Shamrock, SAC or any
other direct or indirect subsidiary of Diamond Shamrock and Shares held in the
treasury of the Company, was converted into the right to receive $27.00 net in
cash, payable to the holder thereof, without interest thereon, subject to the
rights of holders thereof to seek an appraisal of the fair value of their
Shares under Delaware law and Article Sixth of the Company's Restated
Certificate of Incorporation (the "Certificate"), (ii) all of the Shares owned
by Diamond Shamrock, SAC or any other direct or indirect subsidiary of Diamond
Shamrock and Shares held in the treasury of the Company were cancelled, (iii)
each then-outstanding share of SAC was converted into one outstanding Share,
and (iv) the Company became an indirect, wholly owned subsidiary of Diamond
Shamrock. Pursuant to the terms of the Warrant Agreement, each outstanding
Warrant will remain outstanding and holders of Warrants have the right to
obtain $27.00 per Warrant upon payment of the $17.75 exercise price, in lieu of
the one Share previously issuable upon exercise of a Warrant.
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The persons from whom SAC purchased Shares and Warrants in the Offer
were the holders of the outstanding Shares and Warrants, none of whom, to the
knowledge of the Company, had any material relationship with Diamond Shamrock,
SAC or any of their respective affiliates or any director or officer of Diamond
Shamrock, SAC or any associates of any such director or officer.
Pursuant to the Merger Agreement, the directors of SAC immediately
prior to the effective time of the Merger (the "Effective Time") became the
directors of the Company at the Effective Time, to serve as such until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Certificate, the
Company's By-Laws and Delaware law.
SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by SAC to acquire the entire equity
interest in the Company, including the purchase of the Shares and Warrants
pursuant to the Offer and the payment for Shares and Warrants converted into
the right to receive cash pursuant to the Merger, was approximately $180.5
million. The funds for Diamond Shamrock's acquisition of the entire equity
interest in the Company, payment of related fees and expenses and the
refinancing of approximately $37 million of the Company's existing indebtedness
was provided by existing working capital and a $220 million loan (the "Loan")
from a group of banks, for which Bank of America National Trust and Savings
Association ("BofA") acts as the agent bank, made pursuant to the Credit
Agreement dated as of December 11, 1995, which provides for an unsecured senior
revolving credit facility (the "Credit Facility").
The maximum outstanding borrowings under the Credit Facility are
reduced semi-annually by 25% of the amount available under the Credit Facility
on June 11, 1999, beginning on that date. Repayment of the Loan is guaranteed
by the significant subsidiaries of Diamond Shamrock. A commitment fee is
payable quarterly in arrears on unadvanced portions of the Loan at rates
ranging from 0.1% to 0.25% per annum, based on the ratings assigned to Diamond
Shamrock's unsecured senior long-term debt (the "Senior Debt Rating") by
Standard & Poor's Corporation and by Moody's Investors Service, Inc. Amounts
advanced under the Loan will bear interest, at Diamond Shamrock's option, (i)
at a variable rate equal to the higher of BofA's prime rate or 0.5% over the
rate obtainable by BofA in the Federal Funds market or (ii) at a variable rate
equal to the rate offered by BofA as its London Interbank Offered Rate to major
banks in the London Interbank Market for one-, two-, three- or six-month dollar
deposits, adjusted for the cost of reserves and rounded to the nearest 1/16th%,
plus a margin of between 0.3% and 0.75% per annum, based upon Diamond
Shamrock's Senior Debt Rating.
It is anticipated that the indebtedness incurred by Diamond Shamrock
under the Credit Facility will be repaid from funds generated internally by
Diamond Shamrock and its subsidiaries (including funds generated by the Company
and its subsidiaries), through additional borrowings or through a combination
of such sources. No final decisions have been made concerning the method
Diamond Shamrock will employ to repay such indebtedness. Such decisions, when
made, will be based on Diamond Shamrock's review from time to time of the
advisability of particular actions, as well as on prevailing interest rates and
financial and other economic conditions.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
<TABLE>
<CAPTION>
(c) EXHIBITS
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2.1 -- Agreement and Plan of Merger, dated November 8, 1995, among
National Convenience Stores Incorporated, Diamond Shamrock, Inc.
and Shamrock Acquisition Corp. (incorporated by reference to
Exhibit 1 to the Company's Schedule 14D-9 Solicitation/
Recommendation Statement filed with the Securities and Exchange
Commission on November 14, 1995)
3.1 -- Restated Certificate of Incorporation of the Company
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A.W. O'DONNELL
--------------------------
A.W. O'Donnell
Chairman and Chief Executive Officer
Date: December 28, 1995
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EXHIBIT INDEX
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<CAPTION>
Exhibit
Number Exhibit
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2.1 -- Agreement and Plan of Merger, dated November 8, 1995, among
National Convenience Stores Incorporated, Diamond Shamrock, Inc.
and Shamrock Acquisition Corp. (incorporated by reference to
Exhibit 1 to the Company's Schedule 14D-9 Solicitation/
Recommendation Statement filed with the Securities and Exchange
Commission on November 14, 1995)
3.1 -- Restated Certificate of Incorporation of the Company
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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
NATIONAL CONVENIENCE STORES INCORPORATED
National Convenience Stores Incorporated, a Delaware corporation (the
"Corporation"), does hereby certify that this Amended and Restated Certificate
of Incorporation of National Convenience Stores Incorporated was duly adopted
in accordance with Section 245 of the General Corporation Law of the State of
Delaware; the Corporation was originally incorporated under the name of NCS
Merging Corporation; and the Corporation's original Certificate of
Incorporation was filed with the Delaware Secretary of State on June 21, 1979.
The text of the Corporation's Restated Certificate of Incorporation as
heretofore amended or supplemented is hereby restated and further amended to
read in its entirety as follows:
FIRST: The name of the Corporation (the "Corporation") is
National Convenience Stores Incorporated.
SECOND: The address of the Corporation's registered office in
the State of Delaware is 1209 Orange Street, City of Wilmington, County of New
Castle, Delaware 19801. The name of the Corporation's registered agent at such
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: The total number of shares which the Corporation shall
have authority to issue is 10,000,000 shares of Common Stock, par value $.01
per share.
FIFTH: Elections of directors need not be by written ballot
except and to the extent provided in the by-laws of the Corporation.
SIXTH: (1) Notwithstanding any contrary provision of Section
262(b) of the General Corporation Law of the State of Delaware, as in effect on
August 1, 1983, any stockholder of the Corporation who complies with the
requirements of Section 262 of the General Corporation Law of the State of
Delaware, as in effect on August 1, 1983 ("Section 262"), shall be entitled to
an appraisal by the Court of Chancery of the fair value of his shares of Common
Stock (as hereinafter defined) and Preferred Stock (as hereinafter defined)
under each of the circumstances described in subparagraphs (a), (b) and (c)
below (an "Article Sixth Transaction"), all upon the terms and conditions set
forth in this Article Sixth and in Section 262:
(a) the merger or consolidation of the Corporation with
(1) any Interested Stockholder (as hereinafter defined) or (2) any
other corporation (whether or not itself an Interested Stockholder)
which is, or after such merger or consolidation would be, an Affiliate
(as hereinafter defined) of an Interested Stockholder; or
(b) the sale, lease or exchange of all or substantially
all of the property and assets of the Corporation (in one transaction
or a series of transactions) to or with any Interested Stockholder or
any Affiliate of any Interested Stockholder; or
(c) any amendment of the Certificate of Incorporation of
the Corporation which effects a reclassification of securities
(including any reverse stock split) or a recapitalization of the
Corporation, which has the effect, directly or indirectly, of
increasing the proportionate share of the
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outstanding shares of any class of Voting Stock (as hereinafter
defined) which is beneficially owned (as hereinafter defined) by any
Interested Stockholder or any Affiliate of any Interested Stockholder.
(2) For the purposes of this Article Sixth:
(a) The term "person" shall mean any individual, firm,
corporation, partnership or other entity.
(b) The term "Interested Stockholder" shall mean any
person (other than the Corporation or any Subsidiary and other than any
profit sharing, employee stock ownership or other employee benefit plan
of the Corporation or any Subsidiary or any trustee of or fiduciary
with respect to any such plan when acting in such capacity) who or
which:
(1) is the beneficial owner (as hereinafter
defined) of 15 percent or more of the Voting Stock; or
(2) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to an
Announcement Date (as hereinafter defined) was the beneficial
owner of 15 percent or more of the Voting Stock; or
(3) is the assignee of or has otherwise succeeded
to any shares of Voting Stock which were at any time within the
two-year period immediately prior to an Announcement Date
beneficially owned by an Interested Stockholder, if such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as
amended.
(c) A specified person shall be a "beneficial owner" of
and shall be deemed to "beneficially own" any Voting Stock:
(1) which such specified person or any of its
Affiliates or Associates (as hereinafter defined), directly or
indirectly, through contract, arrangement, understanding,
relationship or otherwise has or shares (A) voting power, which
includes the power to vote, or to direct the voting of, such
stock and/or (B) investment power, which includes the power to
dispose of, or to direct the disposition of, such stock; or
(2) which such specified person or any of its
Affiliates or Associates has, directly or indirectly, the right
to acquire (whether such right is then exercisable or becomes
exercisable at some future time by the passage of time or upon
the occurrence of a specified event) pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants, options or otherwise; or
(3) which is subject to the exercise, directly or
indirectly, of sole or shared voting and/or investment power as
described in clause (l) above by any other person with which
such specified person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares of
Voting Stock.
(d) For the purpose of determining whether a specified
person is an Interested Stockholder pursuant to subparagraph (b) of
this paragraph 2, the number of shares of Voting Stock deemed to be
outstanding shall include unissued or issued but not outstanding shares
deemed beneficially owned by such specified person through application
of subparagraph (c) of this paragraph 2 but shall not include any other
unissued or issued but not outstanding shares of Voting Stock which may
be issuable or deliverable pursuant to any agreement, arrangement or
upon exercise of conversion rights, exchange rights, warrants, options
or otherwise.
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(e) The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations, as in effect on August 1, 1983, promulgated by
the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
(f) The term "Subsidiary" shall mean any corporation of
which all the shares of each class of capital stock are beneficially
owned, directly or indirectly, by the Corporation.
(g) The term "Fair Market Value" shall mean (1) in the
case of stock, the highest closing sale price during the 30-day period
immediately preceding and including a Determination Date of a share of
such stock on the Composite Tape for New York Stock Exchange - Listed
Stock, or, if such stock is not quoted on the Composite Tape, on the
New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered
under the Securities Exchange Act of 1934, as amended, on which such
stock is listed, or, if such stock is not listed on any such exchange,
the highest closing bid quotation with respect to a share of such stock
during the 30-day period immediately preceding and including a
Determination Date on the National Association of Securities Dealers,
Inc. Automated Quotation System or any system then in use, or, if no
such quotations exist or are otherwise available, the fair market value
on a Determination Date of a share of such stock as determined in good
faith by an investment banking firm of national reputation retained by
the Corporation following such firm's selection by a committee of at
least three stockholders of the Corporation (other than the Interested
Stockholder and any of its Affiliates and Associates) who shall
beneficially own in the aggregate at least 5% of the then outstanding
Common Stock and who shall be appointed by the Board of Directors of
the Corporation ("Independent Advisor") and (2) in the case of property
other than stock or cash, the fair market value of such property on a
Determination Date as determined in good faith by an Independent
Advisor.
(h) The term "Voting Stock" shall include (1) each then
outstanding share of Common Stock and (2) each then outstanding share
of Preferred Stock which is entitled to vote in the election of the
directors of the Corporation.
(i) The term "Common Stock" shall mean any stock of any
class of the Corporation which is entitled to vote in the election of
directors of the Corporation, which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation
and which is not subject to redemption by the Corporation.
(j) The term "Preferred Stock" shall mean any class of
capital stock of the Corporation (other than Common Stock) which may be
from time to time authorized in or by the Certificate of Incorporation
of the Corporation.
(k) The term "Corporation" shall refer to the corporation
created pursuant to this Certificate of Incorporation and any successor
by merger, consolidation or otherwise.
(l) The term "Determination Date" shall mean the date as
of which a determination is made pursuant to subparagraph (g) of
paragraph 2 of this Article Sixth concerning the Fair Market Value of
any stock or other property.
(3) (a) If within 115 days after the effective date of an Article
Sixth Transaction no stockholder of the Corporation, who has complied with the
provisions of Section 262 and is otherwise entitled to appraisal rights, shall
have filed a petition in the Court of Chancery demanding a determination of the
fair value of the Common Stock and/or Preferred Stock owned by all stockholders
similarly situated, the Corporation shall promptly, and in any event within 120
days after the effective date of an Article Sixth Transaction, file such a
petition. In any appraisal proceeding initiated by a stockholder or by the
Corporation pursuant to Section 262 relating to an Article Sixth Transaction,
the Corporation shall file
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appropriate pleadings which confirm and at all stages of the proceeding
vigorously assert (1) that the fair value of each share of Common Stock subject
to such proceeding, exclusive of interest, if any, is not less than the highest
amount determined pursuant to subparagraph (b) below ("Minimum Fair Value Per
Share of the Common Stock") and (2) that the fair value of each share of each
class or series of Preferred Stock subject to such proceeding, exclusive of
interest, if any, is not less than the highest amount determined pursuant to
subparagraph (c) below for the shares of each such class or series ("Minimum
Fair Value Per Share of Each Class or Series of Preferred Stock").
(b) The Minimum Fair Value Per Share of the Common Stock shall
be equal to the higher amount determined under clauses (1) and (2)
below:
(1) (if applicable) the highest per share price
(including brokerage commissions, placement agent fees,
transfer taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any share of Common Stock acquired
by it (A) within the two-year period immediately prior to the
first public announcement of the proposed Article Sixth
Transaction ("Announcement Date") or (B) in the transaction in
which it became an Interested Stockholder, whichever is higher;
and
(2) the Fair Market Value per share of Common
Stock (A) as of the Announcement Date or (B) as of the date on
which the Interested Stockholder became an Interested
Stockholder ("Inception Date"), whichever is higher.
(c) The Minimum Fair Value Per Share of Each Class or
Series of Preferred Stock shall be equal to the higher amount
determined under clauses (1) and (2) below:
(1) (if applicable) the highest per share price
(including brokerage commissions, placement agent fees,
transfer taxes, and soliciting dealers' fees) paid by an
Interested Stockholder for any shares of such class or series
of Preferred Stock acquired by it (A) within the two-year
period immediately prior to the Announcement Date or (B) in the
transaction in which it became an Interested Stockholder,
whichever is higher; and
(2) the Fair Market Value per share of such class
or series of Preferred Stock as of the (A) Announcement Date or
(B) Inception Date, whichever is higher.
(d) If the Court of Chancery determines in any appraisal
proceeding relating to an Article Sixth Transaction that the fair
value, exclusive of interest, if any, of any share of Common Stock or
Preferred Stock is less than the Minimum Fair Value Per Share of the
Common Stock or the Minimum Fair Value Per Share of Each Class or
Series of Preferred Stock, respectively, the Corporation shall
nevertheless pay to stockholders who are entitled to receive the fair
value of their shares in such appraisal proceeding an amount per share,
before giving effect to any interest awarded by the Court of Chancery,
equal to the Minimum Fair Value Per Share of the Common Stock or the
Minimum Fair Value Per Share of Each Class or Series of Preferred
Stock, as the case may be.
(e) All per share amounts determined pursuant to this
paragraph 3 shall be appropriately adjusted to reflect all stock
dividends, property distributions, stock splits and combinations, and
subdivisions and reclassifications of the outstanding capital stock of
the Corporation.
(4) The Corporation hereby acknowledges that it is equitable in the
circumstances, and accordingly the Corporation shall pay all costs and expenses
(including the reasonable fees and expenses of attorneys, the reasonable fees
and expenses of experts and the costs of the proceeding) incurred by any
stockholder of the Corporation in any appraisal proceeding involving an Article
Sixth Transaction wherein the Fair Market Value of the per share consideration
offered to stockholders of the Corporation in the Article Sixth Transaction is,
in the opinion of the Court of Chancery, less than the Minimum Fair Value Per
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Share of the Common Stock or the Minimum Fair Value Per Share of Each Class or
Series of Preferred Stock, as the case may be.
(5) Notwithstanding any other provisions of this Certificate of
Incorporation or the by-laws of the Corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, this Certificate of
Incorporation or the by-laws of the Corporation), the affirmative vote of the
holders of 66-2/3 percent or more of the shares of stock of the Corporation
otherwise entitled to vote thereon and not beneficially owned by any Interested
Stockholder or any of its Affiliates and Associates, voting as a class, shall
be required to amend or repeal, or adopt any provisions inconsistent with, this
Article Sixth.
SEVENTH: No director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director; provided, however, that the foregoing clause
shall not apply to any liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of the law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. This Article Seventh shall not eliminate or limit
the personal liability of a director for any act or omission occurring prior to
the date this Article Seventh becomes effective.
EIGHTH: In furtherance and not in limitation of the rights,
powers, privileges, and discretionary authority granted or conferred by the
General Corporation Law of the State of Delaware or other statutes or laws of
the State of Delaware, the Board of Directors is expressly authorized to make,
alter, amend or repeal the by-laws of the Corporation, without any action on
the part of the stockholders, but the stockholders may make additional by-laws
and may alter, amend or repeal any by-law whether adopted by them or otherwise.
The Corporation may in its by-laws confer powers upon its Board of Directors in
addition to the foregoing and in addition to the powers and authorities
expressly conferred upon the Board of Directors by applicable law.
NINTH: The Corporation reserves the right at any time and
from time to time to amend, alter, change or repeal any provision contained in
this Certificate of Incorporation, and other provisions authorized by the laws
of the State of Delaware at the time in force may be added or inserted, in the
manner now or hereafter prescribed herein or by applicable law; and all rights,
preferences and privileges of whatsoever nature conferred upon stockholders,
directors or any other persons whomsoever by and pursuant to this Certificate
of Incorporation in its present form or as hereafter amended are granted
subject to this reservation.
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