Exhibit 4.2


 





northern technologies
international corporation


DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF


THE SECURITIES EXCHANGE ACT OF 1934





 


Northern Technologies International Corporation, a Delaware corporation (referred to
as NTIC, we, us and our), has only one class of securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended: common stock, par value $0.02 per share (common stock).


 


The following description of our common stock is a summary and does not purport to be
complete. It is subject to and qualified in its entirety by reference to our Restated Certificate of Incorporation, as amended
(Charter), and our Amended and Restated Bylaws (Bylaws), which are filed as exhibits to our Annual Report on Form 10-K for the
fiscal year ended August 31, 2020 and are incorporated by reference herein. We encourage you to read our Charter, our Bylaws and
the applicable provisions of the General Corporation Law of the State of Delaware (DGCL) for additional information.


 


Authorized Shares


 


Our Charter authorizes the issuance of up to 15,010,000 shares of capital stock, consisting
of:


 


		·	15,000,000
                                         shares of common stock; and



 


		·	10,000
                                         shares of preferred stock, no par value per share (preferred stock).



 


As of August 31, 2020, we had 9,099,990 shares of common stock outstanding and no preferred
stock outstanding.


 





We may amend from time to time our Charter to increase the number of authorized shares
of common stock or preferred stock. Any such amendment would require the approval of the holders of a majority of the voting power
of the shares entitled to vote thereon.


 


Voting Rights


 


Each holder of our common stock is entitled to one vote per share registered in the holder’s
name on our books on all matters submitted to a vote of stockholders. Our common stock does not have cumulative voting rights.
Our Bylaws provide that, in all matters, other than the election of directors and except as otherwise required by law, the Charter,
or the Bylaws, the affirmative vote of a majority of the voting power of the shares present or represented by proxy at the meeting
and entitled to vote on the subject matter shall be the act of the stockholders. Directors shall be elected by a plurality of the
voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.


 


Dividend Rights


 


Subject to applicable law and the rights, if any, of the holders of outstanding shares
of any series of preferred stock we may designate and issue in the future, holders of our common stock are entitled to receive
ratably the dividends, if any, at such times and in such amounts as may be declared by the Board. Dividends may be paid in cash,
in property, or in shares of the capital stock, subject to the provisions of the Charter. Before payment of any dividend, there
may be set aside out of any funds of NTIC available for dividends such sum or sums as the directors from time to time, in their
absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing
or maintaining any property of NTIC, or for such other purpose as the directors think is in the best interest of NTIC, and the
directors may modify or abolish any such reserve in the manner in which it was created.


 






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Liquidation Rights


 


If there is a liquidation, dissolution or winding up of NTIC, subject to applicable law
and the rights, if any, of the holders of outstanding shares of any series of preferred stock we may designate and issue in the
future, holders of our common stock are entitled to share ratably in all the assets that remain after we pay our liabilities.


 


Other Rights and Preferences


 


Holders of our common stock do not have preemptive or subscription rights, and they have
no right to convert their common stock into any other securities, and there are no redemption or sinking fund provisions applicable
to our common stock. The rights, preferences, and privileges of common stockholders are subject to the rights of the stockholders
of any series of preferred stock which we may designate in the future. Our Charter and Bylaws do not restrict the ability of a
holder of common stock to transfer his or her shares of common stock. All currently outstanding shares of our common stock are
fully paid and nonassessable.


 


Transfer Agent and Registrar


 


The transfer agent and registrar for our common stock is Broadridge Financial Services.


 


Exchange Listing


 


Our common stock is listed on the Nasdaq Global Market under the symbol “NTIC.”


 


Anti-Takeover Effects of Certain Provisions of our Charter and Bylaws and the DGCL


 


Our Charter and Bylaws and the DGCL contain provisions that may have the anti-takeover
effect of delaying, deferring or preventing a change in control of NTIC.


 


Anti-Takeover Provisions in our Charter and Bylaws


 


Our Charter and Bylaws contain the following anti-takeover provisions that may have the
anti-takeover effect of delaying, deferring or preventing a change in control of NTIC:


 


		·	We have shares of common stock and preferred stock available for future issuance without stockholder approval. The existence
of unissued and unreserved common stock and preferred stock may enable the Board of Directors to issue shares to persons friendly
to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt
to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our
management.



 


		·	The Board of Directors may adopt, amend or repeal our Bylaws, subject to the reserved power of the stockholders to adopt, amend
or repeal our Bylaws.



 


		·	Special meetings of our stockholders may be called only by our Chairman of the Board, Chief Executive Officer or President
at the request in writing of stockholders owning a majority in the amount of the entire capital stock of NTIC issued and outstanding
and entitled to vote.



 


		·	Stockholders must follow advance notice procedures to submit proposals for business to be brought before an annual meeting
of stockholders. Additionally, stockholders must follow advance notice procedures to propose nominees for election to our Board
of Directors at an annual meeting of stockholders.



 


		·	Subject to the rights, if any, of the holders of any series of preferred stock then outstanding, vacancies and newly created
directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then
in office though less than a quorum, and each director so chosen shall hold office until the next annual election or until a successor
is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.






 



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Delaware Business Combination Statute


 


We are a Delaware corporation and are subject to Section 203 of the DGCL, known as the
Delaware Business Combination Statute. In general, Section 203 of the DGCL prohibits a publicly-held Delaware corporation from
engaging in a “business combination” with an “interested stockholder” for a period of three years following
the time at which the stockholder became an interested stockholder, unless:


 


		·	Prior
                                         to the time the stockholder became an interested stockholder, the board of directors
                                         of the corporation approved either the business combination or the transaction that resulted
                                         in the stockholder becoming an interested stockholder;



 


		·	Upon
                                         consummation of the transaction that resulted in the stockholder becoming an interested
                                         stockholder, the interested stockholder owned at least 85% of the voting stock of the
                                         corporation outstanding at the time the transaction commenced, exclusive of shares owned
                                         by directors who are also officers and by certain employee stock plans; or



 


		·	At
                                         or subsequent to such time, the business combination is approved by the board of directors
                                         and authorized at an annual or special meeting of the stockholder by the affirmative
                                         vote of at least two-thirds of the outstanding voting stock that is not owned by the
                                         interested stockholder.



 


Generally, for purposes of the Delaware Business Combination Statute, a “business
combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested
stockholder, and an “interested stockholder” is a person who owns, individually or through other persons, 15% or more
of the corporation’s outstanding voting stock at any time within the three-year period immediately before the date of determination.


 


 


 


 


 


 


 


 


 


 


 


 


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