Exhibit 4.2
UST
Sequence Number: 422
WARRANT TO PURCHASE COMMON STOCK
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON
TRANSFER AND
OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE
ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS
ON FILE WITH
THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT
BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY
SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
WARRANT
to purchase
459,459
Shares of Common Stock
of Guaranty Federal Bancshares, Inc.
Issue Date: January 30, 2009
1.
Definitions
. Unless the context otherwise requires, when used herein the
following terms shall have the meanings indicated.
"
Affiliate
" has the meaning ascribed to it in the Purchase Agreement.
"
Appraisal Procedure
" means a procedure whereby two independent appraisers,
one chosen by the Company and one by the Original Warrantholder,
shall mutually
agree upon the determinations then the subject of appraisal. Each
party shall
deliver a notice to the other appointing its appraiser within 15
days after the
Appraisal Procedure is invoked. If within 30 days after appointment
of the two
appraisers they are unable to agree upon the amount in question, a
third
independent appraiser shall be chosen within 10 days thereafter by
the mutual
consent of such first two appraisers. The decision of the third
appraiser so
appointed and chosen shall be given within 30 days after the
selection of such
third appraiser. If three appraisers shall be appointed and the
determination of
one appraiser is disparate from the middle determination by more
than twice the
amount by which the other determination is disparate from the
middle
determination, then the determination of such appraiser shall be
excluded, the
remaining two determinations
shall be averaged and such average shall be binding and conclusive
upon the
Company and the Original Warrantholder; otherwise, the average of
all three
determinations shall be binding upon the Company and the Original
Warrantholder.
The costs of conducting any Appraisal Procedure shall be borne by
the Company.
"
Board of Directors
" means the board of directors of the Company, including
any duly authorized committee thereof.
"
Business Combination
" means a merger, consolidation, statutory share
exchange or similar transaction that requires the approval of the
Company's
stockholders.
"
business day
" means any day except Saturday, Sunday and any day on which
banking institutions in the State of New York generally are
authorized or
required by law or other governmental actions to close.
"
Capital Stock
" means (A) with respect to any Person that is a corporation
or company, any and all shares, interests, participations or other
equivalents
(however designated) of capital or capital stock of such Person and
(B) with
respect to any Person that is not a corporation or company, any and
all
partnership or other equity interests of such Person.
"
Charter
" means, with respect to any Person, its certificate or articles of
incorporation, articles of association, or similar organizational
document.
"
Common Stock
" has the meaning ascribed to it in the Purchase Agreement.
"
Company
" means the Person whose name, corporate or other organizational
form and jurisdiction of organization is set forth in Item 1 of
Schedule A
hereto.
"
conversion
" has the meaning set forth in Section 13(B).
"
convertible securities
" has the meaning set forth in Section 13(B).
"
CPP
" has the meaning ascribed to it in the Purchase Agreement.
"
Exchange Act
" means the Securities Exchange Act of 1934, as amended, or
any successor statute, and the rules and regulations promulgated
thereunder.
"
Exercise Price
" means the amount set forth in Item 2 of Schedule A hereto.
"
Expiration Time
" has the meaning set forth in Section 3.
"
Fair Market Value
" means, with respect to any security or other property,
the fair market value of such security or other property as
determined by the
Board of Directors, acting in good faith or, with respect to
Section 14, as
determined by the Original Warrantholder acting in good faith. For
so long as
the Original Warrantholder holds this Warrant or any portion
thereof, it may
object in writing to the Board of Director's calculation of fair
market value
within 10 days of receipt of written notice thereof. If the
Original
Warrantholder and the Company are unable to agree on fair market
value during
the 10-day period following the delivery of the Original
Warrantholder's
objection, the Appraisal Procedure may be invoked by either party
to
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determine Fair Market Value by delivering written notification
thereof not later
than the 30th day after delivery of the Original Warrantholder's
objection.
"
Governmental Entities
" has the meaning ascribed to it in the Purchase
Agreement. "
Initial Number
" has the meaning set forth in Section 13(B).
"
Issue Date
" means the date set forth in Item 3 of Schedule A hereto.
"
Market Price
" means, with respect to a particular security, on any given
day, the last reported sale price regular way or, in case no such
reported sale
takes place on such day, the average of the last closing bid and
ask prices
regular way, in either case on the principal national securities
exchange on
which the applicable securities are listed or admitted to trading,
or if not
listed or admitted to trading on any national securities exchange,
the average
of the closing bid and ask prices as furnished by two members of
the Financial
Industry Regulatory Authority, Inc. selected from time to time by
the Company
for that purpose. "Market Price" shall be determined without
reference to after
hours or extended hours trading. If such security is not listed and
traded in a
manner that the quotations referred to above are available for the
period
required hereunder, the Market Price per share of Common Stock
shall be deemed
to be (i) in the event that any portion of the Warrant is held by
the Original
Warrantholder, the fair market value per share of such security as
determined in
good faith by the Original Warrantholder or (ii) in all other
circumstances, the
fair market value per share of such security as determined in good
faith by the
Board of Directors in reliance on an opinion of a nationally
recognized
independent investment banking corporation retained by the Company
for this
purpose and certified in a resolution to the Warrantholder. For the
purposes of
determining the Market Price of the Common Stock on the "trading
day" preceding,
on or following the occurrence of an event, (i) that trading day
shall be deemed
to commence immediately after the regular scheduled closing time of
trading on
the New York Stock Exchange or, if trading is closed at an earlier
time, such
earlier time and (ii) that trading day shall end at the next
regular scheduled
closing time, or if trading is closed at an earlier time, such
earlier time (for
the avoidance of doubt, and as an example, if the Market Price is
to be
determined as of the last trading day preceding a specified event
and the
closing time of trading on a particular day is 4:00 p.m. and the
specified event
occurs at 5:00 p.m. on that day, the Market Price would be
determined by
reference to such 4:00 p.m. closing price).
"
Ordinary Cash Dividends
" means a regular quarterly cash dividend on shares
of Common Stock out of surplus or net profits legally available
therefor
(determined in accordance with generally accepted accounting
principles in
effect from time to time), provided that Ordinary Cash Dividends
shall not
include any cash dividends paid subsequent to the Issue Date to the
extent the
aggregate per share dividends paid on the outstanding Common Stock
in any
quarter exceed the amount set forth in Item 4 of Schedule A hereto,
as adjusted
for any stock split, stock dividend, reverse stock split,
reclassification or
similar transaction.
"
Original Warrantholder
" means the United States Department of the
Treasury. Any actions specified to be taken by the Original
Warrantholder
hereunder may only be taken by such Person and not by any other
Warrantholder.
"
Permitted Transactions
" has the meaning set forth in Section 13(B).
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"
Person
" has the meaning given to it in Section 3(a)(9) of the Exchange
Act
and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
"
Per Share Fair Market Value
" has the meaning set forth in Section 13(C).
"
Preferred Shares
" means the perpetual preferred stock issued to the
Original Warrantholder on the Issue Date pursuant to the Purchase
Agreement.
"
Pro Rata Repurchases
" means any purchase of shares of Common Stock by the
Company or any Affiliate thereof pursuant to (A) any tender offer
or exchange
offer subject to Section 13(e) or 14(e) of the Exchange Act or
Regulation 14E
promulgated thereunder or (B) any other offer available to
substantially all
holders of Common Stock, in the case of both (A) or (B), whether
for cash,
shares of Capital Stock of the Company, other securities of the
Company,
evidences of indebtedness of the Company or any other Person or any
other
property (including, without limitation, shares of Capital Stock,
other
securities or evidences of indebtedness of a subsidiary), or any
combination
thereof, effected while this Warrant is outstanding. The "Effective
Date" of a
Pro Rata Repurchase shall mean the date of acceptance of shares for
purchase or
exchange by the Company under any tender or exchange offer which is
a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata
Repurchase that
is not a tender or exchange offer.
"
Purchase Agreement
" means the Securities Purchase Agreement - Standard
Terms incorporated into the Letter Agreement, dated as of the date
set forth in
Item 5 of Schedule A hereto, as amended from time to time, between
the Company
and the United States Department of the Treasury (the "Letter
Agreement"),
including all annexes and schedules thereto.
"
Qualified Equity Offering
" has the meaning ascribed to it in the Purchase
Agreement.
"
Regulatory Approvals
" with respect to the Warrantholder, means, to the
extent applicable and required to permit the Warrantholder to
exercise this
Warrant for shares of Common Stock and to own such Common Stock
without the
Warrantholder being in violation of applicable law, rule or
regulation, the
receipt of any necessary approvals and authorizations of, filings
and
registrations with, notifications to, or expiration or termination
of any
applicable waiting period under, the Hart-Scott-Rodino Antitrust
Improvements
Act of 1976, as amended, and the rules and regulations thereunder.
"
SEC
" means the U.S. Securities and Exchange Commission.
"
Securities Act
" means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations promulgated
thereunder.
"
Shares
" has the meaning set forth in Section 2.
"
trading day
" means (A) if the shares of Common Stock are not traded on any
national or regional securities exchange or association or
over-the-counter
market, a business day or (B) if the shares of Common Stock are
traded on any
national or regional securities exchange or association or
over-the-counter
market, a business day on which such relevant exchange or quotation
system is
scheduled to be open for business and on which the shares of Common
Stock
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(i) are not suspended from trading on any national or regional
securities
exchange or association or over-the-counter market for any period
or periods
aggregating one half hour or longer; and (ii) have traded at least
once on the
national or regional securities exchange or association or
over-the-counter
market that is the primary market for the trading of the shares of
Common Stock.
"
U.S. GAAP
" means United States generally accepted accounting principles.
"Warrantholder" has the meaning set forth in Section 2.
"
Warrant
" means this Warrant, issued pursuant to the Purchase Agreement.
2.
Number of Shares; Exercise Price
. This certifies that, for value
received, the United States Department of the Treasury or its
permitted assigns
(the "
Warrantholder
") is entitled, upon the terms and subject to the conditions
hereinafter set forth, to acquire from the Company, in whole or in
part, after
the receipt of all applicable Regulatory Approvals, if any, up to
an aggregate
of the number of fully paid and nonassessable shares of Common
Stock set forth
in Item 6 of Schedule A hereto, at a purchase price per share of
Common Stock
equal to the Exercise Price. The number of shares of Common Stock
(the "
Shares
")
and the Exercise Price are subject to adjustment as provided
herein, and all
references to "Common Stock," "Shares" and "Exercise Price" herein
shall be
deemed to include any such adjustment or series of adjustments.
3.
Exercise of Warrant; Term
. Subject to Section 2, to the extent permitted
by applicable laws and regulations, the right to purchase the
Shares represented
by this Warrant is exercisable, in whole or in part by the
Warrantholder, at any
time or from time to time after the execution and delivery of this
Warrant by
the Company on the date hereof, but in no event later than 5:00
p.m., New York
City time on the tenth anniversary of the Issue Date (the "
Expiration Time
"), by
(A) the surrender of this Warrant and Notice of Exercise annexed
hereto, duly
completed and executed on behalf of the Warrantholder, at the
principal
executive office of the Company located at the address set forth in
Item 7 of
Schedule A hereto (or such other office or agency of the Company in
the United
States as it may designate by notice in writing to the
Warrantholder at the
address of the Warrantholder appearing on the books of the
Company), and (B)
payment of the Exercise Price for the Shares thereby purchased:
(i) by having the Company withhold, from the shares of
Common Stock
that would otherwise be delivered to the Warrantholder upon such
exercise,
shares of Common stock issuable upon exercise of the Warrant equal
in value to
the aggregate Exercise Price as to which this Warrant is so
exercised based on
the Market Price of the Common Stock on the trading day on which
this Warrant is
exercised and the Notice of Exercise is delivered to the Company
pursuant to
this Section 3, or
(ii) with the consent of both the Company and the
Warrantholder, by
tendering in cash, by certified or cashier's check payable to the
order of the
Company, or by wire transfer of immediately available funds to an
account
designated by the Company.
If the Warrantholder does not exercise this Warrant in
its entirety,
the Warrantholder will be entitled to receive from the Company
within a
reasonable time, and in any
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event not exceeding three business days, a new warrant in
substantially
identical form for the purchase of that number of Shares equal to
the difference
between the number of Shares subject to this Warrant and the number
of Shares as
to which this Warrant is so exercised. Notwithstanding anything in
this Warrant
to the contrary, the Warrantholder hereby acknowledges and agrees
that its
exercise of this Warrant for Shares is subject to the condition
that the
Warrantholder will have first received any applicable Regulatory
Approvals.
4.
Issuance of Shares; Authorization; Listing
. Certificates for Shares
issued upon exercise of this Warrant will be issued in such name or
names as the
Warrantholder may designate and will be delivered to such named
Person or
Persons within a reasonable time, not to exceed three business days
after the
date on which this Warrant has been duly exercised in accordance
with the terms
of this Warrant. The Company hereby represents and warrants that
any Shares
issued upon the exercise of this Warrant in accordance with the
provisions of
Section 3 will be duly and validly authorized and issued, fully
paid and
nonassessable and free from all taxes, liens and charges (other
than liens or
charges created by the Warrantholder, income and franchise taxes
incurred in
connection with the exercise of the Warrant or taxes in respect of
any transfer
occurring contemporaneously therewith). The Company agrees that the
Shares so
issued will be deemed to have been issued to the Warrantholder as
of the close
of business on the date on which this Warrant and payment of the
Exercise Price
are delivered to the Company in accordance with the terms of this
Warrant,
notwithstanding that the stock transfer books of the Company may
then be closed
or certificates representing such Shares may not be actually
delivered on such
date. The Company will at all times reserve and keep available, out
of its
authorized but unissued Common Stock, solely for the purpose of
providing for
the exercise of this Warrant, the aggregate number of shares of
Common Stock
then issuable upon exercise of this Warrant at any time. The
Company will (A)
procure, at its sole expense, the listing of the Shares issuable
upon exercise
of this Warrant at any time, subject to issuance or notice of
issuance, on all
principal stock exchanges on which the Common Stock is then listed
or traded and
(B) maintain such listings of such Shares at all times after
issuance. The
Company will use reasonable best efforts to ensure that the Shares
may be issued
without violation of any applicable law or regulation or of any
requirement of
any securities exchange on which the Shares are listed or traded.
5.
No Fractional Shares or Scrip
. No fractional Shares or scrip
representing fractional Shares shall be issued upon any exercise of
this
Warrant. In lieu of any fractional Share to which the Warrantholder
would
otherwise be entitled, the Warrantholder shall be entitled to
receive a cash
payment equal to the Market Price of the Common Stock on the last
trading day
preceding the date of exercise less the pro-rated Exercise Price
for such
fractional share.
6.
No Rights as Stockholders; Transfer Books
. This Warrant does not entitle
the Warrantholder to any voting rights or other rights as a
stockholder of the
Company prior to the date of exercise hereof. The Company will at
no time close
its transfer books against transfer of this Warrant in any manner
which
interferes with the timely exercise of this Warrant.
7.
Charges, Taxes and Expenses
. Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made
without charge to
the
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Warrantholder for any issue or transfer tax or other incidental
expense in
respect of the issuance of such certificates, all of which taxes
and expenses
shall be paid by the Company.
8.
Transfer/Assignment
.
(A) Subject to compliance with clause (B) of this Section 8,
this Warrant
and all rights hereunder are transferable, in whole or in part,
upon the books
of the Company by the registered holder hereof in person or by duly
authorized
attorney, and a new warrant shall be made and delivered by the
Company, of the
same tenor and date as this Warrant but registered in the name of
one or more
transferees, upon surrender of this Warrant, duly endorsed, to the
office or
agency of t
