Exhibit 1
AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT, dated as of June 23, 2000, to the Rights Agreement, dated
as of January 12, 1996 (the "Rights Agreement"), by and between Lilly
Industries, Inc., an Indiana corporation (the "Company"), and National City
Bank, as Rights Agent (the "Rights Agent").
R E C I T A L S
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A. The Company proposes to enter into an Agreement and Plan of Merger,
dated as of the date hereof (as it may be amended or supplemented from time to
time, the "Merger Agreement") by and among the Company, The Valspar Corporation,
a Delaware corporation ("Valspar"), and a wholly-owned subsidiary of Valspar
("Merger Sub"), with respect to a merger of the Company with Merger Sub (the
"Merger").
B. Pursuant to Section 27 of the Rights Agreement, the Company may from
time to time supplement or amend the Rights Agreement in accordance with the
provisions of Section 27 thereof.
C. The Merger Agreement contemplates an amendment to the Rights Agreement.
D. The Board of Directors has determined that it is in the best
interest of the Company and its shareholders to amend the Rights Agreement to
exempt the Merger and the Merger Agreement, and all of the transactions
contemplated thereby, from the application of the Rights Agreement.
A G R E E M E N T
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NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. Section 1(a) of the Rights Agreement is hereby modified and amended by
adding the following proviso at the end of the first sentence thereof:
"; provided, further, that neither The Valspar Corporation,
a Delaware corporation ("Valspar"), nor any Affiliate or
Associate of Valspar shall be deemed to be an Acquiring
Person by virtue of the approval, execution or delivery of
the Agreement and Plan of Merger, dated as of June 23, 2000
by and among the Company, Valspar, and a wholly owned
subsidiary of Valspar (as it may be amended from time to
time, the "Merger Agreement"), or the consummation of the
transactions contemplated thereby."
2. The Rights Agreement is hereby further modified and amended by deleting
the word "or" between clauses (ii) and (iii) of the first sentence of Section
7(a) and inserting the following as a new (iv):
", or (iv) immediately prior to the Effective Time (as
such term is defined in the Merger Agreement)."
3. The Rights Agreement is hereby further modified and amended by adding a
new Section 34 to the end thereof to read in its entirety as follows:
"Section 34. Merger Agreement. Notwithstanding any other
provision of this Rights Agreement, neither the approval,
execution or delivery of the Merger Agreement, nor the
performance thereof or the consummation of the transactions
contemplated thereby, is or shall be deemed to be an event
described in Section 11(a)(ii) or Section 13, nor will such
performance or consummation result in the occurrence of a
Share Acquisition Date, a Distribution Date or any other
separation of the Rights from the underlying Common Shares,
nor entitle or permit the holders of the Rights to exercise
the Rights or otherwise affect the rights of the holders of
Rights, including giving the holders of the Rights the right
to acquire securities of any party to the Merger Agreement."
4. This Amendment shall be deemed to be a contract made under the
laws of the State of Indiana and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State, without giving to its
principles of conflicts of laws.
5. This Amendment may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute one
and the same instrument.
6. Terms not defined herein shall, unless the context otherwise requires,
have the meanings assigned to such terms in the Rights Agreement.
7. In all respects not inconsistent with the terms and provisions of this
Amendment, the Rights Agreement is hereby ratified, adopted, approved and
confirmed. In executing and delivering this Amendment, the Rights Agent shall be
entitled to all the privileges and immunities afforded to the Rights Agent under
the terms and conditions of the Rights Agreement.
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IN WITNESS WHEREOF, this Amendment has been duly executed by the Company
and the Rights Agent as of the day and year first written above.
Attest: LILLY INDUSTRIES, INC.
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By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer, Title: Chairman and Chief
Vice President and Secretary Executive Officer
Attest: NATIONAL CITY BANK
By: /s/ J. Xxxx Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxxx
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Name: J. Xxxx Xxxxxxx Name: Xxxxxxxx X. Xxxxxxxxx
Title: Vice President Title: Vice President
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