Current Report — Form 8-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 8-K National Convenience Stores Inc. Form 8-K 9 44K
2: EX-99.1 Class Action Complaint - Crandon Capital Partners 10 32K
11: EX-99.10 Employment Agreement - V.H. Van Horn 28 117K
12: EX-99.11 Employment Agreement - A.J. Gallerano 25 111K
13: EX-99.12 Second Amend. Employmnt Agreemnt-Arnold Van Zanten 25 112K
14: EX-99.13 Employment Agreement - C. R. Wortham 25 110K
15: EX-99.14 Fourth Amend. Employment Agreement-Brian Fontana 25 113K
16: EX-99.15 Employment Agreement - Douglas B. Binford 25 108K
17: EX-99.16 Employment Agreement - Janice E. Bryant 5 28K
18: EX-99.17 Master Agreement for Atm Facilities 42 145K
19: EX-99.18 Order Providing for Closing Chaper 11 Cases 12 44K
20: EX-99.19 Promissory Note Dated 08/31/95 - V.H. Van Horn 3 17K
3: EX-99.2 Complaint - the Circle K Corporation 7 23K
4: EX-99.3 Complaint - the Circle K Corporation 6 22K
5: EX-99.4 Amended and Restated Ncs Officers' Retirement Plan 12 49K
6: EX-99.5 Amended and Restated Trust 15 48K
7: EX-99.6 Amended Directors' Retirement Plan 8 35K
8: EX-99.7 Amended Directors' Retirement Plan 15 48K
9: EX-99.8 Form of Twenty-Second Amendment to Profit Sharing 1 10K
10: EX-99.9 Form of Director Agreement 8 38K
EX-99.1 — Class Action Complaint – Crandon Capital Partners
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EXHIBIT 99.1
IN THE COURT CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
)
CRANDON CAPITAL PARTNERS, )
a Florida Partnership, )
)
Plaintiff, )
)
v. )
) C.A. No. 14489
V. H. VAN HORN, RICHARD C. )
STEADMAN, DUNBAR N. CHAMBERS, JR., )
RAYMOND W. OELAND, JR., ROBERT B. )
STOBAUGH, WILLIAM K. WILDE, )
CHARLES J. LUELLEN, LIONEL SOSA )
and NATIONAL CONVENIENCE )
STORES INC. )
)
Defendants. )
)
CLASS ACTION COMPLAINT
Plaintiff, by its attorney, alleges upon personal knowledge as to its
own acts and upon information and belief as to all other matters, as follows:
NATURE OF THE ACTION
1. This is a stockholders' class action lawsuit brought on behalf of
the public stockholders of National Convenience Stores Inc. ("NCS" or the
"Company") who have been, and continue to be, deprived of the opportunity to
realize fully the benefits of their investment in the Company. The individual
defendants have wrongfully refused properly to negotiate or consider any bona
fide offer for the Company, including that of Circle K Corp. ("Circle K"), and
have taken a reactive defensive action, which was wrongfully designed to
entrench NCS officers and directors in their positions of control,
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and which was and is unreasonable in relation to any perceived threat posed by
Circle K. In furtherance of these efforts, the individual defendants, on August
10, 1995, specifically adopted and implemented an amendment to the Company's
Restated By-Laws which provides that any change in the number of directors must
be approved by 75 percent of the shares entitled to vote at a meeting of
stockholders (the "75 Percent By-Law Provision"). Their actions constitute
unfair dealing, improper interference with shareholder voting rights, a
manipulation of corporate machinery for personal purposes, and a breach of
fiduciary duty to maximize shareholder value. The individual defendants are
using their fiduciary positions of control over NCS to thwart others in their
legitimate attempts to acquire NCS, and the individual defendants are trying
to entrench themselves in their positions with the Company.
Parties
2. Plaintiff is and, at all relevant times, has been the owner of
shares of NCS common stock.
3. NCS is a corporation duly organized and existing under the laws of
the State of Delaware. NCS operates approximately 660 specialty convenience
stores under the name of "Stop N' Go" in Texas. NCS maintains its principal
executive offices at 100 Waugh Drive, Texas 77007. NCS has approximately
6,000,000 shares of common stock outstanding and 1,380 stockholders of record.
NCS's stock trades over the NASDAQ National Market System.
4. Defendant V. H. Van Horn ("Van Horn") is and has at all times been
NCS' President, Chief Executive Officer and a director.
5. Defendant Richard C. Steadman ("Steadman") is and has at all
2
relevant times been Chairman of NCS' Board of Directors.
6. Defendants Dunbar N. Chambers, Jr. ("Chambers"), Raymond W. Oeland,
Jr. ("Oeland,"), Robert B. Stobaugh ("Stobaugh"), William K. Wilde ("Wilde"),
Charles J. Luellen ("Luellen") and Lionel Sosa ("Sosa") are and have been at all
relevant times directors of NCS.
7. The defendants named in paragraphs 4 through 6 are hereinafter
referred to as the "Individual Defendants."
8. Because of their positions as officers/directors of the Company,
the Individual Defendants owe a fiduciary duty of loyalty and due care to
plaintiff and the other members of the class.
CLASS ACTION ALLEGATIONS
9. Plaintiff brings this case in its own behalf and as a class action,
on behalf of all stockholders of the Company, except defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants, or any of the Company's principal stockholders, who will
be threatened with injury arising from defendants' actions as is described more
fully below.
10. This action is properly maintainable as a class action.
11. The class is so numerous that joinder of all members is
impracticable. The Company has over a thousand stockholders who are scattered
throughout the United States.
12. There are questions of law and fact common to the class including,
inter alia, whether:
a. defendants have breached their fiduciary duties owed by them
3
to plaintiffs and other members of the Class by failing and refusing to attempt
in good faith to maximize shareholder value in the sale of NCS;
b. defendants have improperly interfered with the voting rights of
NCS shareholders and/or improperly manipulated corporate machinery;
c. defendants engaged in a plan and scheme to thwart and reject
offers and proposals from third parties, including Circle K, by means which
include enacting a provision to the bylaws which provides that any change in
the number of directors must be approved by 75 percent of the shares entitled
to vote at a meeting of stockholders; and
d. plaintiffs and the other members of the Class are being and
will continue to be injured by the wrongful conduct alleged herein and, if so,
what is the proper remedy and/or measure of damages.
13. Plaintiff is committed to prosecuting the action and has retained
competent counsel experienced in litigation of this nature. Plaintiff's claims
are typical of the claims of the other members of the class and plaintiff has
the same interests as the other members of the class. Plaintiff is an adequate
representative of the class.
14. The prosecution of separate actions by individual members of the
Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to
individual members of the Class which would as a practical matter be
dispositive of the interests of the other members not parties to the
adjudications or substantially impair or impede their ability to protect their
interests.
4
15. The defendants have acted, or refused to act, on grounds generally
applicable to, and causing injury to, the Class and, therefore, preliminary and
final injunctive relief on behalf of the Class as a whole is appropriate.
SUBSTANTIVE ALLEGATIONS
16. By the acts, transactions, and courses of conduct alleged
herein, defendants, individually and as part of a common plan and scheme
and/or aiding and abetting one another in total disregard of their fiduciary
duties, are attempting to deprive plaintiff and the Class unfairly of the full
value of their investment in NCS, and doing so by interfering with corporate
democratic processes.
17. On August 14, 1995, Circle K announced that on August 8, 1995, it
had submitted to management and the Board of Directors of NCS, a proposal
whereby Circle K would purchase all outstanding common stock of NCS at a price
of $17 per share in cash. In addition, Circle K would agree to assume
approximately $100 million in existing debt of NCS. The transaction was valued
at approximately $210 million.
18. On August 14, 1995, it was also announced that, on August 8, 1995,
Circle K's President and Chief Executive Officer, John Antioco wrote defendant
Van Horn that:
We believe that this proposal presents an extremely attractive
opportunity for your stockholders at a price which provides
them a significant premium. We hope that you and your Board of
Directors will view this offer, as we do, as an excellent
opportunity for the stockholders of NCS to realize full value
for their shares to an extent not likely to be available to
them in the marketplace.
19. At the same time, Circle K also announced that, on August 11,
1995, it submitted a proposal for shareholder vote at NCS's upcoming anuual
meeting to
5
expand the size of NCS's Board of Directors from eight to 17 directors and has
proposed a slate of nine candidates for election at such meeting. According to
its August 14, 1995 press release, Circle K announced that it would also seek
to repeal any by-law amendment adopted since January 1, 1994.
20. NCS has a staggered board of eight members. The Company will
propose the re-election of its four Class III directors (namely, Wilde,
Steadman, Sosa and Luellen) at its annual meeting this year, which is typically
held in October.
21. Although NCS announced on August 14, 1995 that it would be
"premature" to characterize the Company's response to the Circle K proposal,
the Individual Defendants, in enacting the 75 Percent By-Law Provision, have
indicated opposition to it. Indeed, although NCS stated that it would consider
the offer "in due course," the Company's first action was, unbeknownst to
Circle K or the public, to institute the 75 Percent By-Law Provision on August
11, 1995.
22. The 75 Percent By-Law Provision has the effect of making it
extraordinarily time-consuming, difficult, and expensive for any potential
acquiror not approved by the Individual Defendants to fully acquire NCS. It
also makes more difficult shareholder action through corporate suffrage to
change Board composition. Therefore, the 75 Percent By-Law Provision has the
effect of interfering with shareholder voting and precluding successful and
timely completion of even the most attractive offer for NCS unless the Board
acquiesces, thus denying the Company's shareholders an opportunity to make
their own unfettered choice.
23. As a consequence, the adoption and implementation of the 75
Percent By-Law Provision has the force and effect of entrenching the Individual
Defendants in their corporate offices against any real or perceived threat to
their control,
6
and dramatically impairs the rights of Class members to exercise freedom of
choice in a proxy contest or to avail themselves of a bona fide offer to
purchase their shares by an acquiror unfavored by incumbent management. This
fundamental shift of control of the Company's destiny from the hands of its
shareholders to the hands of the Individual Defendants results in a heightened
fiduciary duty of the Individual Defendants to consider, in good faith, a third
party bid.
24. Defendants owe fundamental fiduciary obligations to the Company's
shareholders to consider seriously any bona fide offers for the Company, and to
conduct fair and active bidding procedures or other mechanisms for checking
the market to consider offers received for the Company. Further, the Individual
Defendants must adequately insure that no conflict of interest exists between
their own interests and their fiduciary obligations to maximize shareholder
value or, if such conflicts exist, to insure that all such conflicts will be
resolved in the best interests of the Company's public stockholders.
25. The Individual Defendants have breached their fiduciary and other
common law duties owed to plaintiffs and other members of the class in that
they have not and are not exercising independent business judgment and have
acted and are acting to the detriment of the Class in order to benefit
themselves and NCS's senior management.
26. The Individual Defendants are acting to entrench themselves in
their offices and positions and maintain their substantial salaries and
perquisites, all to the expense and to the detriment of the public shareholders
of NCS.
27. By the acts, transactions and courses of conduct alleged herein,
the Individual Defendants, individually and as part of a common plan and
scheme in breach
7
of their fiduciary duties and obligations, are attempting to unfairly deprive
plaintiff and the other members of the class of the premiums they could realize
in an acquisition transaction and to ensure continuance of their positions as
directors and officers. The Individual Defendants have been engaged in a
wrongful effort to entrench themselves in their offices and positions of
control and prevent the acquisition of NCS except on terms which would further
their own personal interests.
28. As a result of defendants' actions, plaintiff and the other
members of the Class have been and will be injured in that they have been
deprived of the ability to change meaningfully the composition of the Board and
they have not and will not receive their fair proportion of the value of NCS's
assets and businesses and/or have been and will be prevented from obtaining a
fair and adequate price for their shares of NCS's common stock.
29. Plaintiff seeks preliminary and permanent injunctive relief and
declaratory relief against enforcement of the 75 Percent By-Law Provision,
preventing defendants from inequitably and unlawfully depriving plaintiff and
the Class of their rights to realize a full and fair value for their stock at a
substantial premium over the market price, and to compel defendants to carry
out their fiduciary duties to maximize shareholder value in selling NCS.
30. Only through the exercise of this Court's equitable powers can
plaintiff be fully protected from the immediate and irreparable injury which
the defendants' actions threaten to inflict.
31. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
(a) Declaring this to be a proper class action and certifying
8
plaintiff as class representative;
(b) enjoining enforcement of the 75 Percent By-Law Provision;
(c) Ordering the Individual Defendants to carry out their
fiduciary duties to plaintiff and the other members of the Class by announcing
their intention to:
i) cooperate fully with any entity or person, including
Circle K, having a bona fide interest in proposing any transaction that would
maximize shareholder value, including but not limited to, a buy-out or takeover
of the Company;
ii) immediately undertake an appropriate evaluation of
NCS's worth as a merger/acquisition candidate;
iii) take all appropriate steps to enhance NCS's value
and attractiveness as a merger/acquisition candidate;
iv) take all appropriate steps to effectively expose
NCS to the marketplace in an effort to create an active auction of the Company;
v) rescind and render void the amendment by which the
75 Percent By-Law Provision was enacted;
vi) act independently so that the interests of the
Company's public shareholders will be protected; and
vii) adequately ensure that no conflicts of interest
exist between the Individual Defendants' own interest and their fiduciary
obligation to maximize shareholder value or, in the event such conflicts exist,
to ensure that all conflicts of interest are resolved in the best interests of
the public shareholders of NCS;
(d) Ordering the Individual Defendants jointly and severally
to account to plaintiff and the Class for all damages suffered and to be
suffered by them as a result of the acts and transactions alleged herein;
9
(e) Awarding plaintiff the costs and disbursements of this
action, including a reasonable allowance for plaintiff's attorneys' and expert'
fees; and
(f) Granting such other and further relief as may be just and
proper.
Dated: August 18, 1995
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
BY: /s/ HERMAN M. MONHAIT
-----------------------------------------
First Federal Plaza, Suite 214
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
WECHSLER SKIRNICK HARWOOD
HALEBIAN & FEFFER LLP
805 Third Avenue
New York, New York 10022
(212) 935-7400
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Dates Referenced Herein and Documents Incorporated by Reference
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