EXHIBIT 4(d)
THE VALSPAR CORPORATION
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of _________________, ____, between The
Valspar Corporation, a Delaware corporation (hereinafter called the "Company"),
and ___________________________ having a corporate trust office in
______________________, as warrant agent (hereinafter called the "Warrant
Agent").
[[COMMON STOCK] WHEREAS, the Company proposes to issue [Class __]
Purchase Warrants (hereinafter called the "Warrants") entitling the holders
thereof to purchase an aggregate of _________ shares of Common Stock of the
Company (par value $.50 per share) (hereinafter called the "Shares") at an
initial cash purchase price of $______ per Share; and]
[[DEBT SECURITIES] WHEREAS, the Company has entered into an indenture
(the "Indenture") dated as of ____ between the Company and ______, as trustee
(the "Trustee"), providing for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (the "Debt Securities"), to
be issued in one or more series as provided in the Indenture; and the Company
proposes to sell warrant certificates evidencing one or more warrants (the
"Warrants" or individually a "Warrant") representing the right to purchase
[title of Debt Securities purchasable through exercise of Warrants] (the
"Warrant Securities"), such warrant certificates and other warrant certificates
issued pursuant to this Agreement being herein called the "Warrant
Certificates"; and]
WHEREAS, each Warrant may be exercised in whole at any time, as
specified herein, on or after [the date thereof] [________________] and at or
before 3:30 p.m., New York City time, on ________________ [or such later date as
the Company may designate, by notice to the Warrant Agent and the holders of
Warrant Certificates mailed to their addresses as set forth in the record books
of the Warrant Agent] (the "expiration date") (unless extended as provided in
Section 9A hereof). Each Warrant not exercised at or before 3:30 p.m., New York
City time, on the expiration date shall become void, and all rights of the
holder of the Warrant Certificate evidencing such Warrant under this Agreement
shall cease; and]
[[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT] WHEREAS, the
Warrants will be offered in Units, each of which consists of
_______________________ and Warrants to purchase _________ Shares; and]
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange and exercise of Warrants to be issued
from time to time by the Company,
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NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter in this Agreement set forth, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. FORM OF WARRANT. The text of the Warrants and the form of
election to purchase [Shares][Warrant Securities] to be set forth on the reverse
thereof shall be substantially as set forth in [Exhibit A] attached hereto. Each
Warrant shall, subject to the terms of this Warrant Agreement, entitle the
registered holder thereof to initially purchase the number of [Shares][Warrant
Securities] specified therein at an initial exercise price of [$______ per
Share] [_________ plus [accrued amortization of original issue discount]
[accrued interest]; [provided, however, that the warrant exercise price and the
number of Shares issuable upon exercise of Warrants are subject to adjustment
upon the occurrence of certain events, all as hereinafter provided.] The
Warrants shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future Chairman of the Board, President or Vice
President of the Company, under its seal, affixed or in facsimile, and by the
manual or facsimile signature of the present or any future Secretary or
Assistant Secretary of the Company.
The Company shall promptly notify the Warrant Agent from time to time
in writing of the number of Warrants to be issued and furnish written
instructions in connection therewith signed by an executive officer of the
Company; such notification and instructions may, but need not be, in the form of
a general or continuing authorization to the Warrant Agent.
The Warrants shall be dated by the Warrant Agent as of the date of each
initial issuance, and as of the date of issuance thereof upon any transfer or
exchange thereof.
SECTION 3. COUNTERSIGNATURE AND REGISTRATION. The Warrant Agent shall
maintain books for the transfer and registration of the Warrants. Upon the
initial issuance of the Warrants, the Warrant Agent shall issue and register the
Warrants in the names of the respective registered holders thereof. The Warrants
shall be countersigned by the Warrant Agent (or by any successor to the Warrant
Agent then acting as warrant agent under this Agreement) and shall not be valid
for any purpose unless so countersigned. Such Warrants may be so countersigned,
however, by the Warrant Agent (or by its successor as warrant agent) and be
delivered by the Warrant Agent, notwithstanding that the persons whose manual or
facsimile signatures appear thereon as proper officers of the Company shall have
ceased to be such officers at the time of such countersignature or delivery.
Upon issuance of any Warrant, the Company will present the same, or cause the
same to be presented, to the Warrant Agent for countersignature of such Warrant.
SECTION 4. TRANSFERS AND EXCHANGES. The Warrant Agent shall transfer,
from time to time, any outstanding Warrants upon the books to be maintained by
the Warrant Agent for that purpose, upon the surrender thereof for transfer
properly endorsed or accompanied by appropriate instructions for transfer. Upon
any such transfer, a new Warrant of like tenor shall be issued to the transferee
and the surrendered Warrant shall be cancelled by the Warrant Agent. All
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such Warrants so cancelled shall be delivered by the Warrant Agent to the
Company from time to time. The Warrants may be exchanged at the option of the
holder thereof, when surrendered at the office in
______________________________________ of the Warrant Agent, for another
Warrant, or other Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of
[Shares][Warrant Securities]. The Warrant Agent is hereby irrevocably authorized
to countersign and deliver, in accordance with the provisions of this Section
and Section 3 of this Agreement, such new Warrants required pursuant to the
provisions of this Section, and the Company, whenever required by the Warrant
Agent, will supply the Warrant Agent with Warrants duly executed on behalf of
the Company for such purpose.
[[IF THE WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT]
Notwithstanding the foregoing, until __________________, the Warrants shall not
be transferable apart from the _____________ to which they are attached, any
transfer of the _____________ shall be deemed a transfer of the Warrants
attached thereto, and any attempt to transfer the Warrants apart from the
___________________ shall be void and of no effect. Each Warrant shall contain a
legend to the foregoing effect.]
SECTION 5. EXERCISE OF WARRANTS. The registered holder of each Warrant
shall have the right, which may be exercised as in such Warrant expressed, to
purchase from the Company (and the Company shall issue and sell to such
registered holder) the number of [Shares][Warrant Securities] specified in such
Warrants, upon surrender to the Company, at the office in
_________________________ of the Warrant Agent of such Warrant, with the form of
election to purchase on the reverse thereof duly filled in and signed, and upon
payment to the Warrant Agent for the account of the Company of the warrant
exercise price, determined in accordance with the provisions of Section 9 of
this Agreement, for the number of [Shares][Warrant Securities] in respect of
which such Warrant is then exercised. Payment of such warrant exercise price may
be made in cash, or by certified check or bank draft or bank wire transfer, or
postal or express money order, payable in United States dollars [or applicable
currency], to the order of the Warrant Agent. No adjustment shall be made for
any dividends on any [Shares][Warrant Securities] issuable upon exercise of any
Warrant. Subject to Section 6, upon such surrender of Warrants, and payment of
the warrant exercise price as aforesaid, the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
registered holder of such Warrants, and in such name or names as such registered
holder may designate, a certificate or certificates for the number of full
[Shares][Warrant Securities] so purchased upon the exercise of such Warrants,
together with cash, as provided in Section 9 of this Agreement, in respect of
any fraction of a [Share][Warrant Securities] otherwise issuable upon such
surrender. Such certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed to have become
a holder of record of such [Shares][Warrant Securities] as of the date of the
surrender of such Warrants and payment of the warrant exercise price as
aforesaid; provided, however, that if, at the date of surrender of such Warrants
and payment of such warrant exercise price, the transfer books for the
[Shares][Warrant Securities] purchasable upon the exercise of such Warrants
shall be closed, no such surrender of such Warrants and no such payment of such
warrant exercise price shall be effective to constitute the person so designated
to be named therein as the holder of record of such [Shares][Warrant Securities]
on such date, but shall be effective to constitute such person as the holder of
record of
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such [Shares][Warrant Securities] for all purposes at the opening of business on
the next succeeding day on which the transfer books for the [Shares][Warrant
Securities] purchasable upon the exercise of such Warrants shall be opened, and
the certificates for the [Shares][Warrant Securities] in respect of which such
Warrants are then exercised shall be issuable as of the date on which such books
shall next be opened, and until such date the Company shall be under no duty to
deliver any certificate for such [Shares][Warrant Securities]. The rights of
purchase represented by the Warrants shall be exercisable, at the election of
the registered holders thereof, either as an entirety or from time to time for
part only of the [Shares][Warrant Securities] specified therein and, in the
event that any Warrant is exercised in respect of less than all of the
[Shares][Warrant Securities] specified therein at any time prior to the date of
expiration of the Warrants, a new Warrant or Warrants of like tenor will be
issued for the remaining number of [Shares][Warrant Securities] specified in the
Warrant so surrendered, and the Warrant Agent is hereby irrevocably authorized
to countersign and to deliver the required new Warrants pursuant to the
provisions of this Section and of Section 3 of this Agreement, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with
Warrants duly executed on behalf of the Company for such purpose.
[[IF THE WARRANTS ARE SUBJECT TO CASHLESS EXERCISE, INSERT] SECTION 5.1
ADDITIONAL RIGHT TO CONVERT WARRANT.
(a) The Holder of this Warrant shall have the right to require the
Company to convert this Warrant (the "Conversion Right") at any time after it is
exercisable, but prior to its expiration into Shares as provided for in this
Section 5.1. Upon exercise of the Conversion Right, the Company shall deliver to
the Holder (without payment by the Holder of any warrant exercise price) that
number of Shares equal to the result obtained by dividing the Aggregate Excess
Fair Value (determined by multiplying the number of Warrant Shares being
exercised by the Holder by the difference between (a) the per share Fair Value
of the Company's common stock immediately prior to the exercise of the
Conversion Right and (b) the warrant exercise price) by the per share Fair Value
of the Company's common stock immediately prior to the exercise of the
Conversion Right; provided, however, that such number of Shares deliverable to
the Holder shall not exceed the number of Shares remaining exercisable
immediately prior to the exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the Holder, at any time or
from time to time, prior to its expiration, on any business day by delivering a
written notice in the form attached hereto (the "Conversion Notice") to the
Company at the offices of the Company exercising the Conversion Right and
specifying (i) the total number of Shares the Holder will purchase pursuant to
such conversion and (ii) a place and date not less than one or more than twenty
business days from the date of the Conversion Notice for the closing of such
purchase.
(c) At any closing under Section 5.1(b) hereof, (i) the Holder will
surrender the Warrant and (ii) the Company will deliver to the Holder a
certificate or certificates for the number of Shares issuable upon such
conversion, together with cash, in lieu of any fraction of a share, and (iii)
the Company will deliver to the Holder a new Warrant representing the number of
Shares, if any, with respect to which the Warrant shall not have been exercised.
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(d) Fair Value of a share of the Company's common stock as of a
particular date (the "Determination Date") shall mean:
(i) If the Company's common stock is traded on an exchange or
is listed on the Nasdaq National Market or the Nasdaq Small Cap Market, than the
average closing or last sale prices, respectively, reported for the ten (10)
business days immediately preceding the Determination Date, and
(ii) If the Company's common stock is not traded on an
exchange or listed on the Nasdaq National Market or the Nasdaq Small Cap Market,
but is traded on the over-the-counter market, then the average of the closing
bid and asked prices reported for the ten (10) business days immediately
preceding the Determination Date.
(iii) If the Company's common stock is not traded on the
over-the-counter market, the per share consideration received by the Company
upon the most recent issuance and sale of its common stock, exclusive of
issuances pursuant to the exercise or conversion of outstanding options, common
stock purchase warrants or other securities convertible into shares of the
Company's common stock.]
SECTION 6. PAYMENT OF TAXES. The Company will pay any documentary stamp
taxes attributable to the initial issuance of [Shares][Warrant Securities]
issuable upon the exercise of Warrants; provided, however, that the Company
shall not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issue or delivery of any certificates for
[Shares][Warrant Securities] in a name other than that of the registered holder
of Warrants in respect of which such [Shares][Warrant Securities] are issued and
the Company shall not be required to issue and deliver the certificates for such
[Shares][Warrant Securities] unless and until the holder has paid to the Company
the amount of any tax which may be payable in respect of any transfer involved
in such issuance or shall establish to the satisfaction of the Company that such
tax has been paid.
SECTION 7. MUTILATED OR MISSING WARRANTS. In case any of the Warrants
shall be mutilated, lost, stolen or destroyed, the Company will issue and the
Warrant Agent will countersign and deliver in exchange and substitution for and
upon cancellation of the mutilated Warrant, or in lieu of and substitution for
the Warrant lost, stolen or destroyed, a new Warrant of like tenor and
representing an equivalent right or interest, but only upon receipt of evidence
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrants and indemnity, if requested, also satisfactory to
them. Applicants for such substitute Warrants shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company or
the Warrant Agent may prescribe. Any such new Warrant shall constitute an
original contractual obligation of the Company whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
[[COMMON STOCK] SECTION 8. RESERVATION OF SHARES, ETC. Prior to the
issuance of any Warrants there shall have been reserved, and the Company shall
at all times through the expiration date keep reserved, out of its authorized
and unissued Common Stock, a number of
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Shares sufficient to provide for the exercise of the rights of purchase
represented by the Warrants, and the Transfer Agent for the Shares and every
subsequent Transfer Agent for the Shares issuable upon the exercise of any of
the rights of purchase aforesaid are hereby irrevocably authorized and directed
at all times to reserve such number of authorized and unissued Shares as shall
be requisite for such purpose. The Company will keep a copy of this Agreement on
file with the Transfer Agent for the Shares and with every subsequent Transfer
Agent for the Shares issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent certificates required
to honor outstanding Warrants that have been exercised. The Company will supply
such Transfer Agent with duly executed certificates for such purpose and will
itself provide or otherwise make available any cash which may be issuable as
provided in Section 9 of this Agreement. All Warrants surrendered in the
exercise of the rights thereby evidenced or surrendered for transfer, exchange
or partial exercise shall be cancelled by the Warrant Agent and shall thereafter
be delivered to the Company.]
SECTION 9. WARRANT PRICE; [ADJUSTMENTS].
[COMMON STOCK:]
[A. The warrant price per share at which Shares shall be purchasable
upon exercise of Warrants (herein called the "warrant exercise price") to and
including the expiration date (unless the expiration date is extended as
provided below in this Section 9A) shall be $______ per share, or, if adjusted
as provided in this Section, shall be such price as so adjusted. The Warrants
will not be exercisable prior to [the close of business on the date of any
initial issuance thereof] [_____________________] and will expire at 3:30 p.m.,
New York City time, on the expiration date; provided that the Company reserves
the right to, and may, in its sole discretion, at any time and from time to
time, at such time or times as the Company so determines, extend the expiration
date of the Warrants for such periods of time as it chooses; further provided
that in no case may the expiration date of the Warrants (as extended) be
extended beyond five years from the expiration date set forth above. Whenever
the expiration date of the Warrants is so extended, the Company shall at least
20 days prior to the then expiration date cause to be mailed to the Warrant
Agent and the registered holders of the Warrants in accordance with the
provisions of Section 17 hereof a notice stating that the expiration date has
been extended and setting forth the new expiration date.
[B. The above provision is, however, subject to the following:
(1) The warrant purchase price, the number of Shares
purchasable upon exercise of each Warrant and the number of Warrants
outstanding shall be subject to adjustment as follows:
(a) In case the Company shall at any time after the
date of this Agreement (i) pay a dividend, or make a
distribution, on the Common Stock which is payable in shares
of its capital stock (whether shares of Common Stock or of
capital stock of any other class), (ii) subdivide or
reclassify its outstanding shares of Common Stock into a
greater number of securities (including shares of Common
Stock), or
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(iii) combine or reclassify its outstanding shares of Common
Stock into a smaller number of shares (including shares of
Common Stock), the number of shares purchasable upon exercise
of each Warrant immediately prior to the occurrence of such
event shall be adjusted so that the holder of each Warrant
shall be entitled to receive upon payment of the warrant
purchase price the aggregate number of shares of the Company
which, if such Warrant had been exercised immediately prior to
the occurrence of such event, such holder would have owned or
have been entitled to receive immediately after the occurrence
of such event. An adjustment made pursuant to this
subparagraph (a) shall become effective immediately after the
record date in the case of a dividend and shall become
effective immediately after the effective date in the case of
a subdivision or combination. If, as a result of an adjustment
made pursuant to this subparagraph (a), the holder of any
Warrant thereafter exercised shall become entitled to receive
shares of two or more classes of capital stock of the Company,
the Board of Directors of the Company (whose determination
shall be conclusive) shall determine the allocation between or
among shares of such classes of capital stock.
In the event that at any time, as a result of an
adjustment made pursuant to this subparagraph (a), the holder
of any Warrant thereafter exercised shall become entitled to
receive any shares or other securities of the Company other
than shares of Common Stock, thereafter the number of such
other shares so received upon exercise of any Warrant shall be
subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions
with respect to the shares of Common Stock contained in this
paragraph, and other provisions of this paragraph 9B(1) with
respect to the shares of Common Stock shall apply on like
terms to any such other shares or other securities.
[(b) In case the Company shall fix a record date for
the issuance of rights or warrants to all holders of its
Common Stock entitling them (for a period expiring within 45
days after such record date) to subscribe for or purchase
Common Stock at a price per share less than the current market
price per share of Common Stock (as defined in subparagraph
(e) below) at such record date, the warrant purchase price
shall be determined by multiplying the warrant purchase price
in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Shares of Common
Stock outstanding on such record date plus the number of
Shares of Common Stock which the aggregate offering price of
the total number of Shares so offered would purchase at such
current market price, and the denominator of which shall be
the number of Shares of Common Stock outstanding on such
record date plus the number of additional Shares of Common
Stock offered for subscription or purchase. Such adjustment
shall be made successively whenever such a record date is
fixed, and shall become effective immediately after such
record date. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase Shares of
Common Stock at less than such current market price, and in
determining the aggregate offering price of such shares, there
shall be taken into account any consideration received by the
Company for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the
Board of Directors
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of the Company. Common Stock owned by or held for the account
of the Company or any majority owned subsidiary shall not be
deemed outstanding for the purpose of any adjustment required
under this subparagraph (b).]
[(c) In case the Company shall fix a record date for
making a distribution to all holders of its Common Stock of
evidences of its indebtedness or assets (excluding regular
quarterly or other periodic or recurring cash dividends or
distributions and cash dividends or distributions paid from
retained earnings or referred to in subparagraph (a) above) or
rights or warrants to subscribe or warrants to purchase
(excluding those referred to in subparagraph (b) above), then
in each such case the warrant purchase price shall be
determined by multiplying the warrant purchase price in effect
immediately prior to such record date by a fraction (x) the
numerator of which shall be such current market price (as
defined in subparagraph (e) below) per Share of Common Stock
on such record date, less the then fair market value (as
determined in good faith by the Board of Directors, whose
determination shall be conclusive) of the portion of the
assets or evidences of indebtedness so distributed or of such
subscription rights or warrants applicable to one share of the
Common Stock and (y) the denominator of which shall be the
current market price per share of the Common Stock on such
record date. Such adjustment shall be made successively
whenever such a record date is fixed and shall become
effective immediately after such record date. Notwithstanding
the foregoing, in the event that the Company shall distribute
any rights or warrants to acquire capital stock ("Rights")
pursuant to this subparagraph (c), the distribution of
separate certificates representing such Rights subsequent to
their initial distribution (whether or not such distribution
shall have occurred prior to the date of the issuance of such
Warrants) shall be deemed to be the distribution of such
Rights for purposes of this subparagraph (c), provided that
the Company may, in lieu of making any adjustment pursuant to
this subparagraph (c) upon a distribution of separate
certificates representing such Rights, make proper provision
so that each holder of such Warrants who exercises such
Warrants (or any portion thereof) (A) before the record date
for such distribution of separate certificates shall be
entitled to receive upon such exercise shares of Common Stock
issued with Rights and (B) after such record date and prior to
the expiration, redemption or termination of such Rights shall
be entitled to receive upon such exercise, in addition to the
shares of Common Stock issuable upon such exercise, the same
number of such Rights as would a holder of the number of
shares of Common Stock that such Warrants so exercised would
have entitled the holder thereof to purchase in accordance
with the terms and provisions of and applicable to the Rights
if such Warrants were exercised immediately prior to the
record date for such distribution. Common Stock owned by or
held for the account of the Company or any majority owned
subsidiary shall not be deemed outstanding for the purpose of
any adjustment required under this subparagraph (c).]
(d) After each adjustment of the number of shares
purchasable upon exercise of each Warrant pursuant to
subparagraph 9B(1)(a), the warrant exercise price shall be
adjusted by multiplying such warrant exercise price
immediately
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prior to such adjustment by a fraction of which the numerator
shall be the number of Shares purchasable upon exercise of
each Warrant immediately prior to such adjustment, and the
denominator of which shall be the number of Shares so
purchasable immediately thereafter. [After each adjustment of
the warrant exercise price pursuant to subparagraph 9B(1)(b)
or (c), the total number of Shares or fractional part thereof
purchasable upon the exercise of each Warrant shall be
proportionately adjusted to such number of shares or
fractional parts thereof as the aggregate warrant exercise
price of the number of shares or fractional part thereof
purchasable immediately prior to such adjustment will buy at
the adjusted warrant exercise price.]
[(e) For the purpose of any computation under
subparagraphs 9B(1)(b) and (c) above, the current market price
per Share of Common Stock at any date shall be deemed to be
the average of the daily closing prices for the 10 consecutive
business days commencing 15 business days before the day in
question. The closing price for each day shall be (i) if the
Common Stock is listed or admitted for trading on the New York
Stock Exchange, the last sale price (regular way), or the
average of the closing bid and ask prices (regular way), if no
sale occurred, of Common Stock, in either case as reported on
the New York Stock Exchange Composite Tape or, if the Common
Stock is not listed or admitted to trading on the New York
Stock Exchange, on the principal national securities exchange
on which the Common Stock is listed or admitted to trading or,
if not listed or admitted to trading on any national
securities exchange, on the National Market System of the
National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or, (ii) if not listed or quoted
as described in (i), the mean between the closing high bid and
low asked quotations of Common Stock reported by NASDAQ, or
any similar system for automated dissemination of quotations
of securities prices then in common use, if so quoted, or
(iii) if not quoted as described in clause (ii), the mean
between the high bid and low asked quotations for Common Stock
as reported by the National Quotation Bureau Incorporated if
at least two securities dealers have inserted both bid and
asked quotations for Common Stock on at least 5 of the 10
preceding days. If none of the conditions set forth above is
met, the closing price of Common Stock on any day or the
average of such closing prices for any period shall be the
fair market value of Common Stock as determined by a member
firm of the New York Stock Exchange selected by the Company.]
[(f) (A) Nothing contained herein shall be construed
to require an adjustment as a result of the issuance of Common
Stock pursuant to, or the granting or exercise of any rights
under, the Company's [List employee and shareholder plans, if
any, that might otherwise result in adjustments]. ]
(B) In addition, no adjustment in the
warrant exercise price shall be required unless and until the
earlier of the following shall have occurred: (x) such
adjustment would require an increase or decrease of at least
1% in the warrant exercise price or (y) a period of 3 years
shall have elapsed from the date of the occurrence of any
event requiring any such adjustment pursuant to
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subparagraphs 9B(1)(a)[, (b) or (c)] above. All adjustments
shall be made to the nearest one hundredth of a Share and the
nearest cent, and any adjustments which by reason of this
subparagraph (f) are not required to be made shall be carried
forward cumulatively and taken into account in any subsequent
adjustment which (including such carry-forward) is required to
be made under this subparagraph (f).
(g) In any case in which this subparagraph 9B(1)
shall require that an adjustment be made retroactively
immediately following a record date, the Company may elect to
defer (but only until five business days following the mailing
of the notice described in subparagraph 9B(5) below) issuing
to the holder of any Warrant exercised after such record date
the Shares of the Company issuable upon such exercise over and
above the Shares issuable upon such exercise only on the basis
of the warrant exercise price prior to adjustment.
(h) The Company may, at its option, at any time until
the expiration date, reduce the then current warrant exercise
price to any amount deemed appropriate by the Board of
Directors of the Company for any period not exceeding one
hundred (100) consecutive days (as evidenced in a resolution
adopted by such Board of Directors), but only upon giving the
notices required by subparagraph 9B(5) twenty (20) days prior
to taking such action.
(i) Except as herein otherwise expressly provided, no
adjustment in the warrant exercise price shall be made by
reason of the issuance of Shares, or securities convertible
into or exchangeable for Shares, or securities carrying the
right to purchase any of the foregoing or for any other reason
whatsoever.
(j) Irrespective of any of the adjustments in the
warrant exercise price or the number of Shares, Warrant
Certificates theretofore issued may continue to express the
same prices and number of shares as are stated in a similar
Warrant Certificate issuable initially, or at some subsequent
time, pursuant to this Agreement and such number of Shares
specified therein shall be deemed to have been so adjusted.
(2) No fractional Shares of Common Stock shall be issued upon
the exercise of Warrants. If more than one Warrant shall be exercised
at one time by the same holder, the number of full Shares which shall
be issuable upon such exercise shall be computed on the basis of the
aggregate number of Shares purchased pursuant to the Warrants so
exercised. Instead of any fractional Share of Common Stock which would
otherwise be issuable upon exercise of any Warrant, the Company shall
pay a cash adjustment in respect of such fraction in an amount equal to
the same fraction of the last sales price (or bid price if there were
no sales) per Share of Common Stock, in either case as reported on the
New York Stock Exchange Composite Tape on the business day which next
precedes the day of exercise or, if the Common Stock is not then listed
or admitted to trading on the New York Stock Exchange, an amount equal
to the same fraction of the market price per share of Common Stock (as
determined in a manner described by the Board of Directors of the
Company) at the close of business on the business day which next
precedes the day of exercise.
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(3) In case any of the following shall occur while any
Warrants are outstanding: (a) any reclassification or change of the
outstanding Shares of Common Stock (other than a change in par value,
or from par value to no par value, or from no par value to par value);
or (b) any consolidation or merger to which the Company is a party
(other than a consolidation or a merger in which the Company is the
continuing corporation and which does not result in any
reclassification of, or change in, the outstanding shares of Common
Stock issuable upon exercise of the Warrants); or (c) any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety; then the Company, or such
successor or purchasing corporation, as the case may be, shall make
appropriate provision by amendment of this Agreement or otherwise so
that the holders of the Warrants then outstanding shall have the right
at any time thereafter, upon exercise of such Warrants, to purchase the
kind and amount of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger,
sale or conveyance as would be received by a holder of the number of
shares of Common Stock issuable upon exercise of such Warrant
immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance. Such provision shall provide for
adjustments which shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 9. The above provisions
of this subparagraph 9B(3) shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales or
conveyances.
(4) Before taking any action which would cause an adjustment
decreasing the warrant exercise price so that the warrant exercise
price is below the then par value of the shares of Common Stock, the
Company will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Shares of Common Stock at the
warrant exercise price as so adjusted.
(5) Whenever the warrant exercise price then in effect is
adjusted as herein provided, the Company shall mail to each holder of
the Warrants at such holder's address as it shall appear on the books
of the Company a statement setting forth the adjusted warrant exercise
price then and thereafter effective under the provisions hereof,
together with the facts, in reasonable detail, upon which such
adjustment is based.
(6) In case (i) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise than in cash
out of its current or retained earnings, or (ii) the Company shall
authorize the granting to the holders of its Common Stock of rights to
subscribe for or purchase any shares of capital stock of any class or
of any other rights, or (iii) there is to be any reclassification of
the Common Stock of the Company (other than a subdivision or
combination of its outstanding shares of Common Stock), or any
consolidation or merger to which the Company is a party and for which
approval of any shareholders of the Company is required, or (iv) any
distribution is to be made on or in respect of the Common Stock in
connection with the dissolution, liquidation or winding up of the
Company, then the Company shall mail to each holder of Warrants at such
holder's address as it shall appear on the books of the Company, at
least twenty days (or ten days in any case specified in clause (i) or
(ii) above) prior to the applicable record date hereinafter specified,
a notice stating (x) the record date for such
11
dividend, distribution or rights, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights are to be determined,
or (y) the date on which such reclassification, consolidation, merger,
dissolution, liquidation or winding up is expected to become effective,
and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, dissolution, liquidation or winding up. No
failure to mail such notice nor any defect therein or in the mailing
thereof shall affect any such transaction or any adjustment in the
warrant exercise price required by this Section 9.]
[DEBT SECURITIES:]
[A. During the period from __________________, through and including
_________________, the exercise price of each Warrant will be _________ plus
[accrued amortization of the original issue discount] [accrued interest] from
__________________. During the period from _________________, through and
including _________________, the exercise price of each Warrant will be
_________ plus [accrued amortization of the original issue discount] [accrued
interest] from _________________. [In each case, the original issue discount
will be amortized at a ____% annual rate, computed on an annual basis using the
"interest" method and using a 360-day year consisting of twelve 30-day months].
Such purchase price of Warrant Securities is referred to in this Agreement as
the "warrant exercise price". [The original issue discount for each _________
principal amount of Warrant Securities is _________.]
[B. If at any time there shall be a merger, consolidation, conveyance,
transfer or lease of assets subject to the Indenture, then in any such event the
successor or assuming corporation referred to therein shall succeed to and be
substituted for the Company, with the same effect, subject to such Indenture, as
if it had been named herein and in the Warrant as the Company; the Company shall
thereupon be relieved of any further obligation hereunder or under the Warrants,
and the Company as the predecessor corporation may thereupon or at any time
thereafter be dissolved, wound up or liquidated. Such successor or assuming
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all of the Warrants issuable
hereunder which theretofore shall not have been signed by the Company, and may
execute and deliver Warrant Securities in its own name pursuant to such
Indenture, in fulfillment of its obligations to deliver Warrant Securities upon
exercise of the Warrants. All the Warrants so issued shall in all respects have
the same legal rank and benefit under this Agreement as the Warrants theretofore
or thereafter issued in accordance with the terms of this Agreement as though
all of such Warrants had been issued at the date of the execution hereof. In any
case of any such consolidation, merger, conveyance, transfer or lease, such
changes in phraseology and form (but not in substance) may be made in the
Warrants thereafter to be issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal counsel as
conclusive evidence that any such consolidation, merger, conveyance, transfer or
lease complies with the provisions of this Section 9B and such Indenture.]
12
[[COMMON STOCK] SECTION 10. NO RIGHTS AS SHAREHOLDERS. Nothing
contained in this Agreement or in any of the Warrants shall be construed as
conferring upon the holders thereof the right to vote or to consent or to
receive notice as shareholders in respect of the meetings of shareholders or the
election of directors of the Company or any other matter, or any rights
whatsoever as shareholders of the Company.]
SECTION 11. CERTAIN COVENANTS OF THE COMPANY.
A. So long as any unexpired Warrants remain outstanding and if required
in order to comply with the Securities Act of 1933, as amended (the "Act"), the
Company covenants and agrees that it will file such post-effective amendments to
the registration statement filed pursuant to the Act with respect to the
Warrants (File No. 333-_____) (or such other registration statements or
post-effective amendments or supplements) as may be necessary to permit the
Company to deliver to each person exercising a Warrant a prospectus meeting the
requirements of Section 10(a)(3) of the Act and otherwise complying therewith,
and will deliver such a prospectus to each such person. The Company further
covenants and agrees that it will obtain and keep effective all permits,
consents and approvals of governmental agencies and authorities, and will use
its best efforts to take all action which may be necessary to qualify the
[Shares][Warrant Securities] for sale under the securities laws of such of the
United States, as may be necessary to permit the free exercise of the Warrants,
and the issuance, sale, transfer and delivery of the [Shares][Warrant
Securities] issued upon exercise of the Warrants, and to maintain such
qualifications during the entire period in which the Warrants are exercisable.
B. The Company covenants and agrees that it shall take all such action
as may be necessary to ensure that all [Shares][Warrant Securities] will at the
time of delivery of certificates for such [Shares][Warrant Securities] (subject
to payment of the warrant exercise price) be duly and validly authorized and
issued [and fully paid and nonassessable Shares, free from any preemptive rights
and taxes, liens, charges and security interests created by or imposed upon the
Company].
C. [The Company covenants and agrees that it will take all action which
may be necessary to cause the [Shares][Warrant Securities] to be duly listed on
the New York Stock Exchange or any securities exchange on which the other shares
of Common Stock of the Company are listed or on the National Market System of
NASDAQ at the dates of exercise of the Warrants.]
SECTION 12. DISPOSITION OF PROCEEDS, ETC.
A. The Warrant Agent shall account promptly to the Company with respect
to Warrants exercised and concurrently pay to the Company all moneys received by
the Warrant Agent for the purchase of [Shares][Warrant Securities] through the
exercise of such Warrants.
B. The Warrant Agent shall keep copies of this Agreement available for
inspection by holders of Warrants during normal business hours at its principal
office in the City of __________, __________.
13
SECTION 13. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 15 of this Agreement. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, and if any of the Warrants shall have been countersigned but not
delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Warrants so
countersigned; and in case at that time any of the Warrants shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrants
either in the name of the predecessor Warrant Agent or in the name of the
successor Warrant Agent; and in all such cases such Warrant shall have the full
force provided in the Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, the Warrant Agent may countersign
such Warrants either in its prior name or in its changed name; and in all such
cases such Warrants shall have the full force provided in the Warrants and in
this Agreement.
SECTION 14. DUTIES OF WARRANT AGENT. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound:
A. The statements contained herein and in the Warrants shall be taken
as statements of the Company, and the Warrant Agent assumes no responsibility
for the correctness of any of the same except such as describe the Warrant Agent
or action taken or to be taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of the Warrants except as herein
otherwise provided.
B. The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrants to be complied with by the Company.
C. The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents or employees, and the Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees or for any loss to the Company resulting
from such neglect or misconduct, provided reasonable care shall have been
exercised in the selection and continued employment thereof.
D. The Warrant Agent may consult at any time with counsel satisfactory
to it (who may be counsel for the Company), and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Warrant in
respect of any action taken,
14
suffered or omitted by it hereunder in good faith and in accordance with the
opinion or the advice of such counsel.
E. The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant for any action taken in reliance on any
notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
F. The Company agrees to pay to the Warrant Agent agreed upon
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and reasonable counsel fees, for anything done or omitted by the Warrant
Agent in the execution of this Agreement except as a result of the Warrant
Agent's negligence, bad faith or willful misconduct.
G. The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more registered holders of Warrants shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as the Warrant Agent may consider
proper, whether with or without any such security or indemnity. All rights of
action under this Agreement or under any of the Warrants may be enforced by the
Warrant Agent without the possession of any of the Warrants or the production
thereof at any trial or other proceeding relative thereto, and any such action,
suit or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent, and any recovery of judgment shall be for the ratable benefit
of the registered holders of the Warrants, as their respective rights or
interests may appear.
H. The Warrant Agent and any shareholder, director, officer or employee
of the Warrant Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to or
otherwise act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
I. The Warrant Agent shall act hereunder solely as agent and not in a
ministerial capacity, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own gross negligence or bad faith.
SECTION 15. CHANGE OF WARRANT AGENT. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company
notice in writing, and to the holders of the Warrants notice by publication, of
such resignation, specifying a date when such resignation shall take effect,
which notice shall be published at the expense of the Company at least once a
week for two consecutive weeks in a newspaper of general circulation in the City
15
of New York prior to the date so specified. The Warrant Agent may be removed by
the Company by like notice from the Company to the Warrant Agent and the holders
of Warrants at the expense of the Company. If the Warrant Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the registered holder of a Warrant (who shall,
with such notice, submit his Warrant for inspection by the Company), then, at
the expense of the Company, the Warrant Agent or the registered holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a successor to the Warrant Agent. Any successor Warrant Agent, whether appointed
by the Company or by such a court, shall be a bank or trust company, in good
standing, incorporated under the laws of any State or of the United States of
America, having at the time of its appointment as Warrant Agent a combined
capital and surplus of at least $50,000,000. After appointment the successor
Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer to
the successor Warrant Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Failure to file or publish any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor
Warrant Agent, as the case may be.
[[COMMON STOCK] SECTION 16. IDENTITY OF TRANSFER AGENT. Forthwith upon
the appointment of any Transfer Agent for the Shares or of any subsequent
Transfer Agent for Shares issuable upon the exercise of the rights of purchase
represented by the Warrants, the Company will file with the Warrant Agent a
statement setting forth the name and address of such Transfer Agent.]
SECTION 17. NOTICES. Any notice pursuant to this Agreement to be given
or made by the Warrant Agent or by the registered holder of any Warrant to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent) as follows:
The Valspar Corporation
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attn: Corporate Secretary
Any notice pursuant to this Agreement to be given or made by the
Company or by the registered holder of any Warrant to or on the Warrant Agent
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing by the Warrant
Agent with the Company) as follows:
--------------------------
--------------------------
16
--------------------------
--------------------------
Any notice pursuant to this Agreement to be given or made by the
Company or the Warrant Agent to the registered holder of any Warrant shall be
sufficiently given or made (unless otherwise specifically provided for herein)
if sent by first-class mail, postage prepaid, addressed to said registered
holder at his address appearing on the Warrant register.
SECTION 18. SUPPLEMENTS AND AMENDMENTS. The parties hereto may from
time to time supplement or amend this Agreement without the approval of any
holders of Warrants in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which will not materially adversely affect the
interest of the registered holders of the Warrants. The parties hereto may also
modify or amend this Agreement and the terms of the Warrants with the consent of
the holders of not less than a majority in number of the then outstanding
unexercised Warrants affected thereby; provided that no such modification or
amendment that accelerates the expiration date, increases the exercise price,
reduces the number of outstanding Warrants the consent of the holders of which
is required for any such modification or amendment, or otherwise materially
adversely affects the rights of the holders of the Warrants, may be made without
the consent of each holder affected thereby.
SECTION 19. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 20. LAW GOVERNING CONTRACT. This Agreement and each Warrant
issued hereunder shall be deemed to be a contract made under the laws of the
State of _____________ and for all purposes shall be construed in accordance
with the laws of said State.
SECTION 21. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or entity other than the Company and the
Warrant Agent and the holders of Warrants any legal or equitable right, remedy
or claim under this Agreement, but this Agreement shall be for the sole and
exclusive benefit of the Company and the Warrant Agent and the holders of
Warrants.
SECTION 22. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
[[IF THE WARRANTS ARE SUBJECT TO ACCELERATION BY THE COMPANY, INSERT]
SECTION 23. ACCELERATION OF WARRANTS BY THE COMPANY.
A. At any time on or after __________________, the Company shall have
the right to accelerate any or all Warrants at any time by causing them to
expire at the close of business on
17
the day next preceding a specified date (the "Acceleration Date"), if the Market
Price (as hereinafter defined) of the Common Stock equals or exceeds ______
percent (___%) of the then effective warrant exercise price, adjusted as if no
changes in such warrant exercise price had been made pursuant to subsection 9B,
on any 20 Trading Days (as hereinafter defined) within a period of 30
consecutive Trading Days ending no more than five Trading Days prior to the date
on which the Company gives notice to the Warrant Agent of its election to
accelerate the Warrants.
B. "Market Price" for each Trading Day shall be, if the Common Stock is
listed or admitted for trading on the New York Stock Exchange, the last reported
sale price, regular way (or, if no such price is reported, the average of the
reported closing bid and asked prices, regular way) of Common Stock, in either
case as reported on the New York Stock Exchange Composite Tape or, if the Common
Stock is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Market System of NASDAQ or, if not listed
or admitted to trading on any national securities exchange or quoted on the
National Market System of NASDAQ, the average of the closing high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ, or such
other system then in use, or if on any such date the Shares of Common Stock are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by any New York Stock Exchange firm selected from time to
time by the Company for the purpose. "Trading Day" shall be each Monday through
Friday, other than any day on which securities are not traded in the system or
on the exchange that is the principal market for the Common Stock, as determined
by the Board of Directors of the Company.
C. In the event of an acceleration of less than all of the Warrants,
the Warrant Agent shall select the Warrants to be accelerated by lot, pro rata
or in such other manner as it deems, in its discretion, to be fair and
appropriate.
D. Notice of an acceleration specifying the Acceleration Date shall be
sent by mailing first class, postage prepaid, to each registered holder of a
Warrant Certificate representing a Warrant accelerated at such holder's address
appearing on the Warrant register not more than 60 days nor less than 30 days
before the Acceleration Date. Such notice of an acceleration also shall be given
no more than 20 days, and no less than 10 days, prior to the mailing of notice
to registered holders of Warrants pursuant to this Section, by publication at
least once in a newspaper of general circulation in the City of New York.
E. Any Warrant accelerated may be exercised until the 3:30 p.m., New
York City time, on the business day next preceding the Acceleration Date. The
warrant exercise price shall be payable as provided in Section 5.]
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
THE VALSPAR CORPORATION
By
--------------------------------
Its
----------------------------
Attest:
---------------------------------
-----------------------------------
Warrant Agent
By
--------------------------------
Its
----------------------------
Attest:
---------------------------------
19
EXHIBIT A
FORM OF WARRANT CERTIFICATE
[Attach form of Common Stock Warrant or Debt Securities Warrant, as appropriate]
20
