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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)
April 14, 1998
GIANT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or jurisdiction of incorporation)
1-10398 86-0642718
(Commission File Number) (IRS Employer Identification No.)
23733 North Scottsdale Road
Scottsdale, Arizona 85255
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(602) 585-8888
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ITEM 5. OTHER EVENTS
On April 14, 1998, the Board of Directors of Giant
Industries, Inc. ("Giant") approved an Agreement and Plan of
Merger (the "Merger Agreement") whereby Holly Corporation
("Holly") would be merged with and into Giant (the "Merger").
The Merger is conditioned upon the approval of Giant's and
Holly's stockholders and other conditions stated in the Merger
Agreement. Included as an attachment to the Merger Agreement
is a Major Stockholders' Agreement pursuant to which certain
stockholders of Giant and Holly agree to vote in favor of the
Merger in any meeting of stockholders of the respective
companies. A copy of the Merger Agreement, including the Major
Stockholders' Agreement, is attached hereto as Exhibit 2.1,
which documents are incorporated in their entirety herein by
reference. See "Index to Exhibits."<PAGE>
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SIGNATURES
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 thereunto duly
authorized.
/s/ A. Wayne Davenport
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A. Wayne Davenport
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: April 20, 1998
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INDEX TO EXHIBITS
Exhibit
Number Description
- ------- --------------------------------------------------
2.1 Agreement and Plan of Merger, by and between Holly
Corporation and Giant Industries, Inc., dated as of
April 14, 1998.
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
HOLLY CORPORATION
AND
GIANT INDUSTRIES, INC.
DATED AS OF APRIL 14, 1998
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TABLE OF CONTENTS
ARTICLE I
1.01. The Merger
1.02. Closing
1.03. Effective Time
1.04. Effects of the Merger
1.05. Certificate of Incorporation and Bylaws
1.06. Directors and Officers
ARTICLE II
2.01. Effect on Capital Stock
2.02. Exchange
ARTICLE III
3.01. Representations and Warranties of Holly
3.02. Representations and Warranties of Giant
ARTICLE IV
4.01. Conduct of Business
4.02. No Solicitation by Holly
4.03. No Solicitation By Giant
ARTICLE V
5.01. Preparation of the Form S-4 and the Joint
Proxy Statement; Stockholders Meetings
5.02. Letters of Holly's Accountants
5.03. Letters of Giant's Accountants
5.04. Access to Information; Confidentiality
5.05. Reasonable Efforts
5.06. Stock Options and Phantom Stock Rights
5.07. Certain Employee Matters
5.08. Indemnification, Exculpation and Insurance
5.09. Fees and Expenses
5.10. Public Announcements
5.11. NYSE Listing
5.12. Transfer Taxes, Etc.
5.13. Tax Treatment
5.14. Indemnification Agreements
5.15. Certain Tax Matters
ARTICLE VI
6.01. Conditions to Each Party's Obligation to
Effect the Merger
6.02. Conditions to Obligations of Giant
6.03. Conditions of Obligation of Holly
6.04. Frustration of Closing Conditions
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ARTICLE VII
7.01. Termination
7.02. Effect of Termination
7.03. Amendment
7.04. Extension; Waiver
7.05. Procedure for Termination, Amendment,
Extension or Waiver
ARTICLE VIII
8.01. Nonsurvival of Representations and Warranties
8.02. Notices
8.03. Definitions
8.04. Interpretation
8.05. Counterparts
8.06. Entire Agreement; No Third-Party Beneficiaries
8.07. Governing Law
8.08. Assignment
8.09. Enforcement<PAGE>
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement"), dated
as of April 14, 1998, is by and between HOLLY CORPORATION, a
Delaware corporation ("Holly"), and GIANT INDUSTRIES, INC., a
Delaware corporation ("Giant").
RECITALS
A. The respective Boards of Directors of Giant and Holly
have approved the merger of Holly with and into Giant (the
"Merger"), upon the terms and subject to the conditions set forth
in this Agreement, whereby each issued and outstanding share of
common stock, par value $.01 per share, of Holly ("Holly Common
Stock"), other than shares owned by Giant, Holly or any of their
wholly-owned subsidiaries, will be converted into the right to
receive the Merger Consideration (as defined in Section 2.01(b)).
B. The respective Boards of Directors of Giant and Holly
have each determined that the Merger and the other transactions
contemplated by this Agreement are consistent with, and in
furtherance of, their respective business strategies and goals.
C. Giant and Holly desire to make certain
representations, warranties, covenants and agreements in
connection with the Merger and also to prescribe various
conditions to the Merger.
D. For federal income tax purposes, it is intended that
the Merger will qualify as a reorganization under the provisions
of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code").
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement,
the parties agree as follows:
AGREEMENTS
ARTICLE I
THE MERGER
1.01. THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
the Delaware General Corporation Law (the "DGCL"), Holly shall
be merged with and into Giant at the Effective Time (as defined
in Section 1.03). Following the Effective Time, Giant shall be
the surviving corporation (the "Surviving Corporation") and shall
succeed to and assume all the rights and obligations of Holly in
accordance with the DGCL.
1.02. CLOSING. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the
parties (the "Closing Date"), which (subject to satisfaction or
waiver of the conditions set forth in Sections 6.02 and 6.03)
shall be no later than the second business day after satisfaction
or waiver of the conditions set forth in Section 6.01, unless
another time or date is agreed to by the parties. The Closing
will be held at such location in the City of Phoenix, Arizona as
is agreed to by the parties.
1.03. EFFECTIVE TIME. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date,
the parties shall file a certificate of merger or other
appropriate documents (in any such case, the "Certificate of
Merger"), executed in accordance with the relevant provisions of
the DGCL, and shall make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time
as the Certificate of Merger is duly filed with the Delaware
Secretary of State, or at such subsequent date or time as Giant
and Holly shall agree and specify in the Certificate of Merger
(the time the Merger becomes effective being hereinafter referred
to as the "Effective Time").
1.04. EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in Section 259 of the DGCL.
1.05. CERTIFICATE OF INCORPORATION AND BYLAWS.
(a) The certificate of incorporation of Giant, as in
effect immediately prior to the execution of this Agreement,
shall be amended and restated as of the Effective Time as set
forth in Exhibit A and, as so amended and restated, such
certificate of incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The bylaws of Giant, as in effect immediately prior
to the execution of this Agreement, shall be amended and restated
as of the Effective Time as set forth in Exhibit B and, as so
amended and restated, such bylaws shall be the bylaws of the
Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
1.06. DIRECTORS AND OFFICERS. Giant shall cause the Board
of Directors and officers of Giant immediately prior to the
effective time to resign. The Board of Directors (including
classes thereof) and senior officers of the Surviving Corporation
shall be as set forth in Exhibit C until the earlier of the
resignation or removal of any individual listed on or designated
in accordance with Exhibit C or until their respective successors
are duly elected and qualified, as the case may be, it being
agreed that if any director shall be unable to serve as a
director at the Effective Time, the party which designated such
individual as indicated in Exhibit C shall designate another
individual to serve in such individual's place. If any officer
listed on or appointed in accordance with Exhibit C ceases to be
a full-time employee of either Holly or Giant prior to the
Effective Time, the parties will agree upon another person to
serve in such person's stead. The committees of the Board of
Directors of the Surviving Corporation will be elected by the
Board of Directors in accordance with the bylaws as amended and
restated.
1.07 SURVIVING CORPORATION'S HEADQUARTERS. The Surviving
Corporation's headquarters will be in Scottsdale, Arizona. In
addition, the Surviving Corporation will maintain an office in
Dallas, Texas.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.01. EFFECT ON CAPITAL STOCK. As of the Effective Time,
by virtue of the Merger and without any action on the part of the
holder of any shares of Holly Common Stock or on the part of the
holder of any shares of common stock, par value $.01 per share,
of Giant ("Giant Common Stock"):
(a) CANCELLATION OF TREASURY STOCK AND GIANT-OWNED
STOCK. Each share, if any, of Holly Common Stock that is owned
by Holly or by any wholly-owned subsidiary of Holly shall
automatically be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.
(b) CONVERSION OF HOLLY COMMON STOCK. Subject to
Sections 2.02(e) and (j), all of the issued and outstanding
shares (other than shares to be canceled in accordance with
Section 2.01(a)) of Holly Common Stock shall be converted, in the
aggregate, into the right to receive (i) that number of fully
paid and nonassessable shares of Giant Common Stock equal to the
number of shares of Giant Common Stock issued and outstanding
immediately before the Effective Time and (ii) cash in an amount
equal to $25,000,000 multiplied by a fraction, the numerator of
which is the number of issued and outstanding shares of Holly
Common Stock immediately before the Effective Time and the
denominator of which is the sum of (A) the number of issued and
outstanding shares of Holly Common Stock immediately before the
Effective Time, (B) the number of shares of Holly Common Stock
subject to Holly stock options (whether vested or unvested)
outstanding immediately before the Effective Time and (C) the
number of Holly phantom stock rights outstanding immediately
before the Effective Time (with the consideration described in
clauses (i) and (ii) collectively referred to as the "Merger
Consideration"). Accordingly, each issued and outstanding share
of Holly Common Stock (other than shares to be canceled in
accordance with Section 2.01(a)) shall be converted into the
right to receive a fraction of the Merger Consideration equal to
one divided by the number of shares of Holly Common Stock (other
than shares to be canceled in accordance with Section 2.01(a),
and assuming no exercise, conversion or exchange of outstanding
in-the-money options, warrants and other rights to acquire Holly
Common Stock) issued and outstanding immediately before the
Effective Time. As of the Effective Time, all such shares of
Holly Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist,
and each holder of a certificate representing any such shares of
Holly Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration and
any cash in lieu of fractional shares of Giant Common Stock to
be issued or paid in consideration therefor upon surrender of
such certificate in accordance with Section 2.02, without
interest.
2.02. EXCHANGE.
(a) EXCHANGE AGENT. As of the Effective Time, Giant
shall enter into an agreement with such bank or trust company as
may be designated by Giant and Holly (the "Exchange Agent"),
which shall provide that Giant shall deposit with the Exchange
Agent as of the Effective Time, for the benefit of the holders
of shares of Holly Common Stock and for exchange in accordance
with this Article II, through the Exchange Agent, the Merger
Consideration (such shares of Giant Common Stock, together with
any dividends or distributions with respect thereto with a record
date after the Effective Time, any cash payable in lieu of any
fractional shares of Giant Common Stock, and the cash portion of
the Merger Consideration being hereinafter referred to as the
"Exchange Fund") issuable pursuant to Section 2.01 in exchange
for issued and outstanding shares of Holly Common Stock.
(b) EXCHANGE PROCEDURES. As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall
mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Time represented
outstanding shares of Holly Common Stock (the "Certificates")
whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 2.01, (i) a letter of
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent and shall
be in such form and have such other provisions as Giant and Holly
may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the
Merger Consideration. Upon surrender of a Certificate for
cancellation to the Exchange Agent, together with such letter of
transmittal, duly executed, and such other documents as
reasonably may be required by the Exchange Agent, the holder of
such Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares
of Giant Common Stock and cash which such holder has the right
to receive pursuant to the provisions of this Article II, and the
Certificate so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of Holly Common Stock which is
not registered in the transfer records of Holly, a certificate
representing the proper number of shares of Giant Common Stock
may be issued to a person other than the person in whose name the
Certificate so surrendered is registered if such Certificate
shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such issuance shall pay any
transfer or other taxes required by reason of the issuance of
shares of Giant Common Stock to a person other than the
registered holder of such Certificate or establish to the
satisfaction of Giant that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section
2.02, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such
surrender the Merger Consideration and other cash, if any, which
the holder thereof has the right to receive in respect of such
Certificate pursuant to the provisions of this Article II. No
interest will be paid or will accrue on any cash payable to
holders of Certificates pursuant to the provisions of this
Article II.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES.
No dividends or other distributions with respect to Giant Common
Stock with a record date after the Effective Time shall be paid
to the holder of any unsurrendered Certificate, and no cash
payment in lieu of fractional shares shall be paid to any such
holder pursuant to Section 2.02(e), and all such dividends, other
distributions and cash in lieu of fractional shares of Giant
Common Stock shall be paid by Giant to the Exchange Agent and
shall be included in the Exchange Fund, in each case until the
surrender of such Certificate in accordance with this Article II.
Subject to the effect of applicable escheat or similar laws,
following surrender of any such Certificate there shall be paid
to the holder of the certificate representing whole shares of
Giant Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of dividends or
other distributions with a record date after the Effective Time
previously paid with respect to such whole shares of Giant Common
Stock and the amount of any cash payable in lieu of a fractional
share of Giant Common Stock to which such holder is entitled
pursuant to Section 2.02(e) and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to such surrender
and with a payment date subsequent to such surrender payable with
respect to such whole shares of Giant Common Stock
(d) NO FURTHER OWNERSHIP RIGHTS IN HOLLY COMMON STOCK.
All shares of Giant Common Stock issued and cash paid upon the
surrender for exchange of Certificates in accordance with the
terms of this Article II shall be deemed to have been issued and
paid in full satisfaction of all rights pertaining to the shares
of Holly Common Stock previously represented by such
Certificates, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which may have
been declared or made by Holly on such shares of Holly Common
Stock which remain unpaid at the Effective Time, and there shall
be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the shares of Holly Common
Stock which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented
to the Surviving Corporation or the Exchange Agent for any
reason, they shall be canceled and exchanged as provided in this
Article II, except as otherwise provided by law.
(e) NO FRACTIONAL SHARES.
(i) No certificates or scrip representing
fractional shares of Giant Common Stock shall be issued upon the
surrender for exchange of Certificates, no dividend or
distribution of Giant shall relate to such fractional share
interests and such fractional share interests will not entitle
the owner thereof to vote or to any rights of a stockholder of
Giant.
(ii) In lieu of any such fractional shares, the
Surviving Corporation shall pay each holder of Holly Common Stock
an amount in cash equal to the product obtained by multiplying
(A) the fractional share interest to which such holder (after
taking into account all shares of Holly Common Stock held at the
Effective Time by such holder) would otherwise be entitled by (B)
the closing price for a share of Giant Common Stock as reported
on the New York Stock Exchange, Inc. ("NYSE") Composite
Transaction Tape (as reported in the Wall Street Journal, or, if
not reported therein, any other authoritative source) on the
Closing Date.
(iii) As soon as practicable after the
determination of the amount of cash, if any, to be paid to
holders of Holly Common Stock with respect to any fractional
share interests, the Exchange Agent will make available such
amounts to such holders of Holly Common Stock subject to and in
accordance with the terms of Section 2.02(b).
(f) TERMINATION OF EXCHANGE FUND. Any portion of the
Exchange Fund which remains undistributed to the holders of the
Certificates for six months after the Effective Time shall be
delivered to Giant, upon demand, and any holders of the
Certificates who have not previously complied with this Article
II shall thereafter look only to Giant for payment of their claim
for Merger Consideration, any cash in lieu of fractional shares
of Giant Common Stock and any dividends or distributions with
respect to Holly Common Stock or Giant Common Stock.
(g) NO LIABILITY. None of Giant, Holly or the Exchange
Agent shall be liable to any person in respect of any shares of
Giant Common Stock (or dividends or distributions with respect
thereto) or cash from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat
or similar law. If any Certificate shall not have been
surrendered prior to seven years after the Effective Time (or
immediately prior to such earlier date on which any Merger
Consideration, any cash payable to the holder of such Certificate
representing Holly Common Stock pursuant to this Article II or
any dividends or distributions payable to the holder of such
Certificate would otherwise escheat to or become the property of
any Governmental Entity (as defined in Section 3.01(d)), any such
Merger Consideration or cash, dividends or distributions in
respect of such Certificate shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously
entitled thereto.
(h) INVESTMENT OF EXCHANGE FUND. The Exchange Agent
shall invest any cash included in the Exchange Fund, as directed
by Giant, on a daily basis. Any interest and other income
resulting from such investments shall be paid to Giant.
(i) LOST CERTIFICATES. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by the Surviving
Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the
Merger Consideration and, if applicable, any cash in lieu of
fractional shares, and unpaid dividends and distributions on
shares of Giant Common Stock deliverable in respect thereof,
pursuant to this Agreement.
(j) DISSENTING SHARES. Notwithstanding anything in
this Agreement to the contrary, shares of Holly Common Stock
outstanding immediately prior to the Effective Time held by a
holder (if any) who is entitled to demand, and who properly
demands, appraisal for such shares in accordance with Section 262
of the DGCL ("Dissenting Shares") shall not be converted into a
right to receive Merger Consideration unless such holder fails
to perfect or otherwise loses such holder's right to appraisal,
if any. If after the Effective Time such holder fails to perfect
or loses any such right to appraisal, such Dissenting Shares
shall be treated as if they had been converted as of the
Effective Time into a right to receive Merger Consideration
pursuant to Section 2.01(b). Holly shall give prompt written
notice to Giant of any demands received by Holly for appraisal
of shares of Holly Common Stock and Giant shall have the right
to participate in negotiations and proceedings with respect to
such demands. Prior to the Effective Time, Holly shall not,
except with the prior written consent of Giant, which consent
shall not be unreasonably withheld, make any payment with respect
to, or settle or offer to settle, any such demands. Any Merger
Consideration that would otherwise have been allocated to the
Dissenting Shares if the holders thereof had not properly
perfected their appraisal rights will not be paid under Section
2.01(b).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01. REPRESENTATIONS AND WARRANTIES OF HOLLY. Except as
disclosed in the Holly Filed SEC Documents (as such term is
defined in Section 3.01(g)) or as set forth on the Disclosure
Schedule delivered by Holly to Giant prior to the execution of
this Agreement, which schedule shall identify exceptions and
other information by specific Section references (the "Holly
Disclosure Schedule"), Holly represents and warrants to Giant as
follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of
Holly and its Significant Subsidiaries is a corporation or other
legal entity duly organized, validly existing and in good
standing (with respect to jurisdictions which recognize such
concept) under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power and
authority to carry on its business as now being conducted. Each
of Holly and its Significant Subsidiaries is duly qualified or
licensed to do business and is in good standing (with respect to
jurisdictions which recognize such concept) in each jurisdiction
in which the nature of its business or the ownership or leasing
of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to
be so qualified or licensed or to be in good standing
individually or in the aggregate would not have a material
adverse effect (as defined in Section 8.03) on Holly. Holly has
delivered or made available to Giant prior to the execution of
this Agreement complete and correct copies of its certificate of
incorporation and bylaws and has made available to Giant the
certificates of incorporation and bylaws (or comparable
organizational documents) of its Significant Subsidiaries, in
each case as amended to date. As used in this Agreement, a
"Significant Subsidiary" means any subsidiary of Holly or Giant,
as the case may be, that would constitute a "significant
subsidiary" of such party within the meaning of Rule 1-02 of
Regulation S-X of the Securities and Exchange Commission (the
"SEC").
(b) SUBSIDIARIES. Exhibit 21.1 to Holly's Annual
Report on Form 10-K for the fiscal year ended July 31, 1997
includes all the subsidiaries of Holly which as of the date of
this Agreement are Significant Subsidiaries. All the outstanding
shares of capital stock of, or other equity interests in, each
such Significant Subsidiary have been validly issued and are
fully paid and nonassessable and are owned directly or indirectly
by Holly, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens").
(c) CAPITAL STRUCTURE. The authorized capital stock
of Holly consists of 20,000,000 shares of Holly Common Stock and
1,000,000 shares of preferred stock, par value $1.00 per share
("Holly Preferred Stock"). At the close of business on April 14,
1998, (i) 8,253,514 shares of Holly Common Stock were issued and
outstanding, (ii) 396,768 shares of Holly Common Stock were held
by Holly in its treasury, (iii) no shares of Holly Preferred
Stock were designated, issued, outstanding or held by Holly in
its treasury, and (iv) 751,500 shares of Holly Common Stock were
reserved for issuance pursuant to the Holly Corporation Stock
Option Plan (the "Holly Stock Plan"). Except as set forth above,
at the close of business on April 14, 1998: (x) no shares of
capital stock or other voting securities of Holly were issued,
reserved for issuance or outstanding; and (y) there were no
outstanding stock appreciation rights (other than to the extent
Holly phantom stock rights could be deemed to constitute such
rights). The Holly Disclosure Schedule sets forth a complete and
correct list, as of April 14, 1998, of the number of shares of
Holly Common Stock subject to outstanding options under the Holly
Stock Plan and the exercise prices thereof. All outstanding
shares of capital stock of Holly are, and all shares which may
be issued will be, when issued, duly authorized, validly issued,
fully paid, nonassessable and not subject to preemptive rights.
As of the close of business on April 14, 1998, there were no
bonds, debentures, notes or other indebtedness of Holly having
the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which
stockholders of Holly may vote. Except for options outstanding
under the Holly Stock Plan, as of the close of business on April
14, 1998, there were no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements
or undertakings of any kind to which Holly or any of its
subsidiaries is a party or by which any of them is bound
obligating Holly or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares
of capital stock or other voting securities of Holly or of any
of its subsidiaries or obligating Holly or any of its
subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. As of the close of business on April
14, 1998, there were no outstanding contractual obligations of
Holly or any of its subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Holly or any of
its wholly owned subsidiaries. As of the close of business on
April 14, 1998, there were no outstanding contractual obligations
of Holly to vote or to dispose of any shares of the capital stock
of any of its subsidiaries.
(d) AUTHORITY; NONCONTRAVENTION. Holly has all
requisite corporate power and authority to enter into this
Agreement and, subject to the Holly Stockholder Approval (as
defined in Section 3.01(m)), to consummate the transactions
contemplated by this Agreement. The execution and delivery of
this Agreement by Holly and the consummation by Holly of the
transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of
Holly, subject to Holly Stockholder Approval. This Agreement has
been duly executed and delivered by Holly and constitutes the
legal, valid and binding obligation of Holly, enforceable against
Holly in accordance with its terms. The execution and delivery
of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with
the provisions of this Agreement will not, conflict with, or
result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or
loss of a material benefit under, or result in any obligation to
or result in the creation of any Lien upon any of the properties
or assets of Holly or any of its Significant Subsidiaries under,
(i) the certificate of incorporation or bylaws of Holly or the
comparable organizational documents of any of its Significant
Subsidiaries, (ii) any material loan or credit agreement, note,
bond, mortgage, indenture, lease or other material agreement,
instrument, permit, concession, franchise or license applicable
to Holly or any of its Significant Subsidiaries or their
respective properties or assets, (iii) any employment, consulting
or similar agreement, or (iv) subject to the governmental filings
and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Holly or any of its Significant
Subsidiaries or their respective properties or assets, other than
any such conflicts, violations, defaults, rights, losses or Liens
that individually or in the aggregate would not (x) have a
material adverse effect on Holly, (y) materially impair the
ability of Holly to perform its obligations under this Agreement,
or (z) prevent or materially delay the consummation of any of the
transactions contemplated by this Agreement. No consent,
approval, order or authorization of, or registration, declaration
or filing with, any federal, state, local or foreign government
or any court, administrative or regulatory agency or commission
or other governmental authority or agency (a "Governmental
Entity") is required by or with respect to Holly or any of its
Significant Subsidiaries in connection with the execution and
delivery of this Agreement by Holly or the consummation by Holly
of the transactions contemplated by this Agreement, except for:
(1) the filing of a premerger notification and report form by
Holly under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"); (2) the filing with the SEC of
(A) a proxy statement relating to the Holly Stockholders Meeting
(as defined in Section 5.01(b)) (such proxy statement, together
with the proxy statement relating to the Giant Stockholders
Meeting (as defined in Section 5.01(c)), in each case as amended
or supplemented from time to time, the "Joint Proxy Statement"),
and (B) such reports under Section 13(a), 13(d), 15(d) or 16(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as may be required in connection with this Agreement and
the transactions contemplated by this Agreement; (3) the filing
of the Certificate of Merger with the Delaware Secretary of State
and appropriate documents with the relevant authorities of other
states in which Holly is qualified to do business; (4) such other
filings and consents as may be required under any environmental,
health or safety law or regulation pertaining to any
notification, disclosure or required approval necessitated by the
Merger or the transactions contemplated by this Agreement; and
(5) such consents, approvals, orders or authorizations the
failure of which to be made or obtained would not reasonably be
expected to have a material adverse effect on Holly.
(e) SEC DOCUMENTS; UNDISCLOSED LIABILITIES. Holly has
timely filed all required reports, schedules, forms, statements
and other documents with the SEC since August 1, 1996 (the "Holly
SEC Documents"). As of their respective dates, the Holly SEC
Documents complied in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such
Holly SEC Documents, and none of the Holly SEC Documents when
filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
Except to the extent that information contained in any Holly SEC
Document has been revised or superseded by a later Holly Filed
SEC Document, none of the Holly SEC Documents contains any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of
Holly included in the Holly SEC Documents comply as to form, as
of their respective dates of filing with the SEC, in all material
respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto,
have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of Holly
and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements,
to normal recurring year-end audit adjustments). Except (i) as
reflected in such financial statements or in the notes thereto,
(ii) as contemplated by this Agreement, (iii) for liabilities
incurred in connection with this Agreement or the transactions
contemplated by this Agreement, and (iv) for liabilities and
obligations incurred since January 31, 1998 in the ordinary
course of business consistent with past practice, neither Holly
nor any of its subsidiaries has any material liabilities or
obligations of any nature (whether accrued, absolute, contingent
or otherwise), including liabilities arising under any laws
relating to the protection of health, safety or the environment
("Environmental Laws") which, individually or in the aggregate,
could reasonably be expected to have a material adverse effect
on Holly.
(f) INFORMATION SUPPLIED. None of the written
information designated or to be designated by Holly and delivered
to Giant specifically for inclusion or incorporation by reference
in (i) the registration statement on Form S-4 to be filed with
the SEC by Giant in connection with the issuance of Giant Common
Stock in the Merger (the "Form S-4") will, at the time the Form
S-4 is filed with the SEC or at the time it becomes effective
under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, or (ii) the Joint Proxy Statement will, at the date
it is first mailed to Holly's stockholders or at the time of the
Holly Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made,
not misleading. The Joint Proxy Statement will comply as to form
in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, except that no
representation or warranty is made by Holly with respect to
statements made or incorporated by reference therein based on
information supplied by Giant specifically for inclusion or
incorporation by reference in the Joint Proxy Statement.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except (i)
as disclosed in the Holly SEC Documents filed and publicly
available prior to the date of this Agreement (as amended to the
date of this Agreement, the "Holly Filed SEC Documents"), (ii)
for the transactions contemplated by this Agreement, and (iii)
for liabilities incurred in connection with or as a result of
this Agreement, since the date of the most recent financial
statements included in the Holly Filed SEC Documents, Holly has
conducted its business only in the ordinary course, and there has
not been (1) any material adverse change in Holly; (2) any
declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect
to any of Holly's capital stock, other than regular quarterly
dividends of $.15 per share on the Holly Common Stock; (3) any
split, combination or reclassification of any of Holly's capital
stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for
shares of Holly's capital stock; (4) other than as permitted by
Sections 401(a)(xiii) and 5.07, (A) any granting by Holly or any
of its Significant Subsidiaries to any director, executive
officer or other key employee of Holly of any increase in
compensation, except for normal increases in the ordinary course
of business consistent with past practice or as required under
employment agreements in effect as of the date of the most recent
financial statements included in the Holly Filed SEC Documents,
(B) any granting by Holly or any of its Significant Subsidiaries
to any such director, executive officer or key employee of any
increase in severance or termination pay, except as required
under any employment, severance or termination agreements in
effect as of the date of the most recent financial statements
included in the Holly Filed SEC Documents, or (C) any entry by
Holly or any of its subsidiaries into any employment, severance
or termination agreement with any such executive officer or key
employee; or (5) except insofar as may have been disclosed in the
Holly Filed SEC Documents or required by a change in generally
accepted accounting principles, any change in accounting methods,
principles or practices by Holly materially affecting its assets,
liabilities or business. For purposes of this Agreement, "key
employee" means any employee whose current salary and targeted
bonus exceeds $100,000 per annum.
(h) LITIGATION. There is no suit, action or proceeding
pending or, to the knowledge of Holly, threatened against or
affecting Holly or any of its subsidiaries that individually or
in the aggregate could reasonably be expected to have a material
adverse effect on Holly, nor is there any judgment, order or
decree of any Governmental Entity or arbitrator outstanding
against Holly or any of its subsidiaries having, or which could
reasonably be expected to have, any such effect.
(i) COMPLIANCE WITH APPLICABLE LAWS. Holly and its
subsidiaries hold all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities which are
material to the operation of the businesses of Holly and its
subsidiaries, taken as a whole (the "Holly Permits"). Holly and
its subsidiaries are in compliance with the terms of the Holly
Permits and all applicable statutes, laws, ordinances, rules and
regulations, including Environmental Laws, except where the
failure so to comply, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on
Holly. The businesses of Holly and its subsidiaries are not
being conducted in violation of any law, ordinance or regulation
of any Governmental Entity, including Environmental Laws, except
for possible violations which could not reasonably be expected
to have a material adverse effect on Holly. As of the date of
this Agreement, no action, demand, requirement or investigation
by any Governmental Entity with respect to Holly or any of its
subsidiaries is pending or, to the knowledge of Holly,
threatened, other than, in each case, those the outcome of which,
individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on Holly.
(j) ABSENCE OF CHANGES IN BENEFIT PLANS. Since the
date of the most recent financial statements included in the
Holly Filed SEC Documents, there has not been any adoption or
amendment in any material respect by Holly or any of its
subsidiaries of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option,
phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or
understanding (whether or not legally binding) providing benefits
to any current or former employee, officer or director of Holly
or any of its wholly-owned subsidiaries. Except as permitted by
Sections 4.01(a)(xiii) and 5.07, since the date of the most
recent financial statements included in the Holly Filed SEC
Documents, neither Holly nor any of its wholly-owned subsidiaries
has entered into any employment, consulting, severance,
termination or indemnification agreements, arrangements or
understandings with any current or former employee, officer or
director of Holly or any of its wholly-owned subsidiaries.
(k) ERISA COMPLIANCE.
(i) With respect to each employee benefit plan
(including, without limitation, any "employee benefit plan," as
defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (all the foregoing
being herein called "Benefit Plans"), maintained or contributed
to by Holly or any subsidiary of Holly (the "Holly Benefit
Plans"), Holly has given Giant the opportunity to review a true
and correct copy of (A) the most recent annual report (Form 5500)
filed with the IRS, (B) such Holly Benefit Plans, (C) each trust
agreement relating to such Holly Benefit Plans, (D) the most
recent summary plan description for each Holly Benefit Plan for
which a summary plan description is required, (E) the most recent
actuarial report or valuation relating to Holly Benefit Plans
subject to Title IV of ERISA, and (F) the most recent
determination letter issued by the IRS with respect to any Holly
Benefit Plans qualified under Section 401(a) of the Code.
(ii) With respect to the Holly Benefit Plans,
individually and in the aggregate, no event has occurred and, to
the knowledge of Holly, there exists no condition or set of
circumstances, in connection with which Holly or any of its
subsidiaries could be subject to any liability that is reasonably
likely to have a material adverse effect on Holly (except
liability for benefits claims and funding obligations payable in
the ordinary course) under ERISA, the Code or any other
applicable law.
(iii) Each Holly Benefit Plan has been administered
in accordance with its terms except for any failures so to
administer any Holly Benefit Plan as would not individually or
in the aggregate have a material adverse effect on Holly. Holly,
its subsidiaries and all the Holly Benefit Plans are in
compliance with the applicable provisions of ERISA, the Code and
all other applicable laws and the terms of all applicable
collective bargaining agreements, except for any failures to be
in such compliance as would not individually or in the aggregate
have a material adverse effect on Holly.
(iv) No employee of Holly will be entitled to any
additional benefits or any acceleration of the time of payment or
vesting of any benefits under any Holly Benefit Plan as a result
of the transactions contemplated by this Agreement.
(l) TAXES.
(i) Each of Holly and its subsidiaries has filed
all tax returns and reports required to be filed by it or
requests for extensions to file such returns or reports have been
timely filed, granted and have not expired, except to the extent
that such failures to file or to have extensions granted that
remain in effect individually or in the aggregate would not have
a material adverse effect on Holly. Holly and each of its
subsidiaries has paid (or Holly has paid on its behalf) all taxes
shown as due on such returns, and the most recent financial
statements contained in the Holly Filed SEC Documents reflect an
adequate reserve for all taxes payable by Holly and its
subsidiaries for all taxable periods and portions thereof accrued
through the date of such financial statements.
(ii) No deficiencies for any taxes have been
proposed, asserted or assessed against Holly or any of its
subsidiaries that are not adequately reserved for, except for
deficiencies that individually or in the aggregate would not have
a material adverse effect on Holly.
(iii) Neither Holly nor any of its subsidiaries has
taken any action that is reasonably likely to prevent the Merger
from qualifying as a reorganization within the meaning of Section
368(a) of the Code.
(iv) As used in this Agreement, "taxes" shall
include all federal, state and local income, property, sales,
excise and other taxes or similar governmental charges.
(m) VOTING REQUIREMENTS. The affirmative vote of the
holders of a majority of the voting power of all outstanding
shares of Holly Common Stock, voting as a single class, at the
Holly Stockholders Meeting (the "Holly Stockholder Approval") to
adopt this Agreement is the only vote of the holders of any class
or series of Holly's capital stock necessary to approve and adopt
this Agreement.
(n) STATE TAKEOVER STATUTES. The Board of Directors
of Holly has approved the terms of this Agreement and the
consummation of the Merger and the other transactions
contemplated by this Agreement and such approval constitutes
approval of the Merger and the other transactions contemplated
by this Agreement by the Holly Board of Directors under the
provisions of Section 203 of the DGCL.
(o) BROKERS. Except for Donaldson, Lufkin & Jenrette
Securities Corporation, no broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Holly.
(p) OPINION OF FINANCIAL ADVISOR. Holly has received
the opinion of Donaldson, Lufkin & Jenrette Securities
Corporation dated the date of this Agreement, to the effect that,
as of such date, the Merger Consideration is fair to Holly's
stockholders from a financial point of view, a signed copy of
which opinion has been delivered to Giant.
(q) OWNERSHIP OF GIANT COMMON STOCK. Neither Holly
nor, to its knowledge, any of its affiliates, (i) beneficially
owns (as such term is defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, or (ii) is party to any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of, in each case, shares of capital
stock of Giant.
3.02. REPRESENTATIONS AND WARRANTIES OF GIANT. Except as
disclosed in the Giant Filed SEC Documents (as such term is
defined in Section 3.02(g)) or as set forth on the Disclosure
Schedule delivered by Giant to Holly prior to the execution of
this Agreement, which schedule shall identify exceptions and
other information by specific Section references (the "Giant
Disclosure Schedule"), Giant represents and warrants to Holly as
follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each
of Giant and its Significant Subsidiaries is a corporation or
other legal entity duly organized, validly existing and in good
standing (with respect to jurisdictions which recognize such
concept) under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power and
authority to carry on its business as now being conducted. Each
of Giant and its Significant Subsidiaries is duly qualified or
licensed to do business and is in good standing (with respect to
jurisdictions which recognize such concept) in each jurisdiction
in which the nature of its business or the ownership or leasing
of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to
be so qualified or licensed or to be in good standing
individually or in the aggregate would not have a material
adverse effect on Giant. Giant has delivered or made available
to Holly prior to the execution of this Agreement complete and
correct copies of its certificate of incorporation and bylaws and
has made available to Holly the certificates of incorporation and
bylaws (or comparable organizational documents) of its
Significant Subsidiaries, in each case as amended to date.
(b) SUBSIDIARIES. Exhibit 21 to Giant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1997 includes
all the subsidiaries of Giant which as of the date of this
Agreement are Significant Subsidiaries. All the outstanding
shares of capital stock of, or other equity interests in, each
such Significant Subsidiary have been validly issued and are
fully paid and nonassessable and are owned directly or indirectly
by Giant, free and clear of all Liens.
(c) CAPITAL STRUCTURE. The authorized capital stock
of Giant consists of 50,000,000 shares of Giant Common Stock and
10,000,000 shares of preferred stock, par value $.01 per share,
of Giant ("Giant Preferred Stock"). At the close of business on
April 14, 1998, (i) 10,993,267 shares of Giant Common Stock were
issued and outstanding, (ii) 1,239,100 shares of Giant Common
Stock were held by Giant in its treasury, (iii) no shares of
Giant Preferred Stock were designated, issued, outstanding or
held by Giant in its treasury, and (iv) 421,550 shares of Giant
Common Stock were reserved for issuance pursuant to Giant's 1989
Stock Incentive Plan (the "Giant Stock Plan"). Except as set
forth above, at the close of business on April 14, 1998: (x) no
shares of capital stock or other voting securities of Giant were
issued, reserved for issuance or outstanding; and (y) there were
no outstanding stock appreciation rights (other and to the extent
that Giant phantom stock rights would be deemed to constitute
such rights). The Giant Disclosure Schedule sets forth a
complete and correct list, as of April 14, 1998, of the number
of shares of Giant Common Stock subject to outstanding options
under the Giant Stock Plan and the exercise prices thereof. All
outstanding shares of capital stock of Giant are, and all shares
which may be issued will be, when issued, duly authorized,
validly issued, fully paid, nonassessable and not subject to
preemptive rights. As of the close of business on April 14,
1998, there were no bonds, debentures, notes or other
indebtedness of Giant having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of Giant may vote. Except
for options outstanding under the Giant Stock Plan, as of the
close of business on April 14, 1998, there were no outstanding
securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which
Giant or any of its subsidiaries is a party or by which any of
them is bound obligating Giant or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting securities of
Giant or of any of its subsidiaries or obligating Giant or any
of its subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. As of the close of
business on April 14, 1998, there were no outstanding contractual
obligations of Giant or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of Giant
or any of its wholly owned subsidiaries. As of the close of
business on April 14, 1998, there were no outstanding contractual
obligations of Giant to vote or to dispose of any shares of the
capital stock of any of its subsidiaries.
(d) AUTHORITY; NONCONTRAVENTION. Giant has all
requisite corporate power and authority to enter into this
Agreement and, subject to the Giant Stockholder Approval (as
defined in Section 3.02(m)), to consummate the transactions
contemplated by this Agreement. The execution and delivery of
this Agreement by Giant and the consummation by Giant of the
transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of
Giant, subject to Giant Stockholder Approval. This Agreement has
been duly executed and delivered by Giant and constitutes the
legal, valid and binding obligation of Giant, enforceable against
Giant in accordance with its terms. The execution and delivery
of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with
the provisions of this Agreement will not, conflict with, or
result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or
loss of a material benefit under, or result in any obligation to
or result in the creation of any Lien upon any of the properties
or assets of Giant or any of its Significant Subsidiaries under,
(i) the certificate of incorporation or bylaws of Giant or the
comparable organizational documents of any of its Significant
Subsidiaries, (ii) any material loan or credit agreement, note,
bond, mortgage, indenture, lease or other material agreement,
instrument, permit, concession, franchise or license applicable
to Giant or any of its Significant Subsidiaries or their
respective properties or assets, (iii) any employment, consulting
or similar agreement, or (iv) subject to the governmental filings
and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Giant or any of its Significant
Subsidiaries or their respective properties or assets, other than
any such conflicts, violations, defaults, rights, losses or Liens
that individually or in the aggregate would not (x) have a
material adverse effect on Giant, (y) materially impair the
ability of Giant to perform its obligations under this Agreement,
or (z) prevent or materially delay the consummation of any of the
transactions contemplated by this Agreement. No consent,
approval, order or authorization of, or registration, declaration
or filing with, any Governmental Entity is required by or with
respect to Giant or any of its Significant Subsidiaries in
connection with the execution and delivery of this Agreement by
Giant or the consummation by Giant of the transactions
contemplated by this Agreement, except for (1) the filing of a
premerger notification and report form by Giant under the HSR
Act; (2) the filing with the SEC of (A) the Joint Proxy Statement
relating to the Giant Stockholders Meeting (as defined in Section
5.01(c)), (B) the Form S-4 and (C) such reports under Section
13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated by this Agreement; (3) the filing of the Certificate
of Merger with the Delaware Secretary of State and appropriate
documents with the relevant authorities of other states in which
Giant is qualified to do business; (4) filings with Governmental
Entities to satisfy any applicable requirements of state
securities or "blue sky" laws; (5) such filings with and
approvals of the NYSE to permit the shares of Giant Common Stock
that are to be issued in the Merger to be listed on the NYSE; (6)
such other filings and consents as may be required under any
environmental, health or safety law or regulation pertaining to
any notification, disclosure or required approval necessitated
by the Merger or the transactions contemplated by this Agreement;
and (7) such consents, approvals, orders or authorizations the
failure of which to be made or obtained would not reasonably be
expected to have a material adverse effect on Giant.
(e) SEC DOCUMENTS; UNDISCLOSED LIABILITIES. Giant has
timely filed all required reports, schedules, forms, statements
and other documents with the SEC since January 1, 1997 (the
"Giant SEC Documents"). As of their respective dates, the Giant
SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Giant SEC Documents, and none of
the Giant SEC Documents when filed contained any untrue statement
of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. Except to the extent that information
contained in any Giant SEC Document has been revised or
superseded by a later Giant Filed SEC Document, none of the Giant
SEC Documents contains any untrue statement of a material fact
or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
The financial statements of Giant included in the Giant SEC
Documents comply as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable
accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles (except, in the
case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly
present in all material respects the consolidated financial
position of Giant and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal recurring year-end audit
adjustments). Except (i) as reflected in such financial
statements or in the notes thereto, (ii) as contemplated by this
Agreement, (iii) for liabilities incurred in connection with this
Agreement or the transactions contemplated by this Agreement, and
(iv) for liabilities and obligations incurred since December 31,
1997 in the ordinary course of business consistent with past
practice, neither Giant nor any of its subsidiaries has any
material liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise), including
liabilities arising under any Environmental Laws which,
individually or in the aggregate, could reasonably be expected
to have a material adverse effect on Giant.
(f) INFORMATION SUPPLIED. None of the information
supplied or to be supplied by Giant specifically for inclusion
or incorporation by reference in (i) the Form S-4 will, at the
time the Form S-4 is filed with the SEC or at the time it becomes
effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein
not misleading, or (ii) the Joint Proxy Statement will, at the
date it is first mailed to Giant's stockholders or at the time
of the Giant Stockholders Meeting, contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made,
not misleading. The Joint Proxy Statement will comply as to form
in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, except that no
representation or warranty is made by Giant with respect to
statements made or incorporated by reference therein based on
information supplied by Holly specifically for inclusion or
incorporation by reference in the Joint Proxy Statement.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except (i)
as disclosed in the Giant SEC Documents filed and publicly
available prior to the date of this Agreement (as amended to the
date of this Agreement, the "Giant Filed SEC Documents"), (ii)
for the transactions provided for herein, and (iii) for
liabilities incurred in connection with or as a result of this
Agreement, since the date of the most recent financial statements
included in the Giant Filed SEC Documents, Giant has conducted
its business only in the ordinary course, and there has not been
(1) any material adverse change in Giant; (2) any declaration,
setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of
Giant's capital stock, other than regular quarterly dividends of
$.05 per share on the Giant Common Stock; (3) any split,
combination or reclassification of any of Giant's capital stock
or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for
shares of Giant's capital stock; (4) other than as permitted by
Sections 4.01(b)(xiii) and 5.07, (A) any granting by Giant or any
of its Significant Subsidiaries to any director, executive
officer or other key employee of Giant of any increase in
compensation, except for normal increases in the ordinary course
of business consistent with past practice or as required under
employment agreements in effect as of the date of the most recent
financial statements included in the Giant Filed SEC Documents,
(B) any granting by Giant or any of its Significant Subsidiaries
to any such director, executive officer or key employee of any
increase in severance or termination pay, except as required
under any employment, severance or termination agreements in
effect as of the date of the most recent financial statements
included in the Giant Filed SEC Documents, or (C) any entry by
Giant or any of its subsidiaries into any employment, severance
or termination agreement with any such executive officer or key
employee; or (5) except insofar as may have been disclosed in the
Giant Filed SEC Documents or required by a change in generally
accepted accounting principles, any change in accounting methods,
principles or practices by Giant materially affecting its assets,
liabilities or business.
(h) LITIGATION. There is no suit, action or proceeding
pending or, to the knowledge of Giant, threatened against or
affecting Giant or any of its subsidiaries that individually or
in the aggregate could reasonably be expected to have a material
adverse effect on Giant , nor is there any judgment, order or
decree of any Governmental Entity or arbitrator outstanding
against Giant or any of its subsidiaries having, or which could
reasonably be expected to have, any such effect.
(i) COMPLIANCE WITH APPLICABLE LAWS. Giant and its
subsidiaries hold all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities which are
material to the operation of the businesses of Giant and its
subsidiaries, taken as a whole (the "Giant Permits"). Giant and
its subsidiaries are in compliance with the terms of the Giant
Permits and all applicable statutes, laws, ordinances, rules and
regulations, including Environmental Laws, except where the
failure so to comply, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on
Giant. The businesses of Giant and its subsidiaries are not
being conducted in violation of any law, ordinance or regulation
of any Governmental Entity, including Environmental Laws, except
for possible violations which could not reasonably be expected
to have a material adverse effect on Giant. As of the date of
this Agreement, no action, demand, requirement or investigation
by any Governmental Entity with respect to Giant or any of its
subsidiaries is pending or, to the knowledge of Giant,
threatened, other than, in each case, those the outcome of which,
individually or in the aggregate could not reasonably be expected
to have a material adverse effect on Giant.
(j) ABSENCE OF CHANGES IN BENEFIT PLANS. Since the
date of the most recent financial statements included in the
Giant Filed SEC Documents, there has not been any adoption or
amendment in any material respect by Giant or any of its
subsidiaries of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option,
phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or
understanding (whether or not legally binding) providing benefits
to any current or former employee, officer or director of Giant
or any of its wholly-owned subsidiaries. Except as permitted by
Sections 4.01(b)(xiii) and 5.07, since the date of the most
recent financial statements included in the Giant Filed SEC
Documents, neither Giant nor any of its wholly-owned subsidiaries
has entered into any employment, consulting, severance,
termination or indemnification agreements, arrangements or
understandings with any current or former employee, officer or
director of Giant or any of its wholly-owned subsidiaries.
(k) ERISA COMPLIANCE.
(i) With respect to Benefit Plans maintained or
contributed to by Giant or any subsidiary of Giant (the "Giant
Benefit Plans"), Giant has given Holly the opportunity to review
a true and correct copy of (A) the most recent annual report
(Form 5500) filed with the IRS, (B) such Giant Benefit Plans, (C)
each trust agreement relating to such Giant Benefit Plans, (D)
the most recent summary plan description for each Giant Benefit
Plan for which a summary plan description is required, (E) the
most recent actuarial report or valuation relating to Giant
Benefit Plans subject to Title IV of ERISA, and (F) the most
recent determination letter issued by the IRS with respect to any
Giant Benefit Plans qualified under Section 401(a) of the Code.
(ii) With respect to the Giant Benefit Plans,
individually and in the aggregate, no event has occurred and, to
the knowledge of Giant, there exists no condition or set of
circumstances, in connection with which Giant or any of its
subsidiaries could be subject to any liability that is reasonably
likely to have a material adverse effect on Giant (except
liability for benefits claims and funding obligations payable in
the ordinary course) under ERISA, the Code or any other
applicable law.
(iii) Each Giant Benefit Plan has been administered
in accordance with its terms, except for any failures so to
administer any Giant Benefit Plans as would not individually or
in the aggregate have a material adverse effect on Giant. Giant,
its subsidiaries and all the Giant Benefit Plans are in
compliance with the applicable provisions of ERISA, the Code and
all other applicable laws and the terms of all applicable
collective bargaining agreements, except for any failures to be
in such compliance as would not individually or in the aggregate
have a material adverse effect on Giant.
(iv) No employee of Giant will be entitled to any
additional benefits or any acceleration of the time of payment
or vesting of any benefits under any Giant Benefit Plan as a
result of the transactions contemplated by this Agreement.
(l) TAXES.
(i) Each of Giant and its subsidiaries has filed
all tax returns and reports required to be filed by it or
requests for extensions to file such returns or reports have been
timely filed, granted and have not expired, except to the extent
that such failures to file or to have extensions granted that
remain in effect individually or in the aggregate would not have
a material adverse effect on Giant. Giant and each of its
subsidiaries has paid (or Giant has paid on its behalf) all taxes
shown as due on such returns, and the most recent financial
statements contained in the Giant Filed SEC Documents reflect an
adequate reserve for all taxes payable by Giant and its
subsidiaries for all taxable periods and portions thereof accrued
through the date of such financial statements.
(ii) No deficiencies for any taxes have been
proposed, asserted or assessed against Giant or any of its
subsidiaries that are not adequately reserved for, except for
deficiencies that individually or in the aggregate would not have
a material adverse effect on Giant.
(iii) Neither Giant nor any of its subsidiaries
has taken any action that is reasonably likely to prevent the
Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code.
(m) VOTING REQUIREMENTS. The affirmative vote of the
holders of a majority of the voting power of all outstanding
shares of Giant Common Stock, voting as a single class, at the
Giant Stockholders Meeting to adopt this Agreement is the only
vote of the holders of any class or series of Giant's capital
stock necessary to approve and adopt this Agreement and to issue
the Merger Consideration; provided, however, that the affirmative
vote of the holders of 80% of all outstanding shares of Giant
Common Stock, voting as a single class, at the Giant Stockholders
Meeting is required to approve certain of the amendments to
Giant's certificate of incorporation and bylaws contemplated by
Exhibits A and B, respectively. For purposes of this Agreement,
the "Giant Stockholder Approval" means the majority and 80% votes
described above in this Section 3.02(m) as are necessary to adopt
this Agreement and the amendments to the Giant certificate of
incorporation and bylaws contemplated hereby.
(n) STATE TAKEOVER STATUTES. The Board of Directors
of Giant has approved the terms of this Agreement and the
consummation of the Merger and the other transactions
contemplated by this Agreement and such approval constitutes
approval of the Merger and the other transactions contemplated
by this Agreement by the Giant Board of Directors under the
provisions of Section 203 of the DGCL.
(o) BROKERS. Except for Bear, Stearns & Co. Inc., no
broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by
or on behalf of Giant.
(p) OPINION OF FINANCIAL ADVISOR. Giant has received
the opinion of Bear, Stearns & Co. Inc., dated the date of this
Agreement, to the effect that, as of such date, the Merger
Consideration is fair to Giant and, accordingly, to Giant's
stockholders from a financial point of view, a signed copy of
which opinion has been delivered to Holly.
(q) OWNERSHIP OF HOLLY COMMON STOCK. Neither Giant
nor, to its knowledge, any of its affiliates, (i) beneficially
owns (as such term is defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, or (ii) is party to any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of, in each case, shares of capital
stock of Holly.
(r) OWNERSHIP OF GIANT COMMON STOCK UPON EXCHANGE.
Immediately after the Effective Time, the holders of shares of
Holly Common Stock issued and outstanding immediately before the
Effective Time shall, in the aggregate, have the right to
receive, and shall receive pursuant to the provisions of Article
II, that number of shares of Giant Common Stock such that such
holders shall own fifty percent (50%) of the issued and
outstanding capital stock of the Surviving Corporation.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.01. CONDUCT OF BUSINESS.
(a) CONDUCT OF BUSINESS BY HOLLY. Except as
contemplated by this Agreement or as set forth in the Holly
Disclosure Schedule, during the period from the date of this
Agreement to the Effective Time, Holly shall, and shall cause its
subsidiaries to, carry on their respective businesses in the
usual, regular and ordinary course in substantially the same
manner as heretofore conducted and in compliance in all material
respects with all applicable laws and regulations and, to the
extent consistent therewith, use all reasonable efforts to
preserve intact their current business organizations, use
reasonable efforts to keep available the services of their
current officers and other key employees and preserve their
relationships with those persons having business dealings with
them to the end that their goodwill and ongoing businesses shall
be unimpaired at the Effective Time, except such impairment as
would not have a material adverse effect on Holly. Except as set
forth in the Holly Disclosure Schedule, without limiting the
generality of the foregoing, during the period from the date of
this Agreement to the Effective Time, Holly shall not, and shall
not permit any of its subsidiaries to:
(i) other than dividends and distributions
(including liquidating distributions) by a direct or indirect
wholly-owned subsidiary of Holly to its parent, or by a
subsidiary that is partially-owned by Holly or any of its
subsidiaries, provided that Holly or any such subsidiary receives
or is to receive its proportionate share thereof, and other than
the regular quarterly dividends of $.15 per share with respect
to the Holly Common Stock, (x) declare, set aside or pay any
dividends on, or make any other distributions in respect of, any
of its capital stock, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for
shares of its capital stock, or (z) purchase, redeem or otherwise
acquire any shares of capital stock of Holly or any of its
Significant Subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities;
(ii) issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting
securities or convertible securities (other than the issuance of
Holly Common Stock upon the exercise of Holly Employee Stock
Options outstanding on the date of this Agreement and in
accordance with their present terms);
(iii) amend its certificate of incorporation,
bylaws or other comparable organizational documents;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any
corporation, limited liability company, partnership, joint
venture, association or other business organization or division
thereof, except for (x) acquisitions publicly announced before
the date of this Agreement, (y) such acquisitions which do not
in the aggregate exceed $5,000,000 and (z) purchases of
inventory, feedstock and other items in the ordinary course of
business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of
its properties or assets, other than (x) in the ordinary course
of business consistent with past practice and (y) sales of assets
which do not individually or in the aggregate exceed $5,000,000;
(vi) (x) incur any indebtedness for borrowed money
or guarantee any such indebtedness of another person, issue or
sell any debt securities or warrants or other rights to acquire
any debt securities of Holly or any of its wholly-owned
subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any
financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing,
except for short-term borrowings and guarantees of indebtedness
of its subsidiaries incurred in the ordinary course of business
consistent with past practice, or (y) make any loans, advances
or capital contributions to, or investments in, any other person,
other than to Holly or any direct or indirect subsidiary of Holly
or to officers and employees of Holly or any of its subsidiaries
for travel, business or relocation expenses in the ordinary
course of business;
(vii) make or agree to make any capital expenditure
or capital expenditures other than capital expenditures set forth
in the operating budget of Holly previously furnished to Giant,
the relevant portions of which are set forth in the Holly
Disclosure Schedule, other than capital expenditures that do not
or would not constitute a material change;
(viii) make any tax election that could reasonably
be expected to have a material adverse effect on Holly or settle
or compromise any material income tax liability;
(ix) pay, discharge, settle or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the payment,
discharge, settlement or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with
their terms, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial
statements (or the notes thereto) of Holly included in the Holly
Filed SEC Documents, incurred since the date of such financial
statements in the ordinary course of business consistent with
past practice or which do not in the aggregate have a material
adverse effect on Holly;
(x) except in the ordinary course of business or
except as would not reasonably be expected to have a material
adverse effect on Holly, modify, amend or terminate any material
contract or agreement to which Holly or any subsidiary is a party
or waive, release or assign any material rights or claims
thereunder;
(xi) make any material change to its accounting
methods, principles or practices, except as may be required by
generally accepted accounting principles;
(xii) except as required by law or contemplated by
this Agreement, enter into, adopt or amend in any material
respect or terminate any Holly Benefit Plan or any other
agreement, plan or policy involving Holly or its subsidiaries and
one or more of their directors, officers or employees, or
materially change any actuarial or other assumption used to
calculate funding obligations with respect to any Holly pension
plans, or change the manner in which contributions to any Holly
pension plans are made or the basis on which such contributions
are determined;
(xiii) except for (a) new employment agreements
with Holly's three highest-ranking executives on terms no more
favorable than Giant's employment agreements (as amended pursuant
to Section 5.06(g)) with its three highest-ranking executives
(with base salaries equal to the executives' current base
salaries or such other amounts approved by Giant), (b) bonus
payments to Holly employees in amounts and forms as agreed to by
the Holly and Giant Boards of Directors prior to the effective
date of the S-4 and to be paid at or before the Closing, (c)
normal increases in the ordinary course of business consistent
with past practice that, in the aggregate, do not materially
increase benefits or compensation expenses of Holly or its
subsidiaries, and (d) as contemplated hereby or by the terms of
any contract the existence of which does not constitute a
violation of this Agreement, increase the compensation of any
director, executive officer or other key employee of Holly or pay
any benefit or amount not required by a plan or arrangement as
in effect on the date of this Agreement to any such person; or
(xiv) authorize, or commit or agree to take, any of
the foregoing actions.
(b) CONDUCT OF BUSINESS BY GIANT. Except as
contemplated by this Agreement or as set forth in the Giant
Disclosure Schedule, during the period from the date of this
Agreement to the Effective Time, Giant shall, and shall cause its
subsidiaries to, carry on their respective businesses in the
usual, regular and ordinary course in substantially the same
manner as heretofore conducted and in compliance in all material
respects with all applicable laws and regulations and, to the
extent consistent therewith, use all reasonable efforts to
preserve intact their current business organizations, use
reasonable efforts to keep available the services of their
current officers and other key employees and preserve their
relationships with those persons having business dealings with
them to the end that their goodwill and ongoing businesses shall
be unimpaired at the Effective Time, except such impairment as
would not have a material adverse effect on Giant. Except as set
forth in the Giant Disclosure Schedule, without limiting the
generality of the foregoing, during the period from the date of
this Agreement to the Effective Time, Giant shall not, and shall
not permit any of its subsidiaries to:
(i) other than dividends and distributions
(including liquidating distributions) by a direct or indirect
wholly-owned subsidiary of Giant to its parent, or by a
subsidiary that is partially-owned by Giant or any of its
subsidiaries, provided that Giant or any such subsidiary receives
or is to receive its proportionate share thereof, and other than
the regular quarterly dividends of $.05 per share with respect
to the Giant Common Stock, (x) declare, set aside or pay any
dividends on, or make any other distributions in respect of, any
of its capital stock, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for
shares of its capital stock, or (z) purchase, redeem or otherwise
acquire any shares of capital stock of Giant or any of its
Significant Subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities;
(ii) issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting
securities or convertible securities (other than the issuance of
Giant Common Stock upon the exercise of Giant Employee Stock
Options outstanding on the date of this Agreement and in
accordance with their present terms);
(iii) except as contemplated by this Agreement,
amend its certificate of incorporation, bylaws or other
comparable organizational documents;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any
corporation, limited liability company, partnership, joint
venture, association or other business organization or division
thereof, except for (x) acquisitions publicly announced before
the date of this Agreement, (y) such other acquisitions which do
not in the aggregate exceed $5,000,000 and (z) purchases of
inventory, feedstock and other items in the ordinary course of
business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of
its properties or assets, other than (x) in the ordinary course
of business consistent with past practice and (y) sales of assets
which do not individually or in the aggregate exceed $5,000,000;
(vi) except as contemplated by Section 4.01(f) of
this Agreement, (x) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell
any debt securities or warrants or other rights to acquire any
debt securities of Giant or any of its wholly-owned subsidiaries,
guarantee any debt securities of another person, enter into any
"keep well" or other agreement to maintain any financial
statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing,
except for short-term borrowings and guarantees of indebtedness
of its subsidiaries incurred in the ordinary course of business
consistent with past practice, or (y) make any loans, advances
or capital contributions to, or investments in, any other person,
other than to Giant or any direct or indirect subsidiary of Giant
or to officers and employees of Giant or any of its subsidiaries
for travel, business or relocation expenses in the ordinary
course of business;
(vii) make or agree to make any capital expenditure
or capital expenditures other than capital expenditures set forth
in the operating budget of Giant previously furnished to Holly,
the relevant portions of which are set forth in the Giant
Disclosure Schedule, other than capital expenditures that do not
or would not constitute a material change;
(viii) make any tax election that could reasonably
be expected to have a material adverse effect on Giant or settle
or compromise any material income tax liability;
(ix) pay, discharge, settle or satisfy any
material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the
payment, discharge, settlement or satisfaction, in the ordinary
course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in,
or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of Giant included in the Giant
Filed SEC Documents, incurred since the date of such financial
statements in the ordinary course of business consistent with past
practice or which do not in the aggregate have a material adverse
effect on Giant;
(x) except in the ordinary course of business or
except as would not reasonably be expected to have a material
adverse effect on Giant, modify, amend or terminate any material
contract or agreement to which Giant, any subsidiary is a party
or waive, release or assign any material rights or claims
thereunder;
(xi) make any material change to its accounting
methods, principles or practices, except as may be required by
generally accepted accounting principles;
(xii) except as required by law or contemplated by
this Agreement, enter into, adopt or amend in any material
respect or terminate any Giant Benefit Plan or any other
agreement, plan or policy involving Giant or its subsidiaries and
one or more of their directors, officers or employees, or
materially change any actuarial or other assumption used to
calculate funding obligations with respect to any Giant pension
plans, or change the manner in which contributions to any Giant
pension plans are made or the basis on which such contributions
are determined;
(xiii) except for (a) bonus payments to Giant
employees in amounts and forms as agreed to by the Giant and
Holly Boards of Directors prior to the effective date of the Form
S-4 and to be paid at or before the Closing, (b) the amendments
to the Giant employment agreements, stock options and phantom
stock rights described in Section 5.06(g), (c) normal increases
in the ordinary course of business consistent with past practice
that, in the aggregate, do not materially increase benefits or
compensation expenses of Giant or its subsidiaries, and (d) as
contemplated hereby or by the terms of any contract the existence
of which does not constitute a violation of this Agreement,
increase the compensation of any director, executive officer or
other key employee of Giant or pay any benefit or amount not
required by a plan or arrangement as in effect on the date of
this Agreement to any such person; or
(xiv) authorize, or commit or agree to take, any of
the foregoing actions.
(c) COORDINATION OF DIVIDENDS. Each of Giant and Holly
shall coordinate with the other regarding the declaration and
payment of dividends in respect of the Giant Common Stock and the
Holly Common Stock and the record dates and payment dates
relating thereto, it being the intention of Giant and Holly that
any holder of Holly Common Stock shall not receive two dividends,
or fail to receive one dividend, for any single calendar quarter
with respect to its shares of Holly Common Stock and/or any
shares of Giant Common Stock any such holder receives in exchange
therefor pursuant to the Merger.
(d) OTHER ACTIONS. Except as required by law, Holly
and Giant shall not, and shall not permit any of their respective
subsidiaries to, voluntarily take any action that would, or that
could reasonably be expected to, result in (i) any of the
representations and warranties of such party set forth in this
Agreement that are qualified as to materiality becoming untrue,
(ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect, or (iii) any
of the conditions to the Merger set forth in Article VI not being
satisfied.
(e) ADVICE OF CHANGES. Holly and Giant shall promptly
advise the other party orally and in writing of (i) any
representation or warranty made by it contained in this Agreement
that is qualified as to materiality becoming untrue or inaccurate
in any respect or any such representation or warranty that is not
so qualified becoming untrue or inaccurate in any material
respect, (ii) the failure by it to comply in any material respect
with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it under this
Agreement, or (iii) any change or event having, or which, insofar
as can reasonably be foreseen, could reasonably be expected to
have, a material adverse effect on such party or on the truth of
their respective representations and warranties or the ability
of the conditions set forth in Article VI to be satisfied;
provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under
this Agreement.
(f) FINANCING ARRANGEMENT. Giant and Holly shall have
arranged for the Surviving Corporation to finance appropriately
the redemption contingency that will result on account of the
Merger with respect to Giant's outstanding 9% Senior Subordinated
Notes due 2007 ($150,000,000 aggregate principal amount) and its
outstanding 9 3/4% Senior Subordinated Notes due 2003 ($100,000,000
aggregate principal amount). Such arrangement shall be on terms
and in amounts that are acceptable to each of the Giant Board of
Directors and the Holly Board of Directors.
4.02. NO SOLICITATION BY HOLLY.
(a) Holly shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any of its
officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative
retained by it or any of its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or
encourage (including by way of furnishing information), or take
any other action designed to facilitate, any inquiries or the
making of any proposal which constitutes any Holly Takeover
Proposal (as hereinafter defined) or (ii) participate in any
discussions or negotiations regarding any Holly Takeover
Proposal; provided, however, that if, at any time prior to the
adoption of this Agreement by the holders of Holly Common Stock,
the Board of Directors of Holly determines in good faith, after
consultation with outside counsel, that it is necessary to do so
in order to comply with its fiduciary duties to Holly's
stockholders under applicable law, Holly may, in response to a
Holly Takeover Proposal which was not solicited by it or which
did not otherwise result from a breach of this Section 4.02(a),
and subject to compliance with Section 4.02(c), (x) furnish
information with respect to Holly and its subsidiaries to any
person pursuant to a customary confidentiality agreement (as
determined by Holly after consultation with its outside counsel)
and (y) participate in negotiations regarding such Holly Takeover
Proposal. For purposes of this Agreement, "Holly Takeover
Proposal" means any inquiry, proposal or offer from any person
relating to any direct or indirect acquisition or purchase of 35%
or more of the assets of Holly and its subsidiaries or 35% or
more of any class of equity securities of Holly or any of its
subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 35%
or more of any class of equity securities of Holly or any of its
subsidiaries, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving Holly or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 4.02,
neither the Board of Directors of Holly nor any committee thereof
shall (i) withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Giant, the approval or
recommendation by such Board of Directors or such committee of
the Merger or this Agreement, (ii) approve or recommend, or
propose publicly to approve or recommend, any Holly Takeover
Proposal, or (iii) cause Holly to enter into any letter of
intent, agreement in principle, acquisition agreement or other
similar agreement (each, a "Holly Acquisition Agreement") related
to any Holly Takeover Proposal. Notwithstanding the foregoing,
in the event that prior to the adoption of this Agreement by the
holders of Holly Common Stock: (x) the Board of Directors of
Holly determines in good faith, after it has received a Holly
Superior Proposal (as defined below) and after consultation with
outside counsel, that it is necessary to do so in order to comply
with its fiduciary duties to Holly's stockholders under
applicable law, the Board of Directors of Holly may (subject to
this and the following sentences) withdraw or modify its approval
or recommendation of the Merger or this Agreement; or (y) the
Board of Directors of Holly determines in good faith that there
is not a substantial probability that the adoption of this
Agreement by holders of Holly Common Stock will be obtained due
to the existence of a Holly Superior Proposal, the Board of
Directors of Holly may (subject to this and the following
sentences) approve or recommend such Holly Superior Proposal or
terminate this Agreement (and concurrently with or after such
termination, if it so chooses, cause Holly to enter into any
Holly Acquisition Agreement with respect to any Holly Superior
Proposal), but in each of the cases set forth in this clause (y),
only at a time that is after the fifth business day following
Giant's receipt of written notice advising Giant that the Board
of Directors of Holly has received a Holly Superior Proposal,
specifying the material terms and conditions of such Holly
Superior Proposal and identifying the person making such Holly
Superior Proposal. For purposes of this Agreement, a "Holly
Superior Proposal" means any proposal made by a third party to
acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than 50% of the combined voting
power of the shares of Holly Common Stock then outstanding or all
or substantially all the assets of Holly and otherwise on terms
which the Board of Directors of Holly determines in its good
faith judgment (based on the advice of a financial advisor of
nationally recognized reputation) to be more favorable to Holly's
stockholders than the Merger and for which financing, to the
extent required, is then committed or which, in the good faith
judgment of the Board of Directors of Holly, is reasonably
capable of being obtained by such third party.
(c) In addition to the obligations of Holly set forth
in paragraphs (a) and (b) of this Section 4.02, Holly shall
immediately advise Giant orally and in writing of any request for
information or of any Holly Takeover Proposal, the material terms
and conditions of such request or Holly Takeover Proposal and the
identity of the person making such request or Holly Takeover
Proposal. Holly will keep Giant reasonably informed of the
status and details (including amendments or proposed amendments)
of any such request or Holly Takeover Proposal.
(d) Nothing contained in this Section 4.02 shall
prohibit Holly from taking and disclosing to its stockholders a
position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to Holly's
stockholders if, in the good faith judgment of the Board of
Directors of Holly, after consultation with outside counsel,
failure so to disclose would be inconsistent with its fiduciary
duties to Holly's stockholders under applicable law; provided,
however, that neither Holly nor its Board of Directors nor any
committee thereof shall, except as permitted by Section 4.02(b),
withdraw or modify, or propose publicly to withdraw or modify,
its position with respect to this Agreement or the Merger or
approve or recommend, or propose publicly to approve or
recommend, a Holly Takeover Proposal.
4.03. NO SOLICITATION BY GIANT.
(a) Giant shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any of its
officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative
retained by it or any of its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or
encourage (including by way of furnishing information), or take
any other action designed to facilitate, any inquiries or the
making of any proposal which constitutes any Giant Takeover
Proposal (as hereinafter defined) or (ii) participate in any
discussions or negotiations regarding any Giant Takeover
Proposal; provided, however, that if, at any time prior to the
adoption of this Agreement by the holders of Giant Common Stock,
the Board of Directors of Giant determines in good faith, after
consultation with outside counsel, that it is necessary to do so
in order to comply with its fiduciary duties to Giant's
stockholders under applicable law, Giant may, in response to a
Giant Takeover Proposal which was not solicited by it or which
did not otherwise result from a breach of this Section 4.03(a),
and subject to compliance with Section 4.03(c), (x) furnish
information with respect to Giant and its subsidiaries to any
person pursuant to a customary confidentiality agreement (as
determined by Giant after consultation with its outside counsel)
and (y) participate in negotiations regarding such Giant Takeover
Proposal. For purposes of this Agreement, "Giant Takeover
Proposal" means any inquiry, proposal or offer from any person
relating to any direct or indirect acquisition or purchase of 35%
or more of the assets of Giant and its subsidiaries or 35% or
more of any class of equity securities of Giant or any of its
subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 35%
or more of any class of equity securities of Giant or any of its
subsidiaries, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving Giant or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 4.03,
neither the Board of Directors of Giant nor any committee thereof
shall (i) withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Holly, the approval or
recommendation by such Board of Directors or such committee of
the Merger, this Agreement or the issuance of Giant Common Stock
in connection with the Merger, (ii) approve or recommend, or
propose publicly to approve or recommend, any Giant Takeover
Proposal, or (iii) cause Giant to enter into any letter of
intent, agreement in principle, acquisition agreement or other
similar agreement (each, a "Giant Acquisition Agreement") related
to any Giant Takeover Proposal. Notwithstanding the foregoing,
in the event that prior to the adoption of this Agreement by the
holders of Giant Common Stock: (x) the Board of Directors of
Giant determines in good faith, after it has received a Giant
Superior Proposal (as defined below) and after consultation with
outside counsel, that it is necessary to do so in order to comply
with its fiduciary duties to Giant's stockholders under
applicable law, the Board of Directors of Giant may (subject to
this and the following sentences) withdraw or modify its approval
or recommendation of the Merger, this Agreement or the issuance
of Giant Common Stock in connection with the Merger; or (y) the
Board of Directors of Giant determines in good faith that there
is not a substantial probability that the adoption of this
Agreement by holders of Giant Common Stock will be obtained due
to the existence of a Giant Superior Proposal, the Board of
Directors of Giant may (subject to this and the following
sentences) approve or recommend such Giant Superior Proposal or
terminate this Agreement (and concurrently with or after such
termination, if it so chooses, cause Giant to enter into any
Giant Acquisition Agreement with respect to any Giant Superior
Proposal), but in each of the cases set forth in this clause (y),
only at a time that is after the fifth business day following
Holly's receipt of written notice advising Holly that the Board
of Directors of Giant has received a Giant Superior Proposal,
specifying the material terms and conditions of such Giant
Superior Proposal and identifying the person making such Giant
Superior Proposal. For purposes of this Agreement, a "Giant
Superior Proposal" means any proposal made by a third party to
acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than 50% of the combined voting
power of the shares of Giant Common Stock then outstanding or all
or substantially all the assets of Giant and otherwise on terms
which the Board of Directors of Giant determines in its good
faith judgment (based on the advice of a financial advisor of
nationally recognized reputation) to be more favorable to Giant's
stockholders than the Merger and for which financing, to the
extent required, is then committed or which, in the good faith
judgment of the Board of Directors of Giant, is reasonably
capable of being obtained by such third party.
(c) In addition to the obligations of Giant set forth
in paragraphs (a) and (b) of this Section 4.03, Giant shall
immediately advise Holly orally and in writing of any request for
information or of any Giant Takeover Proposal, the material terms
and conditions of such request or Giant Takeover Proposal and the
identity of the person making such request or Giant Takeover
Proposal. Giant will keep Holly reasonably informed of the
status and details (including amendments or proposed amendments)
of any such request or Giant Takeover Proposal.
(d) Nothing contained in this Section 4.03 shall
prohibit Giant from taking and disclosing to its stockholders a
position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to Giant's
stockholders if, in the good faith judgment of the Board of
Directors of Giant, after consultation with outside counsel,
failure so to disclose would be inconsistent with its fiduciary
duties to Giant's stockholders under applicable law; provided,
however, that neither Giant nor its Board of Directors nor any
committee thereof shall, except as permitted by Section 4.03(b),
withdraw or modify, or propose publicly to withdraw or modify,
its position with respect to this Agreement, the Merger, the
issuance of Giant Common Stock in connection with the Merger, or
approve or recommend, or propose publicly to approve or
recommend, a Giant Takeover Proposal.
ARTICLE V
ADDITIONAL AGREEMENTS
5.01. PREPARATION OF THE FORM S-4 AND THE JOINT PROXY
STATEMENT; STOCKHOLDERS MEETINGS.
(a) As soon as practicable following the date of this
Agreement, Holly and Giant shall prepare and file with the SEC
the Joint Proxy Statement and Giant shall prepare and file with
the SEC the Form S-4, in which the Joint Proxy Statement will be
included as a prospectus. Each of Holly and Giant shall use all
reasonable efforts to have the Form S-4 declared effective under
the Securities Act as promptly as practicable after such filing.
Holly will use all reasonable efforts to cause the Joint Proxy
Statement to be mailed to Holly's stockholders, and Giant will
use all reasonable efforts to cause the Joint Proxy Statement to
be mailed to Giant's stockholders, in each case as promptly as
practicable after the Form S-4 is declared effective under the
Securities Act. Giant also shall take any action (other than
qualifying to do business in any jurisdiction in which it is not
now so qualified or to file a general consent to service of
process) required to be taken under any applicable state
securities laws in connection with the issuance of Giant Common
Stock in the Merger and Holly shall furnish all information
concerning Holly and the holders of Holly Common Stock as may be
reasonably requested in connection with any such action.
(b) Holly will, as soon as practicable following the
date of this Agreement, duly call, give notice of, convene and
hold a meeting of its stockholders (the "Holly Stockholders
Meeting") for the purpose of obtaining the Holly Stockholder
Approval. Without limiting the generality of the foregoing but
subject to Section 4.02(b), Holly agrees that its obligations
pursuant to the first sentence of this Section 5.01(b) shall not
be affected by the commencement, public proposal, public
disclosure or communication to Holly of any Holly Takeover
Proposal. Holly will, through its Board of Directors, recommend
to its stockholders the approval and adoption of this Agreement,
the Merger and the other transactions contemplated by this
Agreement, except to the extent that the Board of Directors of
Holly shall have withdrawn or modified its approval or
recommendation of this Agreement or the Merger and terminated
this Agreement in accordance with Section 4.02(b).
(c) Giant will, as soon as practicable following the
date of this Agreement, duly call, give notice of, convene and
hold a meeting of its stockholders (the "Giant Stockholders
Meeting") for the purpose of obtaining the Giant Stockholder
Approval. Without limiting the generality of the foregoing but
subject to Section 4.03(b), Giant agrees that its obligations
pursuant to the first sentence of this Section 5.01(c) shall not
be affected by the commencement, public proposal, public
disclosure or commencement to Giant of any Giant Takeover
Proposal. Giant will, through its Board of Directors, recommend
to its stockholders the approval and adoption of this Agreement,
the Merger and the other transactions contemplated by this
Agreement, except to the extent that the Board of Directors of
Giant shall have withdrawn or modified its recommendation and
terminated this Agreement in accordance with Section 4.03(b).
(d) Giant and Holly will use reasonable efforts to hold
the Holly Stockholders Meeting and the Giant Stockholders Meeting
on the same date and as soon as practicable after the date
hereof.
5.02. LETTERS OF HOLLY'S ACCOUNTANTS. Holly shall use
reasonable efforts to cause to be delivered to Giant two letters
from Ernst & Young LLP, Holly's independent accountants, one
dated a date within two business days before the date on which
the Form S-4 shall become effective and one dated a date within
two business days before the Closing Date, each addressed to
Giant, in form and substance reasonably satisfactory to Giant and
customary in scope and substance for comfort letters delivered
by independent public accountants in connection with registration
statements similar to the Form S-4.
5.03. LETTERS OF GIANT'S ACCOUNTANTS. Giant shall use
reasonable efforts to cause to be delivered to Holly two letters
from Deloitte & Touche LLP, Giant's independent accountants, one
dated a date within two business days before the date on which
the Form S-4 shall become effective and one dated a date within
two business days before the Closing Date, each addressed to
Holly, in form and substance reasonably satisfactory to Holly and
customary in scope and substance for comfort letters delivered
by independent public accountants in connection with registration
statements similar to the Form S-4.
5.04. ACCESS TO INFORMATION; CONFIDENTIALITY. Subject to
the Confidentiality Agreement (as defined below), each of Holly
and Giant shall, and shall cause each of its respective
subsidiaries to, afford to the other party and to the officers,
employees, accountants, counsel, financial advisors and other
representatives of such other party, reasonable access during
normal business hours during the period prior to the Effective
Time to all their respective properties, books, contracts,
commitments, personnel and records and, during such period, each
of Holly and Giant shall, and shall cause each of its respective
subsidiaries to, furnish promptly to the other party (a) a copy
of each report, schedule, registration statement and other
document filed by it during such period pursuant to the
requirements of federal or state securities laws and (b) all
other information concerning its business, properties and
personnel as such other party may reasonably request. Each of
Holly and Giant will hold, and will cause its respective
officers, employees, accountants, counsel, financial advisors and
other representatives and affiliates to hold, any nonpublic
information in accordance with the terms of the Confidentiality
Agreement dated April 6, 1998 between Giant and Holly (the
"Confidentiality Agreement").
5.05. REASONABLE EFFORTS.
(a) Upon the terms and subject to the conditions set
forth in this Agreement, each of the parties agrees to use all
reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement, including (i) the
obtaining of all necessary actions, waivers, consents and
approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with
Governmental Entities, such as those referred to in Sections
3.01(d)(1)-(4) and 3.02(d)(1)-(6)) and the taking of all
reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary actions,
waivers, consents and approvals from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated by this Agreement,
including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or
reversed, and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated
by, and to fully carry out the purposes of, this Agreement.
Nothing set forth in this Section 5.05(a) will limit or affect
actions permitted to be taken pursuant to Sections 4.02 and 4.03.
(b) In connection with and without limiting the
foregoing, each of Holly and Giant shall (i) take all action
necessary to ensure that no state takeover statute or similar
statute or regulation is or becomes applicable to the Merger,
this Agreement or any of the other transactions contemplated by
this Agreement, and (ii) if any state takeover statute or similar
statute or regulation becomes applicable to the Merger, this
Agreement or any other transaction contemplated by this
Agreement, take all action necessary to ensure that the Merger
and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated
by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Merger and the other transactions
contemplated by this Agreement.
(c) In connection with and without limiting the
foregoing, each of Holly and Giant shall (i) promptly make or
cause to be made the filings required of such party or any of its
affiliates or subsidiaries under the HSR Act with respect to the
Merger, (ii) comply at the earliest practicable date with any
request under the HSR Act for additional information, documents,
or other material received by such party or any of its affiliates
or subsidiaries from the Federal Trade Commission or the
Department of Justice or other Governmental Entity in respect of
such filings, the Merger or such other transactions, and
(iii) cooperate with the other party in connection with any such
filing and in connection with resolving any investigation or
other inquiry of any such agency or other Governmental Entity
under the HSR Act, the Sherman Act, as amended, the Clayton Act,
as amended, the Federal Trade Commission Act, as amended, and any
other federal, state or foreign statutes, rules, regulations, or
orders that are designed to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or
restraint of trade (collectively, the "Antitrust Laws") with
respect to any such filing, the Merger, or any such other
transaction. Each party shall promptly inform the other party
of any material communication with, and any proposed
understanding, undertaking, or agreement with, any Governmental
Entity regarding any such filings, the Merger, or any such other
transactions. Neither party shall participate in any meeting
with any Governmental Entity in respect of any such filings,
investigation, or other inquiry without giving the other party
notice of the meeting and, to the extent permitted by such
Governmental Entity, the opportunity to attend and participate.
(d) In connection with and without limiting the
foregoing, each of Holly and Giant shall use its reasonable
efforts to resolve such objections, if any, as may be asserted
by any Governmental Entity with respect to the Merger or any
other transactions provided for in this Agreement under the
Antitrust Laws. In connection therewith, if any administrative
or judicial action or proceeding is instituted (or threatened to
be instituted) challenging the transaction as violative of any
Antitrust Law, and, if by mutual agreement, Holly and Giant
decide that litigation is in their best interests, each of Holly
and Giant shall cooperate and use reasonable efforts vigorously
to contest and resist any such action or proceeding and to have
vacated, lifted, reversed, or overturned any order that is in
effect and that prohibits, prevents, or restricts consummation
of the Merger. Each of Holly and Giant shall use its reasonable
efforts to take such action as may be required to cause the
expiration of the notice periods under the HSR Act or other
Antitrust Laws with respect to the Merger as promptly as possible
after the execution of this Agreement. Notwithstanding anything
to the contrary in this Section 5.05, neither Holly nor Giant
shall be required to divest any of its businesses, product lines,
or assets, or to take or agree to take any other action or agree
to any limitation that would have a material adverse effect on
such party.
5.06. STOCK OPTIONS AND PHANTOM STOCK RIGHTS.
(a) As soon as practicable following the date of this
Agreement, the Board of Directors of Holly (or, if appropriate,
any committee administering the Holly Stock Plan) shall adopt
such resolutions or take such other actions as may be required
to effect the following:
(i) adjust the terms of all outstanding Holly
Employee Stock Options granted under the Holly Stock Plan,
whether vested or unvested, as necessary to provide that,
immediately after the Effective Time, each Holly Employee Stock
Option outstanding immediately prior to the Effective Time shall
be deemed to constitute an option to acquire, on the same terms
and conditions as were applicable under such Holly Employee Stock
Option, including vesting, the same Giant Common Stock portion
of the Merger Consideration the holder of such Holly Employee
Stock Option would have been entitled to receive pursuant to the
Merger had such holder exercised such Holly Employee Stock Option
in full immediately prior to the Effective Time, at a price per
share of Giant Common Stock equal to (a) the aggregate exercise
price for the shares of Holly Common Stock pursuant to such Holly
Employee Stock Option divided by (b) the aggregate number of
shares of Giant Common Stock that may be purchased pursuant to
such Holly Employee Stock Option (each, as so adjusted, an
"Adjusted Option"); provided, however, that in the case of any
option to which Section 421 of the Code applies by reason of its
qualification under any of Sections 422 through 424 of the Code
("qualified stock options"), the option price, the number of
shares purchasable pursuant to such option and the terms and
conditions of exercise of such option shall be determined in
order to comply with Section 424 of the Code;
(ii) make such other changes to the Holly Stock
Plan as Holly and Giant may agree are appropriate to give effect
to the Merger; and
(iii) adjust the terms of all outstanding
Holly phantom stock rights and take all such actions as necessary
to make them obligations of Giant consistent with the adjustment
provisions of Section 5.06(a)(i) regarding options.
Immediately following the Effective Time, Giant shall pay to each
holder of Holly Employee Stock Options immediately before the
Effective Time an amount in cash (subject to applicable
withholding) equal to the number of Holly shares that were
subject to such holder's Holly stock options (whether vested or
unvested) immediately before the Effective Time times the amount
in cash paid per issued and outstanding Holly share as part of
the Merger Consideration pursuant to Section 2.01(b). In
addition, immediately following the Effective Time, Giant shall
pay to each holder of Holly phantom share rights immediately
before the Effective Time an amount in cash (subject to
applicable withholding) equal to the number of phantom shares
held by such holder immediately before the Effective Time times
the amount in cash paid per Holly share as part of the Merger
Consideration pursuant to Section 2.01(b). This provision shall
be interpreted so that the sum of the total cash Merger
Consideration payable at the Effective Time under Section 2.01(b)
(whether or not actually paid) and the total of the cash payments
(including applicable withholding) required to be made under this
Section 5.06(a) shall in all cases equal but not exceed
$25,000,000, subject to the provisions of Section 2.01(j). Such
payments shall be in lieu of any other payment or adjustment to
any holder of a Holly Employee Stock Option or Holly phantom
share right relating to the cash portion of the Merger
Consideration.
(b) As soon as practicable after the Effective Time,
Giant shall deliver to the holders of Holly Employee Stock
Options appropriate notices setting forth such holders' rights
pursuant to the Holly Stock Plan and the agreements evidencing
the grants of such Holly Employee Stock Options and that such
Holly Employee Stock Options and agreements shall be assumed by
Giant and shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section
5.06 after giving effect to the Merger). Giant shall comply with
the terms of the Holly Stock Plan and ensure, to the extent
required by and subject to the provisions of such Holly Stock
Plan, that the Holly Employee Stock Options which qualified as
qualified stock options prior to the Effective Time continue to
qualify as qualified stock options after the Effective Time.
(c) Giant shall take such actions as are necessary for
the assumption of the Holly Stock Plan pursuant to Section
5.06(a), including the reservation, issuance and listing of Giant
Common Stock as is necessary to effectuate the transactions
contemplated by Section 5.06(a). As soon as reasonably
practicable after the Effective Time, Giant shall prepare and
file with the SEC a registration statement on Form S-8 or other
appropriate form with respect to shares of Giant Common Stock
subject to Holly Employee Stock Options issued under the Holly
Stock Plan and shall use all reasonable efforts to maintain the
effectiveness of a registration statement or registration
statements covering such Holly Employee Stock Options (and
maintain the current status of the prospectus or prospectuses
contained therein) for so long as such Holly Employee Stock
Options remain outstanding. With respect to those individuals,
if any, who subsequent to the Effective Time will be subject to
the reporting requirements under Section 16(a) of the Exchange
Act, where applicable, Giant shall use all reasonable efforts to
administer the Holly Stock Plan assumed pursuant to Section
5.06(b) in a manner that complies with Rule 16b-3 promulgated
under the Exchange Act to the extent the Holly Stock Plan
complied with such rule prior to the Merger.
(d) A holder of an Adjusted Option may exercise such
Adjusted Option in whole or in part in accordance with its terms
by delivering a properly executed notice of exercise to Giant,
together with the consideration therefor and the federal
withholding tax information, if any, required in accordance with
the Holly Stock Plan.
(e) Except as otherwise contemplated by this Section
5.06, all restrictions or limitations on transfer and vesting
with respect to Holly Employee Stock Options awarded under the
Holly Stock Plan or any other plan, program or arrangement of
Holly or any of its subsidiaries, to the extent that such
restrictions or limitations shall not have already lapsed, shall
remain in full force and effect with respect to such options
after giving effect to the Merger and the assumption by Giant as
set forth above.
(f) Giant shall have the right to meet its
obligation to assume the Holly Employee Stock Options under this
Section 5.06 by granting to the holder of Holly Employee Stock
Options as soon as practicable after the Effective Time
substitute options to acquire shares of Giant Common Stock on
identical terms as prescribed herein.
(g) Giant has certain outstanding stock options and
phantom stock rights which will become fully vested and will
unless amended be required to be cashed-out as a result of the
Merger. Giant shall amend such options to provide the holders
thereof with the right to elect to be cashed out or to reject the
cash-out and continue to hold the option, as the case may be.
Giant shall use its reasonable efforts to cause the holders of
such options, prior to the Effective Time, to reject the cash-out
and continue to hold the options. Giant shall use its best
efforts to obtain, prior to the Effective Time, waivers from the
holders of its phantom stock rights of the acceleration of
vesting triggered by the Merger (and, accordingly, any cash-out
rights associated with the accelerated vesting). Giant also has
certain employment agreements that include change of control
provisions that may be triggered on account of the Merger. Giant
shall use its best efforts to cause such employment agreements
to be amended prior to the Effective Time to limit the change of
control payments thereunder so that such payments will not
constitute excess parachute payments triggering excise tax
liability under the Code.
5.07. CERTAIN EMPLOYEE MATTERS. Following the Effective
Time, Giant, as the Surviving Corporation in the Merger, will
honor all obligations under employment agreements of Holly or
Giant the existence of which does not constitute a violation of
this Agreement (including those agreements entered into by Holly
pursuant to Section 4.01(a)(xiii)) in accordance with the terms
thereof.
5.08. INDEMNIFICATION, EXCULPATION AND INSURANCE.
(a) Giant agrees that all rights to indemnification and
exculpation from liabilities for acts or omissions occurring at
or prior to the Effective Time now existing in favor of the
current or former directors or officers of Holly and its
subsidiaries as provided in their respective certificates of
incorporation or bylaws (or comparable organizational documents)
and any indemnification agreements of Holly, the existence of
which does not constitute a breach of this Agreement, shall be
assumed by Giant, as the Surviving Corporation in the Merger,
without further action, as of the Effective Time and shall
survive the Merger and shall continue in full force and effect
in accordance with their terms. The Surviving Corporation shall
(i) maintain in effect for not less than three years after the
Effective Time the current policies of directors' and officers'
liability insurance maintained by Holly with respect to matters
occurring on or prior to the Effective Time; provided, however,
that the Surviving Corporation may substitute therefor policies
of at least the same coverage (with carriers comparable to
Holly's existing carriers) containing terms and conditions which
are not materially less advantageous to the former or current
(immediately prior to the Effective Time) directors or officers
of Holly and its subsidiaries and (ii) upon the request of any
former or current (immediately prior to the Effective Time)
director or officer of Holly or any of its subsidiaries, enter
into a contract obligating the Surviving Corporation to indemnify
and exculpate such individual for liabilities as described in
this Section 5.08. In addition, from and after the Effective
Time, directors and officers of Holly who become directors or
officers of Giant will be entitled to the same indemnity rights
and protections as are afforded to other directors and officers
of Giant.
(b) In the event that Giant or any of its successors
or assigns (i) consolidates with or merges into any other person
and is not the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person,
then, and in each such case, proper provision will be made so
that the successors and assigns of Giant assume the obligations
set forth in this Section.
(c) The provisions of this Section 5.08 (i) are
intended to be for the benefit of, and will be enforceable by,
each indemnified party, his or her heirs and his or her
representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or
contribution that any such person may have by contract or
otherwise.
5.09. FEES AND EXPENSES.
(a) Except as set forth in this Section 5.09, all fees
and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated by this Agreement
shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated, except that each of
Giant and Holly shall bear and pay one-half of the costs and
expenses incurred in connection with (i) the filing, printing and
mailing of the Form S-4 and the Joint Proxy Statement (including
SEC filing fees) and (ii) the filings of the premerger
notification and report forms under the HSR Act (including filing
fees).
(b) In the event that (i) a Holly Takeover Proposal
shall have been made known to Holly or any of its subsidiaries
or has been made directly to its stockholders generally or any
person shall have publicly announced an intention (whether or not
conditional) to make a Holly Takeover Proposal and thereafter
this Agreement is terminated by either Giant or Holly pursuant
to Section 7.01(b)(i) or (ii), or (ii) this Agreement is
terminated (x) by Holly pursuant to Section 7.01(g) or (y) by
Giant pursuant to Section 7.01(e), then Holly shall promptly, but
in no event later than two days after the date of such
termination, pay Giant a fee equal to $8,000,000 (the
"Termination Fee"), payable by wire transfer of same day funds;
provided, however, that no Termination Fee shall be payable to
Giant pursuant to clause (i) of this paragraph (b) or pursuant
to a termination by Giant pursuant to Section 7.01(e) unless and
until within 18 months of such termination Holly or any of its
subsidiaries enters into any Holly Acquisition Agreement or
consummates any Holly Takeover Proposal (for the purposes of the
foregoing proviso the terms "Holly Acquisition Agreement" and
"Holly Takeover Proposal" shall have the meanings assigned to
such terms in Section 4.02). Holly acknowledges that the
agreements contained in this Section 5.09(b) are an integral part
of the transactions contemplated by this Agreement, and that,
without these agreements, Giant would not enter into this
Agreement. Accordingly, if Holly fails promptly to pay the
amount due pursuant to this Section 5.09(b), and, in order to
obtain such payment, Giant commences a suit which results in a
judgment against Holly for the fee set forth in this Section
5.09(b), Holly shall pay to Giant its costs and expenses
(including attorneys' fees and expenses) in connection with such
suit, together with interest on the amount of the fee at the
prime rate of Bank of America, N.A. in effect on the date such
payment was required to be made. In the event of a termination
by Giant pursuant to Section 7.01(e), Holly shall promptly pay
upon Giant's request all out-of-pocket expenses incurred by Giant
in connection with this Agreement and the transactions
contemplated by this Agreement in an amount not to exceed
$1,500,000, which payments shall be credited against any
Termination Fee that may subsequently become payable.
(c) In the event that (i) a Giant Takeover Proposal
shall have been made known to Giant or any of its subsidiaries
or has been made directly to its stockholders generally or any
person shall have publicly announced an intention (whether or not
conditional) to make a Giant Takeover Proposal and thereafter
this Agreement is terminated by either Giant or Holly pursuant
to Section 7.01(b)(i) or (iii), or (ii) this Agreement is
terminated (x) by Giant pursuant to Section 7.01(d) or (y) by
Holly pursuant to Section 7.01(h), then Giant shall promptly, but
in no event later than two days after the date of such
termination, pay Holly the Termination Fee, payable by wire
transfer of same day funds; provided, however, that no
Termination Fee shall be payable to Holly pursuant to clause (i)
of this paragraph (c) or pursuant to a termination by Holly
pursuant to Section 7.01(h) unless and until within 18 months of
such termination Giant or any of its subsidiaries enters into any
Giant Acquisition Agreement or consummates any Giant Takeover
Proposal (for the purposes of the foregoing proviso the terms
"Giant Acquisition Agreement" and "Giant Takeover Proposal" shall
have the meanings assigned to such terms in Section 4.03. Giant
acknowledges that the agreements contained in this Section
5.09(c) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Holly would
not enter into this Agreement. Accordingly, if Giant fails
promptly to pay the amount due pursuant to this Section 5.09(c),
and, in order to obtain such payment, Holly commences a suit
which results in a judgment against Giant for the fee set forth
in this Section 5.09(c), Giant shall pay to Holly its costs and
expenses (including attorneys' fees and expenses) in connection
with such suit, together with interest on the amount of the fee
at the prime rate of Bank of America, N.A. in effect on the date
such payment was required to be made. In the event of a
termination by Holly pursuant to Section 7.01(h), Giant shall
promptly pay upon Holly's request all out-of-pocket expenses
incurred by Holly in connection with this Agreement and the
transactions contemplated by this Agreement in an amount not to
exceed $1,500,000 which payments shall be credited against any
Termination Fee that may subsequently become payable.
5.10. PUBLIC ANNOUNCEMENTS. Giant and Holly will consult
with each other before issuing, and provide each other the
opportunity to review, comment upon and concur with, any press
release or other public statements with respect to the
transactions contemplated by this Agreement, and shall not issue
any such press release or make any such public statement prior
to such consultation, except as either party may determine is
required by applicable law, court process or by obligations
pursuant to any listing agreement with any national securities
exchange. The parties agree that the initial press release to
be issued with respect to the transactions contemplated by this
Agreement shall be in the form previously agreed to by the
parties.
5.11. NYSE LISTING. Giant shall use best efforts to cause
the shares of Giant Common Stock to be issued in the Merger and
under the Holly Stock Plan (or Giant Stock Plan, if Giant elects
to issue substitute options to the holders of Holly Employee
Stock Options) to be approved for listing on the NYSE, subject
to official notice of issuance, prior to the Closing Date.
5.12. TRANSFER TAXES, ETC. The Surviving Corporation
shall pay the Merger Consideration to the holders of Holly Common
Stock without deduction or withholding therefrom for transfer
taxes, transfer fees, stamp fees, recording fees, or other
similar taxes or fees that may become payable in connection with
the Merger, all of which shall be paid by the Surviving
Corporation.
5.13. TAX TREATMENT. Each of Giant and Holly shall use
reasonable efforts to cause the Merger to qualify as a
reorganization under the provisions of Section 368 of the Code
and to obtain the opinions of counsel referred to in Sections
6.02 and 6.03.
5.14. INDEMNIFICATION AGREEMENTS. Giant and Holly agree
that as soon as practicable after the Effective Time, the
Surviving Corporation will enter into indemnification agreements
with the directors and officers of the Surviving Corporation
providing for indemnification on the terms set forth in the
bylaws of the Surviving Corporation, as amended pursuant to
Section 1.05, and as otherwise provided for under this Agreement.
5.15. CERTAIN TAX MATTERS. Giant and Holly agree that
they will not treat the Merger as a change in the ownership or
effective control of Giant or a change in the ownership of a
substantial portion of the assets of Giant, each within the
meaning of Section 280G of the Code, unless otherwise required
by a determination (as defined in Section 1313 of the Code).
5.16 AFFILIATE AGREEMENTS. Holly shall, no later than
two (2) days prior to the Closing, cause to be delivered to Giant
a list, reviewed by its counsel and reasonably satisfactory to
Giant, identifying all persons who are, in its opinion, at the
time of the meeting of the Holly's stockholders to be held to
approve the Merger, "affiliates" of Holly for purposes of Rule
145 under the Securities Act. Holly shall furnish such
information and documents as Giant may reasonably request for the
purpose of reviewing such list. Holly shall use its reasonable
efforts to cause each person who is identified as an "affiliate"
in the list furnished pursuant to this Section 5.16 to execute
a written agreement on or prior to the Closing, in a form
satisfactory to Giant (an "Affiliate Agreement"), that such
person shall not offer or sell or otherwise dispose of any of the
shares of Giant Common Stock issued to such person pursuant to
the Merger in violation of the Securities Act or the rules and
regulations promulgated by the SEC thereunder.
ARTICLE VI
CONDITIONS PRECEDENT
6.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the
Merger is subject to the satisfaction or waiver on or prior to
the Closing Date of the following conditions:
(a) STOCKHOLDER APPROVALS. Each of the Holly
Stockholder Approval and the Giant Stockholder Approval shall
have been obtained.
(b) HSR ACT. The waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have
been terminated or shall have expired.
(c) NO INJUNCTIONS OR RESTRAINTS. No judgment, order,
decree, statute, law, ordinance, rule, regulation, temporary
restraining order, preliminary or permanent injunction or other
order enacted, entered, promulgated, enforced or issued by any
court of competent jurisdiction or other Governmental Entity or
other legal restraint or prohibition (collectively,
"Restraints") preventing the consummation of the Merger shall be
in effect; provided, however, that each of the parties shall have
used reasonable efforts to prevent the entry of any such
Restraints and to appeal as promptly as possible any such
Restraints that may be entered.
(d) NO LITIGATION. There shall not be pending any
suit, action or proceeding, in each case brought by any
Governmental Entity and (i) seeking to restrain or prohibit the
consummation of the Merger or any of the other transactions
contemplated by this Agreement or seeking to obtain from either
of Holly or Giant any damages that are material in relation to
Holly and its subsidiaries taken as a whole or Giant and its
subsidiaries taken as a whole, as applicable, (ii) seeking to
prohibit or limit the ownership or operation by Holly, Giant or
any of their respective subsidiaries of any material portion of
the business or assets of Holly, Giant or any of their respective
subsidiaries, or to compel Holly, Giant or any of their
respective subsidiaries to dispose of or hold separate any
material portion of the business or assets of Holly, Giant or any
of their respective subsidiaries, as a result of the Merger or
any of the other transactions contemplated by this Agreement or
(iii) which otherwise could reasonably be expected to have a
material adverse effect on Holly or Giant, as applicable. In
addition, there shall not be any Restraint enacted, entered,
enforced or promulgated that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to
in clauses (ii) or (iii) above.
(e) FORM S-4. The Form S-4 shall have become effective
under the Securities Act and shall not be the subject of any stop
order or proceedings seeking a stop order.
(f) NYSE LISTING. The shares of Giant Common Stock
issuable to Holly's stockholders pursuant to this Agreement and
under the Holly Stock Plan (or Giant Stock Plan, if Giant elects
to issue substitute options to the holders of Holly Employee
Stock Options) shall have been approved for listing on the NYSE,
subject to official notice of issuance.
(g) MAJOR STOCKHOLDERS' AGREEMENT. The parties to
such agreement shall have executed a Major Stockholders'
Agreement substantially in the form attached as Exhibit D.
(h) DISSENTERS' RIGHTS. Dissenters' rights of
appraisal under the DGCL shall not have been exercised with
respect to more than 5% of the issued and outstanding shares of
Holly Common Stock.
6.02. CONDITIONS TO OBLIGATIONS OF GIANT. The obligation
of Giant to effect the Merger is further subject to satisfaction
or waiver of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Holly set forth in this
Agreement that are qualified as to materiality shall be true and
correct, and the representations and warranties of Holly set
forth in this Agreement that are not so qualified shall be true
and correct in all material respects, in each case as of the date
of this Agreement and as of the Closing Date as though made on
and as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier
date (in which case as of such date), and Giant shall have
received a certificate signed on behalf of Holly by the chief
executive officer and the chief financial officer of Holly to
such effect.
(b) PERFORMANCE OF OBLIGATIONS OF HOLLY. Holly shall
have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the
Closing Date, and Giant shall have received a certificate signed
on behalf of Holly by the chief executive officer and the chief
financial officer of Holly to such effect.
(c) TAX OPINION. Giant shall have received from
counsel reasonably acceptable to Giant, on the date of the Joint
Proxy Statement and on the Closing Date, opinions, in each case
dated as of such respective dates and stating that the Merger
will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code,
that Giant and Holly will each be a party to that reorganization
within the meaning of Section 368(b) of the Code and that no gain
or loss will be recognized by the stockholders of Holly upon
their exchange of Holly stock for Giant stock (except to the
extent such a stockholder receives cash as a portion of the
Merger Consideration or in lieu of fractional shares). In
rendering such opinions, such counsel shall be entitled to rely
upon customary representations.
(d) OPINION OF HOLLY COUNSEL. Giant shall have
received from counsel to Holly an opinion, in form and substance
reasonably acceptable to Giant, dated as of the Closing Date and
addressing such matters as are customary in connection with
transactions such as the Merger.
(e) NO MATERIAL ADVERSE CHANGE. At any time after
the date of this Agreement there shall not have occurred any
material adverse change relating to Holly.
6.03. CONDITIONS TO OBLIGATION OF HOLLY. The obligation
of Holly to effect the Merger is further subject to satisfaction
or waiver of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Giant set forth in this
Agreement that are qualified as to materiality shall be true and
correct, and the representations and warranties of Giant set
forth in this Agreement that are not so qualified shall be true
and correct in all material respects, in each case as of the date
of this Agreement and as of the Closing Date as though made on
and as of the Closing Date, except to the extent such
representations expressly relate to an earlier date (in which
case as of such date), and Holly shall have received a
certificate signed on behalf of Giant by the chief executive
officer and the chief financial officer of Giant to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF GIANT. Giant shall
have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the
Closing Date, and Holly shall have received a certificate signed
on behalf of Giant by the chief executive officer and the chief
financial officer of Giant to such effect.
(c) TAX OPINION. Holly shall have received from
counsel reasonably acceptable to Holly, on the date of the Joint
Proxy Statement and on the Closing Date, opinions, in each case
dated as of such respective dates and stating that the Merger
will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code,
that Giant and Holly will each be a party to that reorganization
within the meaning of Section 368(b) of the Code and that no gain
or loss will be recognized by the stockholders of Holly upon
their exchange of Holly stock for Giant stock (except to the
extent such a stockholder receives cash as a portion of the
Merger Consideration or in lieu of fractional shares). In
rendering such opinions, such counsel shall be entitled to rely
upon customary representations.
(d) OPINION OF GIANT COUNSEL. Holly shall have
received from counsel to Giant an opinion, in form and substance
reasonably acceptable to Holly, dated as of the Closing Date and
addressing such matters as are customary in connection with
transactions such as the Merger.
(e) NO MATERIAL ADVERSE CHANGE. At any time after
the date of this Agreement there shall not have occurred any
material adverse change relating to Giant.
(f) AMENDMENTS TO OPTIONS, PHANTOM STOCK RIGHTS AND
EMPLOYMENT AGREEMENTS. Giant shall have amended its outstanding
stock options, phantom stock rights and employment agreements as
provided in Section 5.06(g) to the reasonable satisfaction of
Holly's Board of Directors.
6.04. FRUSTRATION OF CLOSING CONDITIONS. Neither Giant
nor Holly may rely on the failure of any condition set forth in
Section 6.01, 6.02 or 6.03, as the case may be, to be satisfied
if such failure was caused by such party's failure to use
reasonable efforts to consummate the Merger and the other
transactions contemplated by this Agreement, as required by and
subject to Section 5.05.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.01. TERMINATION. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after the
Holly Stockholder Approval or the Giant Stockholder Approval:
(a) by mutual written consent of Giant and Holly;
(b) by either Giant or Holly:
(i) if the Merger shall not have been consummated
by December 31, 1998; provided, however, that the right to
terminate this Agreement pursuant to this Section 7.01(b)(i)
shall not be available to any party whose action or failure to
act has been the cause or resulted in the failure of the Merger
to be consummated by such date;
(ii) if the Holly Stockholder Approval shall not
have been obtained at a Holly Stockholders Meeting duly convened
therefor or at any adjournment or postponement thereof;
(iii) if the Giant Stockholder Approval shall not
have been obtained at a Giant Stockholders Meeting duly convened
therefor or at any adjournment or postponement thereof; or
(iv) if any Governmental Entity shall have issued
a Restraint or taken any other action permanently enjoining,
restraining or otherwise prohibiting the consummation of the
Merger or any of the other transactions contemplated by this
Agreement and such Restraint or other action shall have become
final and nonappealable;
(c) by Giant, if Holly shall have breached or failed
to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this
Agreement, which breach or failure to perform (A) would give rise
to the failure of a condition set forth in Section 6.02(a) or
(b), and (B) cannot be or has not been cured within 30 days after
the giving of written notice to Holly of such breach (a "Holly
Material Breach") (provided that Giant is not then in Giant
Material Breach (as defined in Section 7.01(f)) of any
representation, warranty, covenant or other agreement contained
in this Agreement);
(d) by Giant in accordance with Section 4.03(b),
provided that it has complied with all provisions thereof,
including the notice provisions thereof, and that it complies
with applicable requirements of Section 5.09;
(e) by Giant if (i) the Board of Directors of Holly or
any committee thereof shall have withdrawn or modified in a
manner adverse to Giant its approval or recommendation of the
Merger or this Agreement or failed to reconfirm its
recommendation within 15 business days after a written request
to do so, or approved or recommended any Holly Takeover Proposal
or (ii) the Board of Directors of Holly or any committee thereof
shall have resolved to take any of the foregoing actions;
(f) by Holly, if Giant shall have breached or failed
to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this
Agreement, which breach or failure to perform (A) would give rise
to the failure of a condition set forth in Section 6.03(a) or
(b), and (B) cannot be or has not been cured within 30 days after
the giving of written notice to Giant of such breach (a "Giant
Material Breach") (provided that Holly is not then in Holly
Material Breach of any representation, warranty, covenant or
other agreement contained in this Agreement);
(g) by Holly in accordance with Section 4.02(b),
provided that it has complied with all provisions thereof,
including the notice provisions therein, and that it complies
with applicable requirements of Section 5.09; or
(h) by Holly if (i) the Board of Directors of Giant or
any committee thereof shall have withdrawn or modified in a
manner adverse to Holly its approval or recommendation of the
Merger or this Agreement or failed to reconfirm its
recommendation within 15 business days after a written request
to do so, or approved or recommended any Giant Takeover Proposal
or (ii) the Board of Directors of Giant or any committee thereof
shall have resolved to take any of the foregoing actions.
7.02. EFFECT OF TERMINATION. In the event of termination
of this Agreement by either Holly or Giant as provided in Section
7.01, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of Giant
or Holly, other than the provisions of Section 3.01(o), Section
3.02(o), the last sentence of Section 5.04, Section 5.09, this
Section 7.02 and Article VIII and except to the extent that such
termination results from the willful and material breach by a
party of any of its representations, warranties, covenants or
agreements set forth in this Agreement, in which case the non-
breaching party shall have all rights and remedies available to
it at law or in equity as a result of such willful and material
breach.
7.03. AMENDMENT. This Agreement may be amended by the
parties at any time before or after the Holly Stockholder
Approval or the Giant Stockholder Approval; provided, however,
that after any such approval, there shall not be made any
amendment that by law requires further approval by the
stockholders of Holly or Giant without the further approval of
such stockholders. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties.
7.04. EXTENSION; WAIVER. At any time prior to the
Effective Time, a party may (a) extend the time for the
performance of any of the obligations or other acts of the other
party, (b) waive any inaccuracies in the representations and
warranties of the other party contained in this Agreement or in
any document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 7.03, waive compliance by the other
party with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The
failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a
waiver of such rights.
7.05. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
WAIVER. A termination of this Agreement pursuant to Section
7.01, an extension or waiver pursuant to Section 7.04 and any
amendment to this Agreement shall, in order to be effective,
require, in the case of Giant or Holly, action by its Board of
Directors.
ARTICLE VIII
GENERAL PROVISIONS
8.01. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Except for the representation made by Giant pursuant to Section
3.02(r), which shall survive for a period of twelve months
following the Effective Time, none of the representations and
warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time.
This Section 8.01 shall not limit any covenant or agreement of
the parties which by its terms contemplates performance after the
Effective Time.
8.02. NOTICES. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and
shall be deemed given on the date of delivery, if delivered
personally or telecopied (and confirmed) during normal business
hours, or on the following day if sent by overnight courier
(providing proof of delivery), in each case to the parties at the
following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Giant, to:
Giant Industries, Inc.
23733 North Scottsdale Road
Scottsdale, Arizona 85255
Telecopy No.: (602) 585-8985
Attention: Corporate Secretary
with a copy to:
Fennemore Craig, P.C.
3003 North Central Avenue, Suite 2600
Phoenix, Arizona 85012
Telecopy No.: (602) 916-5507
Attention: Karen C. McConnell
(b) if to Holly, to
Holly Corporation
100 Crescent Court, Suite 1600
Dallas, Texas 75201-6927
Telecopy No.: (214) 871-3578
Attention: Lamar Norsworthy
with a copy to:
W. John Glancy, Esq.
Suite 202, One Glen Lakes
8140 Walnut Hill Lane
Telecopy No.: (214) 361-9247
8.03. DEFINITIONS. For purposes of this Agreement:
(a) "Adjusted Option" has the meaning set forth in
Section 5.06(a)(i);
(b) "Agreement" has the meaning set forth in the
first paragraph of this Agreement;
(c) an "affiliate" of any person means another person
that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
first person;
(d) "Benefit Plans" has the meaning set forth in
Section 3.01(k)(i);
(e) "Certificates" has the meaning set forth in
Section 2.02(b);
(f) "Certificate of Merger" has the meaning set
forth in Section 1.03;
(g) "Closing" has the meaning set forth in Section
1.02;
(h) "Closing Date" has the meaning set forth in
Section 1.02;
(i) "Code" has the meaning set forth in paragraph
D of the Recitals;
(j) "Confidentiality Agreement" has the meaning set
forth in Section 5.04;
(k) "DGCL" has the meaning set forth in Section
1.01;
(l) "ERISA" has the meaning set forth in Section
3.01(k)(i);
(m) "Effective Time" has the meaning set forth in
Section 1.03;
(n) "Environmental Laws" has the meaning set forth
in Section 3.01(e);
(o) "Exchange Act" has the meaning set forth in
Section 3.01(d);
(p) "Exchange Agent" has the meaning set forth in
Section 2.02(a);
(q) "Exchange Fund" has the meaning set forth in
Section 2.02(a);
(r) "Form S-4" has the meaning set forth in Section
3.01(f);
(s) "Giant" has the meaning set forth in the first
paragraph of this Agreement;
(t) "Giant Acquisition Agreement" has the meaning
set forth in Section 4.03(b);
(u) "Giant Benefit Plans" has the meaning set forth
in Section 3.02(k)(i);
(v) "Giant Common Stock" has the meaning set forth
in Section 2.01;
(w) "Giant Filed SEC Documents" has the meaning set
forth in Section 3.02(g);
(x) "Giant Material Breach" has the meaning set
forth in Section 7.01(f);
(y) "Giant Permits" has the meaning set forth in
Section 3.02(i);
(z) "Giant Preferred Stock" has the meaning set
forth in Section 3.02(c);
(a-1) "Giant SEC Documents" has the meaning set
forth in Section 3.02(e);
(a-2) "Giant Stock Plan" has the meaning set forth
in Section 3.02(c);
(a-3) "Giant Stockholder Approval" has the meaning
set forth in Section 3.02(m);
(a-4) "Giant Stockholders Meeting" has the meaning
set forth in Section 5.01(c);
(a-5) "Giant Superior Proposal" has the meaning set
forth in Section 4.03(b);
(a-6) "Giant Takeover Proposal" has the meaning set
forth in Section 4.03(a);
(a-7) "Governmental Entity" has the meaning set
forth in Section 3.01(d);
(a-8) "HSR Act" has the meaning set forth in
Section 3.01(d);
(a-9) "Holly" has the meaning set forth in the first
paragraph of this Agreement;
(a-10) "Holly Acquisition Agreement" has the
meaning set forth in Section 4.02(b);
(a-11) "Holly Benefit Plans" has the meaning set
forth in Section 3.01(k)(i);
(a-12) "Holly Common Stock" has the meaning set
forth in paragraph A of the Recitals;
(a-13) "Holly Disclosure Schedule" has the meaning
set forth in Section 3.01;
(a-14) "Holly Filed SEC Documents" has the meaning
set forth in Section 3.01(g);
(a-15) "Holly Material Breach" has the meaning set
forth in Section 7.01(c);
(a-16) "Holly Permits" has the meaning set forth
in Section 3.01(i);
(a-17) "Holly Preferred Stock" has the meaning set
forth in Section 3.01(c);
(a-18) "Holly SEC Documents" has the meaning set
forth in Section 3.01(e);
(a-19) "Holly Stock Plan" has the meaning set forth
in Section 3.01(c);
(a-20) "Holly Stockholder Approval" has the meaning
set forth in Section 3.01(m);
(a-21) "Holly Stockholders Meeting" has the meaning
set forth in Section 5.01(b);
(a-22) "Holly Superior Proposal" has the meaning
set forth in Section 4.02(b);
(a-23) "Holly Takeover Proposal" has the meaning
set forth in Section 4.02(a);
(a-24) "Joint Proxy Statement" has the meaning set
forth in Section 3.01(d);
(a-25) "key employee" has the meaning set forth in
Section 3.01(g);
(a-26) "knowledge" of any person which is not an
individual means the knowledge of such person's executive
officers after reasonable inquiry.
(a-27) "Liens" has the meaning set forth in Section
3.01(b);
(a-28) "material adverse change" or "material adverse
effect" means, when used in connection with Holly or Giant, any
change, effect, event or occurrence that is materially adverse
to the business, financial condition or results of operations of
such party and its subsidiaries taken as a whole other than any
change, effect, event or occurrence relating to the United States
economy in general or to the petroleum refining and marketing
industry in general, and not specifically relating to Holly or
Giant or their respective subsidiaries, and the terms "material"
and "materially" have correlative meanings;
(a-29) "Merger has the meaning set forth in
paragraph A of the Recitals;
(a-30) "Merger Consideration" has the meaning set
forth in Section 2.01(b);
(a-31) "person" means an individual, corporation,
partnership, limited liability company, joint venture,
association, trust, unincorporated organization or other entity;
(a-32) "qualified stock options" has the meaning
set forth in Section 5.06(a)(i);
(a-33) "SEC" has the meaning set forth in Section
3.01(a);
(a-34) "Securities Act" has the meaning set forth
in Section 3.01(e);
(a-35) "Significant Subsidiary" has the meaning set
forth in Section 3.01(a);
(a-36) a "subsidiary" of any person means another
person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient
to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50%
or more of the equity interests of which) is owned directly or
indirectly by such first person;
(a-37) "Surviving Corporation" has the meaning set
forth in Section 1.01;
(a-38) "taxes" has the meaning set forth in Section
3.01(l)(iv); and
(a-39) "Termination Fee" has the meaning set forth
in Section 5.09(b).
8.04. INTERPRETATION. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall
be to an Article or Section of, or an Exhibit to, this Agreement
unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation." The words
"hereof," "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. All
terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such
term. Any agreement, instrument or statute defined or referred
to herein or in any agreement or instrument that is referred to
herein means such agreement, instrument or statute as from time
to time amended, modified or supplemented, including (in the case
of agreements or instruments) by waiver or consent and (in the
case of statutes) by succession of comparable successor statutes
and references to all attachments thereto and instruments
incorporated therein. References to a person are also to its
permitted successors and assigns.
8.05. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and
delivered to the other parties.
8.06. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
This Agreement (including the documents and instruments referred
to herein) and the Confidentiality Agreement (a) constitute the
entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties with
respect to the subject matter of this Agreement and (b) except
for the provisions of Article II, Section 5.06 and Section 5.08,
are not intended to confer upon any person other than the parties
any rights or remedies.
8.07. GOVERNING LAW. Except to the extent that the laws
of the State of Delaware are mandatorily applicable to the
Merger, this Agreement shall be governed by, and construed in
accordance with, the laws of the State of Arizona, regardless of
the laws that might otherwise govern under applicable principles
of conflict of laws thereof.
8.08. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise
by either of the parties hereto without the prior written consent
of the other party. Any assignment in violation of the preceding
sentence shall be void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and
assigns.
8.09. ENFORCEMENT. The parties agree that irreparable
damage would occur and that the parties would not have any
adequate remedy at law in the event that any of the provisions
of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any
federal court located in the State of Arizona or in Arizona state
court, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the
parties hereto (a) consents to submit itself to the personal
jurisdiction of any federal court located in the State of Arizona
or any Arizona state court in the event any dispute arises out
of this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave
from any such court, and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal
court sitting in the State of Arizona or an Arizona state court.
IN WITNESS WHEREOF, Giant and Holly have caused this Agreement
to be signed by their respective duly authorized officers, all
as of the date first written above.
HOLLY CORPORATION
By: /s/ Lamar Norsworthy
_________________________
Name: Lamar Norsworthy
Title: Chairman of the Board and
Chief Executive Officer
GIANT INDUSTRIES, INC.
By: /s/ James E. Acridge
_________________________
Name: James E. Acridge
Title: Chairman of the Board,
President and Chief
Executive Officer<PAGE>
<PAGE>
EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF SURVIVING CORPORATION
<PAGE>
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
GIANT INDUSTRIES, INC.
_________________________________________
PURSUANT TO SECTIONS 242 AND 245 OF
THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE
_________________________________________
Giant Industries, Inc., a Delaware corporation organized
under the name Giant Oil Industries, Inc. on September 21, 1989,
hereby amends and restates its Certificate of Incorporation to
read in its entirety as set forth below. This Restated
Certificate of Incorporation supersedes in its entirety the
Restated Certificate of Incorporation of Giant Industries, Inc.
dated December 8, 1989.
FIRST: The name of the Corporation is Giant Industries,
Inc. (hereinafter the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in
the City of Wilmington, County of New Castle. The name of its
registered agent at that address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is to engage in
any lawful act or activity for which a corporation may be
organized under the General Corporation Law of the State of
Delaware as set forth in Title 8 of the Delaware Code (the
"DGCL").
FOURTH: The total number of shares which the Corporation
shall have authority to issue is 60,000,000 shares, consisting
of (a) 50,000,000 shares of common stock, par value $.01 per
share (the "Common Stock"), and (b) 10,000,000 shares of
preferred stock, par value $.01 per share (the "Preferred
Stock").
The Board of Directors of the Corporation (the "Board
of Directors") is expressly authorized, at any time and from
time to time, to fix, by resolution or resolutions, the following
provisions for shares of any class or classes of Preferred Stock
of the Corporation or any series of any class of Preferred Stock:
(a) the designation of such class or series,
the number of shares to constitute such class or series and the
stated value thereof if different from the par value thereof;
(b) whether the shares of such class or series
shall have voting rights, in addition to any voting rights
provided by law, and, if so, the terms of such voting rights,
which may (i) be general or limited, (ii) subject to applicable
law or regulation, including without limitation the rules of any
securities exchange on which securities of any class of the
Corporation may be listed, permit more than one vote per share,
or (iii) vary among stockholders of the same class based upon
such factors as the Board of Directors may determine including,
without limitation, the size of a stockholder's position
and/or the length of time with respect to which such position has
been held;
(c) the dividends, if any, payable on such
class or series, whether any such dividends shall be cumulative,
and, if so, from what dates, the conditions and dates upon which
such dividends shall be payable, and the preference or relation
which such dividends shall bear to the dividends payable on any
shares of stock of any other class or any other series of the
same class;
(d) whether the shares of such class or series
shall be subject to redemption by the Corporation, and, if so,
the times, prices and other conditions of such redemption;
(e) the amount or amounts payable upon shares
of such series upon, and the rights of the holders of such class
or series in, the voluntary or involuntary liquidation,
dissolution or winding up, or upon any distribution of the
assets, of the Corporation;
(f) whether the shares of such class or series
shall be subject to the operation of a retirement or sinking fund
and, if so, the extent to and manner in which any such retirement
or sinking fund shall be applied to the purchase or redemption
of the shares of such class or series for retirement or other
corporate purposes and the terms and provisions relative to the
operation thereof;
(g) whether the shares of such class or series
shall be convertible into, or exchangeable for, shares of stock
of any other class or any other series of the same class or any
other securities (including Common Stock) and, if so, the price
or prices or the rate or rates of conversion or exchange and the
method, if any, of adjusting the same, and any other terms and
conditions of conversion or exchange;
(h) the limitations and restrictions, if any,
to be effective while any shares of such class or series are
outstanding upon the payment of dividends or the making of other
distributions on, and upon the purchase, redemption or other
acquisition by the Corporation of, the Common Stock or shares of
stock of any other class or any other series of the same class;
(i) the conditions or restrictions, if any,
upon the creation of indebtedness of the Corporation or upon the
issue of any additional stock, including additional shares of
such class or series or of any other series of the same class or
of any other class;
(j) the ranking (be it pari passu, junior or
senior) of each class or series vis-a-vis any other class or
series of any class of Preferred Stock as to the payment of
dividends, the distribution of assets and all other matters; and
(k) any other powers, preferences and
relative, participating, optional and other special rights, and
any qualifications, limitations and restrictions thereof, insofar
as they are not inconsistent with the provisions of this Restated
Certificate of Incorporation, to the full extent permitted in
accordance with the laws of the State of Delaware.
The powers, preferences and relative, participating,
optional and other special rights of each class or series of
Preferred Stock, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding.
FIFTH: The following provisions are inserted for the
management of the business and the conduct of the affairs of the
Corporation, and for further definition, limitation and
regulation of the powers of the Corporation and of its directors
and stockholders:
(a) The business and affairs of the
Corporation shall be managed by or under the direction of the
Board of Directors.
(b) The directors shall have concurrent power
with the stockholders to make, alter, amend, change, add to or
repeal the bylaws of the Corporation.
(c) The business and affairs of the
Corporation shall be managed by or under the direction of a Board
of Directors consisting of not less than six nor more than twelve
directors. The exact number of directors shall be determined
from time to time by resolution adopted by the affirmative vote
of a majority of the directors then in office. The Directors
shall be divided into three classes, designated Class I, Class
II and Class III. Class I directors shall have a term expiring
at the Annual Meeting of Stockholders in 1999, Class II directors
shall have a term expiring at the Annual Meeting of Stockholders
in 2000, and Class III directors shall have a term expiring at
the Annual Meeting of Stockholders in 2001. At each Annual
Meeting of Stockholders beginning in 1999, successors to the
class of directors whose term expires at the Annual Meeting of
Stockholders shall be elected by the holders of a majority of the
stock represented and entitled to vote thereat for a three-year
term. A director shall hold office until the Annual Meeting of
Stockholders for the year in which his term expires and until his
successor shall be elected and shall qualify, subject, however,
to prior death, resignation, retirement, disqualification or
removal from office.
Notwithstanding the foregoing, whenever the
holders of any one or more classes or series of Preferred Stock
issued by the Corporation, if any, shall have the right, voting
separately by class or series, to elect directors at an annual
or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such directorships
shall be governed by the terms of this Restated Certificate of
Incorporation applicable thereto, and such directors so elected
shall not be divided into classes pursuant to this Article FIFTH
unless expressly provided by such terms.
(d) Directors of the Corporation may be
removed by stockholders of the Corporation only for cause.
(e) No director shall be personally liable to
the Corporation or any of its stockholders for monetary damages
for breach of fiduciary duty as a director, except to the extent
that elimination or limitation of liability is prohibited under
the DGCL as in effect when such liability is determined. Any
repeal or modification of this Article FIFTH by the stockholders
of the Corporation shall not deprive a director of the benefits
hereof with respect to acts or omissions occurring prior to such
repeal or modification.
(f) In addition to the powers and authority
hereinbefore or by statute expressly conferred upon them, the
directors are hereby empowered to exercise all such powers and
do all such acts and things as may be exercised or done by the
Corporation, subject, nevertheless, to the provisions of the
DGCL, this Restated Certificate of Incorporation, and any bylaws
adopted by the stockholders; provided, however, that no bylaws
hereafter adopted by the stockholders shall invalidate any prior
act of the directors which would have been valid if such bylaws
had not been adopted.
SIXTH: Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them
and/or between the Corporation and its stockholders or any class
of them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the
Corporation under the provisions of Section 291 of the DGCL or
on the application of trustees in dissolution or of any receiver
or receivers appointed for the Corporation under the provisions
of Section 279 of the DGCL, order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be
summoned in such manner as the said court directs. If a majority
in number representing seventy-five percent (75%) in value of the
creditors or class of creditors, and/or of the stockholders or
class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization
of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the
said application has been made, be binding on all the creditors
or class of creditors, and/or on all the stockholders or class
of stockholders, of the Corporation, as the case may be, and also
on the Corporation.
SEVENTH: The Corporation shall, to the fullest
extent permitted by Section 145 of the Delaware GCL, as amended
from time to time, or any successor section, indemnify each
person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director
or officer of the Corporation, or is or was serving at the
request of the Corporation, as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action,
suit or proceeding and any appeal therefrom.
Indemnification may include payment by the
Corporation of expenses in defending an action or proceeding in
advance of the final disposition of such action or proceeding
upon receipt of an undertaking by the person indemnified to repay
such payment if it is ultimately determined that such person is
not entitled to indemnification under this Article, which
undertaking may be accepted without reference to the financial
ability of such person to make such repayments.
The Corporation shall not indemnify any such
person seeking indemnification in connection with a proceeding
(or part thereof) initiated by such person unless the initiation
thereof was approved by the Board of Directors of the
Corporation.
The indemnification rights provided in this
Article SEVENTH (i) shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any law,
agreement or vote of stockholders or disinterested directors or
otherwise, and (ii) shall inure to the benefit of the heirs,
executors and administrators of such persons. The Corporation
may, to the extent authorized from time to time by its Board of
Directors, grant indemnification rights to other employees or
agents of the Corporation or other persons serving the
Corporation and such rights may be equivalent to, or greater or
less than, those set forth in this Article SEVENTH.
EIGHTH: Any action required or permitted to be taken by
the stockholders of the Corporation must be effected at an annual
or special meeting of stockholders of the Corporation and may not
be effected by any consent in writing by such stockholders.
Unless otherwise required by law, special meetings of
stockholders of the Corporation may be called only by the Co-
Chairmen of the Board acting together, or the Chairman of the
Board if only one is so appointed, or the Board of Directors
pursuant to a resolution adopted by a majority of the entire
Board of Directors. Written notice of a special meeting stating
the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called shall be given not less
than ten (10) nor more than sixty (60) days before the date of
the meeting to each stockholder entitled to vote at such meeting.
NINTH: The Corporation reserves the right to amend,
alter, change or repeal any provision contained in this Restated
Certificate of Incorporation or in the bylaws of the Corporation,
in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to
this reservation; provided, however, that subject to the powers
and rights provided for herein with respect to Preferred Stock
issued by the Corporation, if any, but notwithstanding anything
else contained in this Restated Certificate of Incorporation to
the contrary, the affirmative vote of the holders of at least
eighty percent (80%) of the combined voting power of each
outstanding class of capital stock shall be required to alter,
amend, rescind or repeal (i) Article FOURTH, Article FIFTH,
Article SIXTH, Article SEVENTH, Article EIGHTH, or this Article
NINTH or to adopt any provision inconsistent therewith and (ii)
Sections 3 and 8 of Article II, Sections 1, 2 and 6 of Article
III and Article VIII of the Bylaws of the Corporation or to adopt
any provision inconsistent therewith.
The foregoing provisions of this Restated Certificate of
Incorporation were duly adopted in accordance with the provisions
of Sections 242 and 245 of the DGCL.
IN WITNESS WHEREOF, Giant Industries, Inc. has caused
this Restated Certificate of Incorporation to be duly executed
in its corporate name this ___ day of ____________, 1998.
GIANT INDUSTRIES, INC.
By:_________________________________
James E. Acridge
President
ATTEST:
By:____________________
Morgan Gust
Secretary
<PAGE>
<PAGE>
EXHIBIT B
AMENDED AND RESTATED BYLAWS
OF SURVIVING CORPORATION
<PAGE>
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
GIANT INDUSTRIES, INC.
(HEREINAFTER CALLED THE "CORPORATION")
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office of the
Corporation shall be in the City of Wilmington, County of New
Castle, State of Delaware.
SECTION 2. OTHER OFFICES. The Corporation may also have
offices at such other places both within and without the State
of Delaware as the Board of Directors may from time to time
determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. Meetings of the stockholders
for the election of directors or for any other purpose shall be
held at such time and place, either within or without the State
of Delaware, as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting or
in a duly executed waiver of notice thereof.
SECTION 2. ANNUAL MEETINGS. The Annual Meetings of
Stockholders shall be held on such date and at such time as
shall be designated from time to time by the Board of Directors
and stated in the notice of the meeting, at which meetings the
stockholders shall elect, in accordance with Section 1 of
Article III of these Bylaws, by the vote of the holders of a
majority of the stock represented and entitled to vote thereat,
those Directors belonging to the class or classes of directors
to be elected at such meeting, and transact such other business
as may properly be brought before the meeting. Written notice
of the Annual Meeting stating the place, date and hour of the
meeting shall be given to each stockholder entitled to vote at
such meeting not less than ten (10) nor more than sixty (60)
days before the date of the meeting.
SECTION 3. SPECIAL MEETINGS. Unless otherwise prescribed
by law or by the Restated Certificate of Incorporation, Special
Meetings of Stockholders may be called only by the Co-Chairmen
of the Board acting together (or the Chairman of the Board if
only one is so appointed) or the Board of Directors pursuant to
a resolution adopted by a majority of the entire board of
directors. Written notice of a Special Meeting stating the
place, date and hour of the meeting and the purpose or purposes
for which the meeting is called shall be given not less than ten
(10) nor more than sixty (60) days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Business transacted at all special meetings shall be confined
to the objects stated in the call.
SECTION 4. QUORUM. Except as otherwise provided by law or
by the Restated Certificate of Incorporation, the holders of a
majority of the capital stock issued and outstanding and
entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall
be present or represented, any business may be transacted which
might have been transacted at the meeting as originally noticed.
If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder entitled to vote at the meeting.
SECTION 5. VOTING. Unless otherwise required by law, the
Restated Certificate of Incorporation or these Bylaws, (i) any
question brought before any meeting of stockholders shall be
decided by the vote of the holders of a majority of the stock
represented and entitled to vote thereat and (ii) each
stockholder represented at a meeting of stockholders shall be
entitled to cast one vote for each share of the capital stock
entitled to vote thereat held by such stockholder. Such votes
may be cast in person or by proxy but no proxy shall be voted
on or after three years from its date, unless such proxy
provides for a longer period. The Board of Directors, in its
discretion, or the officer of the Corporation presiding at a
meeting of stockholders, in his discretion, may require that any
votes cast at such meeting shall be cast by written ballot.
SECTION 6. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The
officer of the Corporation who has charge of the stock ledger
of the Corporation shall prepare and make, at least ten (10)
days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder
and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced
and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder of the
Corporation who is present.
SECTION 7. STOCK LEDGER. The stock ledger of the
Corporation shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list
required by Section 6 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of
stockholders.
SECTION 8. NOTICE OF BUSINESS. At any meeting of
stockholders, only such business shall be conducted as shall
have been brought before the meeting (a) by or at the direction
of the Board of Directors or (b) by any stockholder of the
Corporation who is a stockholder of record at the time of giving
of the notice provided for in this Section 8 of this Article II,
who shall be entitled to vote at such meeting and who complies
with the notice procedures set forth in this Section 8 of this
Article II. For business to be properly brought before a meeting
of stockholders by a stockholder, the stockholder shall have
given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be
delivered to or mailed and received at the principal executive
offices of the Corporation not less than ninety (90) days nor
more than 120 days prior to the meeting; provided, however, that
in the event that less than 100 days' notice or prior public
disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so
received not later than the close of business on the tenth day
following the day on which such notice of the date of the
meeting was mailed or such public disclosure was made, whichever
first occurs. Such stockholder's notice to the Secretary shall
set forth as to each matter the stockholder proposes to bring
before the meeting (a) a brief description of the business
desired to be brought before the meeting, the reasons for
conducting such business at the meeting and, in the event that
such business includes a proposal to amend either the Restated
Certificate of Incorporation or Bylaws of the Corporation, the
language of the proposed amendment, (b) the name and address,
as they appear on the Corporation's books, of the stockholder
proposing such business, (c) the class and number of shares of
capital stock of the Corporation which are beneficially owned
by such stockholder and (d) any material interest of such
stockholder in such business. Notwithstanding anything in the
Bylaws to the contrary, no business shall be conducted at a
stockholder meeting except in accordance with the procedures set
forth in this Section 8 of this Article II. The Chairman of the
meeting shall, if the facts warrant, determine and declare to
the meeting that business was not properly brought before the
meeting and in accordance with the provisions of the Bylaws, and
if he should so determine, he shall so declare to the meeting
and any such business not properly brought before the meeting
shall not be transacted. Notwithstanding the foregoing
provisions of this Section 8 of this Article II, a stockholder
shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder with respect to the matters set forth in
this Section 8 of this Article II.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND ELECTION OF DIRECTORS. The business
and affairs of the Corporation shall be managed by or under the
direction of a Board of Directors consisting of an even number
of directors totaling not less than six nor more than twelve.
The exact number of directors shall be determined from time to
time by resolution adopted by the affirmative vote of a majority
of the directors then in office. One half of the directors
shall be designated "G Directors" and one half shall be
designated "H Directors." The G Directors and H Directors shall
be divided into three classes, designated Class I, Class II and
Class III. Class I directors shall have a term expiring at the
Annual Meeting of Stockholders in 1999, Class II directors shall
have a term expiring at the Annual Meeting of Stockholders in
2000, and Class III directors shall have a term expiring at the
Annual Meeting of Stockholders in 2001. Each class shall
consist of an even number of directors composed equally of G
Directors and H Directors. At each Annual Meeting of
Stockholders beginning in 1999, successors to the class of
directors whose term expires at that Annual Meeting of
Stockholders shall be elected for a three-year term. If the
number of directors is changed, any increase or decrease shall
be apportioned so that there will be equal numbers of G
Directors and H Directors and so as to maintain the number of
directors in each class as nearly equal as possible, but in no
case shall a decrease in the number of directors shorten the
term of any incumbent director. A director shall hold office
until the Annual Meeting of Stockholders for the year in which
his term expires and until his successor shall be elected and
shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office.
Directors of the Corporation may be removed by stockholders
of the Corporation only for cause.
SECTION 2. VACANCIES. It is intended that there shall be
an equal number of G Directors and H Directors and that any
vacancy on the Board of Directors shall be filled so as to
restore and maintain the equality in number of G Directors and
H Directors. In the event of a vacancy on the Board of
Directors such that there is less than the required number of
G Directors, the remaining G Directors shall elect an additional
director who shall fill the vacancy as a G Director; in the
event that a vacancy on the Board of Directors results in there
being less than the required number of H Directors, the
remaining H Directors shall elect an additional director who
shall fill the vacancy as an H Director. Vacancies on the Board
of Directors that result from an increase in the number of
directors shall be filled one-half by a person or persons
elected by the G Directors and one-half by a person or persons
elected by the H Directors.
Any director of any class elected to fill a vacancy
resulting from an increase in the number of directors in such
class shall hold office for a term that shall coincide with the
remaining term of that class. Any director elected to fill a
vacancy not resulting from an increase in the number of
directors shall have the same remaining term as that of his
predecessor.
SECTION 3. DUTIES AND POWERS. The business of the
Corporation shall be managed by or under the direction of the
Board of Directors which may exercise all such powers of the
Corporation and do all lawful acts and things as are not by
statute or by the Restated Certificate of Incorporation or by
these Bylaws directed or required to be exercised or done by the
stockholders.
SECTION 4. MEETINGS. The Board of Directors of the
Corporation may hold meetings, both regular and special, either
within or without the State of Delaware. Regular meetings of
the Board of Directors may be held without notice at such time
and at such place as may from time to time be determined by the
Board of Directors. Special meetings of the Board of Directors
may be called by a Co-Chief Executive Officer or by any two
directors. Notice thereof stating the place, date, and hour of
the meeting shall be given to each director either by mail not
less than forty-eight (48) hours before the date of the meeting
or by telephone, electronic facsimile or telegram on twenty-four
(24) hours' notice. All notices of meetings shall be given to
the extent reasonably possible so that all directors shall have
the opportunity to attend either in person or by means of
conference telephone. Any director who does not attend a
special meeting of the Board of Directors shall be promptly
informed of all action taken by the Board of Directors at the
special meeting.
SECTION 5. QUORUM. Except as may be otherwise
specifically provided by law, the Restated Certificate of
Incorporation or these Bylaws, at all meetings of the Board of
Directors, a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business. If a
quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
SECTION 6. VOTING. On all matters with respect to which
the Board of Directors shall vote, except as may be otherwise
provided in the Restated Certificate of Incorporation or these
Bylaws, the number of affirmative votes required for any
proposed action of the Board of Directors shall be equal to the
sum of (i) the greater of the number of G Directors or the
number of H Directors voting on the matter plus (ii) one.
Except as otherwise specified by the Board of Directors, the
requirements of this Section 6 shall also apply to all voting
by committees of the Board of Directors.
At all times until the occurrence of the Termination Date
as defined in Section 13 of this Article III, the unanimous vote
of the entire Board of Directors shall be required for the
authorization of the issuance of Preferred Stock having voting
rights with respect to the election of directors of the
Corporation.
Except as may be otherwise specifically provided by law,
the Restated Certificate of Incorporation or these Bylaws, after
the occurrence of the Termination Date as defined in Section 13
of this Article III, the act of a majority of the directors
present and eligible to vote on a matter shall be the act of the
Board of Directors on that matter.
SECTION 7. ACTIONS OF THE BOARD. Unless otherwise
provided by the Restated Certificate of Incorporation or these
Bylaws, any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all the members of the Board
of Directors or committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee.
SECTION 8. MEETINGS BY MEANS OF CONFERENCE TELEPHONE.
Unless otherwise provided by the Restated Certificate of
Incorporation or these Bylaws, members of the Board of Directors
of the Corporation, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of
Directors or such committee by means of a conference telephone
or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section 8 of this
Article III shall constitute presence in person at such meeting.
SECTION 9. COMMITTEES. There shall be three standing
committees of the Board of Directors: an Audit Committee, a
Compensation Committee and a Nominating Committee. The Audit
Committee and the Compensation Committee shall each be composed
of two G Directors and two H Directors who are not officers or
employees of the Corporation. The chairman of the Audit
Committee and the chairman of the Compensation Committee shall
be selected by the Board of Directors. The Nominating Committee
shall be composed of the two Co-Chief Executive Officers (who
shall act as co-chairmen of the committee) and two other
directors, one a G Director and the other an H Director. The
requirements of Section 6 of this Article III shall apply to all
votes of the standing committees. The Board of Directors may,
by resolution passed by a majority of the entire Board of
Directors, designate one or more additional committees, each
such additional committee to be composed of one or more of the
directors of the Corporation. Unless otherwise specifically
provided by the Board of Directors, each additional committee
of the Board of Directors shall be composed of an equal number
of G Directors and H Directors and the requirements of Section
6 hereof shall apply to all votes of each such committee. The
chairmen of each standing committee and of any additional
committees shall have the right to vote on their respective
committees. Subject to the other requirements of these Bylaws,
the Board of Directors may designate one or more directors as
alternate members of any standing or additional committee, who
may replace any absent or disqualified member at any meeting of
any such committee. Any committee of the Board of Directors,
to the extent allowed by law and provided in the resolution
establishing such committee, shall have and may exercise all the
powers and authority of the Board of Directors in the management
of the business and affairs of the Corporation. Each committee
shall keep regular minutes and report to the Board of Directors
when requested.
SECTION 10. COMPENSATION. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors and a stated salary as
director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving
compensation therefor. Members of special or standing
committees may be allowed like compensation for attending
committee meetings.
SECTION 11. INTERESTED DIRECTORS. No contract or
transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in
which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or
voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the
Board of Directors or committee thereof which authorizes the
contract or transaction, or solely because his or their votes
are counted for such purpose if (i) the material facts as to his
or their relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of Directors
or the committee, and the Board of Directors or committee in
good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors
(subject to the requirements of Section 6 of this Article III),
even though the disinterested directors be less than a quorum;
or (ii) the material facts as to his or their relationship or
interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith
by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board of Directors, a
committee thereof or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum
at a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.
SECTION 12. NOMINATIONS FOR ELECTIONS OF DIRECTORS. For
each meeting of the stockholders at which directors of the
Corporation are to be elected, the Corporation shall propose to
the stockholders a slate of nominees specifying one nominee for
each director to be elected by the stockholders at such meeting.
The Corporation's slate of nominees for director shall include
the number of nominees for G Director and for H Director such
that the election of all proposed nominees would result in an
equal number of G Directors and H Directors immediately after
the election. The Corporation's nominee or nominees for G
Director shall be selected by the persons then serving as G
Directors and the Corporation's nominee or nominees for H
Director shall be selected by the persons then serving as H
Directors.
SECTION 13. TERMINATION OF DESIGNATIONS OF G DIRECTORS AND
H DIRECTORS. Unless otherwise determined by resolution of the
Board of Directors, the designation of directors of the
Corporation as G Directors and H Directors and the requirement
that the Board of Directors be composed of an even number of
directors shall cease to apply upon the Termination Date, which
shall be the earlier of (i) an amendment to Article III, to
Section 2 or Section 5 of Article IV, or to Article IX of these
Bylaws; (ii) either James E. Acridge ("Acridge") or the
Norsworthy Group (which Norsworthy Group consists of Lamar
Norsworthy ("Norsworthy"), Nona Barrett, NBN Capital Limited
Partnership, a Texas limited partnership, Betty Simmons East
Texas Trust, Margaret Simmons East Texas Trust, Suzanne Simmons
East Texas Trust, Betty Simmons Nueces County Trust, Margaret
Simmons Nueces County Trust and Suzanne Simmons Neuces County
Trust) ceases to hold at least a 3% Stock Interest (as defined
below); (iii) either Acridge or the Norsworthy Group purchases
from the other the Subject Stock Interest (as defined below);
(iv) the death of Acridge or Norsworthy; (v) December 31, 2003;
or (vi) either Acridge or Norsworthy resigns as Co-Chief
Executive Officer and Co-Chairman of the Board and becomes bound
by the provisions of a standstill agreement; provided, however,
that, if the Termination Date arises because of the death of
Acridge or Norsworthy, the remaining G Directors (in the case
of Acridge's death) and the remaining H Directors (in the case
of Norsworthy's death) shall have the power to select a director
to fill the vacancy left by Acridge or Norsworthy, as the case
may be, at the next meeting of the Board of Directors after the
death.
For purposes of these Bylaws, (i) "Acridge Stock Interest"
means the entire Stock Interest (as defined below) owned at the
relevant time by Acridge and his Affiliate Transferees (as
defined below); (ii) "Norsworthy Group Stock Interest" means the
entire Stock Interest owned at the relevant time by all members
of the Norsworthy Group and its Affiliate Transferees; (iii)
"Stock Interest" means the entire right, title and interest of
a party in and to any equity securities of the Corporation,
including shares of common stock or preferred stock held or
otherwise beneficially owned from time to time by a party and
any other securities convertible into or exchangeable for equity
securities of the Corporation, but shall not include any
unexercised options, warrants or similar rights or any equity
securities allocated to the account of a party under an employee
stock ownership plan unless the same may be distributed to the
party upon his resignation as an officer and director of the
Corporation without penalty under the Internal Revenue Code or
other applicable laws; (iv) "Subject Stock Interest" means if
Acridge is the purchaser the Stock Interest which is the lesser
in number of the Acridge Stock Interest or the Norsworthy Group
Stock Interest, and if the Norsworthy Group is the purchaser,
the "Subject Stock Interest" means the amount of the Acridge
Stock Interest; and (v) "Affiliate Transferee" means with
respect to any transferor (a) any person directly or indirectly
controlling, controlled by or under common control with such
transferor ("Control Persons"); (b) individuals ("Family
Members") who are related by blood or marriage to the transferor
or a Control Person of the transferor; (c) entities that are
controlled by any such Family Member; and (d) entities in which
the transferor, one or more Control Persons, or one or more
Family Members have a material interest, but shall not include
the Corporation with respect to any treasury stock acquired from
any person.
ARTICLE IV
OFFICERS
SECTION 1. GENERAL. The officers of the Corporation shall
be chosen by the Board of Directors and shall be two Co-Chief
Executive Officers, a Secretary and a Treasurer. The Co-Chief
Executive Officers shall be directors of the Corporation and
shall be the Co-Chairmen of the Board of Directors. The Board
of Directors, in its discretion, may also choose one or more
Executive Vice Presidents, Senior Vice Presidents and Vice
Presidents, Assistant Secretaries, Assistant Treasurers and
other officers. Any number of offices may be held by the same
person, unless otherwise prohibited by law, the Restated
Certificate of Incorporation or these Bylaws. The officers of
the Corporation need not be stockholders of the Corporation nor,
except in the case of the Co-Chief Executive Officers, need such
officers be directors of the Corporation.
SECTION 2. CO-CHIEF EXECUTIVE OFFICERS. At the effective
date of these Bylaws, the Co-Chief Executive Officers of the
Corporation shall be James E. Acridge and Lamar Norsworthy. The
Board of Directors at its first meeting held after each Annual
Meeting of Stockholders shall elect as hereinafter provided the
Co-Chief Executive Officers, who shall hold their offices until
their successors are chosen and qualified or until their earlier
resignation or removal pursuant to the terms of these Bylaws.
In the election of the Co-Chief Executive Officers after each
Annual Meeting of Stockholders, the G Directors shall elect the
Co-Chief Executive Officer who shall occupy the position
occupied by James E. Acridge at the date of the merger of the
Corporation and Holly Corporation and the H Directors shall
elect the Co-Chief Executive Officer who shall occupy the
position occupied by Lamar Norsworthy at the date of the merger
of the Corporation and Holly Corporation. Subject to the
authority of the Board of Directors, the two Co-Chief Executive
Officers shall work together in the Office of the Chief
Executive Officer, shall have general supervision of the
business of the Corporation, and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
One of the Co-Chief Executive Officers shall be designated as
the Co-Chief Executive Officer to whom all officers and
employees of the Corporation (excluding the other Co-Chief
Executive Officer) shall, directly or indirectly, report; unless
otherwise specified from time to time by the Board of Directors,
James E. Acridge shall be the Co-Chief Executive Officer to whom
all officers (excluding the other Co-Chief Executive Officer)
directly or indirectly report. Each of the Co-Chief Executive
Officers shall be deemed to have the additional title of
President of the Corporation in any circumstance where an
officer of the Corporation with the title of President is
required. Either of the Co-Chief Executive Officers shall have
the authority to execute all bonds, mortgages, contracts and
other instruments of the Corporation requiring a seal, under the
seal of the Corporation, except where required or permitted by
law to be otherwise signed and executed and except that the
other officers of the Corporation may sign and execute documents
when so authorized by these Bylaws, the Board of Directors or
a Co-Chief Executive Officer. The Co-Chief Executive Officers
shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to them by these
Bylaws or by the Board of Directors. The salaries of the Co-
Chief Executive Officers shall be determined pursuant to
applicable employment contracts between the Corporation and each
Co-Chief Executive Officer, which contracts shall be subject to
the authority of the Compensation Committee of the Board of
Directors.
Unless otherwise determined by vote of a majority of the
Board of Directors, the Corporation shall cease to have Co-Chief
Executive Officers and shall have one Chief Executive Officer
after the earlier to occur of the following dates: (i) the date
of the Corporation's Annual Meeting of Stockholders in 2004 and
(ii) the date that either James E. Acridge or Lamar Norsworthy
ceases for any reason to be a Co-Chief Executive Officer of the
Corporation. When the Corporation has one Chief Executive
Officer pursuant to the preceding sentence of this Section 2 of
this Article IV, all references in these Bylaws to Co-Chief
Executive Officers shall refer to the Chief Executive Officer.
SECTION 3. ELECTION OF OTHER OFFICERS. The Board of
Directors at its first meeting held after each Annual Meeting
of Stockholders shall elect the officers of the Corporation
(other than the Co-Chief Executive Officers whose elections
shall be as provided in Section 2 of this Article IV), who shall
hold their offices for such terms and shall exercise such powers
and perform such duties as shall be determined from time to time
by the Board of Directors; and all such officers of the
Corporation shall hold office until their successors are chosen
and qualified, or until their earlier resignation or removal.
Any officer subject to this section may be removed at any time
by the affirmative vote of a majority of the Board of Directors.
Any vacancy occurring in any office of the Corporation subject
to this section shall be filled by the Board or Directors. The
salaries of all officers of the Corporation subject to this
section shall be fixed by the Board of Directors or by the
Compensation Committee.
SECTION 4. VOTING SECURITIES OWNED BY THE CORPORATION.
Powers of attorney, proxies, waivers of notice of meeting,
consents and other instruments relating to securities owned by
the Corporation may be executed in the name of and on behalf of
the Corporation by one of the Co-Chief Executive Officers or by
any Vice President and any such officer may, in the name of and
on behalf of the Corporation, take all such action as any such
officer may deem advisable to vote in person or by proxy at any
meeting of security holders of any corporation in which the
Corporation may own securities and at any such meeting shall
possess and may exercise any and all rights and powers incident
to the ownership of such securities and which, as the owner
thereof, the Corporation might have exercised and possessed if
present. The Board of Directors may, by resolution, from time
to time confer like powers upon any other person or persons.
SECTION 5. CO-CHAIRMEN OF THE BOARD OF DIRECTORS. The Co-
Chief Executive Officers, as Co-Chairmen of the Board of
Directors, shall preside at all meetings of the stockholders and
of the Board of Directors.
SECTION 6. EXECUTIVE VICE PRESIDENTS, SENIOR VICE
PRESIDENTS AND VICE PRESIDENTS. Each Executive Vice President,
Senior Vice President, or Vice President shall exercise general
supervision and have executive control of such departments of
the Corporation's business, or perform such other executive
duties as shall from time to time be assigned to him by the
Board of Directors. The Board of Directors shall have the power
to designate particular areas of authority and responsibility
of an Executive Vice President, Senior Vice President or Vice
President and to indicate such designation in such officer's
title.
ARTICLE V
STOCK
SECTION 1. FORM OF CERTIFICATES. Every holder of stock in
the Corporation shall be entitled to have a certificate signed,
in the name of the Corporation (i) by either Co-Chairman of the
Board of Directors, either Co-Chief Executive Officer or a Vice
President and (ii) by the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by him in the Corporation.
SECTION 2. SIGNATURES. Where a certificate is countersigned
by (i) a transfer agent other than the Corporation or its
employee, or (ii) a registrar other than the Corporation or its
employee, any other signature on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who
has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such Officer, transfer agent
or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such
Officer, transfer agent or registrar at the date of issue.
SECTION 3. LOST CERTIFICATES. The Board of Directors may
direct a new certificate to be issued in place of any
certificate theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate,
or his legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give
the Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost, stolen or
destroyed.
SECTION 4. TRANSFERS. Stock of the Corporation shall be
transferable in the manner prescribed by law and in these
Bylaws. Transfers of stock shall be made on the books of the
Corporation only by the person named in the certificate or by
his attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be cancelled
before a new certificate shall be issued.
SECTION 5. RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a record date, which shall not
be more than sixty (60) days nor less than ten (10) days before
the date of such meeting, nor more than sixty (60) days prior
to any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date
for the adjourned meeting.
SECTION 6. BENEFICIAL OWNERS. The Corporation shall be
entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends, and
to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part
of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by law.
ARTICLE VI
NOTICES
SECTION 1. NOTICES. Whenever written notice is required by
law, the Restated Certificate of Incorporation or these Bylaws,
to be given to any director, member of a committee or
stockholder, such notice may be given by mail, addressed to such
director, member of a committee or stockholder, at his address
as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at
the time when the same shall be deposited in the United States
mail. Written notice may also be given personally or by
electronic facsimile, telegram, telex or cable.
SECTION 2. WAIVERS OF NOTICE. Whenever any notice is
required by law, the Restated Certificate of Incorporation or
these Bylaws, to be given to any director, member of a committee
or stockholder, a waiver thereof in writing, signed, by the
person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE VII
GENERAL PROVISIONS
SECTION 1. DIVIDENDS. Dividends upon the capital stock of
the Corporation, subject to the provisions of the Restated
Certificate of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, and may
be paid in cash, in property, or in shares of the capital stock.
Before payment of any dividend, there may be set aside out of
any funds of the Corporation available for dividends such sum
or sums as the Board of Directors from time to time, in its
absolute discretion, deems proper as a reserve or reserves to
meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for
any proper purpose, and the Board of Directors may modify or
abolish any such reserve.
SECTION 2. DISBURSEMENTS. All checks or demands for money
and notes of the Corporation shall be signed by such officer or
officers or such other person or persons as the Board of
Directors may from time to time designate.
SECTION 3. FISCAL YEAR. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.
SECTION 4. CORPORATE SEAL. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal, Delaware." The seal
may be used by causing it or a facsimile thereof to be impressed
or affixed or reproduced or otherwise.
ARTICLE VIII
INDEMNIFICATION
SECTION 1. POWER TO INDEMNIFY IN ACTIONS, SUITS OR
PROCEEDINGS OTHER THAN THOSE BY OR IN THE RIGHT OF THE
CORPORATION. Subject to Section 3 of this Article VIII, the
Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the Corporation) by reason of the fact that he is
or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise,
against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
SECTION 2. POWER TO INDEMNIFY IN ACTIONS, SUITS OR
PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION. Subject to
Section 3 of this Article VIII, the Corporation shall indemnify
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by
or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he is or was a director or
officer, of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit
if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless
and only to the extent that the Court of Chancery or the court
in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
SECTION 3. AUTHORIZATION OF INDEMNIFICATION. Any
indemnification under this Article VIII (unless ordered by a
court) shall be made by the Corporation only as authorized in
the specific case upon a determination that indemnification of
the director or officer is proper in the circumstances because
he has met the applicable standard of conduct set forth in
Section 1 or Section 2 of this Article VIII, as the case may be.
Subject to Section 6 of Article III, such determination shall
be made (i) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such
action suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders. To the extent, however,
that a director or officer of the Corporation has been
successful on the merits or otherwise in defense of any action,
suit or proceeding described above, or in defense of any claim,
issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith, without the necessity
of authorization in the specific case.
SECTION 4. GOOD FAITH DEFINED. For purposes of any
determination under Section 3 of this Article VIII, a person
shall be deemed to have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal
action or proceeding, to have had no reasonable cause to believe
his conduct was unlawful, if his action is based on the records
or books of account of the Corporation or another enterprise,
or on information supplied to him by the officers of the
Corporation or another enterprise in the course of their duties,
or on the advice of legal counsel for the Corporation or another
enterprise or on information or records given or reports made
to the Corporation or another enterprise by an independent
certified public accountant or by an appraiser or other expert
selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this
Section 4 of this Article VIII shall mean any other corporation
or any partnership, joint venture, trust, employee benefit plan
or other enterprise of which such person is or was serving at
the request of the Corporation as a director, officer, employee
or agent. The provisions of this Section 4 of this Article VIII
shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the
applicable standard of conduct set forth in Section 1 or Section
2 of this Article VIII, as the case may be.
SECTION 5. INDEMNIFICATION BY A COURT. Notwithstanding any
contrary determination in the specific case under Section 3 of
this Article VIII, and notwithstanding the absence of any
determination thereunder, any director or officer may apply to
any court of competent jurisdiction in the State of Delaware for
indemnification to the extent otherwise permissible under
Sections 1 and 2 of this Article VIII. The basis of such
indemnification by a court shall be a determination by such
court that indemnification of the director or officer is proper
in the circumstances because he has met the applicable standards
of conduct set forth in Section 1 or Section 2 of this Article
VIII, as the case may be. Neither a contrary determination in
the specific case under Section 3 of this Article VIII nor the
absence of any determination thereunder shall be a defense to
such application or create a presumption that the director or
officer seeking indemnification has not met any applicable
standard of conduct. Notice of any application for
indemnification pursuant to this Section 5 of this Article VIII
shall be given to the Corporation promptly upon the filing of
such application. If successful in whole or in part, the
director or officer seeking indemnification shall also be
entitled to be paid the expense of prosecuting such application.
SECTION 6. EXPENSES PAYABLE IN ADVANCE. Expenses incurred
by a director or officer in defending or investigating a
threatened or pending action, suit or proceeding shall be paid
by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or
on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article
VIII.
SECTION 7. NONEXCLUSIVITY OF INDEMNIFICATION AND
ADVANCEMENT OF EXPENSES. The indemnification and advancement of
expenses provided by or granted pursuant to this Article VIII
shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be
entitled under any Bylaw, agreement, contract, vote of
stockholders or disinterested directors or pursuant to the
direction (howsoever embodied) of any court of competent
jurisdiction or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office, it being the policy of the Corporation that
indemnification of the persons specified in Sections 1 and 2 of
this Article VIII shall be made to the fullest extent permitted
by law. The provisions of this Article VIII shall not be deemed
to preclude the indemnification of any person who is not
specified in Section 1 or Section 2 of this Article VIII but
whom the Corporation has the power or obligation to indemnify
under the provisions of the General Corporation Law of the State
of Delaware, or otherwise.
SECTION 8. INSURANCE. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a
director or officer of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise against any
liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not
the Corporation would have the power or the obligation to
indemnify him against such liability under the provisions of
this Article VIII.
SECTION 9. CERTAIN DEFINITIONS. For purposes of this
Article VIII, references to "the Corporation" shall include, in
addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to
indemnify its directors and officers, so that any person who is
or was a director or officer of such constituent corporation,
or is or was a director or officer of such constituent
corporation serving at the request of such constituent
corporation as director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, shall stand in the same position under
the provisions of this Article VIII with respect to the
resulting or surviving corporation as such indemnification
relates to his acts while serving in any of the foregoing
capacities, of such constituent corporation, as he would have
with respect to such constituent corporation if its separate
existence had continued. For purposes of this Article VIII,
references to "fines" shall include any excise taxes assessed
on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall
include any service as a director or officer of the Corporation
which imposes duties on, or involves services by, such director
or officer with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred
to in this Article VIII.
SECTION 10. SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article VIII shall,
unless otherwise provided when authorized or ratified, continue
as to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and
administrators of such a person.
SECTION 11. LIMITATION ON INDEMNIFICATION. Notwithstanding
anything contained in this Article VIII to the contrary, except
for proceedings to enforce rights to indemnification (which
shall be governed by Section 5 of this Article VIII), the
Corporation shall not be obligated to indemnify any director or
officer in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part
thereof) was authorized or consented to by the Board of
Directors of the Corporation.
SECTION 12. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The
Corporation may, to the extent authorized from time to time by
the Board of Directors, provide rights to indemnification and
to the advancement of expenses to employees and agents of the
Corporation similar to those conferred in this Article VIII to
directors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
SECTION 1. IN GENERAL. Except as otherwise provided in
the Restated Certificate of Incorporation or in Section 2 of
this Article IX, these Bylaws may be amended, in whole or in
part, or new Bylaws may be adopted by the stockholders or by the
Board of Directors, provided, however, that notice of such
amendment or adoption of new Bylaws be contained in the notice
of such meeting of stockholders or Board of Directors as the
case may be. Except as otherwise provided in the Restated
Certificate of Incorporation or in Section 2 of this Article IX,
all such amendments must be approved by either the holders of
a majority of the outstanding capital stock or by a majority of
the entire Board of Directors then in office.
SECTION 2. GREATER THAN MAJORITY VOTE REQUIRED FOR CERTAIN
AMENDMENTS. Any amendment to any provision of Article III of
these Bylaws, to Section 1, Section 2 and Section 5 of Article
IV of these Bylaws, or to this Article IX of these Bylaws shall
require the affirmative vote of not less than eighty percent
(80%) of the entire Board of Directors then in office or the
affirmative vote of the holders of not less than eighty percent
(80%) of the outstanding capital stock of the Corporation.
SECTION 3. ENTIRE BOARD OF DIRECTORS. As used in this
Article IX and in these Bylaws generally, the term "entire Board
of Directors" means the total number of directors which the
Corporation would have if there were no vacancies.
ARTICLE X
EFFECTIVE DATE
SECTION 1. EFFECTIVE DATE. These Amended and Restated
Bylaws were adopted and approved by the Board of Directors and
the stockholders of the Corporation, are effective as of
_______________, 1998, and supersede in their entirety all prior
Bylaws adopted by the Corporation.
<PAGE>
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EXHIBIT C
BOARD OF DIRECTORS AND OFFICERS
OF SURVIVING CORPORATION
BOARD OF DIRECTORS DESIGNEES AND CLASSES
H DIRECTORS G Directors
Class III Lamar Norsworthy James E. Acridge
Robert G. McKenzie Anthony J. Bernitsky
Class II Jack P. Reid F. Michael Geddes
A. J. Losee Fredric L. Holliger
Class III W. John Glancy Harry S. Howard, Jr.
OFFICERS
NAME OFFICE
James E. Acridge Co-Chairman of the Board and
Co-Chief Executive Officer
Lamar Norsworthy Co-Chairman of the Board and
Co-Chief Executive Officer
Matthew P. Clifton Executive Vice President
Morgan Gust Executive Vice President
Fredric L. Holliger Executive Vice President
Jack P. Reid Executive Vice President
<PAGE>
<PAGE>
EXHIBIT D
MAJOR STOCKHOLDERS' AGREEMENT
<PAGE>
<PAGE>
MAJOR STOCKHOLDERS' AGREEMENT
THIS MAJOR STOCKHOLDERS' AGREEMENT (the "Agreement") is
made and entered into this 14th day of April, 1998, by and among
Giant Industries, Inc., a Delaware corporation ("Giant"), Holly
Corporation, a Delaware corporation ("Holly"), James E. Acridge
("Acridge"), Lamar Norsworthy ("Norsworthy"), Nona Barrett, NBN
Capital Limited Partnership, a Texas limited partnership, Betty
Simmons East Texas Trust, Margaret Simmons East Texas Trust,
Suzanne Simmons East Texas Trust, Betty Simmons Nueces County
Trust, Margaret Simmons Nueces County Trust and Suzanne Simmons
Neuces County Trust (such parties other than Giant and Holly are
collectively referred to as the "Stockholder Parties," and such
parties other than Giant, Holly and Acridge are collectively
referred to as the "Norsworthy Group").
RECITALS
A. Giant and Holly have simultaneously entered into an
Agreement and Plan of Merger, dated April 14, 1998 (such
agreement as it hereafter may be amended in accordance with its
terms, the "Merger Agreement"), pursuant to which Holly has
agreed to merge with and into Giant with Giant as the surviving
corporation (the "Surviving Corporation") on the terms and
subject to the conditions set forth therein (the "Merger").
B. Each of the Stockholder Parties owns shares of
the common stock of Holly or Giant, as the case may be, equal
to more than 1% of the respective issued and outstanding
shares of the common stock of Holly or Giant, which ownership
is reflected on Schedule I attached hereto.
C. After giving effect to the Merger, Acridge and
the Norsworthy Group will own approximately 11.8% and 15.0%,
respectively, of the issued and outstanding capital stock of
the Surviving Corporation without consideration of any
options, warrants or other rights to acquire capital stock of
the Surviving Corporation. In addition, among other things,
(i) Acridge and Norsworthy will serve as Co-Chairmen of the
Board and be Co-Chief Executive Officers acting together as
the Office of the Chief Executive Officer, and (ii) there
will be an equal number of G Directors and H Directors on the
Surviving Corporation's Board of Directors pursuant to the
Surviving Corporation's Bylaws.
D. As a condition to the Merger, the parties desire
to (i) enter into a binding voting agreement among the
Stockholder Parties with respect to the Merger and concerning
voting by the Stockholder Parties as stockholders of the
Surviving Corporation on certain matters following the
Merger, and (ii) provide for a mechanism to resolve any
deadlocked disputes between Acridge, on the one hand, and
Norsworthy, on the other hand, in the fulfillment of their
respective obligations and duties to the Surviving
Corporation.
E. This Agreement is the Major Stockholders'
Agreement referenced in the Merger Agreement.
NOW, THEREFORE, in consideration of the Merger and the
mutual promises and covenants contained in this Agreement,
and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
agree as follows:
TERMS AND CONDITIONS
SECTION 1
DEFINITIONS
1.01 DEFINITIONS. In addition to the various words and
phrases defined throughout this Agreement, the following terms
shall have the meanings set forth in this Section 1.01:
(a) "ACRIDGE STOCK INTEREST" means the entire
Stock Interest owned at the relevant time by Acridge and his
Affiliate Transferees.
(b) "AFFILIATE TRANSFEREE" means with respect to
any transferor (i) any person directly or indirectly
controlling, controlled by or under common control with such
transferor ("Control Persons"); (ii) individuals ("Family
Members") who are related by blood or marriage to the transferor
or a Control Person of the transferor; (iii) entities that are
controlled by any such Family Member; and (iv) entities in which
the transferor, one or more Control Persons, or one or more
Family Members have a material interest, but shall not include
Giant, Holly or the Surviving Corporation with respect to any
treasury stock acquired from any person.
(c) "CONTROL ARRANGEMENTS" means: (i) the
establishment of the positions for Acridge and Norsworthy of Co-
Chairmen of the Board and the designation of each as Co-Chief
Executive Officer acting together as the Office of the Chief
Executive Officer; (ii) the equal number of G Directors and H
Directors on the Surviving Corporation's Board of Directors;
(iii) the voting agreements described in Section 2 of this
Agreement; and (iv) the provisions of the Restated Certificate
of Incorporation and Bylaws of the Surviving Corporation
reflecting any of the foregoing.
(d) "DEADLOCK RESOLUTION PROCEEDINGS" means the
proceedings described in Section 3.02 hereof.
(e) "DISPUTED MATTER" means any matter upon which
Acridge and Norsworthy are unable to agree and which causes
either of them to believe that the Control Arrangements are not
meeting their objectives to enhance the overall competitive and
strategic position of the Surviving Corporation and to otherwise
serve the best interests of the Surviving Corporation and its
stockholders.
(f) "EFFECTIVE DATE" means the date of this
Agreement.
(g) "NORSWORTHY GROUP STOCK INTEREST" means the
entire Stock Interest owned at the relevant time by all members
of the Norsworthy Group and his Affiliate Transferees.
(h) "PURCHASE PRICE" of the Subject Stock Interest
shall mean the per share price set forth in the Offer to Sell
or Purchase, multiplied by the number of shares of equity
securities comprising the Subject Stock Interest to be sold or
purchased as provided in Section 3.02 hereof.
(i) "STANDSTILL PERIOD" means any period during
which (i) a Disputed Matter is referred to the Board of
Directors as provided in Section 3.01 hereof, and for an
additional five days thereafter, or (b) a Deadlock Resolution
Proceeding is pending pursuant to Section 3.02 hereof.
(j) "STOCK INTEREST" means the entire right, title
and interest of a party in and to any equity securities of the
Surviving Corporation, including shares of common stock or
preferred stock held or otherwise beneficially owned from time
to time by a party and any other securities convertible into or
exchangeable for equity securities of the Surviving Corporation,
but shall not include any unexercised options, warrants or
similar rights or any equity securities allocated to the account
of a party under an employee stock ownership plan unless the
same may be distributed to the party upon his resignation as an
officer and director of the Surviving Corporation without
penalty under the Internal Revenue Code or other applicable
laws.
(k) "SUBJECT STOCK INTEREST" means the number of
shares of the stock of the Surviving Corporation required to be
purchased or sold as determined pursuant to Section 3.02(b)
SECTION 2
VOTING AGREEMENTS
2.01 VOTE WITH RESPECT TO MERGER. Each Stockholder
Party shall vote all of the shares of the common stock of Giant
or Holly, as the case may be, owned by such Stockholder Party
at every meeting of stockholders of Giant or Holly, as the case
may be, and at every adjournment thereof, (i) in favor of
approval of the Merger and any matter that could reasonably be
expected to facilitate the Merger and (ii) against any proposal
for any recapitalization, merger, sale of assets or business
combination (other than the Merger) or any other action or
agreement that could reasonably be expected to hinder the Merger
or would result in a breach of any covenant contained in the
Merger Agreement. Nothing herein limits the exercise of
fiduciary duties of a Stockholder Party in his or her capacity
as a director of Giant or Holly.
2.02 VOTE WITH RESPECT TO DIRECTORS AND AMENDMENTS TO
BYLAWS. After the Effective Time (as defined in the Merger
Agreement), each Stockholder Party shall vote all of the stock
of the Surviving Corporation owned by such Stockholder Party
whether acquired before, pursuant to or after the Merger at each
stockholders meeting of the Surviving Corporation (i) for each
of the directors of the Surviving Corporation who is nominated
by the Board of Directors of the Surviving Corporation pursuant
to the terms of Section 12 of Article III of the Surviving
Corporation's Bylaws as in effect as of the Effective Time and
(ii) against any amendment to the Bylaws or the Certificate of
Incorporation of the Surviving Corporation that is not proposed
by the "entire Board of Directors," as such term is defined in
Section 3 of Article IX of the Bylaws of the Surviving
Corporation as in effect as of the Effective Time.
2.03. RIGHTS AND OBLIGATIONS APPLICABLE TO AFFILIATE
TRANSFEREES. Any Stockholder Party proposing to transfer shares
of Holly or Giant currently owned or shares of the Surviving
Corporation after the Effective Time to an Affiliate Transferee
shall notify the proposed Affiliate Transferee of the terms of
this Agreement, shall promptly notify all other parties to this
Agreement of the proposed transfer and shall, prior to the
proposed transfer, require such Affiliate Transferee to sign an
addendum to this Agreement becoming a party hereto. Holly and
Giant will use their best efforts to cause the Surviving
Corporation to not recognize any proposed transfer on the books
and records of the Surviving Corporation made in contravention
to this Section 2.03 and any such proposed transfer shall be
deemed ineffective. The terms of this Agreement, including
provisions of this Section 2.03 with respect to subsequent
transfers and rights to notice of transfers, shall apply fully
to any person who is an Affiliate Transferee. Except as set
forth in the preceding sentences of this Section 2.03, parties
to this Agreement and Affiliate Transferees shall not be
restricted by this Agreement with respect to any transfer
(including any pledge) to any person of shares of the stock of
Holly, Giant or the Surviving Corporation.
SECTION 3
DEADLOCK RESOLUTION AGREEMENTS
3.01 ADVICE OF THE BOARD. If, at any time after the
15th month following the Effective Time, either Acridge or
Norsworthy believes that the Control Arrangements are not
meeting their objectives to enhance the overall competitive and
strategic position of the Surviving Corporation and to otherwise
serve the best interests of the Surviving Corporation and its
stockholders, and they are unable to resolve their differences
through private discussion, either may call a special meeting
of the Board of Directors (the "Special Meeting") for the sole
purpose of considering the Disputed Matters.
(a) PROCEDURES. Notwithstanding the provisions
of the Surviving Corporation's Bylaws: (i) the notice for the
Special Meeting shall be given at least 10 days prior to the
meeting, (ii) the notice shall specifically state that the
meeting is being called to discuss one or more Disputed Matters,
(iii) a quorum for the meeting shall be at least three of the
H Directors and three of the G Directors, and (iv) the meeting
shall be chaired jointly by a representative of each such
category of directors. Acridge and Norsworthy may, but are not
obligated to, reduce the nature of any Disputed Matter to
writing and provide the same to the Board of Directors in
advance of the Special Meeting; provided that if either elects
to do so, he shall provide a copy of such writing in advance
to the other at least two days before sending the same to the
other members of the Board.
(b) PRESENTATIONS BY ACRIDGE AND NORSWORTHY. At
the Special Meeting, both Acridge and Norsworthy shall have the
opportunity to present fully and fairly the Disputed Matters for
consideration by the Board of Directors. The Board of Directors
shall discuss the Disputed Matters in good faith and consistent
with its fiduciary obligations, and may meet to do so privately,
without Acridge and Norsworthy or without either of them. The
Board of Directors may continue the Special Meeting one or more
times if necessary for adequate deliberation of any Disputed
Matter for any reasonable period of time.
(c) BOARD ACTION. At the Special Meeting or any
continuation thereof permitted by Section 3.01(b), the Board
shall provide to Acridge and Norsworthy its advice and
recommendations or decisions, and, if the Board is unable to
agree on a recommended course of action, it shall so state and
the individual members of the Board shall each inform Acridge
and Norsworthy of their opinion on the Disputed Matters.
(d) INTENT. It is the intent of Acridge and
Norsworthy that the process described in this Section 3.01 be
conducted in a fair and impartial manner with the best interests
of the Surviving Corporation and its stockholders as the guiding
factor. To that end, if a Disputed Matter is submitted to the
Board, Acridge and Norsworthy agree that they will not contact
or communicate with the other Board members ex parte or outside
of the contacts and communications contemplated by this Section
3.01 unless either believes in his good faith judgment that such
contacts or other communications are required in the exercise
of his fiduciary duties. Further, to ensure the maximum
effectiveness of this process, the Board may adopt whatever
procedures and may consult with whatever professionals and
advisers it deems necessary or appropriate to provide informed
advice and decisions and to make informed recommendations to
Acridge and Norsworthy.
(e) CONSIDERATION OF BOARD ACTION. Acridge and
Norsworthy each agree to consider the advice, recommendations
or decisions of the Board in good faith and without any pre-
conceived determinations. Notwithstanding the foregoing, (i)
after five days following the communications described in
Section 3.01(c), or (ii) if no Special Meeting is in fact held
as provided in Section 3.01(a) or within five days following the
Special Meeting no communications under Section 3.01(c) are made
by the Board to Acridge and Norsworthy, and either of them in
his sole discretion remains dissatisfied with the Disputed
Matter, he shall have the right to implement the Deadlock
Resolution Proceedings described in Section 3.02.
(f) SUCCESSIVE APPLICATION. Unless the Deadlock
Resolution Proceedings are invoked with respect to any Disputed
Matter, the provisions of this Section 3.01 shall apply
successively to all Disputed Matters whenever arising.
3.02 DEADLOCK RESOLUTION PROCEEDINGS.
(a) PURPOSE. This Section 3.02 sets forth a
procedure pursuant to which either Acridge or Norsworthy can,
if either determines that there are Disputed Matters that cannot
be otherwise resolved, obtain an efficient and businesslike
termination of the Control Arrangements through making an offer
to the other that results in a choice for such other as to the
means whereby the Control Arrangements are terminated. For
purposes of this Section 3.02, the term "Offeror Group" shall,
if the Offeror (as defined in Section 3.02(b)) is Norsworthy,
refer to each member of the Norsworthy Group and any Affiliate
Transferees having a relationship to one or more members of the
Norsworthy Group and, if the Offeror is Acridge, such term shall
refer to Acridge and any Affiliate Transferee having a
relationship to Acridge. The term "Offeree Group" shall, if the
Offeree (as defined in Section 3.02(b)) is Norsworthy, refer to
each member of the Norsworthy Group and any Affiliate
Transferees having a relationship to one or more members of the
Norsworthy Group and, if the Offeree is Acridge, such term shall
refer to Acridge and any Affiliate Transferee having a
relationship with Acridge. If there is an election under clause
(i) or clause (ii) of Section 3.02(d) below, the one of the
Offeror Group or the Offeree Group that becomes the purchaser
as a result of such election is referred to as the "Purchasing
Group," and the one of the Offeror Group or the Offeree Group
that becomes the seller as a result of such election is referred
to as the "Selling Group."
(b) OFFER TO SELL OR PURCHASE. At any time after
the time period set forth in Section 3.01(e), either Acridge or
Norsworthy (the "Offeror") may make to the other (the "Offeree")
an offer to sell or to purchase a Stock Interest as set forth
in this Section 3.02. The offer described in this Section
3.02(b) is referred to hereinafter as an "Offer to Sell or
Purchase." If the Offer to Sell or Purchase is delivered by
Acridge, the Stock Interest he must propose to sell is the
Acridge Stock Interest, and the Stock Interest he must propose
to purchase is the amount equal to the lesser in number of the
Acridge Stock Interest or the Norsworthy Group Stock Interest.
If the Offer to Sell or Purchase is delivered by the Norsworthy
Group, the Stock Interest the Norsworthy Group must propose to
sell is the amount equal to the lesser in number of the
Norsworthy Group Stock Interest or the Acridge Stock Interest,
and the Stock Interest the Norsworthy Group must propose to
purchase is the Acridge Stock Interest. The Offer to Sell or
Purchase shall simultaneously be delivered by the Offeror to the
Offeree, the Surviving Corporation by delivery of the same to
the corporate secretary and to each member of the Board of
Directors at his or her last known address in the records of the
Surviving Corporation. Once given, the Offer to Sell or
Purchase may not be revoked or altered by the Offeror.
(c) CONTENTS OF OFFER TO SELL OR PURCHASE. The
Offer to Sell or Purchase shall include the following:
(i) The per share price (which must be paid
in full in cash at the closing) at which the Offeror offers to
sell or purchase the Subject Stock Interest (which must be the
same price);
(ii) Evidence of the Offeror Group's ability
to fund the Purchase Price, assuming that as a result of the
Offer to Sell or Purchase the Offeror Group was required to
purchase the Subject Stock Interest from the Offeree Group,
including specifically a financing commitment if the Offeror
Group would borrow the necessary funds together with
documentation evidencing the escrow of funds (or equivalent
security in the form of an irrevocable letter of credit or other
comparable instrument) in an amount equal to ten percent (10%)
of the Purchase Price (the "Earnest Money Deposit") as earnest
money to secure the Offeror Group's obligation to pay the
Purchase Price in the event that the Offeree Group elects to
sell the Subject Stock Interest to the Offeror Group pursuant
to the Offer to Sell or Purchase;
(iii) A form of a complete and mutual release
to be delivered by the Offeror, the Offeree and the Surviving
Corporation at closing of a purchase transaction; and
(iv) Such other material terms for the
purchase and sale of the Subject Stock Interest deemed relevant
by the Offeror and not inconsistent with this Agreement.
Each of the instruments and documents referred to above shall
be in commercially reasonable form and shall be prepared in good
faith by the Offeror. The Offer to Sell or Purchase may not
require performance by any person other than Acridge and the
Norsworthy Group, any Affiliate Transferees, and any party
required to act under the Earnest Money Deposit arrangement.
The Selling Group shall be obligated to convey the Subject Stock
Interest to the Purchasing Group free and clear of any liens,
claims or encumbrances and the Offer to Sell or Purchase shall
so provide.
(d) RESPONSE. The Offeree shall elect in writing,
as soon as reasonably possible but not more than 60 days after
his receipt of the Offer to Sell or Purchase, either:
(i) To resign all positions then held with
the Surviving Corporation, including as a director, effective
as of the closing and to cause the sale of the Subject Stock
Interest to the Offeror Group in accordance with the terms of
the Offer to Sell or Purchase; or
(ii) To cause the purchase from the Offeror
Group of the Subject Stock Interest in accordance with the terms
of the Offer to Sell or Purchase; or
(iii) To resign all positions then held with the
Surviving Corporation, including as a director, and be subject
to a Standstill Agreement (as defined below) with the Surviving
Corporation.
The Offeree's election pursuant to this Section 3.02(d) is
referred to hereinafter as the "Response." If issued pursuant
to Section 3.02(d)(ii), the Response shall include evidence of
the Offeree's ability to fund the Purchase Price, including
specifically a financing commitment if the Offeree Group would
borrow the necessary funds together with documentation
evidencing the escrow of funds (or equivalent security in the
form of an irrevocable letter of credit or other comparable
instrument) in an amount equal to ten percent (10%) of the
Purchase Price as the Earnest Money Deposit to secure the
Offeree Group's obligation to pay the Purchase Price to the
Offeror Group pursuant to the Response. The Response shall be
delivered simultaneously to the Offeror and to the Surviving
Corporation by copy to the corporate secretary and to each
member of the Board of Directors. If the Offeree fails to
deliver the Response within the required 60-day period, the
Offeree shall be deemed to have given the Response on the last
day of such period, electing under clause (iii) above to resign
his positions, including as a director, and be subject to the
Standstill Agreement with the Surviving Corporation as provided
in Sections 3.02(e) and (f).
(e) ELECTION OR DEEMED ELECTION UNDER SECTION
3.02(d)(iii). If the Offeree makes the election under Section
3.02(d)(iii) or is deemed to have made such election if no
Response is delivered by the Offeree within the required 60-day
period as provided in Section 3.02(d), a closing will be held
on the fifth day following such election or deemed election, as
the case may be, at the offices of the Surviving Corporation.
At the closing, (i) the Offeree shall deliver his resignation
as to all positions in the Surviving Corporation, including as
a director, then held by the Offeree, (ii) the Control
Arrangements shall terminate, (iii) each member of the Offeree
Group shall use his, her or its best efforts to cause each
member of the category of directors (G or H) of which the
Offeree is a member to resign, and (iv) a Standstill Agreement
and mutual release as provided in Section 3.02(f) shall become
effective.
(f) STANDSTILL AGREEMENT AND MUTUAL RELEASE. The
parties hereby agree that, if the election under Section
3.02(d)(iii) is made or is deemed to have been made if no
Response is made by the Offeree within the 60-day period as
provided in Section 3.02(d), each member of the Offeree Group
shall be subject to the following obligations (the "Standstill
Agreement"): each such member shall not, and he, she or it
shall cause each of his, her or its affiliates not to, directly
or indirectly: (a) acquire, offer to acquire or agree to acquire
any equity securities of the Surviving Corporation, except by
way of stock dividends or other distributions or offerings made
available to all stockholders of the Surviving Corporation or
pursuant to the exercise of outstanding options, warrants or
other rights; (b) make or otherwise participate in any
solicitation of proxies or consents, or seek to advise,
encourage or influence any person with respect to voting any of
the Surviving Corporation's equity securities; (c) initiate or
propose any shareholder proposals, or induce any other person
to initiate a shareholder proposal; (d) form or cause the
formation of any "group" (within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended); (e)
otherwise act to control or seek to control the Surviving
Corporation; (f) seek the removal of any member of the Board;
(g) initiate or propose any tender or exchange offers; or (h)
serve as a member of the Board; provided, however, that the
foregoing shall not prevent the members of the Offeree Group
from effecting routine sales of Surviving Corporation equity
securities in transactions for purposes other than those
prescribed above. The applicable obligations of the members of
the Offeree Group under the Standstill Agreement as provided by
this Section 3.02(f) shall cease to apply on the fifth
anniversary of the Standstill Agreement or at such earlier time
that the Offeree Group holds less than 3% of the Surviving
Corporation's issued and outstanding common stock. Each of the
parties hereby agrees that, if the Standstill Agreement as
provided in this Section 3.02(f) becomes effective, he, she or
its shall release all other parties to this Agreement with
respect to any and all claims and causes of action arising under
or pursuant to or in connection with this Agreement and shall
execute a document confirming such mutual release.
(g) ADJUSTMENT TO OFFER TO SELL OR PURCHASE FOR
TAX PURPOSES. At the request of the Selling Group, the
Purchasing Group agrees to use reasonable efforts to structure
the purchase and sale transaction to minimize the income tax
liabilities of the Selling Group, notwithstanding the express
terms of the Offer to Sell or Purchase; provided that: (i) such
structure will not delay the closing under Section 3.02(h); (ii)
any transaction costs incurred in such structuring are deducted
from the Purchase Price; (iii) such structure will not increase
the risks to the Purchasing Group; and (iv) the Selling Group
agrees in writing to indemnify, defend and hold the Purchasing
Group harmless from any liability on account of such structure.
(h) CLOSING FOR PURCHASE TRANSACTION. Closing of
the transfer of the Selling Group's Subject Stock Interest
pursuant to Section 3.2(d)(i) or (ii) shall take place as soon
as reasonably possible, but not more than 30 days after the
delivery of the Response, at the offices of the Surviving
Corporation, and on the specific date selected by the Purchasing
Group.
(i) CLOSING PROCEDURE FOR PURCHASE TRANSACTION.
At the closing, (i) the Purchasing Group shall pay the Purchase
Price to the Selling Group in immediately available funds, (ii)
the Selling Group shall deliver the stock certificates
representing the Subject Stock Interest to the Purchasing Group,
with duly executed stock powers bearing medallion signature
guarantees, (iii) the members of the Selling Group holding
positions in the Surviving Corporation shall resign all such
positions, including as directors, (iv) the Control Arrangements
shall terminate, (v) the Selling Group will use best efforts to
cause the category of directors (G or H) of which any member of
the Selling Group is a member to resign, and (vi) the parties
shall execute and deliver all documents and instruments required
under the terms of the Offer to Sell or Purchase.
(j) CLOSING ADJUSTMENTS. If, at the closing, the
Selling Group's Stock Interest in the Surviving Corporation is
subject to any lien, claim or encumbrance, the Purchasing Group
shall at the reasonable request of the Selling Group cause the
Purchase Price (or a portion thereof) to be applied to discharge
such lien, claim or encumbrance; provided that (i) such
arrangement will not delay the closing; (ii) any transaction
costs incurred in such arrangement are deducted from the
Purchase Price; (iii) such arrangement will not prevent the
acquisition of the Subject Stock Interest by the Purchasing
Group free and clear of all liens, claims and encumbrances; and
(iv) the Selling Group agrees in writing to indemnify, defend
and hold the Purchasing Group harmless from any liability on
account of such arrangement.
(k) FAILURE TO CLOSE. If the Purchasing Group
fails for any reason to close such purchase (a "Breaching
Group") by no later than the closing date specified in Section
3.02(h), it shall be liable to the Selling Group for all costs
(including without limitation attorneys' fees) incurred by the
Selling Group in connection with the proceedings under this
Section 3.02. The Selling Group shall be entitled to the
Earnest Money Deposit and shall have, in addition to all other
rights and remedies, the option, exercisable within 60 days
after the closing date specified in Section 3.02(h), to purchase
the Breaching Group's Subject Stock Interest in the Surviving
Corporation, on the terms and conditions set forth in the Offer
to Sell or Purchase and this Section 3.02. If the Selling Group
does not elect the option described in the preceding sentence,
the Breaching Group shall be required to take the actions
specified in Section 3.02(d)(iii). If the Selling Group elects
the option to purchase the Subject Stock Interest of the
Breaching Stockholder, it shall close the purchase of the
Subject Stock Interest as soon as reasonably possible but not
more than 30 days after exercise of such option.
(l) OTHER MATTERS. For all purposes under this
Section 3.02, the members of the Norsworthy Group hereby
irrevocably appoint Norsworthy to act as the exclusive
representative of members of the Norsworthy Group and their
Affiliate Transferees on all matters set forth herein. The
obligations of the Norsworthy Group under this Agreement are
joint and several. In the event that part or all of the Acridge
Stock Interest is owned by Affiliate Transferees from Acridge,
Acridge will be the exclusive representative of all holders of
the Acridge Stock Interest. The obligations of Acridge and his
Affiliate Transferees shall be joint and several.
3.03 STANDSTILL. The Stockholder Parties agree that
during any Standstill Period hereunder, they shall not, and they
shall cause each of their affiliates not to, directly or
indirectly: (a) acquire, offer to acquire or agree to acquire
any equity securities of the Surviving Corporation, except by
way of stock dividends or other distributions or offerings made
available to all stockholders of the Surviving Corporation or
pursuant to the exercise of outstanding options, warrants or
other rights; (b) make or otherwise participate in any
solicitation of proxies or consents, or seek to advise,
encourage or influence any person with respect to voting any of
the Surviving Corporation's equity securities, except for
Acridge and Norsworthy in their respective capacities as members
of the Board of Directors on matters approved by the Board; (c)
initiate or propose any shareholder proposals, or induce any
other person to initiate a shareholder proposal; (d) form or
cause the formation of any "group" (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended); (e) otherwise act to control or seek to control the
Surviving Corporation; (f) seek the removal of any member of the
Board; or (g) initiate or propose any tender or exchange offers;
provided, however, that the foregoing shall not prevent the
Stockholder Parties from effecting routine sales of Surviving
Corporation equity securities in transactions for purposes other
than those prescribed above.
3.04 INTENT. The parties acknowledge that the
subject matter of this Section 3 is complicated, and agree that
it is not possible to foresee or prudent to predict all of the
possible Disputed Matters or other factors or circumstances that
might arise in the future and affect the provisions of this
Section 3 and the procedures established herein. The parties
further acknowledge that the purpose of this Section 3 is to
provide a mechanism to deal with Disputed Matters in an
efficient and businesslike manner so as not to unduly disrupt
or damage the Surviving Corporation or the interests of its
stockholders. Accordingly, it is the express intent of the
parties that the provisions hereof and the procedures
established herein be interpreted and conducted with the
overriding interests of the Surviving Corporation and its
stockholders in mind at all times; provided that the foregoing
shall not affect the implementation of the Deadlock Resolution
Proceedings set forth in Section 3.02 hereof.
SECTION 4
TERM AND TERMINATION
4.01 TERM AND TERMINATION. This Agreement shall become
effective on the Effective Date, and shall continue in effect
until the earlier of (i) an amendment to Section 2.01 of the
Merger Agreement; (ii) an amendment to Article III, to Section
2 or Section 5 of Article IV, or to Article IX of the proposed
Bylaws of the Surviving Corporation attached as Exhibit B to the
Merger Agreement; (iii) the termination of the Merger Agreement
in accordance with its terms without consummation of the Merger;
(iv) either Acridge or the Norsworthy Group ceases to hold at
least 3% of the common stock of the Surviving Corporation
(without consideration of any options, warrants or other rights
to acquire Capital Stock of the Surviving Corporation or any
shares of the capital stock of the Surviving Corporation
allocated to either Acridge or Norsworthy under any employee
stock ownership plan); (v) the closing of any Deadlock
Resolution Proceeding under Section 3 hereof; (vi) the death of
Acridge or Norsworthy; or (vii) December 31, 2003. In addition,
with respect to any Stockholder Party other than Acridge or
Norsworthy who shall cease to own a Stock Interest in the
Surviving Corporation (other than pursuant to a transaction in
violation of Section 2.03 of this Agreement), this Agreement
shall terminate as to such Stockholder Party only at such time
as such Stockholder Party ceases to own such Stock Interest.
Notwithstanding the termination of this Agreement as provided
in this Section 4.01, any Standstill Agreement then in effect
as provided in Section 3.02(f) shall continue in effect until
it expires in accordance with the terms set forth in Section
3.02(f).
SECTION 5
REPRESENTATIONS AND WARRANTIES
5.01 REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
PARTIES. Each Stockholder Party represents to each party
hereto: (i) at the date hereof, the Stockholder Party owns the
number of shares of stock of Giant or Holly set forth opposite
his, her or its name on Schedule I attached hereto and such
Stockholder Party has sole power of disposition, sole power of
conversion, sole power to demand appraisal rights, and sole
power to vote or otherwise agree to all matters set forth in
this Agreement, with no limitations, qualifications, or
restrictions on such rights, subject to applicable securities
laws, the terms of this Agreement and normal rights under trust
agreements and pledge agreements which do not circumvent the
purpose or intent of this Agreement; (ii) each Stockholder Party
has the legal capacity, power, and authority to enter into and
perform all of his, her or its obligations under this Agreement;
(iii) the execution, delivery and performance of this Agreement
by such Stockholder Party do not require the consent of any
other person which has not been obtained on the date hereof and
will not violate any other agreement to which such Stockholder
Party is a party, including, without limitation, any voting
agreement, stockholders' agreement or voting trust; and (iv)
this Agreement has been duly executed and delivered by such
Stockholder Party and constitutes the legal, valid and binding
obligation of such Stockholder Party, enforceable against such
Stockholder Party in accordance with its terms.
SECTION 6
GENERAL PROVISIONS
6.01 GENERAL
(a) NON-FRUSTRATION. The parties agree that they
shall not take any actions during the term of this Agreement
that would have the effect of frustrating or circumventing the
purpose and intent of this Agreement; provided, however, that
the foregoing shall not prevent the Stockholder Parties from
effecting routine sales of Surviving Corporation equity
securities in transactions (subject to securities laws
restrictions) for purposes other than those prescribed in
Section 3.03 and elsewhere in this Agreement.
(b) NOTICES. All notices, requests, claims,
demands and other communications under this Agreement shall be
in writing and shall be deemed given on the date of delivery,
if delivered personally or telecopied (and confirmed) during
normal business hours, or on the following business day, if sent
by overnight courier (providing proof of delivery), in each case
to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(i) if to the Surviving Corporation, to:
Giant Industries, Inc.
23733 North Scottsdale Road
Scottsdale, Arizona 85255
Telecopy No.: (602) 585-8985
Attention: Corporate Secretary
(ii) if to Giant, to:
23733 North Scottsdale Road
Scottsdale, Arizona 85255
Telecopy No.: (602) 585-8985
Attention: Corporate Secretary
(iii) if to Holly, to:
Holly Corporation
100 Crescent Court
Suite 1600
Dallas, Texas 75201-6927
Telecopy No.: (214) 871-3578
Attention: Lamar Norsworthy
(iv) if to Acridge, to
23733 North Scottsdale Road
Scottsdale, Arizona 85255
Telecopy No.: (602) 585-8894
Attention: James E. Acridge
(v) if to the Norsworthy Group, to:
100 Crescent Court, Suite 1600
Dallas, Texas 75201-6927
Telecopy No.: (214) 871-3578
Attention: Lamar Norsworthy
Any Affiliate Transferee shall promptly give notice of that
person's address for purposes of this Section 6.01(b) to all of
the other parties and Affiliate Transferees.
(c) COUNTERPARTS. This Agreement may be executed in
one or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and
delivered to the other parties. Facsimile copies with
signatures of the parties to this Agreement, or their duly
authorized representatives, shall be legally binding and
enforceable. All such facsimile copies are declared to be
originals and accordingly admissible in any jurisdiction or
tribunal having jurisdiction over any matter relating to this
Agreement.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
This Agreement (i) constitutes the entire agreement, and
supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter
of this Agreement, and (ii) is not intended to confer upon any
person other than the parties any rights or remedies.
(e) GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Delaware, regardless of the laws that might otherwise govern
under applicable principles of conflict of laws thereof.
(f) ASSIGNMENT. Except as otherwise expressly set
forth herein, neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned,
in whole or in part, by operation of law or otherwise by the
parties hereto without the prior written consent of the other
parties. Any assignment in violation of the preceding sentence
shall be void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and
assigns.
(g) ENFORCEMENT. The parties agree that irreparable
damage would occur and that the parties would not have any
adequate remedy at law in the event that any of the provisions
of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any
federal court located in the State of Delaware or in Delaware
state court, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the
parties hereto (i) consents to submit itself to the personal
jurisdiction of any federal court located in the State of
Delaware or any Delaware state court in the event any dispute
arises out of this Agreement or any of the transactions
contemplated by this Agreement, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, and (iii) agrees
that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any
court other than a federal court sitting in the State of
Delaware or a Delaware state court. Each party to this
Agreement, including Giant, Holly and the Surviving Corporation,
and each Affiliate Transferee shall, so long as that person
holds stock of Giant, Holly or the Surviving Corporation, have
the right to seek, against any person subject to this Agreement,
enforcement of any obligations under the terms of this
Agreement. Any party breaching any provision of this Agreement
shall be liable to each other party for that party's reasonable
attorneys' fees incurred in enforcing the terms of this
Agreement against the breaching party.
(h) DESCRIPTIVE HEADINGS. The titles and subtitles
used in this Agreement are used for convenience only and are not
to be considered in construing or interpreting this Agreement.
(i) AMENDMENTS AND WAIVERS. No amendment of this
Agreement shall be effective unless it is in writing and is
signed by all parties hereto, and no waiver of any provision of
this Agreement or consent to any departure by any party from the
terms hereof shall in any event be effective unless in writing
and signed by the party or parties against whom such waiver or
consent is asserted, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose recited therein.
(j) SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law,
such provision or provisions shall be excluded from this
Agreement and the balance of this Agreement shall be interpreted
as if such provision or provisions were so excluded and shall
be enforceable in accordance with its terms.
(k) SCHEDULE 13D FILING. The Stockholder Parties will
cooperate in the preparation and filing with the Securities and
Exchange Commission, the New York Stock Exchange and the
American Stock Exchange of a Schedule 13D within ten days
following the date of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed and delivered as of the date first written above.
Giant Industries, Inc.
By: ___________________________
Name: James E. Acridge
Title: Chairman of the Board
Holly Corporation
By: __________________________
Name: Lamar Norsworthy
Title: Chairman of the board
______________________________
James E. Acridge
______________________________
Lamar Norsworthy
<PAGE>
______________________________
Nona Barrett
NBN Capital Limited Partnership
By: NBN Assets Management Company, L.L.C.
By:__________________________________
Robert G. McKenzie,
Manager
Betty Simmons East Texas Trust
By: Brown Brothers Harriman Trust Company
of Texas, Trustee
By:__________________________________
Robert G. McKenzie, Executive
Vice President
Margaret Simmons East Texas Trust
By: Brown Brothers Harriman Trust Company
of Texas, Trustee
By:___________________________________
Robert G. McKenzie, Executive
Vice President
<PAGE>
Suzanne Simmons East Texas Trust
By: Brown Brothers Harriman Trust Company
of Texas, Trustee
By:__________________________________
Robert G. McKenzie, Executive
Vice President
Betty Simmons Nueces County Trust
By: Brown Brothers Harriman Trust Company
of Texas, Trustee
By:___________________________________
Robert G. McKenzie, Executive Vice
President
Margaret Simmons Nueces County
Trust
By: Brown Brothers Harriman Trust
Company of Texas, Trustee
By:______________________________
Robert G. McKenzie, Executive
Vice President
Suzanne Simmons Nueces County Trust
By: Brown Brothers Harriman Trust
Company of Texas, Trustee
By:______________________________
Robert G. McKenzie, Executive
Vice President
<PAGE>
SCHEDULE I
SHARES HELD BY THE STOCKHOLDER PARTIES
ACRIDGE NUMBER OF GIANT INDUSTRIES SHARES OWNED
_______ _______________________________________
James E. Acridge 2,315,892
NORSWORTHY GROUP NUMBER OF HOLLY CORPORATION SHARES OWNED
________________ ________________________________________
Lamar Norsworthy 328,859
Nona Barrett 328,132
NBN Capital
Limited Partnership 285,856
Betty Simmons East
Texas Trust 263,242
Margaret Simmons
East Texas Trust 263,242
Suzanne Simmons
East Texas Trust 263,242
Betty Simmons
Nueces County Trust 240,470
Margaret Simmons
Neuces County Trust 240,470
Suzanne Simmons
Neuces County Trust 240,470
