EXHIBIT 99(c)
AMENDMENT NO. 2 TO RIGHTS AGREEMENT, dated as of March 4, 1996,
between GUARDSMAN PRODUCTS, INC., a Delaware corporation (the "Company"),
and Chemical Bank (formerly Manufacturers Hanover Trust Company) (the
"Rights Agent"), amending the Rights Agreement, dated as of August 8, 1986,
as amended, between the Company and the Rights Agent (the "Rights
Agreement").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has approved an
Agreement and Plan of Merger (the "Merger Agreement") by and among the
Company, Lilly Industries, Inc., an Indiana corporation ("Lilly"), and LP
Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of Lilly ("LP"), providing for LP to commence an all-cash tender
offer for all outstanding shares of common stock of the Company (the
"Offer") and for the subsequent merger of LP into the Company (the
"Merger");
WHEREAS, the Board of Directors of the Company has determined
that the Offer and the Merger are fair to and in the best interests of the
Company and its stockholders;
WHEREAS, the willingness of Lilly and LP to enter into the Merger
Agreement is conditioned on, among other things, the amendment of the
Rights Agreement on the terms set forth herein; and
WHEREAS, Section 26 of the Rights Agreement provides that, among
other things, prior to the Distribution Date and subject to the
restrictions set forth in the penultimate sentence of such Section, the
Company may, and the Rights Agent shall, if the Company so directs,
supplement or amend any provisions of the Rights Agreement without the
approval of any holders of certificates representing shares of Common
Stock;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth in the Rights Agreement and this Amendment, the
parties hereby agree as follows:
1. Section 1 of the Rights Agreement is hereby amended by
adding the following definitions thereto:
"Letter Agreements" shall have the meaning set forth in the
Merger Agreement.
"Merger" shall mean the merger of LP into the Company as
contemplated by the Merger Agreement.
"Merger Agreement" shall mean the Agreement and Plan of
Merger, dated as of March 4, 1996, by and among Xxxxx, XX and the
Company, as the same may be amended in accordance with the terms
thereof.
"Offer" shall have the meaning set forth in the Merger
Agreement.
"LP" shall mean LP Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Lilly.
"Lilly" shall mean Lilly Industries, Inc., an Indiana
corporation.
2. Section 1(a) of the Rights Agreement is hereby amended by
adding to the end thereof the following:
"Notwithstanding anything to the contrary contained herein,
neither Lilly nor LP shall be or become an "Acquiring Person"
(and no Stock Acquisition Date shall occur) as a result of
(i) the announcement, commencement or consummation of the Offer,
(ii) the execution of the Merger Agreement (or any amendment
thereto in accordance with the terms thereof) or the consummation
of the transactions contemplated thereby (including, without
limitation, the Offer and the Merger), or (iii) the execution of
the Letter Agreements or the consummation of the transactions or
exercise of any power contemplated thereby (including, without
limitation, the tendering or voting of shares of Common Stock in
the manner contemplated thereby and the grant of a limited proxy
in furtherance thereof)."
3. Section 3(a) of the Rights Agreement is hereby amended by
adding to the end thereof the following:
"Notwithstanding anything to the contrary contained herein,
no Distribution Date shall occur as a result of (i) the
announcement, commencement or consummation of the Offer, (ii) the
execution of the Merger Agreement (or any amendment thereto in
accordance with the terms thereof) or the consummation of the
transactions contemplated thereby (including, without limitation,
the Offer and the Merger), or (iii) the execution of the Letter
Agreements or the consummation of the transactions or exercise of
any power contemplated thereby (including, without limitation,
the tendering or voting of shares of Common Stock in the manner
contemplated thereby and the grant of a limited proxy in
furtherance thereof), and no Distribution Date will, in any
event, occur prior to the effective time of the Merger or the
earlier termination of the Merger Agreement."
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4. Section 7(a) of the Rights Agreement is hereby amended by
replacing the word "earlier" in its first occurrence with the word
"earliest", by deleting the word "or" immediately prior to the symbol
"(ii)", and by replacing the words "(the earlier of (i) and (ii), being
herein referred to as the "Expiration Date")" with the following:
"and (iii) immediately prior to the effective time of the
Merger (the earliest of (i), (ii) and (iii) being herein referred
to as the "Expiration Date")."
5. Section 11 of the Rights Agreement is hereby amended by
adding to the end thereof the following:
"(n) Notwithstanding anything to the contrary contained
herein, the provisions of this Section 11 will not apply to or be
triggered by (i) the announcement, commencement or consummation
of the Offer, (ii) the execution of the Merger Agreement (or any
amendment thereto in accordance with the terms thereof) or the
consummation of the transactions contemplated thereby (including,
without limitation, the Offer and the Merger), or (iii) the
execution of the Letter Agreements or the consummation of the
transactions or exercise of any power contemplated thereby
(including, without limitation, the tendering or voting of shares
of Common Stock in the manner contemplated thereby and the grant
of a limited proxy in furtherance thereof)."
6. Section 13 of the Rights Agreement is hereby amended by
adding to the end thereof the following:
"(d) Notwithstanding anything to the contrary contained
herein, the provisions of this Section 13 will not apply to or be
triggered by the execution of the Merger Agreement or any
amendment thereto or the consummation of the transactions
contemplated thereby (including, without limitation, the
Merger)."
7. The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Amendment.
8. The term "Agreement" as used in the Rights Agreement shall
be deemed to refer to the Rights Agreement as amended by this Amendment No.
2.
9. Except as set forth herein, the Rights Agreement shall
remain in full force and effect and shall be otherwise unaffected hereby.
10. This Amendment No. 2 may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 2 to be duly executed, all as of the day and year first above written.
GUARDSMAN PRODUCTS, INC.
By ___________________________________
Its _______________________________
CHEMICAL BANK, as Rights Agent
By ___________________________________
Its _______________________________
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