EXHIBIT 3.1
B Y L A W S
OF
CSS INDUSTRIES, INC.
(formerly known as City Stores Company)
(a Delaware Corporation)
(Amended and Restated as of December 4, 2012)
(As further amended on March 19, 2013, May 20, 2014 and July 28, 2015)
ARTICLE I
Offices and Fiscal Year
SECTION 1.01.
Registered Office
.--The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware until otherwise established by resolution of the board of directors, and a certificate certifying the change is filed in the manner provided by statute.
SECTION 1.02.
Other Offices
.--The corporation may also have offices and keep its books at such other places within or without the State of Delaware as the board of directors may from time to time determine or the business of the corporation requires.
SECTION 1.03.
Fiscal Year
.--The fiscal year of the corporation shall end on March 31 in each year, unless declared otherwise by resolution of the Board of Directors.
ARTICLE II
Notice - Waivers - Meetings
SECTION 2.01.
Notice, What Constitutes
.--Whenever, under the provisions of the Delaware General Corporation Law ("GCL") or the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail or by telegram (with messenger service specified), telex or TWX (with answerback received) or courier service, charges prepaid, or by facsimile transmission to the address (or to the telex, TWX, facsimile or telephone number) of the person appearing on the books of the corporation, or in the case of directors, supplied to the corporation for the purpose of notice. If the notice is sent by mail, telegraph or courier service, it shall be deemed to be given when deposited in the United States mail or with a telegraph office or courier service for delivery to that person or, in the case of telex or TWX, when dispatched, or in the case of facsimile transmission, when received.
SECTION 2.02.
Notice of Meetings of Board of Directors
.--Notice of a regular meeting of the board of directors need not be given. Notice of every special meeting of the board of directors shall be given to each director by telephone or in writing at least 24 hours (in the case of notice by telephone, telex, TWX or facsimile transmission) or 48 hours (in the case of notice by telegraph, courier service or express mail) or five days (in the case of notice by first class mail) before the time at which the meeting is to be held. Every such notice shall state the time and place of the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board need be specified in a notice of the meeting.
SECTION 2.03.
Notice of Meetings of Stockholders
.--Written notice of the place, date and hour of every meeting of the stockholders, whether annual or special, shall be given to each stockholder of record entitled to vote at the meeting not less than ten nor more than sixty days before the date of the meeting. Every notice of a special meeting shall state the purpose or purposes thereof. If the notice is sent by mail, it shall be deemed to have been given when deposited in the United States mail, postage prepaid, directed to the stockholder at the address of the stockholder as it appears on the records of the corporation.
SECTION 2.04.
Waivers of Notice
.
(a)
Written Waiver
.--Whenever notice is required to be given under any provisions of the GCL or the certificate of incorporation or these bylaws, a written waiver, signed by the person or persons entitled to the notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice of such meeting.
(b)
Waiver by Attendance
.--Attendance of a person at a meeting, either in person or by proxy, shall constitute a waiver of notice of such meeting, except where a person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened.
SECTION 2.05.
Exception to Requirements of Notice
.
(a)
General Rule
.--Whenever notice is required to be given, under any provision of the GCL or of the certificate of incorporation or these bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given.
(b)
Stockholders Without Forwarding Addresses
.--Whenever notice is required to be given, under any provision of the GCL or the certificate of incorporation or these bylaws, to any stockholder to whom (i) notice of two consecutive annual meetings, and all notices of meetings or of the taking of action by written consent without a meeting to such person during the period between such two consecutive annual meetings, or (ii) all, but not less than two, payments (if sent by first class mail) of dividends or interest on securities during a twelve-month period, have been mailed addressed to such person at his address as shown on the records of the corporation and have been returned undeliverable, the giving of such notice to such person shall not be required. Any action or meeting which shall be taken or held without notice to such person shall have the same force and effect as if such notice had been duly given. If any such person shall deliver to the corporation a written notice setting forth the person's then current address, the requirement that notice be given to such person shall be reinstated.
SECTION 2.06.
Conference Telephone Meetings
.--One or more directors may participate in a meeting of the board, or of a committee of the board, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this section shall constitute presence in person at such meeting.
ARTICLE III
Meetings of Stockholders
SECTION 3.01.
Place of Meeting
.--All meetings of the stockholders of the corporation shall be held at the registered office of the corporation, or at such other place within or without the State of Delaware as shall be designated by the board of directors in the notice of such meeting.
SECTION 3.02.
Annual Meeting
.--The board of directors may fix and designate the date and time of the annual meeting of the stockholders, and at said meeting the stockholders then entitled to vote shall elect directors and shall transact such other business as may properly be brought before the meeting.
SECTION 3.03.
Special Meetings
.--Special meetings of the stockholders of the corporation may be called at any time by a majority of the board of directors or by not less than three stockholders entitled to cast at least twenty-five percent (25%) of the votes that all stockholders are entitled to cast at the particular meeting. At any time, upon the written request of any person or persons who have duly called a special meeting, which written request shall state the purpose or purposes of the meeting, it shall be the duty of the secretary to fix the date of the meeting, which shall be held at such date and time as the secretary may fix, and to give due notice thereof. If the secretary shall neglect or refuse to fix the time and date of such meeting and give notice thereof, the person or persons calling the meeting may do so. The business transacted at any special meeting shall be confined to the objects stated in the call.
SECTION 3.04.
Quorum, Manner of Acting and Adjournment
.
(a)
Quorum
.--The holders of a majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders except as otherwise provided by the GCL, by the certificate of incorporation or by these bylaws. If a quorum is not present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At any such adjourned meeting at which a quorum is present or represented, the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
(b)
Manner of Acting
.--Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. In all matters other than the election of directors, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote thereon shall be the act of the stockholders, unless the question is one upon which, by express provision of the applicable statute, the certificate of incorporation or these bylaws, a different vote is required in which case such express provision shall govern and control the decision of the question. The stockholders present in person or by proxy at a duly organized meeting can continue to do business until adjournment, notwithstanding withdrawal of enough stockholders to leave less than a quorum.
SECTION 3.05.
Organization
.--At every meeting of the stockholders, the chairman of the board, if there be one, or in the case of a vacancy in the office or absence of the chairman of the board, one of the following persons present in the order stated: the vice chairman, if one has been appointed, the president, the vice presidents in their order of rank or seniority, a chairman designated by the board of directors or a chairman chosen by the stockholders entitled to cast a majority of the votes which all stockholders present in person or by proxy are entitled to cast, shall act as chairman, and the secretary, or, in the absence of the secretary, an assistant secretary, or in the absence of the secretary and the assistant secretaries, a person appointed by the chairman, shall act as secretary.
SECTION 3.06.
Voting
.
(a)
General Rule
.--Unless otherwise provided in the certificate of incorporation, each stockholder shall be entitled to one vote, in person or by proxy, for each share of capital stock having voting power held by such stockholder.
(b)
Voting and Other Action by Proxy
.--
(1) A stockholder may execute a writing authorizing another person or persons to act for the stockholder as proxy. Such execution may be accomplished by the stockholder or the authorized officer, director, employee or agent of the stockholder signing such writing or causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature. A stockholder may authorize another person or persons to act for the stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission if such telegram, cablegram or other means of electronic transmission sets forth or is submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder.
(2) No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.
(3) A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally.
SECTION 3.07.
Consent of Stockholders in Lieu of Meeting
.--Any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of all of the outstanding stock entitled to vote with respect to such action at any annual or special meeting of stockholders of the corporation and shall be delivered to the corporation by delivery to either its registered office in Delaware, its principal place of business, or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered in the manner required in this section to the corporation, written consents signed by a sufficient number of holders to take action are delivered to the corporation by delivery to either its registered office in Delaware, its principal place of business, or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation's registered office shall be by hand or by certified or registered mail, return receipt requested.
SECTION 3.08.
Voting Lists
.--The officer who has responsibility for the stock ledger of the corporation shall prepare and make or cause to be prepared and made, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting. The list shall be arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
SECTION 3.09.
Inspectors of Election
.
(a)
Appointment
.--All elections of directors shall be by written ballot, unless otherwise provided in the certificate of incorporation; the vote upon any other matter need not be by ballot. In advance of or at any meeting of stockholders the board of directors may appoint not less than two inspectors, who need not be stockholders, to act at the meeting and to make a written report thereof. The board of directors may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no such inspectors have been so appointed by the board of directors, or if any inspector or alternate so appointed shall fail to attend or refuse or be unable to serve, inspectors in place of any so failing to attend or refusing or unable to serve shall be appointed by chairman of the board or the person presiding at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the person's best ability. No person who is a candidate for the office of director shall be an inspector.
(b)
Duties
.--The inspectors shall ascertain the number of shares outstanding and the voting power of each, shall determine the shares represented at the meeting and the validity of proxies and ballots, shall count all votes and ballots, shall determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and shall certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.
(c)
Polls
.--The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a stockholder shall determine otherwise.
(d)
Reconciliation of Proxies and Ballots
.--In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, ballots and the regular books and records of the corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to subsection (b) of this Section 3.09 shall specify the precise information considered by them including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors' belief that such information is accurate and reliable.
SECTION 3.10
Nomination of Directors; Other Business
.
(a)
Annual Meetings of Stockholders
.
(1) Nominations of persons for election to the board of directors of the corporation or the proposal of other business to be transacted by the stockholders at an annual meeting of stockholders may be made only (A) pursuant to the corporation’s notice of meeting (or any supplement thereto), (B) by or at the direction of the board of directors or any committee thereof or (C) by any stockholder of the corporation who is a stockholder of record at the time of giving of notice provided for in this Section 3.10(a) and at the time of the annual meeting, who shall be entitled to vote at the meeting and who complies with the procedures set forth in this Section 3.10(a).
(2) For nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (1)(C) of paragraph (1) of this Section 3.10(a), the stockholder must have given timely notice thereof in writing to the Secretary of the corporation and any such proposed business (other than the nominations of persons for election to the board of directors) must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced more than 30 days prior to such anniversary date or delayed more than 70 days after such anniversary date then to be timely such notice must be received by the corporation no earlier than 120 days prior to such annual meeting and no later than the later of 70 days prior to the date of the meeting or the 10th day following the day on which public announcement of the date of the meeting was first made by the corporation. In no event shall the adjournment or postponement of any meeting, or any announcement thereof, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(3) A stockholder’s notice to the Secretary shall set forth (A) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected, (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these bylaws, the text of the proposed amendment), the reasons for conducting such business and any material interest in such business of such stockholder and the Stockholder Associated Person (as defined below), if any, on whose behalf the proposal is made and (C) as to the stockholder giving the notice and the Stockholder Associated Person, if any, on whose behalf the proposal is made:
(i) the name and address of such stockholder (as they appear on the corporation’s books) and any such Stockholder Associated Person;
(ii) the class or series and number of shares of capital stock of the corporation which are held of record or are beneficially owned by such stockholder and by any such Stockholder Associated Person;
(iii) a description of any agreement, arrangement or understanding between or among such stockholder and any such Stockholder Associated Person, any of their respective affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business;
(iv) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or any such Stockholder Associated Person or any such nominee with respect to the corporation’s securities;
(v) a representation that the stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting; and
(vi) a representation as to whether such stockholder or any such Stockholder Associated Person intends or is part of a group that intends to (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding capital stock required to approve or adopt the proposal or to elect each such nominee and/or (ii) otherwise to solicit proxies from stockholders in support of such proposal or nomination. If requested by the Corporation, the information required under clauses 3.10(a)(3)(C)(ii), (iii) and (iv) of the preceding sentence of this Section 3.10 shall be supplemented by such stockholder and any such Stockholder Associated Person not later than 10 days after the record date for the meeting to disclose such information as of the record date.
(4) For purposes of this Section 3.10, the term “Stockholder Associated Person” of any stockholder shall mean (A) any person controlling, directly or indirectly, or acting in concert with, such stockholder, (B) any beneficial owner of shares of stock of the corporation owned of record or beneficially by such stockholder and (C) any person controlling, controlled by or under common control with such Stockholder Associated Person.
(b)
Special Meetings of Stockholders
. If the election of directors is included as business to be brought before a special meeting in the corporation’s notice of meeting, then nominations of persons for election to the board of directors of the corporation at a special meeting of stockholders may be made by any stockholder who is a stockholder of record at the time of giving of notice provided for in this Section 3.10(b) and at the time of the special meeting, who shall be entitled to vote at the meeting and who complies with the procedures set forth in this Section 3.10(b). For nominations to be properly brought by a stockholder before a special meeting of stockholders pursuant to this Section 3.10(b), the stockholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the corporation (A) not earlier than 120 days prior to the date of the special meeting nor (B) later than the later of 90 days prior to the date of the special meeting or the 10th day following the day on which public announcement of the date of the special meeting was first made. A stockholder’s notice to the Secretary shall comply with the notice requirements of Section 3.10(a)(3).
(c)
General
.
(1) At the request of the board of directors, any person nominated by the board of directors for election as a director shall furnish to the Secretary of the corporation the information that is required to be set forth in a stockholder’s notice of nomination that pertains to the nominee. No person shall be eligible to be nominated by a stockholder to serve as a director of the corporation unless nominated in accordance with the procedures set forth in this Section 3.10. No business proposed by a stockholder shall be conducted at a stockholder meeting except in accordance with this Section 3.10. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these bylaws or that business was not properly brought before the meeting, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded or such business shall not be transacted, as the case may be. Notwithstanding the foregoing provisions of this Section 3.10, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the corporation to present a nomination or other proposed business, such nomination shall be disregarded or such proposed business shall not be transacted, as the case may be, notwithstanding that proxies in respect of such vote may have been received by the corporation and counted for purposes of determining a quorum. For purposes of this Section 3.10, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
(2) Without limiting the foregoing provisions of this Section 3.10, a stockholder shall also comply with all applicable requirements of the Exchange Act, and the rules and regulations thereunder with respect to the matters set forth in this Section 3.10; provided, however, that any references in these bylaws to the Exchange Act or such rules and regulations are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 3.10, and compliance with paragraphs (a) and (b) of this Section 3.10 shall be the exclusive means for a stockholder to make nominations or submit other business (other than as provided in paragraph 3.10(c)(3).
(3) Notwithstanding anything to the contrary, the notice requirements set forth herein with respect to director nominations or other business pursuant to this Section 3.10 shall be deemed satisfied by a stockholder if such stockholder has submitted a nomination in compliance with Rule 14a-11 or a proposal in compliance with Rule 14a-8 under the Exchange Act, and such stockholder’s nomination or proposal, as the case may be, has been included in a proxy statement that has been prepared by the corporation to solicit proxies for the meeting of stockholders.
ARTICLE IV
Board of Directors
SECTION 4.01.
Powers
.--All powers vested by law in the corporation shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the board of directors.
SECTION 4.02.
Number
.—The board of directors shall consist of such number of directors as may be determined from time to time by resolution of the board of directors, but in no case shall the number be less than three (3). Should the board of directors fail to fix the number of directors as aforesaid, the number shall be fixed by the stockholders.
SECTION 4.03.
Term of Office and Age Limitation
.--The board of directors shall be elected at the annual meeting of the stockholders, and each director shall serve until his successor shall be elected and shall qualify or until his earlier resignation or removal. No director shall be qualified to stand for re-election or otherwise continue to serve as a member of the board of directors past the date of the Annual Meeting of Stockholders of the corporation occurring in the calendar year in which such director reaches or has reached his or her seventy-fifth birthday.
SECTION 4.04.
Vacancies
.
(a) Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and a director so chosen shall hold office until the next annual election and until a successor is duly elected and qualified or until the earlier resignation or removal of such person. If there are no directors in office, then an election of directors may be held in the manner provided by statute.
(b) If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery of the State of Delaware may, upon application of any stockholder or stockholders holding at least ten percent of the total number of shares then outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the director or directors chosen by the directors then in office.
SECTION 4.05.
Resignations
.--Any director may resign at any time upon written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at such subsequent time as shall be specified in the notice of resignation and, unless otherwise specified in the notice, the acceptance of the resignation shall not be necessary to make it effective.
SECTION 4.06.
Organization
.--At every meeting of the board of directors, the chairman of the board, if there be one, or, in the case of a vacancy in the office or absence of the chairman of the board, one of the following officers present in the order stated: the vice chairman of the board, if there be one, the chief executive officer, the president, the vice presidents in their order of rank and seniority, or a chairman chosen by a majority of the directors present, shall preside, and the secretary, or, in the absence of the secretary, an assistant secretary, or in the absence of the secretary and the assistant secretaries, any person appointed by the chairman of the meeting, shall act as secretary.
SECTION 4.07.
Place of Meeting - Special Meeting.
—Special meetings of the board of directors shall be held at such place within or without the State of Delaware as shall be designated in the notice of the meeting.
SECTION 4.08.
Place of Meeting - Regular Meetings
.--Regular meetings of the board of directors shall be held without notice at such time and place as shall be determined by the board of directors.
SECTION 4.09.
Special Meetings
.--Special meetings of the board of directors shall be held whenever called by the chairman of the board, or the vice chairman of the board, if there be one, or the president, or a vice president or by three or more of the directors, notice thereof being given to each director by the secretary or assistant secretary or officer calling the meeting.
SECTION 4.10.
Quorum, Manner of Acting and Adjournment
.
(a)
General Rule
.--At all meetings of the board a majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors, except as may be otherwise specifically provided by the GCL or by the certificate of incorporation. If a quorum is not present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
(b)
Unanimous Written Consent
.--Unless otherwise restricted by the certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors may be taken without a meeting, if all members of the board consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board.
SECTION 4.11.
Executive Committee
.
(a)
Establishment
.—Subject to the provisions of Section 5.04 of these bylaws, the board of directors shall elect from its members, by resolution adopted by a majority of the whole board, an executive committee of not less than three nor more than nine directors. Any member of the executive committee may be removed by a majority of the entire board of directors and vacancies in such committee shall be filled in like manner. The board may designate one or more directors as alternate members of such committee, who may replace any absent or disqualified member at any meeting of such committee.
(b)
Powers
.--The executive committee shall have and may exercise all the power and authority of the board of directors in the management of the business and affairs of the corporation during the intervals between the meetings of the board of directors except as otherwise provided by law, and may authorize the seal of the corporation to be affixed to all papers which may require it; but such committee shall not have the power or authority in reference to amending the certificate of incorporation (except that such committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in Section 151(a) of the GCL, fix the designation and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation or fix the number of shares of any series of stock or authorize the increase or decrease of shares of any series), adopting an agreement of merger or consolidation under Section 251, 252, 254, 255, 256, 257, 258, 263 or 264 of the GCL, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation. The executive committee shall have the power and authority to declare a dividend, to authorize the issuance of shares of stock and to adopt a certificate of ownership and merger pursuant to Section 253 of the GCL. The executive committee shall also have such other powers as may be conferred upon it by the board of directors.
(c)
Quorum
.—A majority of all of the members of the executive committee shall constitute a quorum for the transaction of business, and the affirmative vote of a majority of all of the members of the executive committee shall be necessary for its adoption of any resolution or other action.
(d)
Committee Procedures
.-- The executive committee shall meet at such times as it shall determine or as the board of directors may prescribe and shall keep regular minutes of its proceedings. All action by the executive committee shall be reported to the board of directors at its special or regular meeting next succeeding such action and shall be subject to revision or alteration by the board of directors, provided that no rights or acts of third parties shall be affected by such revision or alteration.
SECTION 4.12.
Other Committees
.
(a)
Establishment
.—Subject to the provisions of Section 5.04 of these bylaws, the board of directors may, by resolution adopted by a majority of the whole board, establish one or more other committees, each committee to consist of two or more directors. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee and the alternate or alternates, if any, designated for such member, the member or members of the committee present at any meeting and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another director to act at the meeting in the place of any such absent or disqualified member.
(b)
Powers
.—Such committee or committees, to the extent provided in the resolution establishing such committee, shall have and may exercise all the power and authority of the board of directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in Section 151(a) of the GCL, fix the designation and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation or fix the number of shares of any series of stock or authorize the increase or decrease of shares of any series), adopting an agreement of merger or consolidation under Section 251, 252, 254, 255, 256, 257, 258, 263 or 264 of the GCL, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.
(c)
Committee Procedures
.--Unless otherwise provided by resolution of the board of directors, the provisions of these bylaws relating to the organization or procedures of or the manner of taking action by the board of directors shall be applicable to the organization or procedures of or manner of taking action by any committee formed pursuant to this Section 4.12. For this purpose, the term "board of directors" or "board," when used in any such provision of these bylaws shall be construed to include and refer to such committee of the board. Each committee so formed shall keep regular minutes of its meetings and report the same to the board of directors when required.
SECTION 4.13.
Compensation of Directors
.--Unless otherwise restricted by the certificate of incorporation, the board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors. No such payment or compensation shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees and the executive committee may be allowed like compensation for attending committee meetings.
SECTION 4.14.
Qualifications and Election of Directors
. All directors of the corporation shall be natural persons of full age, but need not be residents of Delaware or stockholders in the corporation. Except in the case of vacancies, directors shall be elected by the stockholders. Nominations for the election of directors may be made by the board of directors or by stockholders of the corporation in accordance with Section 3.10 of these bylaws.
ARTICLE V
Officers
SECTION 5.01.
Number, Qualifications and Designation
.--The executive officers of the corporation shall be chosen by the board of directors and shall be a chief executive officer, a president, one or more vice presidents, a secretary and a treasurer. Any number of executive offices may be held by the same person. The executive officers may, but need not, be directors or stockholders of the corporation. The board of directors may elect from among the members of the board a chairman of the board and a vice chairman of the board who shall not be officers of the corporation unless the board of directors determines by resolution that the chairman and/or the vice chairman shall be officers of the corporation, however, if so determined by the board of directors, such designees shall be executive officers of the corporation.
SECTION 5.02.
Election and Term of Office
.--The officers of the corporation shall be elected annually by the board of directors after its election by the stockholders, and a meeting may be held for this purpose without notice immediately after the annual meeting of the stockholders, and at the same place. Each such officer shall hold office until a successor is elected and qualified, or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the corporation. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the whole board of directors.
SECTION 5.03.
Delegation.
--The board of directors may delegate to any executive officer or committee the power to elect or appoint subordinate officers and to retain or appoint employees, counsel or other agents, or committees thereof, and to prescribe the authority and duties of such subordinate officers, committees, employees or other agents. In case of the absence of any officer of the corporation, or for any other reasons that the board may deem sufficient, the board may delegate, for the time being, the power or duties, or any of them, of such officer to any other officer, or to any director.
SECTION 5.04.
The Chairman and Vice Chairman of the Board
.--The chairman of the board, or in the absence of the chairman, the vice chairman of the board, if there be one, shall preside at all meetings of the stockholders and of the board of directors, and the chairman of the board, by virtue of such office, shall be a member of and chairman of the executive committee and a member of all standing committees except the audit committee, human resources committee and nominating and governance committee or of any committee with similar responsibilities to that of the audit committee, human resources committee or nominating and governance committee. The chairman of the board, or in the absence of the chairman, the vice chairman of the board, if there be one, shall supervise all such matters and shall perform such other duties as may from time to time be delegated to him or her by the board of directors or the executive committee.
SECTION 5.05.
The Chief Executive Officer
. The chief executive officer shall preside at all meetings of the stockholders and at all meetings of the Board of Directors, unless the chairman or the vice chairman is present. Unless another officer has been appointed chief executive officer of the corporation, the president shall be the chief executive officer of the Corporation and shall have general supervision over the business and operations of the corporation, subject, however, to the control of the board of directors. To the extent that a chief executive officer has been appointed and no president has been appointed, all references in these bylaws to the president shall be deemed references to the chief executive officer. The chief executive officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the board of directors shall designate from time to time.
SECTION 5.06.
The President
.--The president shall have general supervision over the business and operations of the corporation, subject, however, to the control of the board of directors and the chief executive officer of the corporation if the president has not been designated as such.
SECTION 5.07.
The Vice Presidents
. -- If so designated by the board of directors or the executive committee, one or more vice presidents shall perform the duties of the president in the event of his or her absence or disability, or if there is a vacancy in the office of president. The vice presidents shall perform such other duties as may from time to time be assigned to them by the board of directors or by the chief executive officer of the corporation.
SECTION 5.08.
The Secretary and Assistant Secretaries
.--The secretary shall attend all meetings of the stockholders and of the board of directors and shall record the proceedings of the stockholders and of the directors and of committees of the board in a book or books to be kept for that purpose; shall see that notices are given and records and reports properly kept and filed by the corporation as required by law; shall be the custodian of the seal of the corporation and see that it is affixed to all documents to be executed on behalf of the corporation under its seal; and, in general, shall perform all duties incident to the office of secretary, and such other duties as may from time to time be assigned by the board of directors or the chief executive officer of the corporation. The assistant secretaries shall perform such duties of the secretary as shall time to time be prescribed by the board of directors, the chief executive officer of the corporation or the secretary.
SECTION 5.09.
The Treasurer and Assistant Treasurers
.--The treasurer shall have or provide for the custody of the funds or other property of the corporation; shall collect and receive or provide for the collection and receipt of moneys earned by or in any manner due to or received by the corporation; shall deposit all funds in his or her custody as treasurer in such banks or other places of deposit as the board of directors may from time to time designate; shall disburse funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements; whenever so required by the board of directors, shall render an account showing his or her transactions as treasurer and the financial condition of the corporation; and, in general, shall discharge such other duties as may from time to time be assigned by the board of directors or the chief executive officer of the corporation. The assistant treasurers shall perform such duties of the treasurer as shall time to time be prescribed by the board of directors, the chief executive officer of the corporation or the treasurer.
SECTION 5.10.
Officers' Bonds
.--No officer of the corporation need provide a bond to guarantee the faithful discharge of the officer's duties unless the board of directors shall by resolution so require a bond in which event such officer shall give the corporation a bond (which shall be renewed if and as required) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of office.
SECTION 5.11.
Salaries
.--The salaries of the officers of the corporation elected by the board of directors shall be fixed from time to time by the board of directors, or a committee thereof.
ARTICLE VI
Certificates of Stock, Transfer, Record Date
SECTION 6.01.
Form and Issuance
.
(a)
Issuance
.--The shares of the corporation shall be represented by certificates unless the board of directors shall by resolution provide that some or all of any class or series of stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until the certificate is surrendered to the corporation. Notwithstanding the adoption of any resolution providing for uncertificated shares, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by, the chairman or vice chairman of the board of directors, or the president or a vice president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary, representing the number of shares registered in certificate form.
(b)
Form and Records
.--Stock certificates of the corporation shall be in such form as approved by the board of directors. The stock record books and the blank stock certificate books shall be kept by the secretary or by any agency designated by the board of directors for that purpose. The stock certificates of the corporation shall be numbered and registered in the stock ledger and transfer books of the corporation as they are issued. The designations, preferences and relative participating option or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificates which the corporation shall issue to represent such class or series of stock.
(c)
Signatures
.--Any of or all the signatures upon the stock certificates of the corporation may be a facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, any share certificate shall have ceased to be such officer, transfer agent or registrar, before the certificate is issued, it may be issued with the same effect as if the signatory were such officer, transfer agent or registrar at the date of its issue.
SECTION 6.02.
Transfer
.--Transfers of shares shall be made on the share register or transfer books of the corporation only upon surrender of the certificate therefor (if there be one), endorsed by the person named in the certificate or by an attorney lawfully constituted in writing. No transfer shall be made which would be inconsistent with the provisions of Article 8, Title 6 of the Delaware Uniform Commercial Code-Investment Securities.
SECTION 6.03.
Lost, Stolen, Destroyed or Mutilated
Certificates
.--The board of directors may direct a new certificate of stock or uncertificated shares to be issued in place of any certificate theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or the legal representative of the owner, to give the corporation a bond sufficient to indemnify against any claim that may be made against the corporation on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate or uncertificated shares.
SECTION 6.04.
Record Holder of Shares
.--The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
SECTION 6.05.
Determination of Stockholders of Record
.
(a)
Meetings of Stockholders
.--In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting unless the board of directors fixes a new record date for the adjourned meeting.
(b)
Consent of Stockholders
.--In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by the GCL, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in Delaware, its principal place of business,
or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by the GCL, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.
(c)
Dividends
.--In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights of the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.
ARTICLE VII
Indemnification of Directors, Officers and Employees
(a) A director of the corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the GCL.
(b) Each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent permitted by the GCL. The right to indemnification conferred in this Article VII shall also include the right to be paid by the Corporation the expenses incurred in connection with any such proceeding in advance of its final disposition to the fullest extent authorized by the GCL. The right to indemnification conferred in this Article VII shall be a contract right.
(c) The corporation may, by action of its board of directors, provide indemnification to such of the employees and agents of the corporation to such extent and to such effect as the board of directors shall determine to be appropriate and authorized by the GCL.
(d) The corporation shall have power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under the GCL.
(e) The rights and authority conferred in this Article VII shall not be exclusive of any other right which any person may otherwise have or hereafter acquire.
(f) Neither the amendment nor repeal of this Article VII, nor the adoption of any provision of the corporation’s Certificate of Incorporation or these bylaws, nor, to the fullest extent permitted by the GCL, any modification of law, shall adversely affect any right or protection of any person granted pursuant hereto existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any proceeding (or part thereof) relating to such event, act or omission arises or is first threatened, commenced or completed).
ARTICLE VIII
General Provisions
SECTION 8.01.
Dividends
.--Subject to the restrictions contained in the GCL and any restrictions contained in the certificate of incorporation, the board of directors may declare and pay dividends upon the shares of capital stock of the corporation.
SECTION 8.02.
Interested Director and Stockholder Contracts
. --
(a) In the absence of fraud, no contract or other transaction between the corporation and any other corporation and no act of the corporation shall in any manner be affected or invalidated by the fact that any of the directors of the corporation are pecuniarily or otherwise interested in or are directors or officers of such other corporation. In the absence of fraud, any director individually, or any firm or association of which any director may be a member, may be a party to or may be pecuniarily or otherwise interested in any contract or transaction of the corporation, provided that the fact that he or such firm or association is so interested shall be disclosed or shall have been known to the board of directors or to a majority thereof; and provided that such contract or transaction shall be approved by the affirmative votes of a majority of the disinterested directors of this corporation; and any director of the corporation who is also a director or officer of such other corporation or who is so interested may be counted in determining the existence of a quorum at any meeting of the board of directors of the corporation which shall authorize any such contract or transaction, and may vote thereat to authorize any such contract or transaction or with respect thereto, and such contract or transaction shall not be void or voidable solely because his or their vote is counted for such purposes. Any director and/or officer of this corporation may act as a director and/or officer of any subsidiary or affiliated corporation and may vote or act without restriction or qualification with regard to any transaction between such corporations.
(b) Section 203 of the Delaware General Corporation Law shall not be applicable to the corporation. Notwithstanding any provision contained herein to the contrary, this Section 8.02(b) of the Bylaws may not be altered, modified or repealed by the board of directors.
SECTION 8.03.
Corporate Seal
.--The corporation shall have a corporate seal, which shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
SECTION 8.04.
Deposits
.--All funds of the corporation shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositories as the board of directors may approve or designate, and all such funds shall be withdrawn only upon checks signed by such one or more officers or employees as the board of directors shall from time to time determine.
SECTION 8.05.
Voting Held Stock
.-- Unless otherwise ordered by the board of directors or by the executive committee, any executive officer of the corporation shall have full power and authority on behalf of the corporation, to attend, to act and to vote at any meetings of the stockholders of any corporation in which the corporation may hold stock, and at any such meeting shall possess and may exercise any and all rights, and powers incident to the ownership of such stock which, as the owner thereof, the corporation might have possessed and exercised if present. The board of directors or the executive committee, by resolution from time to time, may confer like powers upon any other person or persons.
SECTION 8.06.
Amendment of Bylaws
.--These bylaws may be altered or amended or repealed by either (a) the affirmative vote of the holders of record of a majority of the stock issued and outstanding and entitled to vote thereat, at any regular or annual meeting of the stockholders, or at any special meeting of the stockholders, if notice of the proposed alteration or amendment or repeal be contained in the notice of such annual or special meeting or (b) by the affirmative vote of a majority of the board of directors at any regular meeting of the board, or at any special meeting of the board, if notice of the proposed alteration, amendment or repeal be contained in the notice of such special meeting, provided, however, that no change of the time or place for the election of directors shall be made within sixty days next before the day on which such election is to be held and that in case of any change of such time and place, notice thereof shall be given to each stockholder in person or by letter mailed to his last known post office address at least twenty days before the election is held.
SECTION 8.07
Use of E-Mail
. In any place where these bylaws contemplate the delivery of notice by facsimile or electronic means, notice shall be deemed to have been given if transmitted by any electronic means permissible under the GCL, including without limitation by electronic mail directed to an electronic mail address at which the recipient of such notice has consented to receive electronic mail.
EXHIBIT 10.1
CSS INDUSTRIES, INC.
RESTRICTED STOCK UNIT AWARD AGREEMENT
This RESTRICTED STOCK UNIT AWARD AGREEMENT (this “
Agreement
”), dated as of August
11
, 2015 (the “
Date of Grant
”), is delivered by CSS Industries, Inc. (the “
Company
”) to Rebecca Matthias (the “
Grantee
”).
RECITALS
A. The Board of Directors of the Company (the “
Board
”) has decided to make a restricted stock unit grant to Ms. Matthias in connection with her election by the Board at its July 28, 2015 organizational meeting to the role of Non-executive Chair of the Board.
B. The Board has determined that the restricted stock units subject to this grant shall be convertible solely into cash, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:
1.
Restricted Stock Unit Grant
. Subject to the terms and conditions set forth in this Agreement, the Board hereby grants to the Grantee 10,000 restricted stock units (the “
RSUs
”). The RSUs will become vested and convertible into a lump sum cash payment equal to the then Fair Market Value (as defined in Paragraph 16(b) below) of corresponding shares of common stock of the Company if, and only to the extent that, the vesting conditions set forth in Paragraph 3 of this Agreement are met and the other terms and conditions of this Agreement are satisfied. Each RSU shall be a phantom right and shall entitle the Grantee to receive the cash equivalent value of one share of common stock of the Company on the applicable Conversion Date, as described in Paragraph 4 below.
2.
Restricted Stock Unit Account
. The Company shall establish and maintain a RSU account as a bookkeeping account on its records (the “
RSU Account
”) for the Grantee and shall record in such RSU Account the number of RSUs granted to the Grantee pursuant to this Agreement. The Grantee shall not have any interest in any fund or specific assets of the Company by reason of this grant or the RSU Account established for the Grantee.
3.
Vesting of RSUs
.
(a)
Except as provided in subparagraph (b) or (c) below, the RSUs shall become fully vested on August 15, 2017 (the “
Service Date
”), if the Grantee continues in the service with the Company as a non-employee director on the Board from the Date of Grant to the Service Date.
(b)
Notwithstanding subparagraph (a) above, if prior to the Service Date the Grantee ceases as a non-employee director on the Board on account of (i) the Grantee is not nominated for re-election as a non-employee director of the Company upon expiration of the term of her
service as a non-employee director, other than on account of her not seeking re-election, or (ii) the Grantee is nominated for re-election as a non-employee director of the Company, but is not re-elected by the Company’s stockholders, if, in either case, the Grantee continues to be in service with the Company as a non-employee director on the Board from the Date of Grant to the last day of her term of service as a non-employee director, the unvested RSUs shall become fully vested on the last day of her term as a non-employee director (the “
Separation Date
”).
(c)
Notwithstanding subparagraph (a) above, if during the Grantee’s term of service as a non-employee director on the Board, but prior to the Service Date, there is a Change of Control (as defined in Paragraph 16(a) below), the unvested RSUs shall become fully vested on the date of the Change of Control (the “
Change of Control Date
”).
(d)
Except as specifically provided for in subparagraphs 3(a), 3(b) and 3(c), if the Grantee ceases to be a non-employee director on the Board for any reason before the RSUs are fully vested, the RSUs that are not then vested shall be forfeited.
4.
Conversion of RSUs
. The Grantee shall be entitled to receive a payment with respect to the Grantee’s vested RSUs credited to the Grantee’s RSU Account on the first vesting date as provided in Paragraph 3, which is the earlier of (i) the Service Date, (ii) the Separation Date or (iii) the Change of Control Date. The date on which the vested RSUs credited to the Grantee’s RSU Account are payable to the Grantee pursuant to the immediately preceding sentence is referred to as the “
Conversion Date
”. Each RSU credited to the Grantee’s RSU Account shall be converted into and settled in cash, with such cash payment equal to the Fair Market Value of a whole share of common stock of the Company on the Conversion Date multiplied by the number of vested RSUs credited to the Grantee’s RSU Account on the Conversion Date. The Company shall make such cash payment to the Grantee within thirty (30) days after the Conversion Date. Any RSUs not vested because of the failure to satisfy the vesting conditions are forfeited as described in Paragraph 3 above.
5.
Dividend Equivalents
. Should any dividend or other distribution, other than in shares of common stock of the Company, be declared and paid with respect to the shares of the common stock of the Company during the period between the Date of Grant and the earlier of (a) the Conversion Date or (b) the date on which the RSUs credited to the Grantee’s RSU Account are forfeited, at the same time such dividend or other distribution is paid to the Company’s stockholders, the Company shall pay to the Grantee a cash payment equal to the value of the dividend or distribution that would have been paid if the RSUs (whether vested or unvested) credited to the Grantee’s RSU Account were outstanding shares of common stock of the Company. These dividend equivalents shall continue to be paid to the Grantee until the earlier of the date the RSUs credited to the Grantee’s RSU Account are forfeited or the Conversion Date.
6.
Change of Control
. Subject to the provisions of subparagraph 3(c) and Paragraph 4, in the event of a Change of Control, the Board may take such actions as it deems appropriate and consistent with this Agreement.
7.
Acknowledgment by Grantee
. By accepting this grant, the Grantee acknowledges that with respect to any right to any payment pursuant to this Agreement, the Grantee is and shall be
an unsecured creditor of the Company without any preference as against other unsecured general creditors of the Company, and the Grantee hereby covenants for herself, and anyone at any time claiming through or under the Grantee, not to claim any such preference, and hereby disclaims and waives any such preference which may at any time be at issue, to the fullest extent permitted by applicable law. The Grantee also hereby agrees to be bound by the terms of this Agreement. The Grantee further agrees to be bound by the determinations and decisions of the Board with respect to this grant and the Grantee’s rights to benefits under this grant, and agrees that all such determinations and decisions of the Board shall be binding on the Grantee, her beneficiaries and any other person having or claiming an interest under this grant on behalf of the Grantee. The Grantee further hereby acknowledges and agrees that the Grantee will indemnify the Company and hold the Company free and harmless of, from and against any and all losses, damages, obligations or liabilities, and all costs and expenses (including reasonable attorneys’ fees) incurred in connection therewith, which may be suffered or incurred on account or by reason of any act or omission of the Grantee or the Grantee’s heirs, executors, administrators, personal representatives, successors and assigns in breach or violation of the provisions of the agreements of the Grantee set forth herein.
8.
Determinations of the Board
. The grant is subject to interpretations, regulations and determinations concerning the Agreement established from time to time by the Board in accordance with the provisions of the Agreement, including, but not limited to, provisions pertaining to changes in capitalization of the Company and other requirements of applicable law. The Board shall have the authority to interpret and construe this Agreement, and its decisions shall be conclusive as to any questions arising hereunder.
9.
Changes in Capitalization of the Company
. If there is any change in the number or kind of shares of common stock of the Company outstanding by reason of (i) a stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares; (ii) a merger, reorganization or consolidation; (iii) a reclassification or change in par value; or (iv) any other extraordinary or unusual event affecting the outstanding shares of common stock of the Company as a class without the Company’s receipt of consideration, or if the value of outstanding shares of common stock of the Company is substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary dividend or distribution, the kind and number of shares to which the RSUs relate shall be equitably adjusted by the Board to reflect any increase or decrease in the number of, or change in the kind or value of, the issued shares of common stock of the Company to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under this Agreement provided however that any fractional units resulting from such adjustment shall be eliminated. Any adjustments determined by the Board shall be final, binding and conclusive.
10.
No Stockholder Rights
. The Grantee shall not have any of the rights and privileges of a stockholder of the Company, including the right to any dividends (except as provided in Paragraph 5), or the right to vote, with respect to any RSUs.
11.
No Rights to Continued Service
. The grant of the RSUs and dividend equivalents shall not confer upon the Grantee any right to be retained by, or in the service of, the Company or any
of its subsidiaries or affiliates and shall not interfere in any way with the right of the Company and its subsidiaries or affiliates to terminate the Grantee’s service at any time, including as a non-employee director on the Board. The right of the Company and its subsidiaries and affiliates to terminate at will the Grantee’s service at any time for any reason is specifically reserved.
12.
Assignments and Transfers
. Prior to the actual payment of cash under the RSUs and dividend equivalents, the Grantee may not transfer any interest in the RSUs or dividend equivalents or pledge or otherwise hedge the sale of those RSUs or dividend equivalents. Any attempt to transfer, assign, pledge or encumber the RSUs or dividend equivalents under this grant by the Grantee shall be null, void and without effect. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries and affiliates. This Agreement may be assigned by the Company without the Grantee’s consent.
13.
Taxation; Withholdings
. The payment of cash to the Grantee (or, in the event of death, the Grantee’s estate) pursuant to this grant is subject to any applicable taxes and other laws or regulations of the United States or of any state having jurisdiction thereof. All obligations of the Company under this Agreement shall be subject to the rights of the Company to withhold amounts required to be withheld for any taxes, if required by applicable law. The Grantee is solely responsible for the satisfaction of all taxes that may arise in connection with the RSUs and dividend equivalents granted pursuant to this Agreement.
14.
Effect on Other Benefits
. The value of any cash payment on the Conversion Date and dividend equivalents paid with respect to the RSUs shall not be considered eligible earnings for purposes of any other plans maintained by the Company. Neither shall such value be considered part of the Grantee’s compensation for purposes of determining or calculating other benefits that are based on compensation, including life insurance.
15.
Section 409A
. This grant is intended to be exempt from the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “
Code
”) in reliance on the short-term deferral exception under section 409A of the Code. Notwithstanding the foregoing, if any RSUs and dividend equivalents are subject to the requirements of section 409A of the Code it is intended that this Agreement comply with the requirements of section 409A of the Code with respect to such RSUs and dividend equivalents and this Agreement shall be interpreted and administered to avoid any penalty sanctions under section 409A of the Code, including, any payment on a “separation from service” or “change of control” shall only be paid on the occurrence of such to the extent that such “separation from service” or “change of control” qualifies as such under section 409A of the Code and its corresponding regulations. If any payment cannot be provided or made at the time specified herein, then such payment shall be provided in full at the earliest time thereafter when such sanctions cannot be imposed. In no event may the Grantee, directly or indirectly, designate the calendar year of payment.
16.
Definitions
. For purposes of this Agreement, the following terms shall have the following meanings
(a)
A “
Change of Control
” shall be deemed to have occurred if: (i) any “person” (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”)) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of Company; provided that a Change of Control shall not be deemed to occur as a result of a change of ownership resulting from the death of a stockholder, and a Change of Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the parent corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote); (ii) the consummation of a merger or consolidation of the Company with another corporation where the stockholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the surviving corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote); or (iii) the consummation of a sale or other disposition of all or substantially all of the assets of the Company.
(b)
The “
Fair Market Value
” per share of common stock shall mean (i) if the principal trading market for the shares of common stock of the Company is a national securities exchange, the last reported sales price of the shares of common stock of the Company on the trading day immediately prior to the relevant date (or, if there were no trades on that date, the immediately preceding date upon which a sale was reported); (ii) if the shares of common stock of the Company are not principally traded on a national securities exchange, the mean between the last reported “bid” and “asked” prices of shares of common stock of the Company on the relevant date, as reported on the OTC Bulletin Board; or (iii) if the shares of common stock of the Company are not publicly traded or, if publicly traded, are not so reported, the Fair Market Value shall be as determined by the Board.
17.
Applicable Law; Entire Agreement
. The validity, construction, interpretation and effect of this instrument shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflicts of laws provisions thereof. This Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof and may not be changed or terminated except by a writing signed by the Grantee and the Company. This Agreement and any undertakings and indemnities delivered hereunder shall be binding upon and shall inure to the benefit of the Grantee and the Grantee’s heirs, distributees and personal representatives and to the Company, its successors and assigns.
18.
Notice
. Any notice to the Company provided for in this Agreement shall be addressed to the Company in care of the Secretary at the corporate headquarters of the Company, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll of the Company, or to such other address as the Grantee may designate to the Company in writing. Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly
sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.
[
SIGNATURE PAGE FOLLOWS
]
IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant.
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ATTEST
(Corporate Seal)
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CSS INDUSTRIES, INC.
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/s/ Michael A. Santivasci
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By:
/s/ Christopher J. Munyan
Name: Christopher J. Munyan
Title: President & CEO
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I hereby (i) acknowledge that I have read this Agreement and understand the terms and conditions of it, (ii) accept the RSU and dividend equivalent award described in this Agreement, (iii) agree to be bound by the terms of this Agreement, and (iv) agree that all the decisions and determinations of the Board shall be final and binding on me and any other person having or claiming a right under this Award
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Grantee Signature:
/s/ Rebecca Matthias
Grantee Name: Rebecca Matthias
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