Exhibit 3.1
AMENDED AND RESTATED
BY-LAWS
OF
RPM INTERNATIONAL INC.
(Adopted as of April 21, 2009)
ARTICLE I
OFFICES
Section 1.
Registered Office
. The registered office of the Company shall be in the
City of Wilmington, County of New Castle, State of Delaware.
Section 2.
Other Offices
. The Company may also have offices at such other places
both within and without the State of Delaware as the Board of Directors (the “Board”) may from time
to time determine or the business of the Company may require.
ARTICLE
II
FISCAL YEAR
Section 1.
Fiscal Year
. The fiscal year of the Company shall end upon each May 31,
or otherwise shall be as designated by the Board.
ARTICLE III
STOCKHOLDERS
Section 1.
Annual Meeting
. The annual meeting of the stockholders for the election
of Directors, and for the transaction of any other proper business, shall be held on such date
after the annual financial statements of the Company have been prepared as shall be determined by
the Board from time to time. Only such business shall be conducted as shall have been properly
brought before the meeting. In the event that the annual meeting is not held on the date
designated therefor in accordance with this Section 1, the Directors shall cause the annual meeting
to be held as soon after that date as convenient.
(A) Nominations of persons for election to the Board and the proposal of other business to be
considered by the stockholders may be made at an annual meeting of stockholders (i) pursuant to the
Company’s notice of meeting, (ii) by or at the direction of the Board or (iii) by any stockholder
of the Company who (a) was a stockholder of record at the time of giving of notice provided for
herein and at the time of the annual meeting, (b) is entitled to vote at the annual meeting and (c)
complies with the notice procedures set forth herein as to such business or nomination. Clause
(iii) hereof shall be the exclusive means for a stockholder to make nominations or submit other
business (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and included in the Company’s notice of meeting) before an
annual meeting of stockholders.
(B) Without qualification, for any nominations or any other business to be properly brought
before an annual meeting by a stockholder pursuant to Section 1(A)(iii) hereof, the stockholder
must have given
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timely notice thereof in writing to the Secretary and such other business must otherwise be a
proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to
the Secretary at the principal executive offices of the Company not earlier than the close of
business on the 120th day, and not later than the close of business on the 90th day, prior to the
first anniversary of the preceding year’s annual meeting; provided, however, that in the event that
the date of the annual meeting is more than 30 days before or more than 60 days after such
anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the
close of business on the 120th day prior to the date of such annual meeting and not later than the
close of business on the later of the 90th day prior to the date of such annual meeting or, if the
first public announcement of the date of such annual meeting is less than 100 days prior to the
date of such annual meeting, the 10th day following the day on which public announcement of the
date of such meeting is first made by the Company. In no event shall any adjournment or
postponement of an annual meeting or the announcement thereof commence a new time period for giving
of a stockholder’s notice as described above. To be in proper form, a stockholder’s notice
(whether given pursuant to this Section 1(B) or Section 2 hereinafter) to the Secretary must (i)
set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (a) (1) the name and address of such stockholder, as they
appear on the Company’s books, and of such beneficial owner, if any, (2) if such stockholder or
beneficial owner, if any, is not a natural person, the identity of the natural person or persons
associated with such stockholder or beneficial owner responsible for the formulation of and
decision to propose the business to be brought before the annual meeting (such person or persons,
the “Responsible Person”), the manner in which such Responsible Person was selected, any fiduciary
duties owed by such Responsible Person to the equity holders or other beneficiaries of such
stockholder or beneficial owner, the qualifications and background of such Responsible Person and
any material interests or relationships of such Responsible Person that are not shared generally by
the other record or beneficial holders of the shares of any class or series of the Company and that
reasonably could have influenced the decision of such stockholder or beneficial owner to propose
such business to be brought before the annual meeting, and (3) if such stockholder or beneficial
owner, if any, is a natural person, the qualifications and background of such natural person and
any material interests or relationships of such natural person that are not shared generally by the
other record or beneficial holders of the shares of any class or series of the Company and that
reasonably could have influenced the decision of such stockholder or beneficial owner to propose
such business to be brought before the annual meeting, (b) (1) the class or series and number of
shares of the Company which are, directly or indirectly, owned beneficially and of record by such
stockholder and such beneficial owner, (2) any option, warrant, convertible security, stock
appreciation right, or similar right with an exercise or conversion privilege or a settlement
payment or mechanism at a price related to any class or series of shares of the Company or with a
value derived in whole or in part from the value of any class or series of shares of the Company,
whether or not such instrument or right shall be subject to settlement in the underlying class or
series of capital stock of the Company or otherwise (a “Derivative Instrument”) directly or
indirectly owned beneficially by such stockholder
and any other direct or indirect opportunity to
profit or share in any profit derived from any increase or decrease in the value of shares of the
Company, (3) any proxy, contract, arrangement, understanding, or relationship pursuant to which
such stockholder has a right to vote any shares of any security of the Company, (4) any short
interest in any security of the Company (for purposes hereof, a person shall be deemed to have a
short interest in a security if such person directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in
any profit derived from any decrease in the value of the subject security), (5) any rights to
dividends on the shares of the Company owned beneficially by such stockholder that are separated or
separable from the underlying shares of the Company, (6) any proportionate interest in shares of
the Company or Derivative Instruments held, directly or indirectly, by a general or limited
partnership in which such stockholder is a general partner or, directly or indirectly, beneficially
owns an interest in a general partner, (7) any performance-related fees (other than an asset-based
fee) that such stockholder is entitled to based on any increase
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or decrease in the value of shares of the Company or Derivative Instruments, if any, as of the date
of such notice, including without limitation any such interests held by members of such
stockholder’s immediate family sharing the same household (which information shall be supplemented
by such stockholder and beneficial owner, if any, not later than 10 days after the record date for
the meeting to disclose such ownership as of the record date), (8) any direct or indirect interest
of such stockholder in any contract with the Company, any affiliate of the Company (including any
employment agreement, collective bargaining agreement or consulting agreement), or any principal
competitor of the Company, (9) any pending or threatened litigation in which such stockholder is a
party or material participant involving the Company or any of its officers or Directors, or any
affiliate of the Company, and (10) any material transaction occurring during the prior twelve
months between such stockholder, on the one hand, and the Company, any affiliate of the Company or
any principal competitor of the Company, on the other hand, and (c) any other information relating
to the stockholder or beneficial owner, if any, that would be required to be disclosed in a proxy
statement or other filing required to be made in connection with solicitations of proxies for, as
applicable, the proposal and/or for the election of Directors in a contested election pursuant to
Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; (ii) if the
notice relates to any business other than a nomination of a Director or Directors that the
stockholder proposes to bring before the meeting, set forth (a) a brief description of the business
desired to be brought before the meeting, the reasons for conducting such business at the meeting
and any material interest of such stockholder and beneficial owner, if any, in such business and
(b) a description of all agreements, arrangements and understandings between such stockholder and
beneficial owner, if any, and any other person or persons (including their names) in connection
with the proposal of such business by such stockholder, including a summary of any material
discussions regarding the business proposed to be brought before the meeting between or among such
stockholder and beneficial owner, if any, and any other such person or persons; (iii) set forth, as
to each person, if any, whom the stockholder proposes to nominate for election or re-election to
the Board (a) all information relating to such person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with solicitations of proxies
for election of Directors in a contested election pursuant to Section 14 of the Exchange Act and
the rules and regulations promulgated thereunder (including such person’s written consent to be
named in the proxy statement as a nominee and to serving as a Director if elected) and (b) a
description of all direct and indirect compensation and other material monetary agreements,
arrangements and understandings during the past three years, and any other material relationships,
between or among such stockholder and beneficial owner, if any, and their respective affiliates and
associates, or others acting in concert therewith, on the one hand, and each proposed nominee, on
the other hand, including, without limitation all information that would be required to be
disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder making the
nomination and any beneficial owner on whose behalf the nomination is made, if any, or any
affiliate or associate thereof or person acting in concert therewith, were the “registrant” for
purposes of such rule and the nominee were a Director or executive officer of such registrant; and
(iv) with respect to each nominee for election or re-election to the Board, include a completed and
signed questionnaire, representation and agreement required by Section 12 hereof. The Company may
require any proposed nominee to furnish such other information as may reasonably be required by the
Company to determine the eligibility of such proposed nominee to serve as an independent Director
of the Company or that could be material to a reasonable stockholder’s understanding of the
independence, or lack thereof, of such nominee.
(C) Notwithstanding anything in the second sentence of Section 1(B) herein to the contrary, in
the event that the number of Directors to be elected to the Board is increased and there is no
public announcement by the Company naming all of the nominees for Director or specifying the size
of the increased Board at least 100 days prior to the first anniversary of the preceding year’s
annual meeting, a stockholder’s notice required herein shall also be considered timely, but only
with respect to nominees for any new positions created by such increase,
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if it shall be delivered to the Secretary at the principal executive offices of the Company not
later than the close of business on the 10th day following the day on which such public
announcement is first made by the Company.
Section 2.
Special Meetings
. Special meetings of the stockholders may be called at
any time by the Chairman of the Board, the President of the Company, the majority of the Board and
the Chairman of the Board or the President at the written request of stockholders owning a majority
of shares of the Voting Stock (as such term is defined in the Amended and Restated Certificate of
Incorporation (the “Certificate of Incorporation”)). Special meetings of holders of the
outstanding preferred stock, $0.01 par value per share, of the Company (the “Preferred Stock”), if
any, may be called in the manner and for the purposes provided in the applicable Preferred Stock
Designation (as such term is defined in the Certificate of Incorporation). Calls for special
meetings shall specify the purpose or purposes of the proposed meeting. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought before the meeting
pursuant to the Company’s notice of meeting.
(A) Nominations of persons for election to the Board may be made at a special meeting of
stockholders at which Directors are to be elected pursuant to the Company’s notice of meeting (i)
by or at the direction of the Board or (ii) provided that the Board has determined that Directors
shall be elected at such meeting, by any stockholder of the Company who (a) is a stockholder of
record at the time of giving notice provided for herein and at the time of the special meeting, (b)
is entitled to vote at the meeting, and (c) complies with the notice procedures set forth in
Section 1 of this Article III as to such nomination. In the event the Company calls a special
meeting of stockholders for the purpose of electing one or more Directors to the Board, any such
stockholder may nominate a person or persons (as the case may be) for election to such position(s)
as specified in the Company’s notice of meeting, if the stockholder’s notice required by Section
1(B) of this Article III with respect to any nomination (including the completed and signed
questionnaire, representation and agreement required by Section 12 of this Article III) shall be
delivered to the Secretary at the principal executive offices of the Company not earlier than the
close of business on the 120th day prior to the date of such special meeting and not later than the
close of business on the later of the 90th day prior to the date of such special meeting or, if the
first public announcement of the date of such special meeting is less than 100 days prior to the
date of such special meeting, the 10th day following the day on which public announcement is first
made of the date of the special meeting and of the nominees proposed by the Board to be elected at
such meeting. In no event shall any adjournment or postponement of a special meeting or the
announcement thereof commence a new time period for the giving of a stockholder’s notice as
described above.
(B) No stockholder may demand that the President call a special meeting of stockholders
pursuant to Section 2 of this Article III unless a stockholder of record has first submitted a
request in writing that the Board fix a record date for the purpose of determining the stockholders
entitled to demand that the President call such special meeting, which request shall be in proper
form and delivered to, or mailed and received by, the Secretary at the principal executive offices
of the Company. To be in proper form for purposes of Section 2 of this Article III, a request by a
stockholder for the Board to fix a record date shall set forth as to each stockholder giving the
notice and the beneficial owner, if any, on whose behalf the request is made, the information
required to be included in a stockholder’s notice by Section 1(B) of this Article III.
(C) Within 10 days after receipt of a request to fix a record date in proper form and
otherwise in compliance with Section 2 of this Article III from any stockholder of record, the
Board may adopt a resolution fixing a record date for the purpose of determining the stockholders
entitled to demand that the President of the Company call a special meeting, which date shall not
precede the date upon which the resolution fixing the record date is adopted by the Board. If no
resolution fixing a record date has been adopted by the Board within the 10
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day period after the date on which such a request to fix a record date was received, the record
date in respect thereof shall be deemed to be the 20th day after the date on which such a request
is received. Notwithstanding anything in Section 2 of this Article III to the contrary, no record
date shall be fixed if the Board determines that the demand or demands that would otherwise be
submitted following such record date could not comply with the requirements set forth in Section
2(E) of this Article III.
(D) Without qualification, a special meeting of the stockholders shall not be called pursuant
to Section 2 of this Article III unless stockholders of record as of the record date fixed in
accordance with Section 2C) of this Article III who hold, in the aggregate, at least a majority of
shares of the Voting Stock (as such term is defined in the Certificate of Incorporation) timely
provide one or more demands to call such special meeting in writing and in proper form to the
President at the principal executive offices of the Company. Only stockholders of record on the
record date shall be entitled to demand that the President of the Company call a special meeting of
stockholders pursuant to Section 2 of this Article III. To be timely, a stockholder’s demand to
call a special meeting must be delivered to, or mailed and received at, the principal executive
offices of the Company not later than the 60th day following the record date fixed in accordance
with Section 2(C) of this Article III. To be in proper form for purposes of Section 2 of this
Article III, a demand to call a special meeting shall set forth (i) the business proposed to be
conducted at the special meeting, (ii) the text of the proposal or business (including the text of
any resolutions proposed for consideration, and (iii) the information required to be included in a
stockholder’s notice by Section 1(B) of this Article III. A stockholder may revoke a demand to
call a special meeting by written revocation delivered to the President at any time prior to the
special meeting. If any such revocation(s) are received by the President after the President’s
receipt of written demands from the holders of at least a majority of shares of the Voting Stock,
and as a result of such revocation(s), there no longer are unrevoked demands from the holders of at
least a majority of shares of the Voting Stock to call a special meeting, the Board shall have the
discretion to determine whether or not to proceed with the special meeting.
(E) The President shall not accept, and shall consider ineffective, a written demand from a
stockholder to call a special meeting (i) that does not comply with Section 2 of this Article III,
(ii) that relates to an item of business to be transacted at such meeting that is not the proper
subject for stockholder action under applicable law, (iii) that includes an item of business to be
transacted at such meeting that did not appear on the written request that resulted in the
determination of the record date (the “Current Record Date”) to determine the stockholders entitled
to submit such written demand, (iv) that relates to an item of business (other than the election of
Directors) that is identical or substantially similar to an item of business (a “Similar Item”) for
which a record date (other than the Current Record Date) was previously fixed and such demand is
delivered between the time beginning on the 61st day after such previous record date and ending on
the one-year anniversary of such previous record date, (v) if a Similar Item will be submitted for
stockholder approval at any stockholder meeting to be held on or before the 90th day after the
President receives such demand, or (vi) if a Similar Item has been presented at the most recent
annual meeting or at any special meeting held within one year prior to receipt by the President of
such demand to call a special meeting.
(F) After receipt of demands in proper form and in accordance with Section 2 of this Article
III from a stockholder or stockholders holding at least a majority of shares of the Voting Stock,
the Board shall duly call, and determine the place, date and time of, a special meeting of
stockholders for the purpose or purposes and to conduct the business specified in the demands
received by the Company. Notwithstanding anything herein to the contrary, the Board may submit its
own proposal or proposals for consideration at such a special meeting. The record date for such a
special meeting shall be fixed in accordance with Section 2(C) of this Article III. The Board
shall provide written notice of such special meeting to the stockholders in accordance with Section
4 of this Article III.
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(G) In connection with a special meeting called in accordance with Section 2 of this Article
III, the stockholder or stockholders who requested that the Board fix a record date in accordance
with Section 2 of this Article III or who delivered a demand to call a special meeting to the
President shall further update and supplement the information previously provided to the Company in
connection with such request or demand, if necessary, so that the information provided or required
to be provided in such request or demand pursuant to Section 2 of this Article III shall be true
and correct as of the record date for the special meeting and as of the date that is 10 business
days prior to the meeting or any adjournment or postponement thereof, and such update and
supplement shall be delivered to, or mailed and received by, the President at the principal
executive offices of the Company not later than five business days after the record date for the
special meeting (in the case of the update and supplement required to be made as of the record
date), and not later than eight business days prior to the date for the meeting, if practicable
(or, if not practicable, the first practicable date prior to) any adjournment or postponement
thereof (in the case of the update and supplement required to be made as of 10 business days prior
to the special meeting or any adjournment or postponement thereof).
(H) Notwithstanding anything herein to the contrary, the President shall not be required to
call a special meeting pursuant to Section 2 of this Article III except in accordance with Section
2 of this Article III. If the Board shall determine that any request to fix a record date or
demand to call and hold a special meeting was not properly made in accordance with Section 2 of
this Article III, or shall determine that the stockholder or stockholders requesting that the Board
fix such record date or submitting a demand to call the special meeting have not otherwise complied
with Section 2 of this Article III, then the Board shall not be required to fix a record date or to
call and hold the special meeting. In addition to the requirements of Section 2 of this Article
III, each stockholder submitting a request or demand hereunder shall comply with all requirements
of applicable law, including all requirements of the Exchange Act, with respect to any request to
fix a record date or demand to call a special meeting.
Section 3.
Place of Meetings
. All meetings of the stockholders shall be held at such
place, if any, either within or without the State of Delaware, as shall be designated in the notice
of such meeting. The Board may, in its sole discretion, determine that the meeting shall not be
held at any place, but may instead be held solely by means of remote communication as authorized by
the Delaware General Corporation Law. If authorized by the Board, and subject to such guidelines
and procedures as the Board may adopt, stockholders and proxyholders not physically present at a
meeting of stockholders may, by means of remote communication, participate and be deemed present in
person and vote at a meeting of stockholders whether such meeting is to be held at a designated
place or solely by means of remote communication, provided that: (a) the Company shall implement
reasonable measures to verify that each person deemed present and permitted to vote at the meeting
by means of remote communication is a stockholder or proxyholder; (b) the Company shall implement
reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to
participate in the meeting and to vote on matters submitted to the stockholders, including an
opportunity to read or hear the proceedings of the meeting substantially concurrently with such
proceedings; and (c) if any stockholder or proxyholder votes or takes other action at the meeting
by means of remote communication, a record of such vote or other action shall be maintained by the
Company.
Section 4.
Notice of Meetings and Adjourned Meetings
. Written or other proper notice
of any meeting of stockholders stating the place, if any, date and hour of the meeting, the means
of remote communication, if any, by which stockholders and proxyholders may be deemed to be present
in person and vote at such meeting, the information needed to access the stockholders’ list during
the meeting if the meeting is held by means of remote communication and the purpose or purposes for
which the meeting is called, shall be given to each stockholder entitled to vote at such meeting
not less than 10 nor more than 60 days before the date of the meeting. Without limiting the manner
by which notice otherwise may be given effectively to stockholders, any
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notice to stockholders given by the Company under any provision of these Amended and Restated
By-laws (the “By-laws”) or otherwise shall be effective if given by a form of electronic
transmission consented to by the stockholder to whom the notice is given; any such consent shall be
deemed revoked if (a) the Company is unable to deliver by electronic transmission two consecutive
notices given by the Company in accordance with such consent, and (b) such inability becomes known
to the Secretary or an Assistant Secretary of the Company or to the transfer agent, or other person
responsible for the giving of notice; provided, however, that the inadvertent failure to treat such
inability as a revocation shall not invalidate any meeting or other action. Notice given pursuant
to the preceding sentence shall be deemed given: (i) if by facsimile telecommunication, when
directed to a number at which the stockholder has consented to receive notice; (ii) if by
electronic mail, when directed to an electronic mail address at which the stockholder has consented
to receive notice; (iii) if by a posting on an electronic network together with separate notice to
the stockholder of such specific posting, upon the later of (A) such posting, and (B) the giving of
such separate notice; and (iv) if by any other form of electronic transmission, when directed to
the stockholder in the manner consented to by the stockholder.
When a meeting is adjourned to another time or place, if any, notice need not be given of the
adjourned meeting if the time and place, if any, thereof, and the means of remote communication, if
any, by which stockholders and proxyholders may be deemed to be present in person and vote at such
adjourned meeting, are announced at the meeting at which the adjournment is taken. At the
adjourned meeting the Company may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than 30 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.
For purposes of these By-laws, “electronic transmission” means any form of communication, not
directly involving the physical transmission of paper, that creates a record that may be retained,
retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by
such a recipient through an automated process.
Section 5.
Stockholders’ List
. The officer who has charge of the stock ledger of the
Company shall prepare and make, at least 10 days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and
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 for a period of at least 10 days prior to the meeting, either (a) on a
reasonably accessible electronic network, provided that the information required to gain access to
such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the
principal place of business of the Company. If the meeting is to be held at a place, the list
shall 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. If the meeting is to be held solely by means
of remote communication, then the list also shall be open to the examination of any stockholder
during the whole time of the meeting on a reasonably accessible electronic network, and the
information required to access such list shall be provided with the notice of the meeting.
Section 6.
Quorum
. At any meeting of the stockholders, except as otherwise provided
by the Delaware General Corporation Law, the Certificate of Incorporation, or these By-Laws, a
majority of the shares entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum for the transaction of business;
provided
, that no action required by
the Certificate of Incorporation or these By-laws to be authorized or taken by a designated
proportion of shares may be authorized or taken by a lesser proportion;
provided,
further
, that where a separate vote by a class or classes of shares is required by law, the
Certificate of Incorporation or these By-laws, a majority of the outstanding shares of such class
or classes, present in person or represented by
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proxy, shall constitute a quorum entitled to take action with respect to that vote. If such quorum
shall not be present or represented by proxy at any meeting of the stockholders, the stockholders
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 shall be present or
represented by proxy.
Section 7.
Voting
. In all matters other than the election of Directors and other
than any matters upon which by express provision of the Delaware General Corporation Law, the
Certificate of Incorporation or of these By-laws a different vote is required, the vote of a
majority of the shares entitled to vote on the subject matter and present in person or represented
by proxy at the meeting shall be the act of the stockholders. Directors shall be elected by a
plurality of the votes of the shares entitled to vote on the election of Directors and present in
person or represented by proxy at the meeting. Except as otherwise provided in the Certificate of
Incorporation, each stockholder entitled to vote at any meeting of the stockholders shall be
entitled to one vote for each share of capital stock held by such stockholder.
Section 8.
Proxies
. Each stockholder entitled to vote at a meeting of the
stockholders may authorize, by any means permitted pursuant to the Delaware General Corporation Law
and approved by the Board, another person or persons to act for him by proxy. No such proxy shall
be voted or acted upon after three years from its date, unless the proxy provides for a longer
period.
Section 9.
Inspectors
. The Board shall, in advance of any meeting of stockholders,
appoint one or more inspectors of election to act as judges of the voting, to determine those
entitled to vote at any such meeting, or any adjournments thereof, and to make a written report of
any such meeting. The Board may designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is able to act at a meeting of
stockholders, the presiding officer of the meeting may appoint one or more substitute inspectors.
Section 10.
Action of Stockholders Without a Meeting
. Pursuant to the Company’s
Certificate of Incorporation, the right of the stockholders to take any action by consent in
writing without a regular or special meeting of the stockholders is expressly denied.
Section 11.
Order of Business.
The Chairman, or such other officer of the Company
designated by a majority of the Board, will call meetings of the stockholders to order and will act
as presiding officer thereof. Unless otherwise determined by the Board prior to the meeting, the
presiding officer of the meeting of the stockholders will also determine the order of business and
have the authority in his or her sole discretion to regulate the conduct of any such meeting,
including without limitation by imposing restrictions on the persons (other than stockholders of
the Company or their duly appointed proxies) that may attend any such stockholders’ meeting, by
ascertaining whether any stockholder or his proxy may be excluded from any meeting of the
stockholders based upon any determination by the presiding officer, in his sole discretion, that
any such person has unduly disrupted or is likely to disrupt the proceedings thereat, and by
determining the circumstances in which any person may make a statement or ask questions at any
meeting of the stockholders.
Section 12.
Submission of Questionnaire, Representation and Agreement
. To be
eligible to be a nominee for election or re-election as a Director of the Company, a person must
deliver (in accordance with the time periods prescribed for delivery of notice under Section 1 of
this Article III) to the Secretary at the principal executive offices of the Company a written
questionnaire with respect to the background and qualification of such person and the background of
any other person or entity on whose behalf the nomination is being made (which questionnaire shall
be provided by the Secretary upon written request) and a written representation and agreement
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(in the form provided by the Secretary upon written request) that such person (A) is not and will
not become a party to (1) any agreement, arrangement or understanding with, and has not given any
commitment or assurance to, any person or entity as to how such person, if elected as a Director of
the Company, will act or vote on any issue or question (a “Voting Commitment”) that has not been
disclosed to the Company or (2) any Voting Commitment that could limit or interfere with such
person’s ability to comply, if elected as a Director of the Company, with such person’s fiduciary
duties under applicable law, (B) is not and will not become a party to any agreement, arrangement
or understanding with any person or entity other than the Company with respect to any direct or
indirect compensation, reimbursement or indemnification in connection with service or action as a
Director that has not been disclosed therein, and (C) in such person’s individual capacity and on
behalf of any person or entity on whose behalf the nomination is being made, would be in
compliance, if elected as a Director of the Company, and will comply with all applicable publicly
disclosed corporate governance, conflict of interest, confidentiality and stock ownership and
trading policies and guidelines of the Company.
9
Section 13.
General
.
(1) Only such persons who are nominated in accordance with the procedures set forth in this
Article III shall be eligible to serve as Directors and only such business shall be conducted at a
meeting of stockholders as shall have been brought before the meeting in accordance with the
procedures set forth in this Article III. Except as otherwise provided herein, by law or by the
Certificate of Incorporation, the Chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought before the meeting was made
or proposed, as the case may be, in accordance with the procedures set forth in this Article III
and, if any proposed nomination or business is not in compliance with this Article III, to declare
that such defective proposal or nomination shall be disregarded.
(2) For purposes of this Article III, “public announcement” shall mean disclosure in a press
release reported by a national news service or in a document publicly filed by the Company with the
Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the
rules and regulations promulgated thereunder.
(3) Notwithstanding the foregoing provisions of this Article III, a stockholder shall also
comply with all applicable requirements of the Exchange Act and the rules and regulations
promulgated thereunder with respect to the matters set forth in this Article III; provided,
however, that any references herein to the Exchange Act or the rules or regulations promulgated
thereunder are not intended to and shall not limit the requirements applicable to nominations or
proposals as to any other business to be considered pursuant hereto. Nothing in this Article III
shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the
Company’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of
any series of Preferred Stock if and to the extent provided for herein, by law or by the
Certificate of Incorporation.
ARTICLE IV
BOARD OF DIRECTORS
Section 1.
General Powers
. The business and affairs of the Company shall be managed
by or under the direction of a Board, except as may be otherwise provided in the Delaware General
Corporation Law or in the Certificate of Incorporation.
Section 2.
Number, Election, and Terms
. Subject to the rights, if any, of any series
of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock
Designation, and to the minimum and maximum number of authorized Directors provided in the
Certificate of Incorporation, the authorized number of Directors may be determined from time to
time by (i) resolution of the Board adopted by the affirmative vote of a majority of the entire
Board or (ii) by the affirmative vote of the holders of a majority of shares of the Voting Stock at
any annual meeting of stockholders called for that purpose at which a quorum is present;
provided,
however,
that the number of Directors fixed by the stockholders at any
meeting many not be greater by more than one Director than the number fixed or authorized at the
next preceding annual meeting of stockholders, and,
provided,
further,
that no
reduction in the number of Directors by the stockholders shall of itself have the effect of
shortening the term of any incumbent Director. Directors may, but need not, be stockholders. The
Directors, other than those who may be elected by the holders of any series of Preferred Stock,
will be classified with respect to the time for which they severally hold office in accordance with
the Certificate of Incorporation.
10
Section 3.
Removal
. Subject to the rights, if any, of the holders of any series of
Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock
Designation, any Director may be removed from office by the stockholders only for cause and only in
the manner provided in the Certificate of Incorporation and, if applicable, any amendment to this
Section 3.
Section 4.
Vacancies and Newly Created Directorships
. Subject to the rights, if any,
of the holders of any series of Preferred Stock to elect additional Directors under circumstances
specified in a Preferred Stock Designation, newly created directorships resulting from any increase
in the number of Directors and any vacancies on the Board resulting from death, resignation,
disqualification, removal, or other cause will be filled solely by the affirmative vote of a
majority of the remaining Directors then in office, even though less than a quorum of the Board, or
by a sole remaining Director. Any Director elected in accordance with the preceding sentence will
hold office for the remainder of the full term of the class of Directors in which the new
directorship was created or the vacancy occurred and until such Director’s successor is elected and
qualified. No decrease in the number of Directors constituting the Board will shorten the term of
an incumbent Director.
Section 5.
Resignation
. Any Director may resign at any time upon notice given in
writing or by electronic transmission to the Company. A resignation from the Board shall be deemed
to take effect immediately upon receipt of such notice or at such other time as the Director may
specify in such notice.
Section 6.
Annual Meeting
. Immediately following each annual meeting of stockholders
for the election of Directors, the Board may meet for the purpose of organization, the election of
officers and the transaction of other business at the place, if any, where the annual meeting of
stockholders for the election of Directors is held. Notice of such meeting need not be given.
Such meeting may be held at any other time or place, if any, which shall be specified in a notice
given as hereinafter provided for special meetings of the Board or in a consent and waiver of
notice thereof signed by all of the Directors.
Section 7.
Regular Meetings
. Regular meetings of the Board may be held at such
places (within or without the State of Delaware), if any, and at such times as the Board shall by
resolution determine. If any day fixed for a regular meeting shall be a legal holiday at the place
where the meeting is to be held, then the meeting which would otherwise be held on that day shall
be held at such place, if any, at the same hour and on the next succeeding business day not a legal
holiday. Notice of regular meetings need not be given.
Section 8.
Special Meetings
. Special meetings of the Board shall be held whenever
called by the Chairman of the Board, President or by any two of the Directors. Notice of each such
meeting shall be mailed to each Director, addressed to him at his residence or usual place of
business, at least three days before the day on which the meeting is to be held, or shall be sent
to him by telegram or cablegram so addressed, or shall be delivered personally or by telephone or
telecopy or other electronic or wireless means, at least 24 hours before the time the meeting is to
be held. Each such notice shall state the time and place (within or without the State of
Delaware), if any, of the meeting but need not state the purposes thereof, except as otherwise
required by the Delaware General Corporation Law or by these By-laws.
Section 9.
Quorum: Voting Adjournment
. Except as otherwise provided by the
Certificate of Incorporation or by these By-laws, a majority of the total number of Directors shall
constitute a quorum for the transaction of business at any meeting, and the vote of a majority of
the Directors present at a meeting at which a quorum is present shall be the act of the Board. In
the absence of a quorum, the Director or Directors present at any meeting may adjourn such meeting
from time to time until a quorum shall be present. Notice of any adjourned meeting need not be
given.
11
Section 10.
Communications
. Members of the Board, or of any committee thereof, may
participate in a meeting of such board or committee by means of conference telephone or other
communications equipment by means of which all persons participating in the meeting can hear each
other, and participation in a meeting pursuant to this Section 10 shall constitute presence in
person at such meeting.
Section 11.
Action of Directors Without a Meeting
. Except as may be otherwise
provided for in the Certificate of Incorporation, any action required or permitted to be taken at
any meeting of the Board, or of any committee thereof, may be taken without a meeting if all
members of the Board or such committee, as the case may be, consent thereto in writing or by
electronic transmission, and such written consent or consents or electronic transmission or
transmissions are filed with the minutes of proceedings of the Board or such committee. Such
filings shall be in paper form if the minutes are maintained in paper form and shall be in
electronic form if the minutes are maintained in electronic form.
Section 12.
Compensation
. The Board may establish the compensation for, and
reimbursement of the expenses of, Directors for membership on the Board and on committees of the
Board, attendance at meetings of the Board or committees of the Board, and for other services by
Directors to the Company or any of its majority-owned subsidiaries. Nothing herein contained shall
be construed so as to preclude any Director from serving the Company in any other capacity, or from
serving any of its stockholders, subsidiaries or affiliated corporations in any capacity, and
receiving compensation therefor.
Section 13.
Committees
. The Board may, by resolution passed by a majority of the
whole Board, designate one or more committees, each committee to consist of three or more of the
Directors of the Company. 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, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he, she or they constitute
a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of
any such absent or disqualified member. Subject to the limitations of Section 141(c) of the
Delaware General Corporation Law, as amended from time to time (or of any successor thereto,
however denominated), any such committee, to the extent provided in the Board resolution, shall
have and may exercise the powers and authority of the Board in the management of the business and
affairs of the Company, and may authorize the seal of the Company (if any) to be affixed to all
papers which may require it. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board. Each committee shall keep regular
minutes of its meetings and report the same to the Board when required
.
ARTICLE V
NOTICES
Section 1.
Notices
. Whenever, under the provisions of the Delaware General
Corporation Law or of the Certificate of Incorporation or these By-laws, notice is required to be
given to any Director or stockholder, it shall not be necessary that personal notice be given, and
such notice may be given in writing, by mail, addressed to such Director or stockholder, at his
address as it appears on the records of the Company or at his residence or usual place of business,
with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited in the United States mail. Notice also may be given in any other proper form,
as authorized by the Delaware General Corporation Law. Notice that is given by facsimile shall be
deemed delivered when sent to a number at which any Director or stockholder has consented to
receive such notice.
12
Notice by telegram or cablegram shall be deemed to be given when the same shall be filed. Notice
that is given in person or by telephone shall be deemed to be given when the same shall be
delivered. Without limiting the manner by which notice otherwise may be given effectively to any
Director or stockholder, any notice given under any provision of these By-laws shall be effective
if given by a form of electronic transmission consented to by such person. Notice given by
electronic mail shall be deemed delivered when directed to an electronic mail address at which such
person has consented to receive notice and notice given by a posting on an electronic network
together with separate notice to such person of such specific posting shall be deemed delivered
upon the later of (a) such posting and (b) the giving of such separate notice. Notice given by any
other form of electronic transmission shall be deemed given when directed to any Director or
stockholder in the manner consented to by such Director or stockholder.
Section 2.
Waiver of Notice
. Whenever any notice is required to be given under any
provision of the Delaware General Corporation Law or of the Certificate of Incorporation or these
By-laws, a written waiver, signed by the person or persons entitled to said notice, or a waiver by
electronic transmission by the person or persons entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when the 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 is not lawfully called or convened.
ARTICLE VI
OFFICERS
Section 1.
Officers
. The officers of the Company shall be a President, a Secretary,
a Treasurer and, if the Board shall so determine, or as may be deemed necessary by the Board from
time to time, a Chairman of the Board, one or more Vice Presidents and other officers and assistant
officers. The Chairman of the Board, if any, shall be chosen from among the members of the Board;
however; none of the other officers need be a Director. Any number of offices may be held by the
same person.
Section 2.
Election of Officers
. Each officer of the Company shall be elected by the
Board and shall hold office at the pleasure of the Board until his successor has been elected or
until his earlier resignation or removal.
Section 3.
Resignation
. Any officer may resign at any time by giving written notice
of his resignation to the Company. Any such resignation shall take effect immediately upon receipt
of such notice or at such other time specified in such notice. Unless otherwise specified in such
notice, the acceptance of such resignation by the Company shall not be necessary to make it
effective.
Section 4.
Removal
. Any officer may be removed at any time, either with or without
cause, by action of the Board.
Section 5.
Vacancies
. A vacancy in any office because of death, resignation, removal
or any other reason shall be filled by the Board.
Section 6.
Powers and Duties
. All officers, as between themselves and the Company,
shall have such authority and perform such duties as are customarily incident to their respective
offices, and as may be specified from time to time by the Board, regardless of whether such
authority and duties are customarily incident to such office. In the absence of any officer of the
Company, or for any other reason the Board may deem
13
sufficient, the Board may delegate for the time being the powers or duties of such officer, or any
of them, to any other officer or to any Director. The Board may from time to time delegate to any
officer the authority to appoint and remove subordinate officers and to prescribe their authority
and duties.
Section 7.
Compensation
. The compensation of the officers and agents of the Company
shall be fixed by the Board and the Board may delegate such authority to a committee of the Board
or to any one or more officers of the Company.
ARTICLE VII
SHARES AND THEIR TRANSFER
Section 1.
Share Certificates
. Shares of stock of the Company may be certificated or
uncertificated, as provided under the Delaware General Corporation Law. Each stockholder, upon
written request to the transfer agent or registrar of the Company, shall be entitled to a
certificate of stock of the Company in such form as may from time to time be prescribed by the
Board, subject to applicable legal requirements. Each such certificate will be numbered and its
issuance recorded in the books of the Company, and such certificate will exhibit the holder’s name
and the number of shares and will be signed by, or in the name of, the Company by the Chairman of
the Board or the President and the Secretary or an Assistant Secretary, or the Treasurer or an
Assistant Treasurer, and will also be signed by, or bear the facsimile signature of, a duly
authorized officer or agent of any properly designated transfer agent of the Company. Any or all
of the signatures and the seal of the Company, if any, upon such certificates may be facsimiles,
engraved, or printed. Such certificates may be issued and delivered notwithstanding that the
person whose facsimile signature appears thereon may have ceased to be such officer at the time the
certificates are issued and delivered.
Section 2.
Classes of Stock
. The designations, powers, preferences and relative,
participating, optional or other special rights of the various classes of stock or series thereof,
and the qualifications, limitations or restrictions thereof, will be set forth in full or
summarized on the face or back of the certificates which the Company issues to represent its stock
or, in lieu thereof, such certificates will set forth the office of the Company from which the
holders of certificates may obtain a copy of such information at no charge. For uncertificated
shares, the holder thereof may obtain a copy of the information described in this section upon
written request to the Company at no charge to such holder.
Section 3.
Lost, Stolen or Destroyed Certificates
. The Board may direct a new
certificate or certificates to be issued in place of any certificate or certificates theretofore
issued by the Company alleged to have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate for stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the Board 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 his legal representative, to advertise the same
in such manner as it shall require and/or to give the Company a bond in such sum as it may direct
as indemnity against any claim that may be made against the Company with respect to the certificate
or certificates alleged to have been lost, stolen or destroyed. However, if such shares have
ceased to be certificated, a new certificate shall be issued only upon written request to the
transfer agent or registrar of the Company.
Section 4.
Transfers
. Subject to any restrictions on transfer and unless otherwise
provided by the Board, shares of stock of the Company may be transferred only on the books of the
Company, if such shares are certificated, by the surrender to the Company or its transfer agent of
the certificate therefore properly endorsed or
14
accompanied by a written assignment or power of attorney properly executed, with transfer stamps
(if necessary) affixed, or upon proper instructions from the holder of uncertificated shares, in
each case with such proof of the authenticity of signature as the Company or its transfer agent may
reasonably require.
Section 5.
Record Dates
. In order that the Company may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to
receive payment of any dividend or other distribution or allotment of any rights, or 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 may fix a record date, which record date shall not precede the date
upon which the resolution fixing such record date is adopted by the Board. In the case of (a) a
meeting, such record date also shall not be more than 60 nor less than 10 days before the date of
such meeting; or (b) the payment of any dividend or other distribution, allotment of any rights,
exercise of any rights in respect of any change, conversion or exchange of stock or any other
lawful action, such record date also shall not be more than 60 days prior to such action. 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;
provided,
however
, that
the Board may fix a new record date for the adjourned meeting.
Section 6.
Protection of Corporation
. The Company 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.
ARTICLE VIII
BANKING
All funds of the Company not otherwise employed shall be deposited from time to time to the
credit of the Company in such banks, trust companies or other depositaries as the Board may
authorize. The Board may make such special rules and regulations with respect to such bank
accounts, not inconsistent with the provisions of these By-laws, as it may deem expedient. For the
purpose of deposit and for the purpose of collection for the account of the Company, checks, drafts
and other orders for the payment of money which are payable to the order of the Company shall be
endorsed, assigned and delivered by such person or persons and in such manner as may from time to
time be authorized by the Board.
ARTICLE IX
FORM OF RECORDS
Any records maintained by the Company in the regular course of its business, including its
stock ledger, books of account and minute books, may be kept in any manner authorized by the
Delaware General Corporation Law, including by means of, or in the form of, any storage device or
method, provided that records so kept can be converted into clearly legible paper form within a
reasonable time. The Company shall so convert any records kept in such manner upon the request of
any person entitled to inspect such records pursuant to the Delaware General Corporation Law.
15
ARTICLE X
RELIANCE ON BOOKS, REPORTS AND RECORDS
Each Director, each member of a committee designated by the Board, and each officer of the
Company will, in the performance of his or her duties, be fully protected in relying in good faith
upon the records of the Company and upon such information, opinions, reports, or statements
presented to the Company by any of the Company’s officers or employees, or committees of the Board,
or by any other person or entity as to matters the Director, committee member, or officer believes
are within such other person’s professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company.
ARTICLE XI
CORPORATE SEAL
The corporate seal of the Company shall be in circular form and shall contain the name of the
Company. Failure to affix the corporate seal to any instrument executed on behalf of the Company
shall not affect the validity of such instrument.
ARTICLE XII
EMERGENCY BY-LAWS
The Board may adopt, either before or during an emergency, as that term is defined by the
Delaware General Corporation Law, any emergency by-laws permitted by the Delaware General
Corporation Law which shall be operative only during such emergency. In the event the Board does
not adopt any such emergency by-laws, the special rules provided in the Delaware General
Corporation Law shall be applicable during an emergency as therein defined.
ARTICLE XIII
SECTION HEADINGS
The headings contained in these By-laws are for reference purposes only and shall not be
construed to be part of and shall not affect in any way the meaning or interpretation of these
By-laws.
ARTICLE XIV
AMENDMENTS
Except as otherwise provided by law or by the Certificate of Incorporation or these By-Laws,
these By-Laws or any of them may be amended in any respect or repealed at any time, either (i) at
any meeting of stockholders, provided that any amendment or supplement proposed to be acted upon at
any such meeting has been described or referred to in the notice of such meeting; and
provided
,
however
, that the affirmative vote of at least 80% of the Voting Stock,
voting together as a single class, is required to amend, or repeal, or to adopt any provision
inconsistent with, Article IV, Section 2, relating to the number, election and terms of office of
Directors, or (ii) at any meeting of the Board, provided that no amendment adopted by the Board may
vary or conflict with any amendment adopted by the stockholders in accordance with the Certificate
of Incorporation and these By-Laws.
16
Exhibit 4.1
EXECUTION VERSION
RPM INTERNATIONAL INC.
and
NATIONAL CITY BANK
RIGHTS AGREEMENT
Dated as of April 21, 2009
TABLE OF CONTENTS
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PAGE
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Section 1. Certain Definitions
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1
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Section 2. Appointment of Rights Agent
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4
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Section 3. Issue of Right Certificates
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5
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Section 4. Form of Right Certificates
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6
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Section 5. Countersignature and Registration
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7
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Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates
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7
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights
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8
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Section 8. Cancellation and Destruction of Right Certificates
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9
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Section 9. Reservation and Availability of Shares of Common Stock
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9
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Section 10. Common Stock Record Date
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11
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Section 11. Adjustment of Purchase Price, Number and Type of Shares or
Number of Rights
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11
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Section 12. Certificate of Adjusted Purchase Price or Number of
Shares
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19
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Section 13. Notice of Adjusted Purchase Price or Number or Type of
Shares to Holders of Rights
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19
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Section 14. Fractional Rights and Fractional Shares
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19
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Section 15. Rights of Action
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20
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Section 16. Agreement of Rights Holders
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20
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Section 17. Right Certificate Holder Not Deemed a Stockholder
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21
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Section 18. Concerning the Rights Agent
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21
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Section 19. Merger or Consolidation or Change of Name of Rights Agent
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22
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Section 20. Duties of Rights Agent
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23
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PAGE
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Section 21. Change of Rights Agent
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25
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Section 22. Issuance of New Right Certificates
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26
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Section 23. Redemption
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26
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Section 24. Notice of Certain Events
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27
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Section 25. Notices
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28
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Section 26. Supplements and Amendments
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28
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Section 27. Exchange
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29
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Section 28. Successors
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30
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Section 29. Benefits of this Agreement
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31
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Section 30. Determinations and Actions by Directors
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31
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Section 31. Severability
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31
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Section 32. Governing Law
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32
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Section 33. Counterparts
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32
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Section 34. Descriptive Headings
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32
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Section 35. Force Majeure
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32
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ii
Rights Agreement, dated as of April 21, 2009, (this “Agreement”), between RPM International
Inc., a Delaware corporation (the “Company”), and National City Bank, as rights agent (the “Rights
Agent”).
RECITALS
On April 21, 2009, the Directors of the Company authorized and declared a dividend consisting
of one right (“Right”) for each share of common stock, par value $0.01 per share, of the Company
(the “Common Stock”) of the Company outstanding as of the Close of business on May 11, 2009 (the
“Record Date”), each Right initially representing the right to purchase one-tenth of one share of
Common Stock on the terms and subject to the conditions herein set forth, and have further
authorized and directed the issuance of one Right (subject to adjustment as provided herein) with
respect to each share of Common Stock issued or delivered by the Company (whether originally issued
or delivered from the Company’s treasury) after the Record Date but prior to the earlier of the
Distribution Date (in the case of shares of Common Stock issued upon conversion of the Company’s
convertible securities, prior to the tenth day after the Distribution Date), and the Expiration
Date (each as hereinafter defined), or as provided in Section 27.
Accordingly, in consideration of the premises and the mutual agreements herein set forth, the
parties hereto hereby agree as follows:
Section 1.
Certain Definitions
.
For purposes of this Agreement, the following terms have the meanings indicated:
(a) “Acquiring Person” shall mean any Person (other than the Company, any Subsidiary,
any employee benefit or stock ownership plan of the Company or of any Subsidiary, any entity
holding Common Stock for or pursuant to any such plan, or any Person who, prior to the
Company’s public announcement of the Directors’ approval of this Agreement, is the
Beneficial Owner of Common Stock equal to or in excess of 15% of the Common Stock then
outstanding (a “Current 15% Owner”);
provided
,
however
, that if following
such public announcement of the Directors’ approval of this Agreement, such Current 15%
Owner becomes the Beneficial Owner of any additional shares of Common Stock and is the
Beneficial Owner of Common Stock equal to or in excess of 15% of the Common Stock then
outstanding, then such Current 15% Owner shall be deemed an “Acquiring Person”) who or that,
together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the Common Stock then outstanding,
provided
,
however
, that a
Person will not be deemed to have become an Acquiring Person solely as a result of a
reduction in the number of shares of Common Stock outstanding unless and until (i) such time
as such Person or any Affiliate or Associate of such Person shall thereafter become the
Beneficial Owner of any additional shares of Common Stock, other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which all holders of
Common Stock are treated equally, or (ii) any other Person who is the Beneficial Owner of
any Common Stock shall thereafter become an Affiliate or Associate of such Person.
Notwithstanding the foregoing, if the Directors of the Company determine in good faith that
a Person who
1
would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an Acquiring Person as defined pursuant to the foregoing provisions of
this paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for any
purposes of this Agreement.
(b) “Affiliate” and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), as in effect on the date hereof.
(c) A Person shall be deemed the “Beneficial Owner” of, and to “beneficially own,” any
securities:
(i) the beneficial ownership of which such Person or any of such Person’s
Affiliates or Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise (in each case, other than upon exercise or exchange of the Rights);
provided
,
however
, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, securities tendered pursuant to an offer to
purchase or a tender or exchange offer made by or on behalf of such Person or any of
such Person’s Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or
(ii) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has or shares the right to vote or dispose of, including
pursuant to any agreement, arrangement or understanding (whether or not in writing);
or
(iii) of which any other Person is the Beneficial Owner, if such Person or any
of such Person’s Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) with such other Person (or any of such
other Person’s Affiliates or Associates) with respect to acquiring, holding, voting
or disposing of any securities of the Company; or
(iv) in respect of which such Person or any of such Person’s Affiliates or
Associates has a Synthetic Long Position;
provided
,
however
, that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, any security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding (whether or not in writing)
which (1) arises solely from a revocable proxy given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules
and regulations of the Exchange Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report), or (B)
2
if such beneficial ownership arises solely as a result of such Person’s status as a
“clearing agency,” as defined in Section 3(a)(23) of the Exchange Act; and
provided,
further
, that nothing in this paragraph (c) shall cause a Person engaged in business as
an underwriter of securities to be the Beneficial Owner of, or to beneficially own, any
securities acquired through such Person’s participation in good faith in an underwriting
syndicate until the expiration of 40 calendar days after the date of such acquisition, or
such later date as the Directors of the Company may determine in any specific case.
(d) “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which
banking institutions in the States of Ohio, Delaware, or New York (or such other state in
which the principal office of the Rights Agent is located) are authorized or obligated by
law or executive order to close.
(e) “Close of business” on any given date shall mean 5:00 p.m., Cleveland, Ohio time,
on such date;
provided
,
however
, that if such date is not a Business Day it
shall mean 5:00 p.m., Cleveland, Ohio time, on the next succeeding Business Day.
(f) “Common Stock” when used with reference to the Company shall mean the shares of
Common Stock, par value $0.01 per share, of the Company;
provided
that, if the
Company is the continuing or surviving corporation in a transaction described in Section
11(d)(ii) hereof, “Common Stock” when used with reference to the Company shall mean the
capital stock with the greatest aggregate voting power of the Company, or, if the Company is
a subsidiary of another corporation or business trust, the corporation or business trust
that ultimately controls the Company. “Common Stock” when used with reference to any
corporation or business trust, other than the Company, shall mean the capital stock with the
greatest aggregate voting power of such corporation or business trust, or, if such
corporation or business trust is a subsidiary of another corporation or business trust, the
corporation or business trust which ultimately controls such first-mentioned corporation or
business trust.
(g) “Distribution Date” shall mean the earlier of: (i) the close of business on the
tenth calendar day following the Share Acquisition Date, or (ii) the close of business on
the tenth Business Day (or, unless the Distribution Date shall have previously occurred,
such later date as may be specified by the Directors of the Company) after the date of the
commencement of a tender or exchange offer by any Person (other than the Company or any
Subsidiary or any employee benefit or stock ownership plan of the Company or of any
Subsidiary or any entity holding Common Stock for or pursuant to the terms of any such
plan), if upon the consummation thereof such Person would be the Beneficial Owner of 15% or
more of the then-outstanding Common Stock.
(h) “Expiration Date” shall mean the earliest of (i) the close of business on the Final
Expiration Date, (ii) the time at which the Rights are redeemed as provided in Section 23
hereof, and (iii) the time at which all exercisable Rights are exchanged as provided in
Section 27 hereof.
(i) “Final Expiration Date” shall mean the tenth anniversary of the Record Date.
3
(j) “Flip-in Event” shall mean the event described in Section 11(a)(ii) hereof.
(k) “Flip-over Event” shall mean any event described in clauses (i), (ii) or (iii) of
Section 11(d) hereof.
(l) “Person” shall mean any individual, firm, corporation or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(m) “Share Acquisition Date” shall mean the first date of public announcement by the
Company (by press release, filing made with the Securities and Exchange Commission or
otherwise) that an Acquiring Person has become such.
(n) “Subsidiary” shall mean any corporation or other entity of which a majority of the
voting power of the voting equity securities or equity interests is owned, directly or
indirectly, by the Company.
(o) “Synthetic Long Position” shall mean, with respect to any security, any option,
warrant, convertible security, stock appreciation right or other contractual right, whether
or not presently exercisable, which has an exercise or conversion privilege or a settlement
payment or mechanism at a price related to such security or a value determined in whole or
part with reference to, or derived in whole or in part from, the market price or value of
such security (without regard to whether such instrument or right (i) conveys any voting
power to such Person or any Affiliate or Associate thereof, or (ii) is required to be, or
capable of being, settled through delivery of such securities) and which increases in value
as the value of such security increases or which provides to the holder of such instrument
or right an opportunity, directly or indirectly, to profit or share in any profit derived
from any increase in the value of such security, but shall not include interests in
broad-based index options, broad-based index futures, and broad-based publicly traded market
baskets of stocks approved for trading by the appropriate federal governmental authority.
The number of securities in respect of which a Person has a Synthetic Long Position shall be
the notional or other number of securities specified in the documentation evidencing the
Synthetic Long Position as being subject to be acquired upon the exercise or settlement of
the applicable right or as the basis upon which the value or settlement amount of such
right, or the opportunity of the holder of such right to profit or share in any profit, is
to be calculated in whole or in part or, if no such number of securities is specified in
such filing or documentation, as determined by the Directors of the Company in good faith to
be the number of securities to which the Synthetic Long Position relates.
(p) “Triggering Event” shall mean any Flip-in Event or Flip-over Event.
Section 2.
Appointment of Rights Agent
.
The Company hereby appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3 hereof, shall also be, prior to the Distribution
Date, the holders of the Common Stock) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment and hereby certifies that it complies with the
requirements of the New York Stock Exchange governing transfer
4
agents and registrars. The Company may from time to time act as Co-Rights Agent or appoint such
Co-Rights Agents as it may deem necessary or desirable. Any actions which may be taken by the
Rights Agent pursuant to the terms of this Agreement may be taken by any such Co-Rights Agent. To
the extent that any Co-Rights Agent takes any action pursuant to this Agreement, such Co-Rights
Agent shall be entitled to all of the rights and protections of, and subject to all of the
applicable duties and obligations imposed upon, the Rights Agent pursuant to the terms of this
Agreement.
Section 3.
Issue of Right Certificates
.
(a) Until the Distribution Date (i) the Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for Common Stock registered in the names of
the record holders thereof (which certificates for Common Stock shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (ii) the Rights will be transferable only
in connection with the transfer of the underlying Common Stock in the stock transfer books of the
Company maintained by the Company or its appointed transfer agent. As soon as practicable after the
Distribution Date, the Rights Agent will send, at the expense of the Company, by first-class,
insured, postage prepaid mail, to each record holder of shares of Common Stock as of the close of
business on the Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit A hereto, evidencing one Right
for each share of Common Stock so held, subject to adjustment, together with a notice setting forth
the Purchase Price (as defined in Section 4 hereof) as in effect on the Distribution Date. As of
the Distribution Date, the Rights will be evidenced solely by such Right Certificates.
Any Right Certificate issued pursuant to this Section 3 that represents Rights beneficially
owned by an Acquiring Person or any Associate or Affiliate thereof and any Right Certificate issued
at any time upon the transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and any Right
Certificate issued pursuant to Sections 6 or 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall be subject to and
shall contain the following legend or such similar legend as the Company may deem appropriate and
as is not inconsistent with the provisions of this Agreement, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or transaction reporting system on which the Rights may from time
to time be listed or quoted, or to conform to usage:
The Rights represented by this Right Certificate are or were beneficially owned by a
Person who is or was an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may become null and void in the
circumstances specified in Section 11(a)(ii) or Section 11(d) of the Rights
Agreement.
(b) On the Record Date or as soon as practicable thereafter, the Company will make available a
copy of a Summary of Rights to Purchase Shares of Common Stock, in substantially the form attached
hereto as Exhibit B (the “Summary of Rights”), to any holder of
5
Rights who may request it from time to time prior to the Final Expiration Date. With respect
to certificates for shares of Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for shares of Common Stock
registered in the names of the holders thereof. Until the earlier of the Distribution Date and the
Expiration Date, the surrender for transfer of any certificate for shares of Common Stock
outstanding on the Record Date shall also constitute the surrender for transfer of the Rights
associated with the Common Stock represented thereby.
(c) Certificates for shares of Common Stock issued (including, without limitation, any
certificates for shares of Common Stock issued upon conversion of the Company’s convertible
securities or upon exercise of stock options) or surrendered for transfer or exchange after the
Record Date but prior to the earlier of the Distribution Date or the Expiration Date, shall have
stamped on, impressed on, printed on, written on or otherwise affixed to them the following legend
or such similar legend as the Company may deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or
transaction reporting system on which the Common Shares or the Rights may from time to time be
listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof to certain Rights as
set forth in a Rights Agreement between RPM International Inc. and National City
Bank, dated as of April 21, 2009 (the “Rights Agreement”), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of RPM International Inc. The Rights are not exercisable
prior to the occurrence of certain events specified in the Rights Agreement. Under
certain circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may be exchanged, may expire, or may be evidenced by separate certificates
and will no longer be evidenced by this Certificate. RPM International Inc. will
mail to the holder of this Certificate a copy of the Rights Agreement without charge
promptly after receipt of a written request therefor. Under certain circumstances,
Rights that are or were beneficially owned by an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement) and any
subsequent holder of such Rights may become null and void.
With respect to certificates containing the legend described above, until the Distribution Date,
the Rights associated with the Common Stock represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such certificate shall also
constitute the surrender for transfer of the Rights associated with the Common Stock represented
thereby.
Section 4.
Form of Right Certificates
.
The Right Certificates (and the forms of (a) election to purchase shares, (b) assignment and
(c) certificate of exchange to be printed on the reverse thereof) shall be substantially the same
as Exhibit A hereto with such changes, marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may
6
deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made pursuant thereto or
with any exchange on which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 and 22 hereof, the Right Certificates, whenever issued,
shall be dated as of the Record Date, and on their face shall entitle the holders thereof to
purchase such number of shares of Common Stock as shall be set forth therein at the price per whole
share set forth therein (the “Purchase Price”), but the Purchase Price and the number and kind of
securities issuable upon exercise of each Right and the number of Rights outstanding shall be
subject to adjustment as provided herein.
Section 5.
Countersignature and Registration
.
The Right Certificates shall be executed on behalf of the Company by its Chairman of the
Board, President or any Vice President, either manually or by facsimile signature, and have affixed
thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, and issued and delivered by the Company with the same force
and effect as though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Right Certificate, shall be a proper
officer of the company to sign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be kept, at the
principal office of the Rights Agent designated for such purpose and at such other offices as may
be required to comply with any applicable law or with any rule or regulations made pursuant thereto
or with any rule or regulation of any stock exchange or transaction reporting system on which the
Rights may be listed, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 6.
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates
.
Subject to the provisions of Sections 7(e) and 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on the Expiration Date,
any Right Certificate or Certificates representing exercisable rights may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of shares of Common Stock (or other securities, as the case may
be) as the Right Certificate or Right Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered
7
holder desiring to transfer, split up, combine or exchange any Right Certificate, shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the principal office of
the Rights Agent designated for such purpose. Thereupon or as promptly as practicable thereafter,
subject to the provisions of Section 11 and Section 14 hereof, the Company will prepare, execute
and deliver to the Rights Agent, and the Rights Agent will countersign and deliver, a Right
Certificate or Rights Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to them, and, if requested by the
Company, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent, and cancellation of the Right Certificate if
mutilated, the Company will prepare, execute and deliver a new Right Certificate of like tenor to
the Rights Agent and the Rights Agent shall countersign and deliver such new Right Certificate to
the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7.
Exercise of Rights; Purchase Price; Expiration Date of Rights
.
(a) The registered holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after the Distribution Date
and prior to the Expiration Date, upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for such purpose, together with payment
in cash, in lawful money of the United States of America by certified check or bank draft payable
to the order of the Company, equal to the sum of (i) the exercise price for the total number of
securities as to which such surrendered Rights are exercised and (ii) an amount equal to any
applicable transfer tax required to be paid by the holder of such Right Certificate in accordance
with the provisions of Section 9 hereof.
(b) The Purchase Price shall initially be $70.00 (equivalent to $7.00 for each one-tenth of a
share of Common Stock), and shall be subject to adjustment from time to time as provided in Section
11 hereof and shall be payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the Purchase Price for the shares to
be purchased and an amount equal to any applicable transfer tax in cash, or by certified check or
bank draft payable to the order of the Company, the Rights Agent shall thereupon promptly (i)
requisition from any transfer agent of the Common Stock (or make available, if the Rights Agent is
the transfer agent) certificates for the number of whole shares of Common Stock to be purchased and
the Company hereby irrevocably authorizes and directs its transfer agent to comply with all such
requests, (ii) when appropriate, requisition from the Company the amount of cash to be paid or
depositary receipts to be issued in lieu of the issuance
8
of fractional shares in accordance with Section 14 hereof or the amount of cash to be paid in
lieu of the issuance of Common Stock in accordance with Sections 11(a)(iii) or 11(d) hereof, (iii)
promptly after receipt of such certificates (or depositary receipts, when appropriate), cause the
same to be delivered to or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and (iv) when appropriate,
after receipt promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate.
(d) In case the registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to any purported transfer,
split up, combination or exchange of any Right Certificate pursuant to Section 6 hereof or the
exercise of a Right Certificate as set forth in this Section 7 unless the registered holder of such
Right Certificate shall have (i) completed and signed the certificate following the form of
assignment or form of election to purchase, as applicable, set forth on the reverse side of the
Right Certificate surrendered for such transfer, split up, combination, exchange or exercise, and
(ii) provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall have reasonably
requested.
Section 8.
Cancellation and Destruction of Right Certificates
.
All Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its stock transfer
agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered
to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the
Company, or shall, at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.
Section 9.
Reservation and Availability of Shares of Common Stock
.
The Company covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Common Stock or any authorized and issued Common Stock held in its
treasury, the number of shares of Common Stock that will be sufficient to permit the exercise
pursuant to Section 7 hereof of all outstanding Rights; such number of shares of Common Stock
reserved and kept available shall be adjusted from time to time, if and to the extent required,
upon the occurrence of any of the events described in Section 11 hereof.
9
So long as the Company’s shares of Common Stock are listed on a national securities exchange
or quoted on the Nasdaq National Market, the Company shall endeavor to cause, from and after such
time as the Rights become exercisable, all shares of Common Stock reserved for issuance upon
exercise of the Rights to be listed on such exchange or included in the Nasdaq National Market, as
the case may be, upon official notice of issuance.
The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all shares of Common Stock delivered upon exercise of Rights shall be, at the time of
delivery of the certificates for such shares (subject to payment of the Purchase Price), duly and
validly authorized and issued, fully paid, nonassessable and freely tradeable shares, free and
clear of any liens, encumbrances and other adverse claims and not subject to any rights of call or
first refusal.
The Company further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of Common Stock upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a person other than, or the issuance or
delivery of certificates for the shares of Common Stock in a name other than that of, the
registered holder of the Right Certificates evidencing Rights surrendered for exercise, or to issue
or deliver any certificates for shares of Common Stock upon the exercise of any Rights until any
such tax shall have been paid (any such tax being payable by the holder of such Right Certificate
at the time of surrender) or until it has been established to the Company’s satisfaction that no
such tax is due.
The Company also shall use its best efforts (i) to file on an appropriate form, as soon as
practicable following the Distribution Date, a registration statement under the Securities Act of
1933, as amended (the “Securities Act”), with respect to the securities issuable upon exercise of
the Rights, (ii) to cause such registration statement to become effective as soon as practicable
after such filing, and (iii) to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company shall also take such action as may be appropriate under, or to ensure
compliance with, the securities or “blue sky” laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period of time after the
date set forth in clause (i) of the first sentence of this paragraph, the exercisability of the
Rights in order to prepare and file such registration statement and to permit it to become
effective. Upon any such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. In addition, if the Company shall determine
that a registration statement should be filed under the Securities Act or any state securities laws
following the Distribution Date, the Company may temporarily suspend the exercisability of the
Rights in each relevant jurisdiction until such time as a registration statement has been declared
effective and, upon any such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. Notwithstanding anything in this Agreement
to the contrary, the Rights shall not be
10
exercisable in any jurisdiction if the requisite registration or qualification in such jurisdiction
shall not have been effected or the exercise of the Rights shall not be permitted under applicable
law.
Notwithstanding anything in this Agreement to the contrary, after the Distribution Date, the
Company shall not, except as permitted by Section 23 or Section 26 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable
that such action will eliminate or otherwise diminish the benefits intended to be afforded by the
Rights.
In the event that the Company is obligated to pay cash pursuant to Sections 11 or 14 hereof,
it shall make all arrangements necessary so that such cash is available for distribution by the
Rights Agent, if and when appropriate.
Section 10.
Common Stock Record Date
.
Each person in whose name any certificate for shares of Common Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of record of the
shares of Common Stock represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made;
provided
,
however
, that if the
date of such surrender and payment is a date upon which the Common Stock transfer books of the
Company are closed, such person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which the Common Stock
transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11.
Adjustment of Purchase Price, Number and Type of Shares or Number of
Rights
.
The Purchase Price, the number and type of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide the
outstanding shares of Common Stock, (C) combine the outstanding shares of Common Stock into a
smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the
Common Stock (including any such reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), except as otherwise provided in this
Section 11(a) or in Section 11(d) hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and type of shares of capital
11
stock issuable on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such date and at a time
when the Common Stock transfer books of the Company were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof or Section 11(d) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) or Section 11(d) hereof.
(ii) In the event that any Person becomes an Acquiring Person, provision shall be made
so that from and after the Distribution Date each holder of a Right, except as provided
below, shall thereafter have a right to receive, upon exercise thereof in accordance with
the terms of this Agreement at an exercise price per Right equal to the product of ten (10)
times the then-current Purchase Price multiplied by the number of shares of Common Stock for
which a Right is then exercisable, such number of shares of Common Stock as shall equal the
result obtained by (x) multiplying the product of ten (10) times the then-current Purchase
Price by the number of shares of Common Stock for which a Right was exercisable immediately
prior to the first occurrence of a Triggering Event, and dividing that product by (y) 50% of
the current per share market price of the Common Stock (determined pursuant to Section 11(e)
hereof) on the date of the occurrence of such event. Notwithstanding anything in this
Agreement to the contrary, from and after the occurrence of such event (1) any Rights that
are or were acquired or beneficially owned by any Acquiring Person (or any Affiliate or
Associate of such Acquiring Person) shall be void and any holder of such Rights shall
thereafter have no right to exercise such Rights under any provision of this Agreement, (2)
no Right Certificate shall be issued pursuant to this Agreement that represents Rights
beneficially owned by an Acquiring Person or any Affiliate or Associate thereof, (3) no
Right Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person or any Affiliate or Associate thereof or to any nominee of such Acquiring
Person or Affiliate thereof, and (4) any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person or any Affiliate or Associate thereof shall be cancelled.
(iii) Upon the occurrence of a Flip-in Event, if there shall not be sufficient
authorized but unissued shares of Common Stock or authorized and issued shares of Common
Stock held in treasury to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Directors of the Company shall use their best efforts
promptly to authorize additional shares of Common Stock for issuance upon exercise of the
Rights;
provided
,
however
, that if at any time after 90 calendar days after
the first occurrence of a Flip-in Event, there shall not be sufficient shares of Common
Stock available for issuance upon the exercise of a Right, then the Company shall deliver,
upon the surrender of such Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available), and then cash (to the extent permitted by
applicable law and any agreements or instruments to which the Company is a party in effect
immediately prior to the first occurrence of any Flip-in Event), which shares of Common
Stock and cash shall have an aggregate value equal to
12
the excess of (1) the aggregate current per share market price of all the shares of
Common Stock (determined pursuant to Section 11(e) hereof) issuable in accordance with
subsection (ii) of this Section 11(a) upon the exercise of a Right over (2) the product of
ten (10) times the then-current Purchase Price multiplied by the number of shares of Common
Stock for which a Right was exercisable immediately prior to the first occurrence of a
Triggering Event. To the extent that any legal or contractual restrictions prevent the
Company from paying the full amount of cash payable in accordance with the foregoing
sentence, the Company shall pay to holders of the Rights as to which such payments are being
made all amounts which are not then restricted on a pro rata basis. The Company shall
continue to make payments on a pro rata basis as funds become available until such payments
have been paid in full.
(b) In the event that the Company shall fix a record date for the issuance of rights, options
or warrants to all holders of Common Stock entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase shares of Common Stock (or shares having
the same rights, privileges and preferences as the Common Stock (“equivalent common stock”)) or
securities convertible into Common Stock or equivalent common stock at a price per share of Common
Stock or equivalent common stock (or having a conversion price per share, if a security convertible
into Common Stock or equivalent common stock) less than the current per share market price of the
shares of Common Stock (as determined pursuant to Section 11(e) hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number of shares of
Common Stock and/or equivalent common stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of shares of Common Stock outstanding
on such record date plus the number of additional shares of Common Stock and/or equivalent common
stock to be offered for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such consideration shall be
as determined in good faith by the Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all purposes. Shares of
Common Stock owned by or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In the event that the Company shall fix a record date for the making of a distribution to
all holders of Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness, cash (other than a regular periodic cash dividend at a rate not in
excess of 125% of the rate of the last cash dividend theretofore paid), assets, stock (other than a
dividend payable in shares of Common Stock) or subscription rights, options or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such
13
record date shall be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the current per share market
price of the shares of Common Stock (as determined pursuant to Section 11(e) hereof) on such record
date, less the fair market value (as determined in good faith by the Directors of the Company,
whose determination shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes) of the portion of the cash, assets, stock or evidences of indebtedness
so to be distributed (in the case of regular periodic cash dividends at a rate in excess of 125% of
the rate of the last cash dividend theretofore paid, only that portion in excess of 125% of such
rate) or of such subscription rights, options or warrants applicable to one share of Common Stock,
and the denominator of which shall be such current per share market price of the shares of Common
Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date had not been fixed.
(d) In the event that, following the Share Acquisition Date, directly or indirectly:
(i) the Company shall consolidate with, or merge with or into, any other Person and the
Company shall not be the continuing or surviving corporation of such consolidation or
merger; or
(ii) any Person shall consolidate with the Company, or merge with or into the Company
and the Company shall be the continuing or surviving corporation of such merger or
consolidation and, in connection with such merger or consolidation, all or part of the
Common Stock shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property; or
(iii) the Company shall sell or otherwise transfer (or one or more Subsidiaries shall
sell or otherwise transfer), in one or more transactions, assets or earning power
(including, without limitation, securities creating any obligation on the part of the
Company and/or any Subsidiaries) representing in the aggregate more than 50% of the assets
or earning power of the Company and the Subsidiaries (taken as a whole) to any Person or
Persons,
then, and in each such case, proper provision shall be made so that (A) except as provided below,
each holder of a Right shall thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement at an exercise price per Right equal to the product of
ten (10) times the then-current Purchase Price multiplied by the number of shares of Common Stock
for which a Right was exercisable immediately prior to the first occurrence of a Triggering Event,
such number of validly authorized and issued, fully paid, nonassessable and freely tradeable shares
of Common Stock of such surviving, resulting or acquiring Person (including the Company as the
continuing or surviving corporation of a transaction described in clause (ii) above), as the case
may be, free and clear of any liens, encumbrances and other adverse claims and not subject to any
rights of call or first refusal, as shall be equal to the result obtained by (x) multiplying the
product of ten (10) times the then-current Purchase Price by the number of shares of Common Stock
for which a Right was exercisable immediately prior to the first occurrence of
14
a Triggering Event and dividing that product by (y) 50% of the current per share market price of
the Common Stock of such Person (determined pursuant to Section 11(e) hereof) on the date of
consummation of such Flip-over Event; (B) the issuer of such Common Stock shall thereafter be
liable for, and shall assume, by virtue of the consummation of such Flip-over Event, all the
obligations and duties of the Company pursuant to this Agreement; (C) the term “Company” shall
thereafter be deemed to refer to such issuer; and (D) such issuer shall take such steps (including,
but not limited to, the reservation of a sufficient number of its shares of Common Stock in
accordance with Section 9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be
possible, in relation to its shares of Common Stock thereafter deliverable upon the exercise of the
Rights. Notwithstanding the foregoing, if the surviving, resulting or acquiring Person in any
Flip-over Event, is not a corporation or business trust, then, and in each such case, if such
surviving, resulting or acquiring Person is directly or indirectly wholly owned by a corporation or
business trust, then all references to shares of Common Stock of such surviving, resulting or
acquiring Person in this Section 11(d) shall be deemed to be references to the shares of Common
Stock of the corporation or business trust which ultimately controls such Person, and if there is
no such corporation or business trust, (Y) proper provision shall be made so that such surviving,
resulting or acquiring Person shall create or otherwise make available for purposes of the exercise
of the Rights in accordance with the terms of this Agreement, a type or types of security or
securities having a fair market value at least equal to the economic value of the shares of Common
Stock which each holder of a Right would have been entitled to receive if such surviving, resulting
or acquiring Person had been a corporation or a business trust; and (Z) all other provisions of
this Section 11(d) shall apply to the issuer of such securities as if such securities were shares
of Common Stock. The Company shall not consummate any Flip-over Event, unless the issuer of the
shares of Common Stock or other securities, as the case may be, shall have a sufficient number of
authorized shares of Common Stock or other securities which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this Section 11(d) and
unless prior to such consummation the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement providing for the terms set forth in this Section 11 and
further providing that as promptly as practicable after the consummation of any Flip-over Event,
the issuer shall:
(I) prepare and file a registration statement under the Securities Act, with respect to
the Rights and the securities issuable upon exercise of the Rights on an appropriate form,
and shall use its best efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the Expiration Date;
(II) take all such action as may be appropriate under, or to ensure compliance with,
the securities or “blue sky” laws of the various states in connection with the
exercisability of the Rights; and
(III) deliver to holders of the Rights historical financial statements for such issuer
and each of its Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
15
Notwithstanding the foregoing, upon the occurrence of any Flip-over Event, any Rights that are or
were at any time beneficially owned by any Acquiring Person or any Associate or Affiliate of such
Acquiring Person (which Acquiring Person, Associate or Affiliate is, directly or indirectly,
causing such Flip-over Event to occur) after the date upon which such Acquiring Person became such
shall become void and any holder of such Rights shall thereafter have no right to exercise such
Rights under any provision of this Agreement. The provisions of this Section 11(d) shall similarly
apply to successive mergers or consolidations or sales or other transfers. In the event that a
Flip-over Event occurs at any time after the occurrence of a Flip-in Event, the Rights which have
not therefore been exercised shall thereafter become exercisable in the manner described in this
Section 11(d).
(e) For the purpose of any computation hereunder, the “current per share market price” of
Common Stock on any date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date;
provided
,
however
, that in the event that the
current per share market price of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock (i) of a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible into such Common Stock or
(ii) any subdivision, combination or reclassification of such shares of Common Stock, and prior to
the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution or
the record date for such subdivision, combination or reclassification, then, and in each such case,
the “current market price” shall be appropriately adjusted to take into account ex-dividend trading
or to reflect the current market price per share of Common Stock equivalent. The closing price for
each day shall be the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed
or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System (“Nasdaq”) or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the shares of Common
Stock selected by the Directors of the Company. The term “Trading Day” shall mean any day on which
the principal national securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in the State of New York are not
authorized or obligated by law or executive order to close. If the shares of Common Stock are not
publicly held or not so listed or traded, or not the subject of available bid and asked quotes,
“current per share market price” shall mean the fair value per share as determined in good faith by
the Directors of the Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
16
(f) Except as set forth below, no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such price;
provided
,
however
, that any adjustments which by reason of this Section 11(f) are
not required to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share as the case may be. Notwithstanding the first sentence of this
Section 11(f), any adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such adjustment and (ii) the
Expiration Date.
(g) If as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any shares of capital stock of the
Company other than shares of Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the shares contained in
this Section 11 and the provisions of Sections 7, 9, 10 and 14 hereof with respect to the shares of
Common Stock shall apply on like terms to any such other shares.
(h) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the
number of shares of Common Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(i) Unless the Company shall have exercised its election as provided in Section 11(j) hereof,
upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b)
and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of shares
(calculated to the nearest ten-thousandth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.
(j) The Company may elect, on or after the date of any adjustment of the Purchase Price, to
adjust the number of Rights in substitution for any adjustment in the number of shares of Common
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of shares of Common Stock
for which a Right was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of Rights (calculated to
the nearest ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 calendar days later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the
17
number of Rights pursuant to this Section 11(j), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record
of Right Certificates on the record date specified in the public announcement.
(k) Irrespective of any adjustment or change in the Purchase Price or the number or type of
shares issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number of shares which were
expressed in the initial Right Certificate issued hereunder.
(l) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then par value, if any, of the shares of Common Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and nonassessable shares of Common
Stock at such adjusted Purchase Price.
(m) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of any Right exercised after such
record date the shares of Common Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the shares of Common Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment;
provided
,
however
, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to
receive such additional shares upon the occurrence of the event requiring such adjustment.
(n) Anything in Sections 11 (a) through (m), inclusive, hereof to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order that any consolidation or
subdivision of the shares of Common Stock, issuance wholly for cash of any of the shares of Common
Stock at less than the current market price, issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or exchangeable for shares of Common Stock,
stock dividends or issuance of rights, options or warrants referred to hereinabove in this Section
11, hereafter made by the Company to holders of its Common Stock shall not be taxable to such
stockholders.
(o) Notwithstanding any other provision of this Agreement, no adjustment to the Purchase
Price, the number of shares of Common Stock (or fractions of a share) for which a
18
Right is exercisable or the number or Rights outstanding shall be made or be effective if such
adjustment would have the effect of reducing or limiting the benefits the holders of the Rights
would have had absent such adjustment, including, without limitation, the benefits under Sections
11(a)(ii) and 11(d) hereof, unless the terms of this Agreement are amended so as to preserve such
benefits.
Section 12.
Certificate of Adjusted Purchase Price or Number of Shares
.
Whenever an adjustment is made as provided in Section 11 hereof, the Company shall promptly
prepare a certificate setting forth such adjustment, (including a description of any Rights which
have become void as a result thereof), and a brief statement of the facts accounting for such
adjustment and promptly file with the Rights Agent and with each transfer agent for the shares of
Common Stock a copy of such certificate. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained and shall not be obligated or
responsible for calculating any adjustment nor shall it be deemed to have knowledge of such
adjustment unless and until it shall have received such certificate.
Section 13.
Notice of Adjusted Purchase Price or Number or Type of Shares to Holders of
Rights
.
Whenever an adjustment is made as provided in Section 11 hereof after the Distribution Date,
the Company shall mail a brief summary of such adjustment to each holder of a Right Certificate in
accordance with Section 25 hereof.
Section 14.
Fractional Rights and Fractional Shares
.
(a) The Company shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be
paid as promptly as practicable to the registered holders of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to trading or, if the
Rights are not listed or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights selected by the
Directors of the Company. If on any such date no such market maker is making a market in the
19
Rights the fair value of the Rights on such date as determined in good faith by the Directors
of the Company shall be used and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of shares upon exercise of the Rights
or to distribute certificates which evidence fractional shares. Fractions of shares of Common Stock
may, at the election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of shares of Common
Stock. In lieu of fractional shares, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one share of Common Stock. For purposes of this
Section 14(b), the current market value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second sentence of Section 11(e) hereof) for
the Trading Day immediately prior to the date of such exercise or exchange.
(c) The holder of a Right by the acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise or exchange of a Right.
Section 15.
Rights of Action
.
All rights of action in respect of this Agreement, excepting the rights of action given to the
Rights Agent under Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of shares of Common
Stock); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of
shares of Common Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of shares of Common Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific performance of the
obligations under this Agreement, and injunctive relief against actual or threatened violations of
the obligations of any Person subject to this Agreement.
Section 16.
Agreement of Rights Holders
.
Every holder of a Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in connection with
the transfer of shares of Common Stock;
20
(b) after the Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificate or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive fractional Rights and any fractional
securities upon exercise or exchange of a Right, except as otherwise provided in Section 14; and
(e) Notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction
or by a governmental, regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation;
provided
,
however
, that the
Company shall use its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17.
Right Certificate Holder Not Deemed a Stockholder
.
No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of shares of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to confer upon the holder
of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof or exchanged
pursuant to the provisions of Section 27 hereof.
Section 18.
Concerning the Rights Agent
.
The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any
21
loss, liability, suit, action, proceeding or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability. The costs and expenses of enforcing this
right of indemnification shall also be paid by the Company. The indemnification provided for
hereunder shall survive the expiration of the Rights and the termination of this Agreement. The
Rights Agent may conclusively rely upon and shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its administration of
this Agreement in reliance upon any Right Certificate or certificate for shares of Common Stock or
for other securities of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons. Notwithstanding anything in this Agreement to
the contrary, in no event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form
of the action.
Section 19.
Merger or Consolidation or Change of Name of Rights Agent
.
Any corporation into which the Rights Agent or any successor Rights Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at such time any of the
Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
22
Section 20.
Duties of Rights Agent
.
The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, the Rights Agent may consult with
legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board, the President, any Vice President,
the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Right Certificate (except its
countersignature hereof); nor shall it be responsible for any breach by the Company of any covenant
or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible
for any adjustment required under the provisions of Section 11 hereof (including any adjustment
which results in Rights becoming void) or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates after actual notice
of any such adjustment or voidance); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares of Common Stock to
be issued pursuant to this Agreement or any Right Certificate or as to whether any shares of Common
Stock will, when issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further and
23
other acts, instruments and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any one of the Chairman of the Board, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions. Any application by the
Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than ten Business Days after the date
any officer of the Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received written instructions in
response to such application subject to the proposed action or omission and/or specifying the
action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection and continued
employment thereof. The Rights Agent shall not be under any duty or responsibility to ensure
compliance with any applicable federal or state securities laws in connection with the issuance,
transfer or exchange of Right Certificates.
(j) The Rights Agent shall promptly remit to the Company any funds paid to it upon exercise of
the Rights pursuant to Section 7 hereof.
(k) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise,
transfer, split up, combination or exchange, either (i) the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 or 2 thereof, or (ii) any other actual or suspected
irregularity exists, the Rights Agent shall not take any further action with respect to such
requested exercise, transfer, split up, combination or exchange, without first consulting with
24
the Company, and will thereafter take further action with respect thereto only in accordance
with the Company’s written instructions.
(l) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it.
(m) The Rights Agent shall not be required to take notice or be deemed to have notice of any
fact, event or determination (including, without limitation, any dates or events defined in this
Agreement or the designation of any Person as an Acquiring Person, Affiliate or Associate) under
this Agreement unless and until the Rights Agent shall be specifically notified in writing by the
Company of such fact, event or determination.
Section 21.
Change of Rights Agent
.
The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days’ notice in writing mailed to the Company and to each transfer
agent of the shares of Common Stock by registered or certified mail, and, at the expense of the
Company, to the holders of the Right Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent of the shares of
Common Stock by registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice,
submit his Right Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation or other legal entity organized and doing business under the laws of the
United States (or of any state of the United States so long as such corporation is authorized to do
business as a banking institution in such state), in good standing, which is authorized under such
laws to exercise corporate trust powers or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50 million and which shall otherwise meet any
requirements imposed by the New York Stock Exchange on transfer agents and registrars. After
appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the shares of Common Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any
25
notice provided for in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22.
Issuance of New Right Certificates
.
Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be
approved by its Directors to reflect any adjustment or change in the Purchase Price and the number
or kind or class of shares or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement. In addition, in connection with the
issuance or sale by the Company of shares of Common Stock following the Distribution Date and prior
to the Expiration Date, the Company (a) shall, with respect to shares of Common Stock so issued or
sold pursuant to the exercise, exchange or conversion of securities (other than Rights) issued
prior to the Distribution Date which are exercisable for or exchangeable for, or convertible into,
shares of Common Stock, and (b) may, in any other case, if deemed necessary, appropriate or
desirable by the Directors of the Company, issue Right Certificates representing an equivalent
number of Rights as would have been issued in respect of such shares of Common Stock if they had
been issued or sold prior to the Distribution Date, as appropriately adjusted as provided herein as
if they had been so issued or sold;
provided
,
however
, that (i) no such Right
Certificate shall be issued if, and to the extent that, in its good faith judgment the Directors of
the Company shall have determined that the issuance of such Right Certificate could have a material
adverse tax consequence to the Company or to the Person to whom or which such Right Certificate
otherwise would be issued, and (ii) no such Right Certificate shall be issued if, and to the extent
that, appropriate adjustment otherwise shall have been made in lieu of the issuance thereof.
Section 23.
Redemption
.
(a) Prior to the Expiration Date, the Directors of the Company may, at their option, redeem
all but not less than all of the then-outstanding Rights at a redemption price of $.001 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (the “Redemption Price”), at any time prior to the close of business on the
Distribution Date.
(b) Immediately upon the effective date of the action of the Directors of the Company ordering
the redemption of the Rights, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price, without interest thereon. Promptly after the effectiveness of the
redemption of the Rights, the Company shall publicly announce such action and, within ten calendar
days thereafter, will give notice of such redemption to the holders of the then-outstanding Rights
by mailing such notice to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer
agent for the shares of Common Stock;
provided
,
however
, that the failure to give,
or any defect in, any such notice shall not affect the validity of the redemption of the Rights.
Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the
26
method by which the payment of the Redemption Price will be made. The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based upon the current per share
market price of the Common Stock (determined pursuant to Section 11(e) hereof) at the time of
redemption) or any other form of consideration deemed appropriate by the Directors of the Company
(based upon the fair market value of such other consideration, determined by the Directors of the
Company in good faith) or any combination thereof. The Company may, at its option, combine the
payment of the Redemption Price with any other payment being made concurrently to holders of shares
of Common Stock and, to the extent that any such other payment is discretionary, may reduce the
amount thereof on account of the concurrent payment of the Redemption Price. If legal or
contractual restrictions prevent the Company from paying the Redemption Price (in the form of
consideration deemed appropriate by the Directors) at the time of redemption, the Company shall pay
the Redemption Price, without interest, promptly after such time as the Company ceases to be so
prevented from paying the Redemption Price.
(c) At any time, the Directors of the Company may relinquish their rights to redeem the Rights
under paragraphs (a) or (b) above, or both, by duly adopting a resolution to that effect.
Immediately upon adoption of such resolution, the rights of the Directors under the portions of
this Section 23 specified in such resolution shall terminate without further action and without any
notice.
(d) Notwithstanding the foregoing, it is understood that no later than five years from the
date of this Agreement (or sooner than that if any Person shall have made a proposal to the
Company, or taken any such other action, that, if effective, could cause such Person to become an
Acquiring Person hereunder), the Board of Directors of the Company shall review and evaluate this
Agreement in order to consider whether the maintenance of this Agreement continues to be in the
interests of the Company, its stockholders and any other relevant constituencies of the Company.
Section 24.
Notice of Certain Events
.
In case, after the Distribution Date, the Company shall propose (a) to pay any dividend
payable in stock of any class to the holders of shares of Common Stock or to make any other
distribution to the holders of shares of Common Stock (other than a regular periodic cash dividend
at a rate not in excess of 125% of the rate of the last cash dividend theretofore paid) or (b) to
offer to the holders of shares of Common Stock rights, options or warrants to subscribe for or to
purchase any additional shares of Common Stock or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification of its shares of Common Stock
(other than a reclassification involving only the subdivision of outstanding shares of Common
Stock), or (d) to effect any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in
one or more transactions, of more than 50% of the assets or earning power of the Company and its
Subsidiaries, taken as a whole, to any other Person or Persons, or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company shall give to each
holder of a Right Certificate, in accordance with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock dividend, distribution
or offering of rights, options or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up is to take place and
27
the date of participation therein by the holders of the shares of Common Stock, if any such date is
to be fixed, and such notice shall be so given, in the case of any action covered by clause (a) or
(b) above, at least 20 calendar days prior to the record date for determining holders of the shares
of Common Stock for purposes of such action, and, in the case of any such other action, at least 20
calendar days prior to the date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Common Stock, whichever shall be the earlier.
In case any Triggering Event shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to the Rights Agent and each holder of a Right Certificate, in
accordance with Section 25 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights.
Section 25.
Notices
.
Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by
the holder of any Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
RPM, Inc.
2628 Pearl Road
P.O. Box 777
Medina, Ohio 44258
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by registered or certified mail and shall
be deemed given upon receipt, addressed (until another address is filed in writing with the
Company) as follows:
National City Bank
Suite 635 — LOC 01-3116
629 Euclid Avenue
Cleveland, Ohio 44114
Attention: Shareholder Services Administration
Notices or demands authorized by this Agreement to be given or made by the Company or the
Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Rights Agent.
Section 26.
Supplements and Amendments
.
Prior to the Distribution Date and subject to Section 11 and the last sentence of this Section
26, if the Company so directs, the Company and the Rights Agent shall, at the
28
expense of the Company, supplement or amend any provision of this Agreement without the approval of
any holders of certificates representing shares of Common Stock. From and after the Distribution
Date and subject to the last sentence of this Section 26, if the Company so directs, the Company
and the Rights Agent shall supplement or amend this Agreement without the approval of any holders
of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to supplement or amend the
provisions hereunder in any manner which the Company may deem desirable, including, without
limitation, the addition of other events requiring adjustment to the Rights under Sections
11(a)(ii) or 11(d) hereof or procedures relating to the redemption of the Rights, which supplement
or amendment shall not, in the good faith determination of the Directors of the Company, adversely
affect the interests of the holders of Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Upon the delivery of a certificate from an officer
of the Company which states that the proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute such supplement or amendment;
provided
,
however
, that the failure or refusal of the Rights Agent to execute such
supplement or amendment shall not affect the validity of any supplement or amendment adopted by the
Company, any of which shall be effective in accordance with the terms thereof,
provided
,
however
, that notwithstanding anything in this Agreement to the contrary, no supplement or
amendment that changes the rights and duties of the Rights Agent under this Agreement will be
effective against the Rights Agent without the execution of such supplement or amendment by the
Rights Agent. Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment shall be made which (x) changes the stated Redemption Price, (y) reduces the number of
shares of Common Stock for which a Right is then exercisable, or (z) modifies a time period
relating to when the Rights may be redeemed at such time as the Rights are not then redeemable.
Section 27.
Exchange
.
(a) The Directors of the Company may, at their option, at any time after the Distribution
Date, exchange all or part of the then-outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for shares of
Common Stock at an exchange ratio of one share of Common Stock (or a lesser ratio as determined by
the Board of Directors, if the Company does not have sufficient authorized and unreserved shares of
Common Stock) per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred
to as the “Exchange Ratio”). Notwithstanding the foregoing, the Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any Subsidiary, any
employee benefit plan of the Company or any Subsidiary, or any entity holding Common Stock for or
pursuant to the terms of any such plan), who or which, together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock
outstanding.
(b) Immediately upon the effective date of the action of the Directors of the Company ordering
the exchange of any Rights pursuant to Section 27(a) hereof, and without any further action and
without any notice, the right to exercise such Rights shall terminate and the only right with
respect to such Rights thereafter of the holder of such Rights shall be to receive
29
that number of shares of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. Promptly after the action of the Directors of the Company
ordering the exchange of any Rights pursuant to Section 27(a) hereof, the Company shall publicly
announce such action, and within 10 calendar days thereafter shall give notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon the registry books
of the Rights Agent;
provided
,
however
, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives the notice. Each
such notice of exchange shall state the method by which the exchange of the shares of Common Stock
for Rights will be effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Each such notice shall be accompanied by a certificate of exchange to be
completed by each holder of Rights pursuant to Section 27(d) hereof. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 27, the Company, at its option, may substitute
for any share of Common Stock exchangeable for a Right, (i) cash, (ii) debt securities of the
company, (iii) other assets, or (iv) any combination of the foregoing, in any event having an
aggregate value which the Directors of the Company shall have determined in good faith to be equal
to the current market value of one share of Common Stock (determined pursuant to Section 11(e)
hereof) on the Trading Day immediately preceding the date of exchange pursuant to this Section 27.
(d) Notwithstanding anything to the contrary in the foregoing, no holder of Rights shall be
entitled to receive shares of Common Stock (or any substitute therefor pursuant to the provisions
of Section 27(c) hereof) in exchange for such holder’s Rights pursuant to this Section 27 unless
and until such holder submits a certificate of exchange (substantially in the form of the
Certificate of Exchange included in Exhibit A hereto) certifying that such holder is not or after
due inquiry and to the best of such holder’s knowledge did not receive such holder’s Rights from a
Person who is or was, an “Acquiring Person” as set forth in this Agreement.
(e) As soon as reasonably practicable after the Distribution Date and until all Rights have
been exchanged as set forth in this Section 27, the Company shall make provision for a number of
shares of Common Stock in an amount equal to at least three percent of the number of shares of
Common Stock for which Rights may be exchanged pursuant to this Section 27 to be held in trust by a
third party (the identity of such party to be mutually agreed upon by the Company and the Rights
Agent) for the benefit of eligible holders of Rights who are not “Acquiring Persons” as set forth
in this Agreement and who, or whose brokers, did not provide the certification required by this
Section 27 by a date (such date to be mutually agreed upon by the Company and the Rights Agent)
following the Distribution Date.
Section 28.
Successors
.
All the covenants and provisions of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their respective successors and assigns
hereunder.
30
Section 29.
Benefits of this Agreement
.
Nothing in this Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution
Date, the shares of Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (or prior to the Distribution
Date, the shares of Common Stock).
Section 30.
Determinations and Actions by Directors
.
For all purposes of this Agreement, any calculation of the number of shares of Common Stock of
the Company outstanding at any particular time, including for purposes of determining a particular
percentage of such outstanding shares of Common Stock of the Company of which any Person is the
Beneficial Owner, will be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Directors of the Company will have the
exclusive power and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including without limitation the right and power
to (i) interpret the provisions of this Agreement (including without limitation Section 26, this
Section 30 and other provisions hereof relating to powers or authority hereunder) and (ii) make all
determinations deemed necessary or advisable for the administration of this Agreement (including
without limitation any determination contemplated by Section 1(a) or any determination as to
whether particular Rights shall have become void). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, any omission with respect to any
of the foregoing) which are done or made by the Directors of the Company in good faith will be (x)
final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all
other parties and (y) not subject the Directors of the Company to any liability to any Person,
including without limitation the Rights Agent and the holders of the Rights.
Whenever any action hereunder or in connection with the Rights is required or permitted to be
taken by the Directors of the Company, such action may be taken by the Executive Committee of the
Directors or by any other duly authorized committee thereof.
Section 31.
Severability
.
If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided
,
however
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that nothing contained in this Section 31 shall affect the ability of the Company under the
provisions of Section 26 to supplement or amend this Agreement to replace such invalid, void or
unenforceable term, provision, covenant or restriction with a legal, valid and enforceable term,
provision, covenant or restriction.
31
Section 32.
Governing Law
.
This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33.
Counterparts
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This Agreement may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34.
Descriptive Headings
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Descriptive headings of the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the provisions hereof.
Section 35.
Force Majeure
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Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be
liable for any delays or failures in performance resulting from acts beyond its reasonable control
including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or
malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power
failures or mechanical difficulties with information storage or retrieval systems, labor
difficulties, war, or civil unrest.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
their respective corporate seals to be hereunto affixed and attested, effective as of the 21st day
of April, 2009.
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RPM INTERNATIONAL INC.
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By:
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/s/ Edward W. Moore
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Name:
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Edward W. Moore
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Title:
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Vice President, General Counsel and Secretary
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NATIONAL CITY BANK, as Rights Agent
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By:
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/s/ Pamela Fisher
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Name:
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Pamela Fisher
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Title:
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Vice President—Shareholder Services
Administration
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32
Exhibit A
FORM OF RIGHT CERTIFICATE
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Certificate No. R-
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___________ Rights
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NOT EXERCISABLE AFTER MAY 11, 2019 OR EARLIER IF REDEEMED OR EXCHANGED. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO IS OR WAS AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OR SECTION 11(d) OF
THE RIGHTS AGREEMENT.
*
]
Right Certificate
RPM INTERNATIONAL INC.
This certifies that
_______________________, or registered assigns, is the registered owner
of the number of Rights set forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of April 21, 2009, (the “Rights
Agreement”), between RPM International Inc., a Delaware corporation (the “Company”), and National
City Bank (the “Rights Agent”), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Agreement) and prior to 5:00 P.M. (Cleveland, Ohio time) on
May 11, 2019 at the principal office of the Rights Agent, or its successors as Rights Agent, at its
principal executive offices designated for such purpose, one-tenth of one fully paid nonassessable
share of Common Stock, par value $0.01 per share (“Common Stock”) of the Company, at a purchase
price of $70.00 per whole share of Common Stock (the “Purchase Price”), upon representation and
surrender of this Right Certificate with the Form of Election to purchase and related Certificate
duly executed. The number of Rights evidenced by this Right Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of the Record Date, based on the shares of Common Stock
as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of shares of Common
Stock which may be purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is hereby made for a
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*
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The portion of the legend in brackets shall be inserted
only if applicable.
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A-1
full description of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the
Rights Agreement are on file at the above-mentioned office of the Rights Agent.
Pursuant to the Rights Agreement, from and after the time that any Person becomes an Acquiring
Person (as such terms are defined in the Rights Agreement), (i) any Rights that are or were
beneficially owned by any Acquiring Person (or any Affiliate or Associate of such Acquiring Person)
shall be void and any holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of the Rights Agreement, (ii) no Right Certificate shall be issued pursuant to
the Rights Agreement that represents Rights beneficially owned by an Acquiring Person or any
Affiliate or Associate thereof, (iii) no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person or any Affiliate or Associate thereof, and (iv) any
Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person or any
Affiliate or Associate thereof shall be cancelled.
This Right Certificate, with or without other Right Certificates, upon surrender at the
principal office of the Rights Agent designated for such purpose, may be exchanged for another
Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of shares of Common Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a redemption price of $.001 per Right.
Subject to the provisions of the Rights Agreement, the Directors of the Company may exchange
the Rights (other than any Rights which have become void), in whole or in part, at an exchange
ratio of one share of Common Stock per Right (subject to adjustment).
No fractional shares of Common Stock will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the shares of Common Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions affecting stockholders (except
as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.
A-2
This Right Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of _________, _____.
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ATTEST:
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RPM INTERNATIONAL INC.
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By:
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Secretary
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Name:
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Title:
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Countersigned:
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By:
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Authorized Signature
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A-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED,
______________________ hereby sells, assigns and transfers unto
________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint _______________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of substitution.
Dated: ___________________, ____
Signature Guaranteed:
A-4
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not being sold, assigned,
transferred, split up, combined or exchanged by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ___________________, ____
A-5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To RPM International Inc.:
The undersigned hereby irrevocably elects to exercise _____________ Rights represented by this
Right Certificate to purchase the one-tenth of a share of Common Stock or other securities issuable
upon the exercise of such Rights and requests that certificates for such securities be issued in
the name of:
Please insert social security
or other identifying number:______________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new
Right Certificate for the balance remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number:______________________________
(Please print name and address)
Dated: ___________________, ____
Signature Guaranteed:
A-6
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not being exercised by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ___________________, ____
A-7
FORM OF CERTIFICATE OF EXCHANGE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not being exchanged by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ___________________, ____
NOTICE
Signatures on the foregoing Form of Assignment and Form of Election to Purchase and in the
related Certificates and the Form of Certificate of Exchange must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved medallion signature
program) pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.
A-8
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF COMMON STOCK
On April 21, 2009, the Directors of RPM International Inc. (the “Company”) declared a dividend
distribution of one right (a “Right”) for each outstanding share of Common Stock, par value $0.01
per share (the “Common Stock”), of the Company. The distribution was payable on May 11, 2009 (the
“Record Date”) to the stockholders of record as of the close of business on the Record Date. Each
Right entitles the registered holder to purchase from the Company one-tenth of a share of Common
Stock at a price of $70.00 per whole share, subject to adjustment (the “Purchase Price”). The
description and terms of the Rights are set forth in a Rights Agreement dated as of April 21, 2009,
(the “Rights Agreement”), between the Company and National City Bank, as Rights Agent (the “Rights
Agent”).
Until the earliest to occur of (i) the close of business on the tenth business day following a
public announcement that a person or group of affiliated or associated persons has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the outstanding Common Stock
(an “Acquiring Person”), or (ii) the close of business on the tenth business day (or such later
date as may be specified by the Directors) following the commencement of a tender offer or exchange
offer by a person or group of affiliated or associated persons, the consummation of which would
result in beneficial ownership by such person or group of 15% or more of the outstanding Common
Stock (the earliest of such dates being hereinafter called the “Distribution Date”), the Rights
will be evidenced, with respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificates.
The Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the shares of Common Stock. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights) or, in the case of shares of Common Stock issued
upon conversion of the Company’s convertible securities, until the tenth day after the Distribution
Date, new Common Stock certificates issued after the Record Date upon transfer or new issuance of
shares of Common Stock will contain a notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption, exchange or expiration of the Rights), the
surrender for transfer of any certificates for shares of Common Stock in respect of which Rights
have been issued will also constitute the transfer of the Rights associated with the shares of
Common Stock represented by such certificate. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights (the “Right Certificates”) will be mailed to
holders of record of the shares of Common Stock as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will expire on May 11,
2019 (the “Final Expiration Date”), unless earlier redeemed or exchanged by the Company as
described below.
B-1
The Purchase Price payable, and the number of shares of Common Stock or other property
issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification
of the Common Stock; (ii) upon the grant to holders of the Common Stock of certain rights, options
or warrants to subscribe for shares of Common Stock or convertible securities at less than the
current market price of the shares of Common Stock; or (iii) upon the distribution to holders of
shares of Common Stock of evidences of indebtedness, cash (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last cash dividend theretofore paid),
assets, stock (other than dividends payable in Common Stock) or of subscription rights, options or
warrants (other than those referred to above).
In the event (a “Flip-in Event”), that any person or group or affiliate or associated persons
becomes an Acquiring Person, proper provision shall be made so that each holder of a Right, other
than Rights that are or were owned beneficially by the Acquiring Person (which, from and after the
date of the earliest of any such event, will be void), will thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price, that number of shares of Common Stock
having a market value of two times the Purchase Price.
With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares will
be issued (other than fractions which may, at the election of the Company, be evidenced by
depositary receipts), and in lieu thereof, a payment in cash will be made based on the market price
of the Common Stock on the last trading day prior to the date of exercise.
In the event (a “Flip-over Event”) that, following the first date of public announcement that
a person has become an Acquiring Person, (i) the Company merges with or into any person and the
Company is not the surviving corporation, (ii) any person merges with or into the Company and the
Company is the surviving corporation, but its shares of Common Stock are changed or exchanged, or
(iii) 50% or more of the Company’s assets or earning power, including without limitation securities
creating obligations of the Company, are sold, proper provision shall be made so that each holder
of a Right, other than Rights that are or were beneficially owned by the Acquiring Person after the
date upon which the Acquiring Person became such (which will thereafter be void), shall thereafter
have the right to receive, upon the exercise thereof at the then current Purchase Price of the
Right, that number of shares of Common Stock (or, under certain circumstances, an economically
equivalent security or securities) of such other person which at the time of such transaction would
have a market value of two times the Purchase Price of the Right.
At any time after the Distribution Date, the Directors of the Company may exchange the Rights
(other than any Rights which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock (or a lesser ratio as determined by the Board of Directors if the Company
does not have sufficient authorized and unreserved shares of Common Stock) per Right (subject to
adjustment).
The Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right
(the “Redemption Price”), at any time prior to the close of business on the Distribution Date.
Immediately upon the effective date of action of the Directors electing to
B-2
redeem the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price. The Company will give notice of such redemption to the holders of the
then outstanding Rights by mailing such notice to all such holders at their last addresses as they
appear on the registry books of the Rights Agent.
Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive dividends.
The Rights Agreement may be amended by the Company without the approval of any holders of
Rights, including amendments which add other events requiring adjustment to the Purchase Price
payable and the number of shares of Common Stock or other securities issuable upon the exercise of
the Rights or which modify procedures relating to the redemption of the Rights, provided that no
amendment may be made which (i) changes the stated Redemption Price, (ii) reduces the number of
shares of Common Stock for which a Right is then exercisable, or (iii) modifies a time period
relating to when the Rights may be redeemed at such time as the Rights are not then redeemable.
A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Form 8-A dated May ___, 2009. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
B-3