EX-4.1






Exhibit 4.1




R. G. Barry Corporation




and




The Bank of New York Mellon,




as Rights Agent




RIGHTS AGREEMENT




Dated as of May 1, 2009















 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 1.

	 	Certain Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2.

	 	Appointment of Rights Agent
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 3.

	 	Issuance of Rights Certificates
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 4.

	 	Form of Rights Certificates
	 	 	7	 
	 
	 	 	 	 	 	 
	Section 5.

	 	Countersignature and Registration
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 6.

	 	Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 7.

	 	Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	9	 
	 
	 	 	 	 	 	 
	Section 8.

	 	Cancellation and Destruction of Rights Certificates
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 9.

	 	Reservation and Availability of Capital Shares
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 10.

	 	Preferred Share Record Date
	 	 	13	 
	 
	 	 	 	 	 	 
	Section 11.

	 	Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights
	 	 	13	 
	 
	 	 	 	 	 	 
	Section 12.

	 	Certificate of Adjusted Purchase Price or Number of Shares
	 	 	20	 
	 
	 	 	 	 	 	 
	Section 13.

	 	Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or
Earning Power
	 	 	21	 
	 
	 	 	 	 	 	 
	Section 14.

	 	Fractional Rights and Fractional Shares
	 	 	23	 
	 
	 	 	 	 	 	 
	Section 15.

	 	Exchange of Rights
	 	 	24	 
	 
	 	 	 	 	 	 
	Section 16.

	 	Rights of Action
	 	 	25	 
	 
	 	 	 	 	 	 
	Section 17.

	 	Agreement of Rights Holders
	 	 	25	 
	 
	 	 	 	 	 	 
	Section 18.

	 	Rights Certificate Holder Not Deemed a Shareholder
	 	 	26	 
	 
	 	 	 	 	 	 
	Section 19.

	 	Concerning the Rights Agent
	 	 	26	 
	 
	 	 	 	 	 	 
	Section 20.

	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	27	 
	 
	 	 	 	 	 	 
	Section 21.

	 	Duties of Rights Agent
	 	 	27	 
	 
	 	 	 	 	 	 
	Section 22.

	 	Change of Rights Agent
	 	 	30	 






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	 	 	 	 	Page
	Section 23.

	 	Issuance of New Rights Certificates
	 	 	30	 
	 
	 	 	 	 	 	 
	Section 24.

	 	Redemption and Termination
	 	 	31	 
	 
	 	 	 	 	 	 
	Section 25.

	 	Notice of Certain Events
	 	 	32	 
	 
	 	 	 	 	 	 
	Section 26.

	 	Notices
	 	 	32	 
	 
	 	 	 	 	 	 
	Section 27.

	 	Supplements and Amendments
	 	 	33	 
	 
	 	 	 	 	 	 
	Section 28.

	 	Successors
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 29.

	 	Determinations and Actions by the Board of Directors, etc
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 30.

	 	Benefits of this Agreement
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 31.

	 	Severability
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 32.

	 	Governing Law
	 	 	35	 
	 
	 	 	 	 	 	 
	Section 33.

	 	Counterparts
	 	 	35	 
	 
	 	 	 	 	 	 
	Section 34.

	 	Descriptive Headings
	 	 	35	 
	 
	 	 	 	 	 	 
	Section 35.

	 	Force Majeure
	 	 	35	 







ii









 








RIGHTS AGREEMENT




     This Rights Agreement, dated as of May 1, 2009 (the “Agreement”), is entered into
between R. G. Barry Corporation, an Ohio corporation (the “Company”), and The Bank of New York
Mellon, a New York banking corporation (the “Rights Agent”).



Witnesseth:




     Whereas, on May 1, 2009 (the “Rights Dividend Declaration Date”), the Board of
Directors of the Company (the “Board”) authorized and declared a dividend distribution of one Right
(as hereinafter defined) for each common share, par value $1.00 per share, of the Company (the
“Common Shares”) outstanding at the Close of Business on May 15, 2009 (the “Record Date”) and has
authorized the issuance of one Right (as such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p) hereof) for each Common Share issued between the Record Date (whether
originally issued or delivered from the Company’s treasury) and the Distribution Date (as
hereinafter defined), each Right initially representing the right to purchase one one-hundredth of
a share of Series II Junior Participating Class A Preferred Shares (the “Preferred Shares”) of the
Company having the rights, powers and preferences set forth in the form of Certificate of Amendment
to the Articles of Incorporation attached hereto as Exhibit A, upon the terms and subject
to the conditions hereinafter set forth (the “Rights”);



     Now, Therefore, in consideration of the premises and the mutual agreements herein set
forth, the parties 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 who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of fifteen percent (15%) or more of the
Common Shares then outstanding, other than in connection with any transfer by reason of the death
of, or gift from, any Person (including succeeding any such Person as trustee), but shall not
include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company, (iv) any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan, (v) any Person who
becomes the Beneficial Owner of fifteen percent (15%) or more of the Common Shares then outstanding
as a result of a reduction in the number of Common Shares outstanding due to the repurchase of
Common Shares by the Company unless and until such Person, after becoming aware that such Person
has become the Beneficial Owner of fifteen percent (15%) or more of the then outstanding Common
Shares, acquires beneficial ownership of additional Common Shares representing one percent (1%) or
more of the Common Shares then outstanding; provided, however, that if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be an “Acquiring Person” as
defined pursuant to the foregoing provisions of this subsection (a) has become such inadvertently,
and such Person promptly (and in any event within ten (10) Business Days after being so requested
by the Company) certifies to the Company that such Person acquired Common Shares causing such
Person to become an Acquiring Person inadvertently or without knowledge of the terms of the Rights
and who, together with all Affiliates and Associates, thereafter does not acquire














 




additional Common Shares while the Beneficial Owner of fifteen percent (15%) or more of the
Common Shares then outstanding; provided further, that if the Person requested to so certify fails
to do so within ten (10) Business Days, then such Person shall become an Acquiring Person
immediately after such ten (10) Business Day period.




          (b) “Act” shall mean the Securities Act of 1933, as amended and in effect on the date of this
Agreement.




          (c) “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 and in effect on the date of this Agreement (the “Exchange Act”).




          (d) A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially
own,” any securities:





          (i) 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; provided, however, that a Person shall not be deemed the
“Beneficial Owner” of, or to “beneficially own,” (A) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person’s Affiliates or
Associates until such tendered securities are accepted for purchase or exchange, (B)
securities issuable upon exercise of Rights at any time prior to the occurrence of a
Triggering Event (as hereinafter defined), or (C) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person’s Affiliates or Associates prior to the Distribution Date
(as hereinafter defined) or pursuant to Section 3(a) or Section 23 hereof (the “Original
Rights”) or pursuant to Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;




          (ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or
to “beneficially own,” any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if such agreement, arrangement
or understanding: (A) arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act, and (B) is not
reportable by such Person on Schedule 13D or Schedule 13G under the Exchange Act (or any
comparable or successor report); or




          (iii) which are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of such



2









 







Person’s Affiliates or Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant
to a revocable proxy as described in the proviso to subparagraph (ii) of this paragraph (d))
or disposing of any voting securities of the Company, provided, however, that nothing in
this paragraph (d) 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 a firm commitment underwriting until the
expiration of forty (40) days after the date of such acquisition, and then only if such
securities continue to be owned by such Person at the expiration of forty (40) days.



          (e) “Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking
institutions in the States of New York, New Jersey or Ohio are authorized or obligated by law or
executive order to close.




          (f) “Close of Business” on any given date shall mean 5:00 P.M., New York City time, on such
date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., New York
City time, on the next succeeding Business Day.




          (g) “Common Shares” shall mean the common shares, par value $1.00 per share, of the Company,
except that “Common Shares” when used with reference to any Person other than the Company shall
mean the capital stock of such Person with the greatest voting power, or the equity securities or
other equity interest having power to control or direct the management, of such Person.




          (h) “Common Share Equivalents” shall have the meaning set forth in Section 11(a)(iii) hereof.




          (i) “Current Market Price” shall have the meaning set forth in Section 11(d)(i) hereof.




          (j) “Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof.




          (k) “Distribution Date” shall have the meaning set forth in Section 3(a) hereof.




          (l) “Equivalent Preferred Shares” shall have the meaning set forth in Section 11(b) hereof.




          (m) “Exchange Act” shall have the meaning set forth in Section 1(a) hereof.




          (n) “Expiration Date” shall have the meaning set forth in Section 7(a) hereof.




          (o) “Final Expiration Date” shall have the meaning set forth in Section 7(a) hereof.




          (p) “Flip-In Event” shall have the meaning set forth in Section 11(a)(ii).




3









 





          (q) “Flip-In Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof.




          (r) “Flip-Over Event” shall mean any event described in clauses (x), (y) or (z) of Section
13(a) hereof.




          (s) “Person” shall mean any individual, firm, corporation, limited liability company,
partnership, trust or other entity.




          (t) “Preferred Shares” shall mean the Series II Junior Participating Class A Preferred Shares,
par value $1.00 per share, of the Company, and, to the extent that there are not a sufficient
number of Series II Junior Participating Class A Preferred Shares authorized to permit the full
exercise of the Rights, any other series of Class A Preferred Shares, par value $1.00 per share, or
Class B Preferred Shares, par value $1.00 per share, of the Company designated for such purpose
containing terms substantially similar to the terms of the Series II Junior Participating Class A
Preferred Shares.




          (u) “Principal Party” shall have the meaning set forth in Section 13(b) hereof.




          (v) “Purchase Price” shall have the meaning set forth in Section 7(b) hereof.




          (w) “Record Date” shall have the meaning set forth in the WHEREAS clause at the beginning of
this Agreement.




          (x) “Redemption Price” shall have the meaning set forth in Section 24(a) hereof.




          (y) “Rights” shall have the meaning set forth in the WHEREAS clause at the beginning of this
Agreement.




          (z) “Rights Agent” shall have the meaning set forth in the parties clause at the beginning of
this Agreement.




          (aa) “Rights Certificate” shall have the meaning set forth in Section 3(a) hereof.




          (bb) “Rights Dividend Declaration Date” shall have the meaning set forth in the WHEREAS clause
at the beginning of this Agreement.




          (cc) “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.




          (dd) “Share Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a report filed or amended pursuant
to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.




          (ee) “Subsidiary” shall mean, with reference to any Person, any corporation of which an amount
of voting securities sufficient to elect at least a majority of the directors of such




4









 




corporation is beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.




          (ff) “Substitution Period” shall have the meaning set forth in Section 11(a)(iii) hereof.




          (gg) “Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.




          (hh) “Trading Day” shall have the meaning set forth in Section 11(d)(i) hereof.




          (ii) “Triggering Event” shall mean any Flip-In Event or any Flip-Over Event.




     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint such co-rights
agents as it may deem necessary or desirable upon ten (10) days’ prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such co-rights agent.



     Section 3. Issuance of Rights Certificates.



          (a) Until the earlier of (i) the Close of Business on the tenth Business Day after the Share
Acquisition Date (or, if the tenth Business Day after the Share Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date), or (ii) the Close of Business on the tenth
Business Day (or such later date as the Board shall determine) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if upon consummation thereof, such Person would become an Acquiring Person
(the earlier of (i) and (ii) being herein referred to as the “Distribution Date”), (x) the Rights
will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Shares registered in the names of the holders of the Common Shares (or,
in the case of uncertificated Common Shares, by the book-entry account that evidences record
ownership of such shares) and not by separate certificates (the certificates for Common Shares
being deemed also to be certificates for Rights), and (y) the Rights will be transferable only in
connection with the transfer of the underlying Common Shares (including a transfer to the Company).
The Company shall give the Rights Agent prompt written notice of the Distribution Date. Until
such notice is received by the Rights Agent, the Rights Agent may presume conclusively for all
purposes that the Distribution Date has not occurred. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested and provided with
all necessary information, send), at the expense of the Company, by first-class, insured, postage
prepaid mail,
to each record holder of the Common Shares as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the Company or the transfer agent or




5









 




registrar for the Common Shares, one or more rights certificates, in substantially the form of
Exhibit B hereto (the “Rights Certificates”), evidencing one Right for each Common Share so
held, subject to adjustment as provided herein. In the event that an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11(p) hereof, at the time of distribution
of the Rights Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates,
and the Rights will be transferable only separately from the transfer of the Common Shares.




          (b) As promptly as practicable following the Record Date, the Company will make available a
copy of a Summary of Rights, in substantially the form attached hereto as Exhibit C (the
“Summary of Rights”), to any holder of Rights who may so request from time to time prior to the
Expiration Date. With respect to certificates for the Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced by such certificates for the Common
Shares and the registered holders of the Common Shares shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration Date (as such term
is defined in Section 7(a) hereof), the transfer of any certificates representing Common Shares in
respect of which Rights have been issued shall also constitute the transfer of the Rights
associated with such Common Shares.




    
      (c) Rights shall be issued in respect of all Common Shares which are issued (whether
originally issued or from the Company’s treasury) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date. Certificates representing such Common Shares shall
also be deemed to be certificates for Rights, and shall bear a legend in substantially the
following form:





This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between
R. G. Barry Corporation (the “Company”) and The Bank of New York
Mellon, as the Rights Agent, dated as of May 1, 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 offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge
within five days after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.



6









 




With respect to such certificates containing the foregoing legend, until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone and registered
holders of Common Shares shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the Rights associated
with the Common Shares represented by such certificates.




     Section 4. Form of Rights Certificates.



          (a) The Rights Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit
B hereto and may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate (but which do not affect the
rights, immunities, duties or responsibilities of the Rights Agent) 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 rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to usage. The Rights
Certificates shall be in a machine printable format and in a form reasonably satisfactory to the
Rights Agent. Subject to the provisions of Section 11 and Section 23 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date, shall show the date of
countersignature and on their face shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the price set forth therein
(such exercise price per one one-hundredth of a share, the “Purchase Price”), but the amount and
type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.




          (b) Any Rights Certificate issued pursuant to Section 3(a), Section 11(i), or Section 23
hereof that represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii)
a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding (whether or not in
writing) regarding the transferred Rights or (B) a transfer which the Board has determined is part
of a plan, arrangement or understanding (whether or not in writing) which has as a primary purpose
or effect avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible) a legend in
substantially the following form:





The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become



7









 







null and
void in the circumstances specified in Section 7(e) of the Rights
Agreement.


The Company shall instruct the Rights Agent in writing of the Rights which should be so legended
and shall supply the Rights Agent with such legended Rights Certificates.




     Section 5. Countersignature and Registration.



          (a) The Rights Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile signature, and shall be
attested to by the Secretary or an Assistant Secretary of the Company, either manually, or by
facsimile signature. The Rights Certificates shall be countersigned by the Rights Agent, either
manually or by facsimile signature, 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 Rights Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights 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 Rights Certificates had not ceased to be such officer of the Company; and any
Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights Agreement any such person
was not such an officer.




          (b) Following the Distribution Date, upon receipt by the Rights Agent of notice to that effect
and all other relevant information referred to in Section 3(a), the Rights Agent will keep or cause
to be kept, at its office or offices designated for such purpose, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses
of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates and the date of each of the Rights Certificates.




     Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates.



          (a) Subject to the provisions of Section 4(b), Section 7(e) and Section 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 Rights Certificate(s) may be transferred, split up, combined or exchanged
for another Rights Certificate(s), entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share (or, following a Triggering
Event, Common Shares, other securities, cash or other assets, as the case may be) as the
Rights Certificate(s) surrendered then entitles such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange
any Rights Certificate(s) shall make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate(s) to be transferred, split up, combined or exchanged at the
office or offices of the Rights Agent designated for such purpose. The Right Certificates are
transferable only on the registry books of the Rights Agent. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the transfer of any




8









 




such
surrendered Rights Certificate until the registered holder shall have (i) properly completed and
duly signed the certificate contained in the form of assignment on the reverse side of such Rights
Certificate, (ii) provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) thereof and of the Rights evidenced thereby and the Affiliates and
Associates of such Beneficial Owner (or former Beneficial Owner) as the Company or the Rights Agent
shall reasonably request and (iii) paid a sum sufficient to cover any tax or charge that may be
imposed in connection with any transfer, split up, combination or exchange of Rights Certificates
as required by Section 9(e) hereof. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested, registered in such name or
names as may be designated by the surrendering registered holder. The Rights Agent shall promptly
forward any such sum collected by it to the Company or to such Persons as the Company shall specify
by written notice. The Rights Agent shall have no duty or obligation to take any action under any
section of this Agreement which requires the payment by a Rights holder of applicable taxes and/or
charges unless and until it is satisfied that all such taxes and/or charges have been paid.




          (b) Upon receipt by the Company and the Rights Agent of evidence satisfactory to them of the
loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security satisfactory to them, and 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 Rights Certificate if mutilated, the Company will execute and deliver
a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.




     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.



          (a) Subject to Section 7(e) hereof, at any time after the Distribution Date, the registered
holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 24(a) hereof) in whole or in part upon surrender of
the Rights Certificate, with the form of election to purchase and the certificate on the reverse
side thereof properly completed and duly executed, to the Rights Agent at the office or offices of
the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price
with respect to the total number of one one-hundredths of a share (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or
prior to the earlier of (i) 5:00 P.M., New York City time, on May 1, 2014,
or such later date as may be established by the Board prior to the expiration of the Rights
(such date, as it may be extended by the Board (the “Final Expiration Date”), or (ii) the time at
which the Rights are redeemed as provided in Section 24 hereof (the earlier of (i) and (ii) being
herein referred to as the “Expiration Date”).




          (b) The Purchase Price for each one one-hundredth (1/100) of a Preferred Share pursuant to the
exercise of a Right shall initially be Twenty-Five Dollars ($25.00) and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.





9









 








          (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase and the certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one one-hundredth (1/100) of a Preferred Share
(or other shares, securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable tax or charge required to be paid under Section
9(e) hereof, the Rights Agent shall, subject to Section 21(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for the total number of one one-hundredths of a
Preferred Share to be purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have elected to deposit the total number
of Preferred Shares issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply with such request,
(ii) when necessary to comply with this Agreement, requisition from the Company the amount of cash,
if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the
order of the registered holder of such Rights Certificate, registered in such name or names as may
be designated by such holder, and (iv) when necessary to comply with this Agreement, after receipt
thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price and any applicable tax or charge (as such amount may
be reduced pursuant to Section 11(a)(iii) hereof) shall be made by certified check, cashier’s
check, bank draft or money order payable to the order of the Company. In the event that the Company
is obligated to issue other securities (including Common Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate. The Company reserves the right to require prior to
the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole Preferred Shares would be issued.




          (d) If the registered holder of any Rights Certificate exercises less than all the Rights
evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate or to his duly authorized assigns, registered in
such name or names as may be designated by such holder, subject to the provisions of Section
14 hereof.




          (e) Notwithstanding anything in this Agreement to the contrary, from and after the first
occurrence of a Flip-In Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any




10









 




Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding (whether or not in
writing) regarding the transferred Rights or (B) a transfer which the Board has determined is part
of a plan, arrangement or understanding (whether or not in writing) which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become null and void without any further action
and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or any other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.




          (f) 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 a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless such registered holder
shall have (i) properly completed and duly signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise,
and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) thereof and of the Rights evidenced thereby and of the Affiliates and Associates
of such Beneficial Owner (or former Beneficial Owner) as the Company or the Rights Agent shall
reasonably request.




     Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its 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 Rights 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 Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent
shall deliver all cancelled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.



     Section 9. Reservation and Availability of Capital Shares.



          (a) The Company covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares, the number of Preferred Shares that, as provided
in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in
full of all outstanding Rights.




          (b) So long as the Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) issuable and deliverable upon the exercise of the Rights may
be listed on any national securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange upon official notice of issuance upon such exercise.






11









 








          (c) The Company shall use its best efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Flip-In Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in accordance with Section
11(a)(iii) hereof, a registration statement under the Act with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times meeting the requirements
of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities, and (B) the date of the expiration of the Rights. The Company will 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 not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order
to prepare and file such registration statement and 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 has been rescinded, in each case with simultaneous written notice, which notice shall
include a copy of such announcement, to the Rights Agent. In addition, if the Company shall
determine that a registration statement is required following the Distribution Date, the Company
may temporarily suspend the exercisability of the Rights until such time as a registration
statement has been declared effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared effective. The Rights Agent
may assume that any Right exercised is permitted to be exercised under applicable law and shall
have no liability for acting in reliance upon such assumption.




          (d) The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all one one-hundredths of a Preferred Share (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and nonassessable.




          (e) The Company further covenants and agrees that it will pay when due and payable any and all
taxes and charges which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-hundredths of a Preferred Share (or
Common Shares and/or other securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any tax or charge which may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of
a number of one one-hundredths of a Preferred Share (or Common Shares and/or other securities, as
the case may be) in respect of a name other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to issue or deliver any certificates for
a number of one one-hundredths of a Preferred Share (or Common Shares and/or other securities, as
the case may be) in a name other than that of the registered holder upon the exercise of any Rights
until such tax or charge shall have been paid (any such tax or charge being payable by the holder
of such Rights Certificate at the time of




12









 




surrender) or until it has been established to the
Company’s or the Rights Agent’s satisfaction that no such tax or charge is due.




     Section 10. Preferred Share Record Date. Each Person in whose name any certificate
for a number of one one-hundredths of a Preferred Share (or Common Share and/or other securities,
as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional Preferred Share (or Common Share and/or other
securities, as the case may be) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and all applicable taxes or charges) was duly made; provided, however, that if
the date of such surrender and payment is a date upon which the Preferred Shares (or Common Shares
and/or other securities, as the case may be) transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not
be entitled to any rights of a shareholder 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 Kind of Shares or Number of
Rights. The Purchase Price, the number and kind 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) If the Company at any time after the date of this Agreement (A) declares a
dividend on the Preferred Shares payable in Preferred Shares, (B) subdivides the outstanding
Preferred Shares, (C) combines the outstanding Preferred Shares into a smaller number of
shares, or (D) issues any of its capital shares in a reclassification of the Preferred
Shares (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) and Section 7(e) 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 kind of shares of Preferred
Shares or capital stock, as the case may be, issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of
Preferred Shares or shares of capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred Shares
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, 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) hereof.



13









 






          (ii) If any Person, alone or together with its Affiliates or Associates, shall, at any
time after the Rights Dividend Declaration Date, become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a transaction set forth in
Section 13(a) hereof (a “Flip-In Event”), then, promptly following the occurrence of any
such Flip-In Event, proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of a Preferred Share, such number of
Common Shares as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the first occurrence of a Flip-In Event, and (y)
dividing that product (which, following such first occurrence, shall thereafter be referred
to as the “Purchase Price” for each Right and for all purposes of this Agreement) by 50% of
the Current Market Price (determined pursuant to Section 11(d) hereof) per Common Share on
the date of such first occurrence (such number of shares, the “Adjustment Shares”).




          No Right Certificate shall be issued pursuant to Section 3 hereof that represents
Rights Beneficially Owned by an Acquiring Person whose Rights would be null and void
pursuant to Section 7(e) hereof or any Associate or Affiliate or nominee thereof; no Right
Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be null and void pursuant to pursuant to Section 7(e) hereof or
any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be null and void pursuant to pursuant to Section 7(e)
hereof or any Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate shall be cancelled. The Company shall give the Rights Agent written
notice of the identity of any such Acquiring Person, Associate or Affiliate, or the nominee
of any of the foregoing, and the Rights Agent may rely on such notice in carrying out its
duties under this Agreement and shall be deemed not to have any knowledge of the identity of
any such Acquiring Person,
Associate or Affiliate, or the nominee of any of the foregoing unless and until it
shall have received such notice.




          (iii) If the number of shares of Common Shares which are authorized by the Company’s
Articles of Incorporation but which are not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a),
the Company shall (A) determine the value of the Adjustment Shares issuable upon the
exercise of a Right (the “Current Value”), and (B) with respect to each Right (subject to
Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon
the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company
(including, without limitation, preferred shares or units of preferred shares, such as the
Preferred Shares, which the Board has deemed to have essentially the same value or economic
rights as Common Shares (such preferred shares being referred to as “Common Share
Equivalents”)), (4) debt securities of the Company,



14









 







(5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the Current Value (less the amount of
any reduction in the Purchase Price), where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized investment banking firm selected by
the Board; provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the later of
(x) the first occurrence of a Flip-In Event and (y) the date on which the Company’s right of
redemption pursuant to Section 24(a) expires (the later of (x) and (y) being referred to
herein as the “Flip-In Trigger Date”), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the Purchase Price,
Common Shares (to the extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. For purposes of the preceding sentence,
the term “Spread” shall mean the excess of (i) the Current Value over (ii) the Purchase
Price. If the Board determines in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent necessary, but not more
than one hundred twenty (120) days after the Flip-In Trigger Date, in order that the Company
may seek shareholder approval for the authorization of such additional shares (such thirty
(30) day period, as it may be extended, being the “Substitution Period”). To the extent that
action is to be taken pursuant to the first and/or third sentences of this Section
11(a)(iii), the Company (1) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (2) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek such shareholder
approval for such authorization of additional shares and/or to decide the appropriate form
of distribution to be made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended (with prompt
written notice thereof to the Rights Agent), as well as a public announcement at such time
as the suspension is no longer in effect (with prompt written notice thereof to the Rights
Agent). For purposes of this Section 11(a)(iii), the per share or per unit value shall be
the Current Market Price per Common Share on the Flip-In Trigger Date and the value of
any Common Share Equivalent shall be deemed to equal the current market price per
Common Share on such date.



          (b) If the Company fixes a record date for the issuance of rights, options or warrants to all
holders of Preferred Shares entitling them to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record date) Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares (“Equivalent Preferred Shares”)) or
securities convertible into Preferred Shares or Equivalent Preferred Shares at a price per
Preferred Share or per Equivalent Preferred Share (or having a conversion price per share, if a
security convertible into Preferred Shares or Equivalent Preferred Shares) less than the Current
Market Price (as determined pursuant to Section 11(d) hereof) per Preferred Share 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 Preferred Shares outstanding on such record date, plus the number of
Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or
Equivalent Preferred Shares so to be offered (and/or the




15









 




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 Preferred Shares outstanding on such record date, plus
the number of additional Preferred Shares and/or Equivalent Preferred Shares 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 by delivery of consideration, part or all
of which may be in a form other than cash, the value of such consideration shall be as determined
in good faith by the Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Preferred
Shares 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 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) If the Company fixes a record date for a distribution to all holders of Preferred Shares
(including any such distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other
than a dividend payable in Preferred Shares, but including any dividend payable in shares other
than Preferred Shares) or evidences of indebtedness, or of subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), 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 Current Market Price (as
determined pursuant to Section 11(d) hereof) per Preferred Shares on such record date, less the
fair market value (as determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants applicable to a
Preferred Share and the denominator of which shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per Preferred Share. 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 be adjusted to be the Purchase
Price which would have been in effect if such record date had not been fixed.




          (d) (i) For the purpose of any computation hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the “Current Market Price” per Common Share on any date shall be deemed
to be the average of the daily closing prices per Common Share for the thirty (30) consecutive
Trading Days immediately prior to such date, and for purposes of computations made pursuant to
Section 11(a)(iii) hereof, the Current Market Price per Common Share on any date shall be deemed to
be the average of the daily closing prices per Common Share for the ten (10) consecutive Trading
Days immediately following such date; provided, however, that in the event that the Current Market
Price per Common Share is determined during a period following the announcement by the issuer of
such Common Share of (A) a dividend or distribution on such Common Share payable in Common Shares
or securities convertible into Common Shares (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Share, and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or reclassification shall not




16









 




have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, then, and in each such case, the Current Market Price shall
be properly adjusted to take into account ex-dividend trading. 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 NASDAQ Stock Market or, if the Common Shares are not listed or admitted to trading on The
NASDAQ Stock Market, as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on which the Common
Shares are listed or admitted to trading, or if the Common Shares 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 or, if on any such date
the Common Shares 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 Common Shares selected by
the Board. If on any such date no market maker is making a market in the Common Shares, the fair
value of such shares on such date as determined in good faith by the Board shall be used. The term
“Trading Day” shall mean a day on which the principal national securities exchange on which the
Common Shares are listed or admitted to trading is open for the transaction of business or, if the
Common Shares are not listed or admitted to trading on any national securities exchange, a Business
Day. If the Common Shares are not publicly held or not so listed or traded, Current Market Price
per share shall mean the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.





          (ii) For the purpose of any computation hereunder, the Current Market Price per
Preferred Share shall be determined in the same manner as set forth above for the Common
Shares in clause (i) of this Section 11(d) (other than the last sentence thereof). If the
Current Market Price per Preferred Share cannot be determined in the manner provided above
or if the Preferred Shares are not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the Current Market Price per Preferred Share shall be
conclusively deemed to be an amount equal to one hundred (100)
(as such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Shares occurring after the date
of this Agreement) multiplied by the Current Market Price per Common Share. If neither the
Common Shares nor the Preferred Shares are publicly held or so listed or traded, Current
Market Price per Preferred Share shall mean the fair value per share as determined in good
faith by the Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement,
the Current Market Price of one one-hundredth of a Preferred Share shall be equal to the
Current Market Price of one Preferred Share divided by one hundred (100).



          (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least one percent
(1%) in the Purchase Price; provided, however, that any adjustments which by reason of this Section
11(e) 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




17









 




to the nearest cent or to the
nearest ten-thousandth of a Common Share or other share or one-millionth of a Preferred Share, as
the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required
by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of
the transaction which mandates such adjustment, or (ii) the Expiration Date.




          (f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled to receive any capital
shares other than Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof 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 Preferred Shares contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m),
and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares
shall apply on like terms to any such other shares.




          (g) 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 one one-hundredths of a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.




          (h) Unless the Company has exercised its election as provided in Section 11(i), upon each
adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c),
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 one one-hundredths of a
Preferred Share (calculated to the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-hundredths of a share 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.




          (i) The Company may elect on or after the date of any adjustment of the Purchase Price to
adjust the number of Rights, in lieu of any adjustment in the number of one one-hundredths of a
Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of one one-hundredths of a
Preferred Share 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 one-millionth) 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 (with prompt
written notice thereof to the Rights Agent) 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 Rights Certificates have been issued, shall be at least ten (10)
days later than but not including the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates




18









 




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 Rights Certificates held by such holders prior to the date of adjustment,
and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and delivered by the Company, and countersigned and delivered
by the Rights Agent, 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
Rights Certificates on the record date specified in the public announcement.




          (j) Irrespective of any adjustment or change in the Purchase Price or the number of one
one-hundredths of a Preferred Share issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredth of a share which were expressed in the
initial Rights Certificates issued hereunder.




          (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then stated value, if any, of the number of one one-hundredths of a Preferred Share 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 such number of one one-hundredths of a Preferred Share at such adjusted Purchase
Price.




          (l) In any case in which this Section 11 requires 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 (with
prompt written notice thereof to the Rights Agent) until the occurrence of such event the issuance
to the holder of any Right exercised after such record date the number of one one-hundredths of a
Preferred Share and other capital shares or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-hundredths of a
Preferred Share and other capital shares 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 (fractional or otherwise) or
securities upon the occurrence of the event requiring such adjustment.




          (m) Anything in this Section 11 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 in their good faith judgment the Board shall
determine to be advisable in order that any (i) consolidation or subdivision of the Preferred
Shares, (ii) issuance wholly for cash of any Preferred Shares at less than the Current Market
Price, (iii) issuance wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, (iv) Preferred Share dividends or (v)
issuance of rights, options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such shareholders.




19









 








          (n) The Company covenants and agrees that it shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof),
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a
series of related transactions, assets, cash flow or earning power aggregating more than fifty
percent (50%) of the assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the shareholders of
the Person who constitutes, or would constitute, the “Principal Party” for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates.




          (o) The Company covenants and agrees that, after the Distribution Date, it will not, except as
permitted by Section 24 or Section 27 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 diminish
substantially or otherwise eliminate the benefits intended to be afforded by the Rights.




          (p) Anything in this Agreement to the contrary notwithstanding, in the event that the Company
shall at any time after the Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding Common Shares into a smaller number of
shares, the number of Rights associated with each Common Share then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be proportionately adjusted so that
the number of Rights thereafter associated with each Common Share following any such event shall
equal the result obtained by multiplying the
number of Rights associated with each Common Share immediately prior to such event by a
fraction the numerator which shall be the total number of Common Shares outstanding immediately
prior to the occurrence of the event and the denominator of which shall be the total number of
Common Shares outstanding immediately following the occurrence of such event.




     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made or any event affecting the Rights or their exercisability (including without
limitation an event which causes the Rights to become null and void) occurs as provided in Section
11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment or describing such event, and a brief, reasonably detailed statement of the facts,
computations and methodology accounting for such adjustment, (b) promptly file with the Rights
Agent, and with each transfer agent for the Preferred Shares and the Common Shares, a copy of such
certificate and (c) if a Distribution Date has occurred, mail a brief summary thereof to each
holder of a Rights Certificate in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment or statement therein
contained and shall have no duty or liability with respect to, and
shall not be deemed to have
knowledge of, such adjustment or event unless and until it shall have received such certificate.



20









 





     Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning
Power.



          (a) If, following the Share Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding Common Shares shall be changed into or exchanged for shares
or other securities of any other Person or cash or any other property, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one transaction or a series of related transactions, assets, cash flow or earning power
aggregating more than fifty percent (50%) of the assets, cash flow or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies with Section 11(o)
hereof), then, and in each such case (except as may be contemplated by Section 13(d) hereof),
proper provision shall be made so that: (i) each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable Common Shares of the
Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is exercisable immediately prior to
the first occurrence of a Flip-Over Event (or, if a Flip-In Event has occurred prior to the
first occurrence of a Flip-Over Event, multiplying the number of such one one-hundredths of a share
for which a Right was exercisable immediately prior to the first occurrence of a Flip-In Event by
the Purchase Price in effect immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Flip-Over Event, shall be referred to as the “Purchase
Price” for each Right and for all purposes of this Agreement) by (2) fifty percent (50%) of the
Current Market Price (determined pursuant to Section 11(d)(i) hereof) per Common Share of such
Principal Party on the date of consummation of such Flip-Over Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Flip-Over Event, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term “Company” shall
thereafter be deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Flip-Over Event; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of its Common Shares) in connection with the
consummation of any such transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii)
hereof shall be of no effect following the first occurrence of any Flip-Over Event.





21









 








          (b) “Principal Party” shall mean:





          (i) in the case of any transaction described in clause (x) or (y) of the first sentence
of Section 13(a), the Person that is the issuer of any securities into which Common Shares
of the Company are converted in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to such merger or consolidation; and




          (ii) in the case of any transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the greatest portion of the assets,
cash flow or earning power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such Person are not at
such time and have not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so registered,
“Principal Party” shall refer to such other Person; and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Shares of two or
more of which are and have been so registered, “Principal Party” shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate market value.



          (c) The Company shall not consummate any such consolidation, merger, sale or transfer unless
the Principal Party shall have a sufficient number of authorized shares of its Common Shares which
have not been issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and
further providing that, as soon as practicable after the date of any consolidation, merger or
sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party will:





          (i) prepare and file a registration statement under the Act, with respect to the Rights
and the securities purchasable upon exercise of the Rights on an appropriate form, and will
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 Act) until the Expiration Date;




          (ii) take all such other action as may be necessary to enable the Principal Party to
issue the securities purchasable upon exercise of the Rights, including but not limited to
the registration or qualification of such securities under all requisite securities laws of
jurisdictions of the various states and the listing of such securities on such exchanges and
trading markets as may be necessary or appropriate; and




          (iii) will deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.



22









 





          (d) In no event shall the Rights Agent have any liability in respect of any such Principal
Party transactions, including, without limitation, the propriety thereof. The Rights Agent may rely
and be fully protected in relying upon a certificate of the Company stating that the provisions of
this Section 13 have been fulfilled. Notwithstanding anything in this Agreement to the contrary,
the prior written consent of the Rights Agent must be obtained in connection with any supplemental
agreement which alters the rights, immunities, duties and obligations of the Rights Agent.




          (e) In case the Principal Party which is to be a party to a transaction referred to in
this Section 13 has provision in any of its authorized securities or in its Certificate of
Incorporation or By-laws or other instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section 13, shares of Common
Shares of such Principal Party at less than the then Current Market Price per share (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Shares
of such Principal Party at less than such then Current Market Price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment, tax or similar
provisions in connection with the issuance of the Common Shares of such Principal Party pursuant to
the provisions of Section 13; then, in such event, the Company shall not consummate any such
transaction unless prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing that the provision in question of
such Principal Party shall have been cancelled, waived or amended, or that the authorized
securities shall be redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.




          (f) The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Flip-Over Event shall
occur at any time after the occurrence of a Flip-In Event, the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner described in Section
13(a).




     Section 14. Fractional Rights and Fractional Shares.



          (a) The Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights, the Company shall pay to the
registered holders of the Rights 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 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 of the Rights 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 NASDAQ Stock Market or, if the Rights are not listed or




23









 




admitted to trading on
The NASDAQ Stock Market, 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 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 Board. If on any such date
no such market maker is making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board shall be used.




          (b) The Company shall not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of
the Rights or to distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share). In lieu of
fractional Preferred Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Company may pay to the registered holders of Rights 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 one-hundredth of a Preferred Share. For purposes of this Section 14(b), the current
market value of one one-hundredth of a Preferred Share shall be one one-hundredth of the closing
price of a Preferred Share (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.




          (c) Following the occurrence of a Triggering Event, the Company shall not be required to issue
fractions of Common Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Company may pay to the
registered holders of Rights 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 (1) Common Share.
For purposes of this Section 14(c), the current market value of
one Common Share shall be the closing price of one (1) Common Share (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise.




          (d) 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 of a Right, except as
permitted by this Section 14.




          (e) Whenever a payment for fractional Rights or fractional shares is to be made by the Rights
Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting
forth in reasonable detail the facts related to such payments and the prices and/or formulas
utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in
the form of fully collected funds to make such payments. The Rights Agent shall be fully protected
in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed
to have knowledge of any payment for fractional Rights or fractional shares under any Section of
this Agreement relating to the payment of fractional Rights or fractional shares unless and until
the Rights Agent shall have received such a certificate and sufficient monies.




     Section 15. Exchange of Rights. At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may, at its option,



24









 




exchange the Rights (other than Rights owned by such person or group which will have become void), in whole or
in part, at an exchange ratio of one Common Share, or one one-hundredth (1/100) of a Preferred
Share (or of a share of a class or series of the Company’s preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment). If the Board authorizes
such an exchange, the Rights will immediately terminate and the only right of the holders of such
Rights will be to receive the exchange shares.




     Section 16. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 19 and Section 21 hereof,
are vested in the respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Shares), 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 Rights Certificate in the
manner provided in such Rights 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 by the Company of this Agreement
and shall be entitled to specific performance of the obligations hereunder and injunctive relief
against actual or threatened violations by the Company of the obligations hereunder of any Person
subject to this Agreement.



     Section 17. 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 Common Shares;




          (b) after the Distribution Date, the Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office or offices of the Rights Agent designated
for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;




          (c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem
and treat the Person in whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates
or the associated Common Share certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the
last sentence of Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and




          (d) 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




25









 




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, judgment, decree or ruling (whether interlocutory or final)
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, the Company must use its best efforts to have any such order, judgment, decree
or ruling lifted or otherwise overturned as soon as possible.




     Section 18. Rights Certificate Holder Not Deemed a Shareholder. No holder, as such,
of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of the number of one one-hundredths of a Preferred Share 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 Rights Certificate be construed to confer upon the holder
of any Rights Certificate, as such, any of the rights of a shareholder of the Company or any right
to vote for the election of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.



     Section 19. Concerning the Rights Agent.



          (a) The Company agrees to pay to the Rights Agent such compensation as shall be agreed in
writing from time to time by the Company and the Rights Agent 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 disbursements and other disbursements incurred in the preparation, negotiation,
delivery, amendment, 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 and all loss, liability, damage, judgment, fine, penalty, demand,
settlement, cost, claim or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent (which gross negligence, bad faith or willful misconduct
must be determined by a final, non-appealable judgment of a court of competent jurisdiction), for
any action taken, suffered or omitted by the Rights Agent in connection with the acceptance,
exercise, performance and administration of its duties under this Agreement, including the costs
and expenses of defending against any claim of liability in the premises. The costs and expenses
incurred in enforcing this right or indemnification shall be paid by the Company. The provisions
of this Section 19(a) shall survive the exercise or expiration of the Rights, the resignation,
replacement or removal of the Rights Agent and the termination of this Agreement.




          (b) The Rights Agent shall be authorized and protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its acceptance and
administration of this Agreement and the exercise and performance of its duties hereunder in
reliance upon any Rights Certificate or certificate for Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney, endorsement,




26









 




instruction,
opinion, 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, to be
verified or acknowledged by the proper Person or Persons, or otherwise upon the advice of counsel
as set forth in Section 21 hereof. The Rights Agent shall not be deemed to have knowledge of any
event of which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be
fully protected and shall incur no liability for failing to take action in connection therewith
unless and until it has received such notice.




     Section 20. Merger or Consolidation or Change of Name of Rights Agent.



          (a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to all or
substantially all the corporate trust or stock transfer or other shareholder services 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, however, that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 22 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent
and deliver such Rights 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
Rights 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 Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.




          (b) In case at any time the name of the Rights Agent shall be changed and at such time any of
the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.




     Section 21. Duties of Rights Agent. The Rights Agent undertakes to perform only the
duties and obligations expressly 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 Rights Certificates, by their acceptance thereof, shall
be bound:



          (a) The Rights Agent may consult with legal counsel of its selection (who may be legal counsel
for the Company or an employee of the Rights Agent), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as to any action taken,
suffered or omitted by it in accordance with such advice or opinion.





27









 








          (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 (including, without limitation, the identity of
any Acquiring Person and the determination of Current Market Price) 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 the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be full and complete
authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for
or in respect of any action taken, suffered or omitted by it under the provisions of this Agreement
in reliance upon such certificate.




          (c) The Rights Agent shall be liable hereunder to the Company and any other Person only for
its own gross negligence, bad faith or willful misconduct (which gross negligence, willful
misconduct or bad faith must be determined by a final, non-appealable judgment of a court of
competent jurisdiction). Anything to the contrary notwithstanding, in no event shall the Rights
Agent be liable for special, punitive, indirect, consequential or incidental 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. Any liability of the Rights Agent under this
Rights Agreement will be limited to the amount of annual fees paid by the Company to the Rights
Agent hereunder




          (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 Rights Certificates or be required to verify the
same (except as to its countersignature on such Rights Certificates), 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 have any liability for or be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights (including the
Rights becoming null and void pursuant to Section 7(e) hereof) or any change or adjustment in the
terms of the Rights required under the provisions of Section 3, Section 11, Section 13 or Section
24 hereof or responsible for the manner, method or amount of any such change or adjustment or the
ascertaining of the existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Rights Certificates after actual notice
pursuant to Section 12, upon which the Rights Agent may rely, of any such adjustment); nor shall it
by any act hereunder be deemed to make any representation or warranty as to the authorization or
reservation of any Common Shares or Preferred Shares to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any Common Shares or Preferred Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable; nor shall the Rights Agent be
responsible for the legality of the terms hereof in its capacity as an administrative agent.





28









 








          (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 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 the Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in connection with its duties,
and such instructions shall be full authorization and protection to the Rights Agent and the Rights
Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance
with instructions of any such officer or for any delay in acting while waiting for those
instructions. The Rights Agent shall be fully authorized and protected in relying upon the most
recent instructions received from any such officer. 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, suffered or omitted by the Rights Agent under this Agreement and
the date on and/or after which such action shall be taken or suffered or such omission shall be
effective. The Rights Agent shall not be liable for any action taken or suffered by, or omission
of, the Rights Agent in accordance with a proposal included in such application on or after the
date specified in such application (which date shall not be less than three Business Days after but
not including the date any officer of the Company actually receives such application, unless any
such officer shall have consented in writing to any 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
specifying the action to be taken, suffered or omitted.




          (h) The Rights Agent and any shareholder, affiliate, 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 the
Rights Agent were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such shareholder, affiliate, director, officer or employee from acting in any other
capacity for the Company or for any other Person.




          (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 (through its directors, officers and employees) 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 or any other Person resulting from any such act, default, neglect or misconduct, absent
gross negligence, willful misconduct or bad faith in the selection and continued employment thereof
(which gross negligence, willful misconduct or bad faith must be determined by a final,
non-appealable judgment of a court of competent jurisdiction).




          (j) 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 it reasonably believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.





29









 








          (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, 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)
and/or (2) thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.




          (l) The Company agrees to give the Rights Agent prompt written notice of any event or
ownership which would prohibit the exercise or transfer of the Rights Certificates.




     Section 22. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon thirty (30) days’ notice in
writing mailed to the Company, and to each transfer agent of the Common Shares and Preferred Shares
known to the Rights Agent, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights
Agent upon thirty (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 Common Shares and Preferred Shares, by
registered or certified mail, and to the holders of the Rights 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 thirty (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 Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the Rights Agent or any registered holder of any Rights
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) a Person organized and doing business under the laws of the United States or of any State
thereof, in good standing, which is authorized under such laws to exercise corporate trust, stock
transfer or shareholder services powers and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a Person
described in clause (a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, immunities, duties and obligations 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 Common Shares
and the Preferred Shares, and, if such appointment occurs after the Distribution Date, mail a
notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any
notice provided for in this Section 22, 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 23. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price and the number or kind or class of



30









 




shares or
other securities or property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, granted or awarded as of the Distribution
Date, or upon the exercise, conversion or exchange of securities hereinafter issued by the Company,
and (b) may, in any other case, if deemed necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of Rights in connection with such issuance or
sale; provided, however, that (i) no such Rights Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.




     Section 24. Redemption and Termination.



          (a) The Board may, at its option, at any time prior to the earlier of (i) the Close of
Business on the tenth Business Day following the Share Acquisition Date (or, if the Share
Acquisition Date shall have occurred prior to the Record Date, the Close of Business on
the tenth Business Day following the Record Date), or (ii) the Final Expiration Date, redeem
all but not less than all of the then outstanding Rights at a redemption price of $.01 per Right,
as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being hereinafter referred to as
the “Redemption Price”). Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Flip-In Event until such time as
the Company’s right of redemption hereunder has expired. The Company may, at its option, pay the
Redemption Price in cash, Common Shares (based on the Current Market Price, as defined in Section
11(d)(i) hereof, of the Common Shares at the time of redemption) or any other form of consideration
deemed appropriate by the Board.




          (b) Immediately upon the action of the Board ordering the redemption of the Rights, evidence
of which shall have been filed with the Rights Agent 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 for each Right so held. Promptly after
the action of the Board ordering the redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at each holder’s last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares. 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
method by which the payment of the Redemption Price will be made.




          (c) Notwithstanding the provisions of Section 24(a) hereof, in the event that a majority of
the Board is elected by shareholder action by written consent, or is comprised of persons elected
at a meeting of shareholders who were not nominated or recommended by the




31









 




Board in office
immediately prior to such meeting, then for a period of one hundred and eighty (180) days following
the effectiveness of such election the Rights shall not be redeemed if such redemption is
reasonably likely to have the purpose or effect of allowing any Person to become an Acquiring
Person or otherwise facilitating the occurrence of a Triggering Event or a transaction with an
Acquiring Person.




     Section 25. Notice of Certain Events.



          (a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any
dividend payable in shares of any class to the holders of Preferred Shares or to make any other
distribution to the holders of Preferred Shares (other than a regular quarterly cash dividend out
of earnings or retained earnings of the Company), or (ii) to offer to the holders of Preferred
Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares
of any class or any other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the subdivision of outstanding
Preferred Shares), or (iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof),
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 transaction or a series of related
transactions, of more than fifty percent (50%) of the assets, cash flow or earning power of
the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) 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 Rights Certificate and to the
Rights Agent, to the extent feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Preferred Shares, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (i) or (ii) above at
least twenty (20) days prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least twenty (20) days prior
to the date of the taking of such proposed action or the date of participation therein by the
holders of the Preferred Shares whichever shall be the earlier.




          (b) If any Flip-In Event shall occur, then (i) the Company shall as soon as practicable
thereafter give to the Rights Agent and, to the extent feasible, to each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Preferred Shares shall be
deemed thereafter to refer to Common Shares and/or, if appropriate, other securities.




     Section 26. Notices. Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights 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:



32









 






R. G. Barry Corporation

13405 Yarmouth Road, N.W.

Pickerington, Ohio 43147

Attention: Corporate Secretary


Subject to the provisions of Section 22, any notice or demand authorized by this Agreement to be
given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing by the Rights Agent with the Company) as follows:





The Bank of New York Mellon

c/o Mellon Investor Services LLC

BNY Mellon Shareowner Services

300 Galleria Parkway — Suite 1020

Atlanta, Georgia 30339

Attention: Relationship Manager




with a copy to:




Mellon Investor Services LLC

Newport Office Center VII

480 Washington Boulevard

Jersey City, New Jersey 07310

Attention: General Counsel


Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing Common Shares) 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 Company.




     Section 27. Supplements and Amendments. Prior to the Distribution Date, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates representing Common Shares. From and
after the Distribution Date, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights 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 change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which shall not adversely affect the interests of
the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person); provided, from and after the Distribution Date, this Agreement may not be
supplemented or amended to lengthen pursuant to clause (iii) of this sentence any time period
hereunder, unless such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights
Agent. Upon the delivery of a certificate from an appropriate officer of the



33









 




Company, which
states that the proposed supplement or amendment, is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Notwithstanding any other
provision hereof, the Rights Agent’s consent must be obtained regarding any amendment or supplement
which alters the Rights Agent’s rights, immunities, duties and obligations under this Agreement,
and the Rights Agent may, but shall not be obligated to, enter into any such amendment or
supplement. Notwithstanding anything contained herein to the contrary, this Agreement may not be
amended at a time when the Rights are not redeemable. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the holders of Common
Shares.




     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.



     Section 29. Determinations and Actions by the Board of Directors, etc. For all
purposes of this Agreement, any calculation of the number of Common Shares outstanding at any
particular time, including for purposes of determining the particular percentage of such
outstanding Common Shares of which any Person is the Beneficial Owner, shall 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 Board shall have the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board 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, and (ii) make
all determinations deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (y) not subject the Board to any liability to the holders of
the Rights. The Rights Agent is entitled always to assume the Company’s Board acted in good faith
and shall be fully protected and incur no liability in reliance thereon.



     Section 30. 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
Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Shares)
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
Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Shares).



     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, that notwithstanding anything in
this Agreement to the contrary, if any such term, provision, covenant or restriction is held by
such court or authority to be



34









 







invalid, void or unenforceable and the Board determines in its good
faith judgment that severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in Section 24 hereof shall
be reinstated and shall not expire until the Close of Business on the tenth day following the date
of such determination by the Board; provided further, however, that if such excluded provision
shall affect the rights, immunities, duties and obligations of the Rights Agent, the Rights Agent
shall be entitled to resign immediately.



     Section 32. Governing Law. This Agreement, each Right and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the laws of the State of Ohio and for
all purposes shall be governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such State; provided, however,
that all provisions regarding the rights, immunities, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of New York applicable
to contracts made to be performed entirely within such State.



     Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and by facsimile and electronic transmission 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. 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. 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 malfunctions 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.



[Remainder of page intentionally blank. Signatures follow.]




35









 








     IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to be duly executed,
all as of the day and year first above written.



	 	 	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	R. G. BARRY CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By: 

Name:

	 	/s/ Jose Ibarra
 

Jose Ibarra
	 	 	 	By:

Name:
	 	/s/ Greg Tunney
 

Greg Tunney
	 	 
	Title:

	 	Senior Vice President-Finance
	 	 	 	Title:
	 	President and	 	 
	 

	 	Chief Financial Officer and Secretary
	 	 	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	THE BANK OF NEW YORK MELLON,

as Rights Agent	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Rita A. Swartz	 	 	 	By:	 	/s/ Mitzi Brinkman 	 	 
	Name:

	 	 

Rita A. Swartz	 	 	 	Name:
	 	 
Mitzi Brinkman
	 	 
	Title:

	 	Relationship Manager	 	 	 	Title:	 	Relationship Manager 	 	 






36









 






Exhibit A




FORM OF CERTIFICATE OF AMENDMENT

TO THE ARTICLES OF INCORPORATION OF

R. G. BARRY CORPORATION AUTHORIZING THE

SERIES II JUNIOR PARTICIPATING CLASS A PREFERRED SHARES




     RESOLVED, that pursuant to the authority vested in the Board of Directors by Article FOURTH,
Section II of the Articles of Incorporation of R. G. Barry Corporation (the “Company”), Article
FOURTH of the Articles of Incorporation of the Company be, and the same hereby is, amended to add a
new Article FOURTH, Section X to fix the division of 225,000 shares of the existing authorized and
unissued Class A Preferred Shares, par value $1.00 per share, into a series designated as “Series
II Junior Participating Class A Preferred Shares” the express terms of which are as follows:



     X. Series II Junior Participating Class A Preferred Shares.



     A. Designation of Series. The series shall be designated “Series II Junior
Participating Class A Preferred Shares,” par value $1.00 per share (hereinafter called “Series II
Class A Preferred Shares”).



     B. Number of Shares. The authorized number of shares of Series II Class A Preferred
Shares is 225,000, which number the Board of Directors may increase or decrease to the extent
appropriate in connection with the terms under which such Series II Class A Preferred Shares (or
options or rights related thereto) are issued; provided, that no decrease shall reduce the number
of Series II Class A Preferred Shares to a number less than that of the shares then outstanding
plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Company.



     C. Dividend Payment Dates. The dates on which dividends on shares of the Series II
Class A Preferred Shares shall be payable are the fifteenth day of March, June, September and
December of each year (each such date being referred to herein as a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series II Class A Preferred Shares.



     D. Dividend Rate. The dividend rate for the Series II Class A Preferred Shares shall
be, subject to the provision for adjustment hereinafter set forth, one hundred (100) times the
aggregate per share amount (payable in kind) of all non-cash dividends or other distributions
(other than a dividend payable in Common Shares (by reclassification or otherwise)), declared on
the Common Shares, par value $1.00 per share, of the Company since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series II Class A Preferred Shares.
In the event the Company shall at any time after May 1, 2009 (i) declare or pay any dividend on
its Common Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares or (iii)
combine the outstanding Common Shares into a smaller number of shares, then in each such case, the
amount to which holders of shares of Series II Class A Preferred Shares were entitled immediately
prior to such event under this Paragraph shall be adjusted by multiplying



37









 







such amount by a fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.



     Subject to the prior and superior rights of the holders of any preferred shares ranking prior
and superior to the Series II Class A Preferred Shares with respect to dividends, the Company shall
declare a dividend or distribution on the Series II Class A Preferred Shares as provided in the
immediately preceding subparagraph after it declares a dividend or distribution on the Common
Shares (other than a dividend payable in Common Shares); provided that, in the event no dividend or
distribution shall have been declared on the Common Shares during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $0.50
per share on the Series II Class A Preferred Shares shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.



     E. Cumulative Dates. Dividends shall begin to accrue and be cumulative on outstanding
shares of Series II Class A Preferred Shares from the Quarterly Dividend Payment Date next
preceding the date of issue of such Series II Class A Preferred Shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series II Class A Preferred Shares entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the Series II Class
A Preferred Shares in an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series II Class A Preferred Shares entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more than 45 days prior to
the date fixed for the payment thereof.



     F. Voting Rights. The holders of shares of Series II Class A Preferred Shares shall
have the voting rights set forth in Article FOURTH of the Articles of Incorporation and as may
otherwise be required by law.



     G. Reacquired Shares. Any Series II Class A Preferred Shares purchased or otherwise
acquired by the Company in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become authorized but unissued
Class A Preferred Shares and may be reissued as part of a new series of Class A Preferred Shares to
be created by resolution or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.



     H. Liquidation, Dissolution or Winding Up.



          (1) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Company,
no distribution shall be made to the holders of shares ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series II Class A Preferred




38









 




Shares unless, prior thereto, the holders of shares of Series II Class A Preferred Shares
shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the “Series II Class A
Liquidation Preference”). Following the payment of the full amount of the Series II Class A
Liquidation Preference, no additional distributions shall be made to the holders of shares of
Series II Class A Preferred Shares unless, prior thereto, the holders of (Common Shares shall have
received an amount per share (the “Common Adjustment”) equal to the quotient obtained by dividing
(i) the Series II Class A Liquidation Preference by (ii) one hundred (100) (as appropriately
adjusted as set forth in subparagraph 3 below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Shares) (such number in clause (ii), the
“Adjustment Number”). Following the payment of the full amount of the Series II Class A
Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series II
Class A Preferred Shares and Common Shares, respectively, holders of Series II Class A Preferred
Shares and holders of Common Shares shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such
Series II Class A Preferred Shares and Common Shares, on a per share basis, respectively.




          (2) In the event, however, that there are not sufficient assets available to permit payment in
full of the Series II Class A Liquidation Preference and the liquidation preferences of all other
series of preferred stock, if any, which rank on a parity with the Series II Class A Preferred
Shares, then such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event, however, that
there are not sufficient assets available to permit payment in full of the Common Adjustment, then
such remaining assets shall be distributed ratably to the holders of Common Shares.




          (3) In the event the Company shall at any time after May 1, 2009 (i) declare any dividend on
Common Stock payable in Common Shares, (ii) subdivide the outstanding Common Shares, or (iii)
combine the outstanding Common Shares into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.




     I. Consolidation, Merger, etc. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Shares are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case the shares of Series II Class A Preferred Shares shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter
set forth) equal to one hundred (100) times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for which each Common Share
is changed or exchanged. In the event the Company shall at any time after May 1, 2009 (i) declare
any dividend on Common Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, or (iii) combine the outstanding Common Shares into a smaller number of shares, then in
each such case the amount set forth in the preceding



39









 







sentence with respect to the exchange or change of shares of Series II Class A Preferred
Shares shall be adjusted by multiplying such amount by a fraction the numerator of which is the
number of Common Shares outstanding immediately after such event and the denominator of which is
the number of Common Shares that were outstanding immediately prior to such event.



     J. No Redemption. The Series II Class A Preferred Shares shall not be redeemable.



     K. Ranking. The Series II Class A Preferred Shares shall rank junior to all other
series of the Company’s Class A or Class B Preferred Shares as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall provide otherwise.



     L. Amendment. So long as any Series II Class A Preferred Shares are outstanding, the
Articles of Incorporation of the Company shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the Series II Class A
Preferred Shares so as to affect them adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series II Class A Preferred Shares, voting separately
as a class.



     M. Fractional Shares. Series II Class A Preferred Shares may be issued in fractions
of a share which shall entitle the holder, in proportion to such holder’s fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series II Class A Preferred Shares.



40









 





Exhibit B




[Form of Rights Certificate]




Certificate No. R-                     Rights



NOT EXERCISABLE AFTER MAY 1, 2014 OR EARLIER IF REDEEMED BY THE COMPANY, THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH
TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.](1)




Rights Certificate




R. G. BARRY CORPORATION




     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                     , 2009, (the “Rights
Agreement”), between R. G. Barry Corporation, an Ohio corporation (the “Company”), and The Bank of
New York Mellon, a New York banking corporation (the “Rights Agent”), to purchase from the Company
at any time prior to 5:00 P.M. (New York City time) on                     , 2014 at the office or offices of
the Rights Agent designated for such purpose, or its successors as Rights Agent, one one-hundredth
of a fully paid, non-assessable Series II Junior Participating Class A Preferred Share (the
“Preferred Shares”) of the Company, at a purchase price of $25.00 per one one-hundredth of a share
(the “Purchase Price”), upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set
forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as
of                     , 2009, based on the Preferred Shares as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement) that a number of Rights be exercised so that only whole Preferred
Shares will be issued.





 




			
	(1)	 	The portion of the legend in brackets shall be inserted only if applicable and shall replace
the preceding sentence.




41









 










     Upon the occurrence of a Flip-In Event (as such term is defined in the Rights Agreement), if
the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Flip-In Event.



     As provided in the Rights Agreement, the Purchase Price and the number and kind of Preferred
Shares or other securities, which may be purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to modification and adjustment upon the happening of certain
events, including Triggering Events.



     This Rights 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 full
description of the rights limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of
rights include the temporary suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written request to the
Rights Agent.



     This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office or offices of the Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of one-tenths of a Preferred Share as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or Rights 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 $.0l per Right at any time
prior to the earlier of the Close of Business on (i) the tenth Business Day following the Share
Acquisition Date (as such time period may be extended pursuant to the Rights Agreement), and (ii)
the Final Expiration Date. The foregoing notwithstanding, the Rights generally may not be redeemed
for one hundred eighty (180) days following a change in a majority of the Board as a result of a
proxy contest.



     No fractional Preferred Shares will be issued upon the exercise of any Right or Rights
evidenced hereby (other than, except as set forth in the Rights Agreement, fractions which are
integral multiples of one one-hundredths of a Preferred Share, 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.



42









 





     No holder of this Rights Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of Preferred Shares 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 shareholder of the Company or any right to vote for the election of directors or upon
any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions affecting shareholders (except
as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.



     This Rights 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                           , 2009




ATTEST: R. G. BARRY CORPORATION




	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Secretary	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Countersigned:	 	 	 	 	 	 	 	 
	 
	[BANK]	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Authorized Signatory	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date of Countersignature:	 	 	 	 	 	 	 	 






43









 






[Form of Reverse Side of Rights Certificate]




FORM OF ASSIGNMENT



(To be executed by the registered holder if such holder desires to transfer the Rights Certificate.)





			
	FOR VALUE RECEIVED	 	
 







			
	hereby sells, assigns and transfers unto	 	
 






 





(Please print name and address of transferee)




 





this Rights Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint                                          Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of substitution.




Dated:                                         , 20     




    
                                                   
                
         

Signature




Signature Guaranteed:




     Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program.



Certificate




     The undersigned hereby certifies by checking the appropriate boxes that:



     (1) this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring 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 Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.



	 	 	 	 	 	 	 
	Dated:                     , 20     
	 	 	 	 	 	 
	 

	 	 	 	 

Signature
	 	 






Signature Guaranteed:




     Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program.



44









 





NOTICE




     The signature to the foregoing Assignment and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.



FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to exercise Rights represented by the Rights Certificate.)




     To: R. G. BARRY CORPORATION:



     The undersigned hereby irrevocably elects to exercise                      Rights represented by this
Rights Certificate to purchase the Preferred Shares issuable upon the exercise of the Rights (or
such other securities of the Company or of any other person which may be issuable upon the exercise
of the Rights) and requests that certificates for such shares be issued in the name of and
delivered to:



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 Rights Certificate, a
new Rights Certificate for the balance 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:                     , 20     




                                                            
Signature




Signature Guaranteed:




     Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program.



45









 





Certificate




     The undersigned hereby certifies by checking the appropriate boxes that:



     (1) the Rights evidenced by this Rights 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
Acquiring 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 Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.



	 	 	 	 	 	 	 
	Dated:                     , 20     
	 	 	 	 	 	 
	 

	 	 	 	 

Signature
	 	 






Signature Guaranteed:




NOTICE




     The signature to the foregoing Election to Purchase and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.



46









 





Exhibit C




SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES




     On May 1, 2009, the Board of Directors of R. G. Barry Corporation (the “Company”) declared a
dividend distribution of one Right for each outstanding Common Share of the Company to shareholders
of record at the close of business on May 15, 2009. Each Right entitles the registered holder to
purchase from the Company a unit consisting of one one-hundredth (1/100) of a share (a “Unit”) of
Series II Junior Participating Class A Preferred Shares, par value $1.00 per share (the “Preferred
Shares”) at a Purchase Price of $25.00 per Unit, subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the “Rights Agreement”) between the Company and
The Bank of New York Mellon, as Rights Agent.



     Initially, the Rights will be attached to all certificates representing Common Shares then
outstanding (or, in the case of uncertificated Common Shares, by the book-entry account that
evidences record ownership of such shares), and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Shares and a Distribution Date will occur
upon the earlier of (i) 10 business days 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 Shares (the
“Share Acquisition Date”), other
than as a result of repurchases of stock by Company or certain inadvertent actions by institutional
or certain other shareholders, or (ii) 10 business days (or such later date as the Board shall
determine) following the commencement of a tender offer or exchange offer that would result in a
person or group beneficially owning 15% or more of such outstanding Common Shares. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Share certificates and will be
transferred with and only with such Common Share certificates, (ii) new Common Share certificates
issued after the Record Date will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Common Shares outstanding
will also constitute the transfer of the Rights associated with the Common Shares represented by
such certificate.



     The Rights are not exercisable until the Distribution Date and will expire at the close of
business on May 1, 2014, unless earlier redeemed or exchanged by the Company as described below.



     As soon as practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of the Common Shares as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise
determined by the Board of Directors, only shares of Common Shares issued prior to the Distribution
Date will be issued with Rights.



     In the event that a Person becomes the beneficial owner of 15% or more of the then outstanding
Common Shares, each holder of a Right will thereafter have the right to receive, upon exercise,
Common Shares (or, in certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this



47









 







paragraph, all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and void. However, Rights
are not exercisable following the occurrence of the event set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.



     For example, at an exercise price of $25.00 per Right, each Right not owned by an Acquiring
Person (or by certain related parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase $50.00 worth of Common Shares (or other consideration, as
noted above) for $25.00. Assuming that the Common Shares had a per share value of $12.50 at such
time, the holder of each valid Right would be entitled to purchase four Common Shares for $25.00.



     In the event that, at any time following the Share Acquisition Date, (i) the Company is
acquired in a merger or other business combination transaction in which the Company is not the
surviving corporation, or (ii) 50% or more of the Company’s assets, cash flow or earning power is
sold or transferred, each holder of a Right (except Rights which previously have been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common shares of the
acquiring company having a value equal to two times the exercise price of the Right. The events
set forth in this paragraph and in the second preceding paragraph are referred to as the
“Triggering Events.”



     At any time until 10 business days following the Share Acquisition Date, the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right (payable in cash, Common
Shares or other consideration deemed appropriate by the Board of Directors). Immediately upon the
action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the $.01 redemption price. The Board of
Directors may also exchange the Rights at a ratio of one Common Share or one one-hundredth of a
Preferred Share per Right (subject to adjustment).



     Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Company, including, without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to shareholders or to the Company, shareholders
may, depending upon the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Shares (or other consideration) of the Company or for common shares of the
acquiring company as set forth above.



     Any of the provisions of the Rights Agreement may be amended by the Board of Directors of the
Company prior to the Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights, or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment may be made at such time as the
Rights are not redeemable.



     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Current Report on Form 8-K. 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 incorporated herein by reference.




48