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EXHIBIT 10.28
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement"), is made and entered into as
of the 16th day of June, 1998, by and between Wm. Cameron & Co. d/b/a Xxxxxxx
Xxxxxx Building Products, Inc., a Georgia corporation (the "Company"), and Xxx
X. Xxxxxxxx, Xx. (the "Optionee").
W I T N E S S E T H
WHEREAS, the Company, the Optionee and A.P.I. Supply Company, a
Minnesota corporation, are parties to that certain Asset Purchase Agreement
dated as of the date hereof (the "Purchase Agreement"); and
WHEREAS, pursuant to Section 11.6 of the Purchase Agreement, the
Optionee has agreed not to engage in a Competing Business (as defined in the
Purchase Agreement) (the "Covenant Not to Compete"); and
WHEREAS, in consideration for the Optionee's Covenant Not to Compete,
the Company has agreed to grant to the Optionee the following option to purchase
shares of common stock of the Company, no par value ("Common Stock"), pursuant
to the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee the right
and option to purchase, at the times and under the terms and conditions
set forth herein, 200,000 shares of Common Stock at an exercise price
of $20.00 per share, the number of shares of Common Stock and the
exercise price thereof subject to adjustment, pursuant to the terms of
Section 9 hereof (the "Option").
2. Date of Grant. The date of grant of the Option is the date of this
Agreement (the "Date of Grant").
3. Option Term. The Option shall be outstanding for a period of five years
from the Date of Grant set forth in Section 2 hereof and shall be
exercisable in full for a period of four years, commencing one year
from the Date of Grant and terminating on the fifth anniversary of the
Date of Grant (the "Option Term").
4. Exercise of Option. The Option shall be exercisable by the Optionee, or
by the other person or persons then entitled to exercise the Option
pursuant to Section 7 hereof, from time to time, in whole or in part,
but not as to a fraction of a share, during the Option Term. The Option
granted hereunder shall be exercisable by giving written notice of the
exercise to the Company, in form satisfactory to the Company,
specifying the number of shares to be purchased and accompanying such
notice with a certified or cashier's check payable to the order of the
Company for the full purchase price of the shares purchased. The
Option, or any part thereof, shall be deemed to have been exercised on
the first date upon which the
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Company receives a notice of exercise, payment of the purchase price of
the shares and all other documents required in respect of such exercise
by this Agreement.
5. Representations, Warranties, Covenants and Agreements of the Optionee.
The Optionee represents and warrants to, and covenants and agrees with,
the Company as follows:
A. The Optionee understands that neither the Option nor the
shares of Common Stock underlying the Option (the "Shares")
has been registered under the United States Securities Act of
1933, as amended (the "Act"), and that the Option is being
granted to him in reliance upon one or more exemptions from
registration contained in the Act;
B. The Optionee is acquiring the Option, and upon exercise of the
Option will acquire the Shares, for his own account for
investment and not with a view to the resale or distribution
thereof;
C. The Optionee has received or had access to all information he
considers necessary or advisable to enable him to make a
decision concerning his acquisition of the Option;
D. The Optionee has such knowledge and experience in business and
financial matters that he is capable of evaluating the merits
and risks of the Option;
E. The Optionee shall not transfer, assign, pledge, hypothecate
or otherwise dispose of the Shares unless the Shares are
subsequently registered under the Act or unless the Optionee
furnishes to the Company an opinion of counsel which is, in
the good faith, reasonable judgment of the Company,
satisfactory to the Company, or otherwise establishes to the
reasonable satisfaction of the Company, determined in good
faith, that an exemption from registration is available;
F. The Optionee understands that a legend referring to the
foregoing restrictions on transferability will be placed on
the certificates issued to represent the Shares; and
G. In the event that by reason of his acquisition of the Option
or the Shares the Optionee is required to make any filing
pursuant to the United States Securities Exchange Act of 1934,
as amended, he shall make such filing in a proper and timely
manner.
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6. Representations, Warranties, Covenants and Agreements of the Company.
A. The Company represents, warrants and agrees that all Shares
issuable upon any exercise of the Option shall be validly
authorized and issued, fully paid and nonassessable. The
Company covenants and agrees that it will pay all expenses,
stock transfer taxes and other charges payable in connection
with the preparation, execution and delivery of all stock
certificates evidencing Shares purchased upon any exercise of
the Option.
B. The Company covenants and agrees that it will reserve and set
apart and have at all times a number of shares of authorized
but unissued Common Stock deliverable upon the exercise of the
Option or any other rights or privileges provided for herein
sufficient to enable it at any time to fulfill all of its
obligations hereunder; and if at any time the number of
authorized but unissued shares of Common Stock shall not be
sufficient to effect the exercise of the Option, the Company
will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be
sufficient for such purpose.
C. If any shares of Common Stock reserved or to be reserved for
issuance upon the exercise of the Option require approval of
any governmental authority under any federal or state law
before such shares may be validly issued upon the exercise of
the Option, then the Company covenants that it will in good
faith and as expeditiously as possible endeavor to secure such
approval.
D. Whenever the number of shares purchasable under the Option or
the Purchase Price (as hereinafter defined) shall be adjusted
as required by the provisions of Section 9 hereof, the Company
shall forthwith mail a notice setting forth the adjusted
number of Shares then purchasable upon the exercise of the
Option to the holder thereof, but failure to give or receive
such notice, or any defects therein, or in the mailing
thereof, shall not affect such adjustment in the number of
shares purchasable under the Option or of the Purchase Price.
E. In case the Company proposes:
(1) to pay any stock dividend upon the Common Stock or
make any distribution (other than ordinary cash
dividends payable out of earnings) or offer any
subscription or other rights to the holders of Common
Stock, or
(2) to effect any capital reorganization, any
recapitalization, or any combination, split or
reclassification of capital stock of the Company, or
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(3) to effect the consolidation, merger, sale of all or
substantially all of the assets, liquidation,
dissolution or winding up of the Company, then the
Company shall cause notice of any such intended
action to be given to the holder of the Option not
less than thirty (30) nor more than sixty (60) days
prior to the date on which the transfer books of the
Company shall close or a record be taken for such
dividend or distribution, or the date when such
capital reorganization, recapitalization,
combination, split, reclassification, consolidation,
merger, sale, liquidation, dissolution or winding up
shall be effected, as the case may be.
7. Transferability.
A. Except as provided in Subsections B and C below, the Option
and the rights and privileges contained hereby may not be
transferred, assigned, pledged, hypothecated or otherwise
disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment
or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of the Option, or any
right or privilege conferred hereby, contrary to the
provisions hereof, the Option and the rights and privileges
conferred hereby shall immediately become null and void.
B. The Option shall not be transferable by the Optionee otherwise
than by will, or if he dies intestate, by the laws of descent
and distribution of the jurisdiction of his domicile at the
time of his death. During his lifetime, the Option shall be
exercisable only by the Optionee, except as provided in
Subsection C of this Section.
C. In the event of the death of the Optionee, or in the event of
permanent mental incapacity of the Optionee, the Option held
by him shall be fully exercisable as provided in Section 4, in
the case of death, by the person or persons entitled to do so
under the Optionee's will or, if the Optionee shall fail to
make a specific testamentary disposition of the Option or
shall die intestate, by the Optionee's legal representative or
representatives, or, in the case of incapacity, by his legal
guardian.
8. Securities Laws.
A. Each exercise of the Option shall be contingent upon receipt
by the Company from the Optionee (or from the other person or
persons then entitled to exercise the Option pursuant to
Sections 6B and 6C hereof) of such written representations
concerning the Optionee's (or such other person or persons')
intentions with regard to the acquisition, retention or
disposition of the Shares being acquired upon exercise of the
Option and/or such written covenants and agreements as to the
acquisition, retention and disposition of such Shares as, in
the reasonable opinion of the Company, made in good faith with
advice of counsel, may be necessary to ensure that the
acquisition, retention and any disposition of such Shares by
the
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Optionee (or such other person or persons) will not involve a
violation of the Act or any similar or superseding statute or
statutes, or any other applicable statute or regulation, as
then in effect.
B. Each exercise of the Option shall be subject to the
requirement that, if at any time the Company shall determine,
in its reasonable discretion, exercised in good faith with
advice of counsel, that the consent or approval of any
governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the exercise of the
Option or the issuance or delivery of Shares thereunder, the
Option may not be exercised in whole or in part unless such
consent or approval shall have been effected or obtained free
of any conditions not reasonably acceptable to the Company.
The Company covenants and agrees that it will use its best
efforts to obtain all such required consents and approvals.
C. Nothing in the Option granted shall require the Company to
issue or deliver any Shares upon any exercise of the Option if
such sale would, in the opinion of counsel for the Company,
constitute a violation of the Act or any similar or
superseding statute or statutes, or any other applicable
statute or regulation, as then in effect.
9. Adjustment of Purchase Rights.
A. As used herein:
(1) "Common Stock" shall mean the Common Stock, no par
value, of the Company and any other shares of stock
or other securities or property of the Company or of
any other corporation for which the Option shall be
exercisable.
(2) "Purchase Price" initially shall be $20.00 per share.
The Purchase Price shall be subject to adjustment
from time to time as provided in Subsection B(1) of
this Section.
B. If any of the following events occurs at any time or from time
to time prior to the expiration of the Option by exercise or
by its terms, the indicated adjustments shall be made in the
Purchase Price and the number of shares of Common Stock or the
class of securities purchasable upon any exercise of the
Option, as appropriate:
(1) If the Company subdivides its outstanding shares of
Common Stock into a greater number of shares or
declares any dividend on its Common Stock payable in
Common Stock, the Purchase Price in effect
immediately prior to such division shall be
proportionately reduced, and the number of shares
purchasable under the Option shall be proportionately
increased. Conversely, if the outstanding shares of
Common Stock of the Company are in any manner
combined into a smaller number of shares, the
Purchase Price
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in effect immediately prior to such combination shall
be proportionately increased, and the number of
shares purchasable under the Option shall be
proportionately reduced.
(2) If the Company declares any dividend on its Common
Stock payable in stock (other than Common Stock) or
other securities of the Company or of any other
corporation, or in property or otherwise than in
cash, to the holders of its Common Stock the holder
of the Option shall, without additional cost, be
entitled to receive upon any exercise of the Option,
in addition to the Common Stock to which such holder
shall then be entitled, the number of shares of stock
or other securities or property which such holder
would have been entitled to receive if he had been a
holder immediately prior to the record date for such
dividend of the number of shares of Common Stock
purchased pursuant to such exercise, which number of
shares of stock or other securities and the purchase
price therefor shall be subject to adjustment
pursuant to the provisions of this Section 9 from and
after such record date.
(3) If there occurs any recapitalization, combination,
split or reclassification of the Common Stock of the
Company or any merger of the Company and one or more
other corporations with the Company as the surviving
corporation, as a result of which holders of the
Company's Common Stock receive other stock,
securities or property in lieu of or in addition to,
but on account of, their Common Stock, the holder of
the Option, upon any exercise of the Option after the
record date for determination of stockholders
entitled to such other stock, securities or property,
shall receive, in lieu of or in addition to any
shares of Common Stock of the Company, the
proportionate share of all stock, securities or other
property issued, paid or delivered for or on all of
the Common Stock of the Company that would have been
allocable to the shares of Common Stock that would
have been purchased pursuant to such exercise of the
Option if such exercise had been made immediately
prior to such record date, which number of shares of
stock or other securities and the purchase price
therefor shall be subject to adjustment pursuant to
the provisions of this Section 9 from and after such
record date.
(4) If there occurs any merger or consolidation of the
Company with or into another corporation so that
another corporation is the surviving or resulting
corporation, or if there occurs any sale of
substantially all the assets of the Company or any
similar transaction, then:
(a) If provision is made in writing in
connection with such transaction for the
continuance and/or assumption of the Option
or the substitution for the Option of a new
option equivalent to the Option, with
appropriate adjustment as to number and kind
of shares or other securities deliverable
with respect thereto, the Option, or the new
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option substituted therefor, shall continue
in effect after the transaction.
(b) In the event provision is not made in
connection with such transaction for the
continuance and/or assumption of the Option
or for the substitution of an equivalent
option, then the holder of the Option shall
be entitled, immediately prior to the
effective date of such transaction, to
purchase the full number of shares that he
would otherwise have been entitled to
purchase during the entire remaining term of
the Option. The unexercised portion of the
Option shall be deemed cancelled and
terminated as of the effective date of such
transaction.
10. Further Adjustments.
Except as hereinbefore provided, the issue by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
for cash, property, labor or services either upon direct sale or upon the
exercise of rights, options or warrants to subscribe therefore, or upon the
conversion of securities of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of Shares subject to the Option.
11. Miscellaneous.
A. Neither the Optionee nor any other person or persons entitled
to exercise the Option pursuant to Subsections 6B and 6C shall
be or have any of the rights or privileges of a stockholder of
the Company with respect to any of the Shares unless and until
the Option shall have been exercised with respect thereto and
the certificates representing such Shares shall have been
issued and delivered.
B. Except as provided in Section 6 and Section 9 of this
Agreement, the existence of the Option shall not affect in any
way the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the corporate structure or
capitalization affecting the Common Stock of the Company, any
merger or consolidation of the Company, any issue of bonds,
debentures, preferred or prior preference stocks ahead of or
affecting the Common Stock or the rights thereof, any issue or
disposition of any unissued or treasury shares of any class of
stock, any evidences of indebtedness or other securities
convertible into or which carry a right to subscribe for or to
receive such unissued or treasury shares, any right of
subscription for or to receive or any warrant, right or option
for the purchase of any security of the Company, the
dissolution or liquidation of the Company, any sale or
transfer of all or any part of its assets or business or any
other corporate or actual proceeding of a similar character or
otherwise.
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C. The Optionee shall furnish to the Company all information
reasonably requested by the Company to enable it to comply
with any reporting or other requirement imposed upon the
Company by or under any applicable act, statute, regulation or
law, as then in effect.
D. Prior to the exercise of the Option and as a condition to the
Company's obligation to deliver Shares upon such exercise, the
Optionee shall make arrangements, which in the good faith
reasonable judgment of the Company shall be satisfactory to
the Company, for the payment of any applicable United States
federal withholding taxes or other withholding taxes payable
as a result of any exercise of the Option.
E. Any notice relating to this Agreement shall be in writing and
delivered in person or by registered mail to the Company at
its office at 00000 Xxxxx Xxxx, Xxxxxx, Xxxxx 00000, or to
such other address as may be hereafter specified by the
Company in writing by notice given in accordance herewith, to
the attention of the Corporate Secretary. All notices to the
Optionee or other person or persons then entitled to exercise
the Option shall be delivered in person or by registered mail
to the Optionee or such other person or persons at the
Optionee's address below specified (or such other address as
may be specified by such person in writing by notice given in
accordance herewith).
F. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first above written.
OPTIONEE
/s/ Xxx X. Xxxxxxxx
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Xxx X. Xxxxxxxx, Xx.
Address:
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WM. CAMERON & CO.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Vice President and General Counsel
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