Document:

Stockholder Protection Rights Agreement, dated October 30, 2007

 Exhibit 4.2 
  

 STOCKHOLDER PROTECTION RIGHTS AGREEMENT 
 dated as of 
 October 30, 2007 
 between 
 ZEP INC. 

and 
 MELLON INVESTOR SERVICES
LLC 
 as Rights Agent 
  

 STOCKHOLDER PROTECTION RIGHTS AGREEMENT 
 Table of Contents 
  

					
	 	  	 	  	Page
	ARTICLE I CERTAIN DEFINITIONS	  	2
	 1.1
	  	Certain Definitions	  	2
		
	ARTICLE II THE RIGHTS	  	9
	 2.1
	  	Legend on Common Stock Certificates	  	9
	 2.2
	  	Exercise of Rights; Separation of Rights	  	11
	 2.3
	  	Adjustments to Exercise Price; Number of Rights	  	14
	 2.4
	  	Date on Which Exercise is Effective	  	16
	 2.5
	  	Execution, Authentication, Delivery and Dating of Rights Certificates	  	16
	 2.6
	  	Registration, Registration of Transfer and Exchange	  	17
	 2.7
	  	Mutilated, Destroyed, Lost and Stolen Rights Certificates	  	19
	 2.8
	  	Persons Deemed Owners	  	20
	 2.9
	  	Delivery, Cancellation and Destruction of Certificates	  	20
	 2.10
	  	Agreement of Rights Holders	  	21
		
	ARTICLE III ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS	  	22
	 3.1
	  	Flip-in	  	22
	 3.2
	  	Flip-over	  	25
		
	ARTICLE IV THE RIGHTS AGENT	  	26
	 4.1
	  	General	  	26
	 4.2
	  	Merger or Consolidation or Change of Name of Rights Agent	  	28
	 4.3
	  	Duties of Rights Agent	  	29
	 4.4
	  	Change of Rights Agent	  	33
		
	ARTICLE V MISCELLANEOUS	  	34
	 5.1
	  	Redemption	  	34
	 5.2
	  	Expiration	  	35
	 5.3
	  	Issuance of New Rights Certificates	  	35
	 5.4
	  	Supplements and Amendments	  	36
	 5.5
	  	Fractional Shares	  	36
	 5.6
	  	Rights of Action	  	37
	 5.7
	  	Holder of Rights Not Deemed a Stockholder	  	38
	 5.8
	  	Notice of Proposed Actions	  	38
	 5.9
	  	Notices	  	38
	 5.10
	  	Suspension of Exercisability	  	40
	 5.11
	  	Costs of Enforcement	  	40
	 5.12
	  	Successors	  	40
	 5.13
	  	Benefits of this Agreement	  	40

  

 i 

					
	 5.14
	  	Determination and Actions by the Board of Directors, etc.	  	41
	 5.15
	  	Descriptive Headings	  	41
	 5.16
	  	GOVERNING LAW	  	41
	 5.17
	  	Counterparts	  	42
	 5.18
	  	Severability	  	42
		  	  
 EXHIBITS
  
	  	
	 Exhibit A
	  	Form of Rights Certificate (Together with Form of Election to Exercise)	  	
			
	 Exhibit B
	  	Form of Article IV. C to Restated Certificate of Incorporation of Zep Inc. (setting forth terms of Participating Preferred Stock)	  	

  

 ii 

 STOCKHOLDER PROTECTION RIGHTS AGREEMENT 
 STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time, this “Agreement”), dated as of October 30, 2007, between Zep Inc.,
a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited liability company, as rights agent (the “Rights Agent”, which term shall include any successor Rights Agent hereunder). 
 WITNESSETH: 
 WHEREAS, the Board of
Directors of the Company has (a) authorized and declared a dividend of one right (“Right”) in respect of each share of Common Stock (as hereinafter defined) held of record as of 5:00 p.m. New York City time on October 31, 2007
(the “Record Time”) and (b) as provided in Section 2.3, authorized the issuance of one Right in respect of each share of Common Stock issued on or after the date hereof and prior to the Separation Time (as hereinafter defined)
and, to the extent provided in Section 5.3, each share of Common Stock issued after the Separation Time; 
 WHEREAS, subject to the
terms and conditions hereof, each Right entitles the holder thereof, after the Separation Time, to purchase securities or assets of the Company (or, in certain cases, securities of certain other entities) pursuant to the terms and subject to the
conditions set forth herein; and 
 WHEREAS, the Company desires to appoint the Rights Agent to act on behalf of the Company, and the Rights
Agent is willing so to act, in connection with the issuance, transfer, exchange and replacement of Rights Certificates (as hereinafter defined), the exercise of Rights and other matters referred to herein; 

 NOW THEREFORE, in consideration of the premises and the respective agreements set forth herein, the
parties hereby agree as follows: 
 ARTICLE I 
 CERTAIN DEFINITIONS 
 1.1 Certain Definitions. For purposes of this Agreement, the following terms
have the meanings indicated: 
 “Acquiring Person” shall mean any Person, together with all Affiliates and Associates of such
Person, who is or becomes the Beneficial Owner of 15% or more of the outstanding shares of Common Stock; provided, however, that the term “Acquiring Person” shall not include (i) Acuity Brands, Inc., a Delaware
corporation (“Parent”), until the effective date of the distribution of shares of Common Stock by Parent as contemplated by the Agreement and Plan of Distribution, dated as of October 31, 2007, between Parent and the Company;
(ii) any Person who is the Beneficial Owner of 15% or more of the outstanding shares of Common Stock on the date of this Agreement or who shall become the Beneficial Owner of 15% or more of the outstanding shares of Common Stock solely as a
result of an acquisition by the Company of shares of Common Stock, until such time hereafter or thereafter as any of such Persons shall become the Beneficial Owner (other than by means of a stock dividend or stock split) of any additional shares of
Common Stock, or (iii) any Person who becomes the Beneficial Owner of 15% or more of the outstanding shares of Common Stock but who acquired Beneficial Ownership of shares of Common Stock without any plan or intention to seek or affect control
of the Company, if such Person promptly divests, or enters into an agreement with the Company satisfactory to the Company, in its sole discretion, to divest, and thereafter promptly divests (without exercising or retaining any power, including
voting power, with respect to such shares), 

  

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sufficient shares of Common Stock (or securities convertible into, exchangeable into or exercisable for Common Stock) so that such Person ceases to be the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock. In addition, the Company, any Subsidiary of the Company and any employee stock ownership or other employee benefit plan of the Company or a Subsidiary of the Company (or any
entity or trustee holding shares of Common Stock for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or of any Subsidiary of the Company) or any
Person organized, appointed or established by the Company for or pursuant to the terms of any such plan shall not be an Acquiring Person. 
 “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Exchange Act, as such Rule is amended and in effect on the date of this Agreement. 
 A Person shall be deemed the “Beneficial Owner”, and to have “Beneficial Ownership” of, and to “Beneficially Own” any
securities: 
 (i) which such Person or any of such Person’s Affiliates or Associates is or may be deemed to be the beneficial owner
of pursuant to Rule 13d-3 and Rule 13d-5 under the Exchange Act, as such Rules are amended and in effect on the date of this Agreement; 
 (ii) which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to become Beneficial Owner (whether such right is exercisable immediately or only after the passage of time or the
occurrence of conditions) pursuant to any agreement, arrangement or understanding, whether or not in writing (other than customary agreements with and between underwriters and selling group members with respect to a bona 

  

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fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; or 
 (iii) which are deemed to be beneficially owned, directly or indirectly, pursuant to Rule 13d-3 and Rule 13d-5 under
the Exchange Act, as such Rules are amended and in effect on the date of this Agreement, by any other Person (or any Affiliates or Associates thereof) with which such Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting or disposing any securities of the Company. 
 Notwithstanding anything in the foregoing to the contrary, a Person shall not be deemed the “Beneficial Owner”, or to have “Beneficial Ownership” of, or to “Beneficially Own”, any security (i) solely
because such security has been tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered security is accepted for payment or exchange or
(ii) solely because such Person or any of such Person’s Affiliates or Associates has or shares the power to vote or direct the voting of such security pursuant to a revocable proxy given in response to a public proxy or consent
solicitation made to more than ten holders of shares of a class of stock of the Company registered under Section 12 of the Exchange Act and pursuant to, and in accordance with, the applicable rules and regulations under the Exchange Act except
if such power (or the agreements, arrangements or understandings related thereto) is then reportable under Item 6 of Schedule 13D under the Exchange Act (or any similar provision of a comparable or successor report). For purposes of this
Agreement, in determining the percentage of the outstanding shares of Common Stock with respect to which a Person is the Beneficial Owner, all 

  

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shares as to which such Person is deemed the Beneficial Owner (whether or not such shares are issued and outstanding) shall be deemed outstanding.

 “Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking institutions in The City of New York
and/or the State of New Jersey are generally authorized or obligated by law or executive order to close. 
 “Close of Business” on
any given date shall mean 5:00 p.m. New York City time on such date or, if such date is not a Business Day, 5:00 p.m. New York City time on the next succeeding Business Day. 
 “Common Stock” shall mean the shares of Common Stock, par value $0.01 per share, of the Company. 
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and as in effect on the date of this Agreement. 
 “Exchange Time” shall mean the time at which the right to exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.

 “Exercise Price” shall mean, as of any date, the price at which a holder may purchase the securities issuable upon exercise of
one whole Right. Until adjustment thereof in accordance with the terms hereof, the Exercise Price shall equal $55.00. 
 “Expiration
Time” shall mean the earliest of (i) the Exchange Time, (ii) the Redemption Time, and (iii) the Close of Business on the tenth anniversary of the Record Time, unless extended by action of the Board of Directors. 
 “Flip-in Date” shall mean any Stock Acquisition Date or such later date and time as the Board of Directors of the Company may from time to time
fix by resolution adopted prior to the Flip-in Date that would otherwise have occurred. 
  

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 “Flip-over Entity,” for purposes of Section 3.2, shall mean (i) in the case of a
Flip-over Transaction or Event described in clauses (i) or (ii) of the definition thereof, the Person issuing any securities into which shares of Common Stock are being converted or exchanged and, if no such securities are being issued,
the other party to such Flip-over Transaction or Event and (ii) in the case of a Flip-over Transaction or Event referred to in clause (iii) of the definition thereof, the Person receiving the greatest portion of the assets, operating
income or cash flow being transferred in such Flip-over Transaction or Event, provided in all cases if such Person is a Subsidiary of a Person, the parent Person shall be the Flip-Over Entity. 
 “Flip-over Stock” shall mean the capital stock (or similar equity interest) with the greatest voting power in respect of the election of
directors (or other Persons similarly responsible for direction of the business and affairs) of the Flip-Over Entity. 
 “Flip-over
Transaction or Event” shall mean a transaction or series of transactions on or after a Flip-in Date in which, directly or indirectly, (i) the Company shall consolidate with, or merge with and into, any other Person, (ii) any Person
shall consolidate with the Company, or merge with and into the Company, and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or the Company) or cash or any other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets (A) aggregating more than 50% of the assets (measured by either book value or fair market value) or (B) generating more than 50% of the operating income or cash flow, of the Company and its Subsidiaries (taken as
a whole) to any Person (other than the Company or one 

  

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or more of its wholly owned Subsidiaries) or to two or more such Persons which are Affiliates or Associates or otherwise acting in concert. 
 “Market Price” per share of any securities on any date shall mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days through and including the Trading Day immediately preceding such date; provided, however, that if any event described in Section 2.3 hereof, or any
analogous event, shall have caused the closing prices used to determine the Market Price on any Trading Days during such period of 20 Trading Days not to be fully comparable with the closing price on such date, each such closing price so used shall
be appropriately adjusted in order to make it fully comparable with the closing price on such date. The closing price per share of any securities on any date shall be the last reported sale price, regular way, or, in case no such sale takes place or
is quoted on such date, the average of the closing bid and asked prices, regular way, for each share of such securities, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange, Inc. or, if the securities are not listed or admitted to trading on the New York Stock Exchange, Inc., as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the securities are listed or admitted to trading or, if the securities are not listed or admitted to trading on any national securities exchange, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use, or, if on any such date the securities are not listed or admitted to trading on any national securities exchange or 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 securities selected by the Board of Directors 

  

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of the Company; provided, however, that if on any such date the securities are not listed or admitted to trading on a national securities
exchange or traded in the over-the-counter market, the closing price per share of such securities on such date shall mean the fair value per share of securities on such date as determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm, and set forth in a certificate delivered to the Rights Agent. 
 “Person” shall mean any individual, firm, partnership, limited liability company, association, trust, group (as such term is used in Rule 13d-5 under the Exchange Act, as such Rule is in effect on the date of this Agreement),
corporation or other entity. 
 “Preferred Stock” shall mean the series of Participating Preferred Stock, $.01 par value, of the
Company created by Article IV.C of the Restated Certificate of Incorporation in substantially the form set forth in Exhibit B hereto appropriately completed. 
 “Redemption Price” shall mean an amount equal to one cent, $0.01. 
 “Redemption Time”
shall mean the time at which the right to exercise the Rights shall terminate pursuant to Section 5.1 hereof. 
 “Separation
Time” shall mean the earlier of (i) the Close of Business on the tenth Business Day (or such later date as the Board of Directors of the Company may from time to time fix by resolution adopted prior to the Separation Time that would
otherwise have occurred) after the date on which any Person commences or publicly announces the intention to commence a tender or exchange offer that, if consummated, would result in such Person’s becoming an Acquiring Person and (ii) the
Close of Business on the Flip-in Date; provided, that if any tender or exchange offer or public announcement of an intention to commence such an offer referred to in clause (i) of this paragraph is canceled, terminated or otherwise
withdrawn prior to the 

  

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Separation Time without the purchase of any shares of Common Stock pursuant thereto, such offer shall be deemed, for purposes of this paragraph, never to
have been made. 
 “Stock Acquisition Date” shall mean the first date of public announcement by the Company (by any means,
including, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) that a Person has become an Acquiring Person or the date on which any Person who has made a tender or exchange offer for 15% or more of the outstanding
shares of Common Stock becomes an Acquiring Person by the purchase of shares pursuant to the tender or exchange offer (or by any other means within 180 days following the expiration of such tender or exchange offer). 
 “Subsidiary” of any specified Person shall mean any corporation or other entity of which a majority of the voting power of the equity
securities or a majority of the equity or membership interest is Beneficially Owned, directly or indirectly, by such Person or otherwise controlled by such Person. 
 “Trading Day,” when used with respect to any securities, shall mean a day on which the New York Stock Exchange, Inc. is open for the transaction of business or, if such securities are not listed or admitted
to trading on the New York Stock Exchange, Inc., a day on which the principal national securities exchange on which such securities are listed or admitted to trading is open for the transaction of business or, if such securities are not listed or
admitted to trading on any national securities exchange, a Business Day. 
 ARTICLE II 
 THE RIGHTS 
 2.1 Legend on Common Stock
Certificates. Certificates for the Common Stock issued on or after the date of this Agreement but prior to the Separation Time shall 

  

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evidence one Right for each share of Common Stock represented thereby and shall have impressed on, printed on, written on or otherwise affixed to them a
legend in substantially the following form: 
 Until the Separation Time (as defined in the Rights Agreement referred to below), this
certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Stockholder Protection Rights Agreement, dated as of October 30, 2007 (as such may be amended from time to time, the “Rights Agreement”),
between Zep Inc. (the “Company”) and Mellon Investor Services LLC, as Rights Agent, the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such Rights may be redeemed, may become exercisable for securities or assets of the Company or securities of another entity, may be exchanged for shares of Common Stock or other securities
or assets of the Company, may expire, may become null and void (if they are “Beneficially Owned” by an “Acquiring Person” or an “Affiliate” or “Associate” thereof, as such terms are defined in the Rights
Agreement, or by any transferee of any of the foregoing) or may be evidenced by separate certificates and may no longer be evidenced by this certificate. The Company will mail or arrange for the mailing of a copy of the Rights Agreement to the
holder of this certificate without charge after the receipt of a written request therefor. 
 Certificates representing shares of Common Stock that are
issued and outstanding at the Record Time shall evidence one Right for each share of Common Stock evidenced thereby notwithstanding the absence of the foregoing legend. 
 If the Common Stock issued after the Record Time but prior to the Separation Time shall be uncertificated, the registration of such Common Stock on the stock transfer books of the Company shall evidence one Right for
each share of Common Stock represented thereby and the Company will mail to every Person that holds such Common Stock a confirmation of the registration of such Common Stock on the stock transfer books of the Company, which confirmation will have
impressed, printed, written or stamped thereon or otherwise affixed thereto the above legend or such other notification as to which the Company and the Rights Agent shall mutually agree. The Company will mail or arrange for the mailing of a copy of
this Agreement to any Person that holds Common Stock, as evidenced by the registration of the 

  

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Common Stock in the name of such Person on the stock transfer books of the Company, without charge after the receipt of a written request therefor from such
Person. 
 2.2 Exercise of Rights; Separation of Rights. (a) Subject to Sections 3.1, 3.2, 5.1 and 5.10 and subject to adjustment
as herein set forth, each Right will entitle the holder thereof, on or after the Separation Time and prior to the Expiration Time, to purchase, for the Exercise Price, one one-hundredth of a share of Preferred Stock. 
 (b) Until the Separation Time, (i) no Right may be exercised and (ii) each Right will be evidenced by the certificate for the associated share
of Common Stock (or, if the Common Stock shall be uncertificated, by the registration of the associated Common Stock on the stock transfer books of the Company) and will be transferable only together with, and will be transferred by a transfer of,
such associated share. 
 (c) Subject to the terms and conditions hereof, on or after the Separation Time and prior to the Expiration Time,
the Rights (i) may be exercised and (ii) may be transferred independent of shares of Common Stock. Promptly following the Separation Time and receipt by the Rights Agent of notice thereof as well as other relevant information, the Rights
Agent will mail to each holder of record of Common Stock as of the Separation Time (other than any Person whose Rights have become null and void pursuant to Section 3.1(b)), at such holder’s address as shown by the records of the Company
(the Company hereby agreeing to furnish, or causing to be furnished, copies of such records to the Rights Agent for this purpose), (x) a certificate (a “Rights Certificate”) in substantially the form of Exhibit A hereto
appropriately completed, representing the number of Rights held by such holder at the Separation Time and having 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, duties, 

  

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liabilities 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 law or with any rule or regulation made pursuant thereto or with any rule or regulation of any national securities exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights. 
 (d) Subject to the terms and conditions hereof, Rights may be exercised on any Business Day on
or after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent the Rights Certificate evidencing such Rights with an Election to Exercise (an “Election to Exercise”) substantially in the form attached to
the Rights Certificate duly and properly completed, accompanied by payment in cash, or by certified or official bank check or money order payable to the order of the Company, of a sum equal to the Exercise Price multiplied by the number of Rights
being exercised and a sum sufficient to cover any tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates (or, if uncertificated, the
registration on the stock transfer books of the Company) for shares or depositary receipts (or both) in a name other than that of the holder of the Rights being exercised. 
 (e) Upon receipt of a Rights Certificate, with an Election to Exercise duly and properly completed and accompanied by payment as set forth in
Section 2.2(d), and subject to the terms and conditions hereof, the Rights Agent will thereupon promptly (i)(A) requisition from the transfer agent of the Company stock certificates evidencing such number of shares or other securities to be
purchased or, in the case of uncertificated shares or other securities, requisition from the transfer agent of the Company a notice setting forth such number of shares or other securities to be purchased for which registration will be made on the
stock transfer 

  

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books of the Company (the Company hereby irrevocably authorizing its transfer agents to comply with all such requisitions) and (B) if the Company elects
pursuant to Section 5.5 not to issue certificates (or effect registration on the stock transfer books of the Company) representing fractional shares, requisition from the depositary selected by the Company depositary receipts representing the
fractional shares to be purchased or requisition from the Company the amount of cash to be paid in lieu of fractional shares in accordance with Section 5.5 and (ii) after receipt of such certificates, depositary receipts, notices and/or
cash, deliver the same to or upon the order of the registered holder of such Rights Certificate, registered (in the case of certificates, depositary receipts or notices) in such name or names as may be designated by such holder. 
 (f) In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent to such holder or to such holder’s duly authorized assigns. 
 (g) The Company covenants and agrees that it will (i) take all such action as may be necessary to ensure that all shares delivered (or evidenced by registration on the stock transfer books of the Company) upon exercise of Rights shall,
at the time of delivery of the certificates (or registration) for such shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered (or registered) and fully paid and nonassessable; (ii) take
all such action as may be necessary to comply with any applicable requirements of the Securities Act of 1933, as amended, or the Exchange Act, and the rules and regulations thereunder, and any other applicable law, rule or regulation, in connection
with the issuance of any securities upon exercise of Rights; and (iii) pay when due and payable any and all federal and state taxes and governmental charges which may be payable in respect of the 

  

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original issuance or delivery of the Rights Certificates or of any shares issued upon the exercise of Rights, provided, that the Company shall not be
required to pay any tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates (or the registration) for shares in a name other than that of
the holder of the Rights being transferred or exercised. 
 2.3 Adjustments to Exercise Price; Number of Rights. (a) In the event
the Company shall at any time after the Record Time and prior to the Separation Time (i) declare or pay a dividend on Common Stock payable in Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding
Common Stock into a smaller number of shares of Common Stock, (x) the Exercise Price in effect after such adjustment will be equal to the Exercise Price in effect immediately prior to such adjustment divided by the number of shares of Common
Stock (the “Expansion Factor”) that a holder of one share of Common Stock immediately prior to such dividend, subdivision or combination would hold thereafter as a result thereof and (y) each Right held prior to such adjustment will
become that number of Rights equal to the Expansion Factor, and the adjusted number of Rights will be deemed to be distributed among the shares of Common Stock with respect to which the original Rights were associated (if they remain outstanding)
and the shares issued in respect of such dividend, subdivision or combination, so that each such share of Common Stock will have exactly one Right associated with it. Each adjustment made pursuant to this paragraph shall be made as of the payment or
effective date for the applicable dividend, subdivision or combination. 
 In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue any shares of Common Stock otherwise than in a transaction referred to in the preceding paragraph, each such share of Common Stock so issued shall automatically have 

  

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one new Right associated with it, which Right shall be evidenced by the certificate representing such share (or, if the Common Stock shall be uncertificated,
such Right shall be evidenced by the registration of such Common Stock on the stock transfer books of the Company). Rights shall be issued by the Company in respect of shares of Common Stock that are issued or sold by the Company after the
Separation Time only to the extent provided in Section 5.3. 
 (b) In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue or distribute any securities or assets in respect of, in lieu of or in exchange for Common Stock (other than pursuant to any non-extraordinary periodic cash dividend or a dividend paid solely in Common Stock)
whether by dividend, in a reclassification or recapitalization (including any such transaction involving a merger, consolidation or share exchange), or otherwise, the Company shall make such adjustments, if any, in the Exercise Price, number of
Rights and/or securities or other property purchasable upon exercise of Rights as the Board of Directors of the Company, in its sole discretion, may deem to be appropriate under the circumstances in order to adequately protect the interests of the
holders of Rights generally, and the Company and the Rights Agent, subject to Section 5.4, shall amend this Agreement as necessary to provide for such adjustments. 
 (c) Each adjustment to the Exercise Price made pursuant to this Section 2.3 shall be calculated to the nearest cent. Whenever an adjustment to the Exercise Price is made pursuant to this Section 2.3 or any
event affecting the Rights or their exercisability (including, without limitation, an event which causes the Rights to become null and void), the Company shall (i) 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 and (ii) promptly file with the Rights Agent and with each transfer agent for the 

  

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Common Stock a copy of such certificate. The Rights Agent shall be fully protected in relying on such certificate and on any adjustment therein contained and
shall have no duty with respect to and shall not be deemed to have knowledge of any adjustment unless and until it shall have received such a certificate. 
 (d) Rights certificates shall represent the securities purchasable under the terms of this Agreement, including any adjustment or change in the securities purchasable upon exercise of the Rights, even though such
certificates may continue to express the securities purchasable at the time of issuance of the initial Rights Certificates. 
 2.4 Date on
Which Exercise is Effective. Each Person in whose name any certificate for shares is issued (or registration on the stock transfer books of the Company is effected) upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the shares represented thereby on the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Exercise Price for such Rights (and any applicable taxes and other governmental charges
payable by the exercising holder hereunder) was made; provided, however, that if the date of such surrender and payment is a date upon which the stock transfer books of the Company are closed, such Person shall be deemed to have become
the record holder of such shares on, and such certificate (or registration) shall be dated, the next succeeding Business Day on which the stock transfer books of the Company are open. 
 2.5 Execution, Authentication, Delivery and Dating of Rights Certificates. 
 (a) The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, Chief Executive Officer, President, Treasurer,
Chief Operating Officer or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary 

  

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or one of its Assistant Secretaries. The signature of any of these officers on the Rights Certificates may be manual or facsimile. 
 Rights Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the countersignature and delivery of such Rights Certificates. 
 Promptly after the Separation Time, the Company will give written notice to the Rights Agent of such Separation Time and will deliver Rights Certificates executed by the Company to the Rights Agent for
counter-signature, and, subject to Section 3.1(b), the Rights Agent shall countersign and deliver such Rights Certificates to the holders of the Rights pursuant to Section 2.2(c) hereof. Until such notice is received by the Rights Agent,
the Rights Agent may presume conclusively that the Separation Time has not occurred. No Rights Certificate shall be valid for any purpose unless countersigned by the Rights Agent. The countersignature of the Rights Agent on the Rights Certificates
must be manual. 
 (b) Each Rights Certificate shall be dated the date of countersignature thereof. 
 2.6 Registration, Registration of Transfer and Exchange. (a) After the Separation Time, the Company will cause to be kept a register (the
“Rights Register”) in which, subject to such reasonable regulations as it may prescribe, the Company will provide for the registration and transfer of Rights. The Rights Agent is hereby appointed “Rights Registrar” for the
purpose of maintaining the Rights Register for the Company and registering Rights and transfers of Rights after the Separation Time as herein provided. In the event that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will
have the right to examine the Rights Register at all reasonable times after the Separation Time. 
  

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 After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer
or exchange of any Rights Certificate, and subject to the provisions of Section 2.6(c) and (d), the Company will execute, and the Rights Agent will countersign and deliver, in the name of the holder or the designated transferee or transferees,
as required pursuant to the holder’s instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificate so surrendered. 
 (b) Except as otherwise provided in Section 3.1(b), all Rights issued upon any registration of transfer or exchange of Rights Certificates shall be
the valid obligations of the Company, and such Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon such registration of transfer or exchange. 
 (c) Every Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case may be, duly executed by the holder thereof or such holder’s attorney duly authorized in writing. As a condition to the issuance of any new Rights Certificate under
this Section 2.6, the Company or the Rights Agent may require the payment of a sum sufficient to cover any tax or other charge that may be imposed in relation thereto. The Rights Agent shall have no duty or obligation to take any action under
any Section of this Agreement which requires the payment of a Rights holder of applicable taxes and changes unless and until the Rights Agent is satisfied that all such taxes and/or charges have been paid. 
 (d) The Company shall not register the transfer or exchange of any Rights after such Rights have become null and void under Section 3.1(b), been
exchanged under Section 3.1(c) or been redeemed under Section 5.1. 
  

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 2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If any mutilated Rights
Certificate is surrendered to the Rights Agent prior to the Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company shall execute and the Rights Agent shall countersign and deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so surrendered. 
 (b) If there shall be delivered to the Company and the
Rights Agent prior to the Expiration Time (i) evidence to their satisfaction of the destruction, loss or theft of any Rights Certificate and (ii) such security or indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the absence of notice to the Company or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, the Company shall execute and
upon its request the Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or
stolen. 
 (c) As a condition to the issuance of any new Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Rights Agent) connected therewith. 
 (d) Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Rights Certificate shall be at any time enforceable by anyone, and, subject to Section 3.1(b) shall be entitled to all the 

  

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benefits of this Agreement equally and proportionately with any and all other Rights duly issued hereunder. 
 2.8 Persons Deemed Owners. Prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated Common Stock
certificate or notice of transfer, if uncertificated) for registration of transfer, the Company, the Rights Agent and any agent of the Company or the Rights Agent may deem and treat the Person in whose name such Rights Certificate (or, prior to the
Separation Time, such Common Stock certificate or Common Stock registration, if uncertificated) is registered as the absolute owner thereof and of the Rights evidenced thereby for all purposes whatsoever, including the payment of the Redemption
Price and neither the Company nor the Rights Agent shall be affected by any notice to the contrary. As used in this Agreement, unless the context otherwise requires, the term “holder” of any Rights shall mean the registered holder of such
Rights (or, prior to the Separation Time, the associated shares of Common Stock). 
 2.9 Delivery, Cancellation and Destruction of
Certificates. All Rights Certificates surrendered upon exercise or for registration of transfer or exchange shall, if surrendered to any Person other than the Rights Agent, be delivered to the Rights Agent and, in any case, shall be promptly
canceled by the Rights Agent. The Company may at any time deliver to the Rights Agent for cancellation any Rights Certificates previously countersigned and delivered hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly canceled by the Rights Agent. No Rights Certificates shall be countersigned in lieu of or in exchange for any Rights Certificates canceled as provided in this Section 2.9, except as expressly
permitted by this Agreement. The Rights Agent shall return to the Company all canceled Rights Certificates approximately one and one- 

  

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half (1 1/2) years after the cancellation date. The Company shall destroy the certificates after any applicable retention period required by the
United States Securities and Exchange Commission. 
 2.10 Agreement of Rights Holders. Every holder of Rights by accepting the same
consents and agrees with the Company and the Rights Agent and with every other holder of Rights that: 
 (a) prior to the Separation Time,
each Right will be transferable only together with, and will be transferred by a transfer of, the associated share of Common Stock; 
 (b)
after the Separation Time, the Rights Certificates will be transferable only on the Rights Register as provided herein; 
 (c) prior to due
presentment of a Rights Certificate (or, prior to the Separation Time, the associated Common Stock certificate or Common Stock registration, if uncertificated) for registration of transfer, the Company, the Rights Agent and any agent of the Company
or the Rights Agent may deem and treat the Person in whose name the Rights Certificate (or, prior to the Separation Time, the associated Common Stock certificate or Common Stock registration, if uncertificated) is registered as the absolute owner
thereof and of the Rights evidenced thereby for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary; 
 (d) Rights beneficially owned by certain Persons will, under the circumstances set forth in Section 3.1(b), become null and void; and 
 (e) this Agreement may be supplemented or amended from time to time pursuant to Section 2.3(b) or 5.4 hereof. 
  

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 ARTICLE III 
 ADJUSTMENTS TO THE RIGHTS IN 
 THE EVENT OF CERTAIN TRANSACTIONS 
 3.1 Flip-in. (a) In the event that prior to the Expiration Time a Flip-in Date shall occur, except as provided in this Section 3.1, each
Right shall constitute the right to purchase from the Company, upon exercise thereof in accordance with the terms hereof (but subject to Section 5.10), that number of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date that gave rise to the Flip-in Date equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such right to be appropriately adjusted in order to protect the interests of the holders of Rights generally in
the event that on or after such Stock Acquisition Date any of the events described in Section 2.3(a) or (b), or any analogous event, shall have occurred with respect to the Common Stock). 
 (b) Notwithstanding the foregoing, any Rights that are or were Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person or an
Affiliate or Associate thereof or by any transferee, direct or indirect, of any of the foregoing shall become null and void and any holder of such Rights (including transferees) shall thereafter have no right to exercise or transfer such Rights
under any provision of this Agreement. If any Rights Certificate is presented for assignment or exercise and the Person presenting the same will not complete the certification set forth at the end of the form of assignment or notice of election to
exercise and provide such additional evidence of the identity of the Beneficial Owner and its Affiliates and Associates (or former Beneficial Owners and their Affiliates and Associates) as the Company or the Rights Agent shall reasonably request,
then the Company shall be entitled conclusively to deem the Beneficial Owner thereof to be an Acquiring Person or an Affiliate or Associate thereof or a transferee of any of the foregoing and accordingly will deem the Rights 

  

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evidenced thereby to be null and void and not transferable or exercisable. 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. 
 (c)
The Board of Directors of the Company may, at its option, at any time after a Flip-in Date and prior to the time that an Acquiring Person becomes the Beneficial Owner of more than 50% of the outstanding shares of Common Stock elect to exchange all
(but not less than all) the then outstanding Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 3.1(b)) for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted in order to protect the interests of holders of Rights generally in the event that after the Separation Time any of the events described in Section 2.3(a) or (b), or any analogous event, shall have occurred with
respect to the Common Stock (such exchange ratio, as adjusted from time to time, being hereinafter referred to as the “Exchange Ratio”). 
 Immediately upon the action of the Board of Directors of the Company electing to exchange the Rights, without any further action and without any notice, the right to exercise the Rights will terminate and each Right (other than Rights that
have become null and void pursuant to Section 3.1(b)), whether or not previously exercised, will thereafter represent only the right to receive a number of shares of Common Stock equal to the Exchange Ratio. Promptly after the action of the
Board of Directors electing to exchange the Rights, the Company shall give written notice thereof (specifying the steps to be taken to receive shares of Common Stock in exchange 

  

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for Rights) to the Rights Agent and the holders of the Rights (other than Rights that have become null and void pursuant to Section 3.1(b)) outstanding
immediately prior thereto by mailing such notice in accordance with Section 5.9. 
 Each Person in whose name any certificate for shares
is issued (or for whom any registration on the stock transfer books of the Company is made) upon the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall for all purposes be deemed to have become the holder of record
of the shares represented thereby on, and such certificate (or registration on the stock transfer books of the Company) shall be dated (or registered as of), the date upon which the Rights Certificate evidencing such Rights was duly surrendered and
payment of any applicable taxes and other governmental charges payable by the holder was made; provided, however, that if the date of such surrender and payment is a date upon which the stock transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on, and such certificate (or registration on the stock transfer books of the Company) shall be dated (or registered as of), the next succeeding Business Day on which the
stock transfer books of the Company are open. 
 (d) Whenever the Company shall become obligated under Section 3.1(a) or (c) to
issue shares of Common Stock upon exercise of or in exchange for Rights, the Company, at its option, may substitute therefor shares of Preferred Stock, at an initial rate of one one-hundredth of a share of Preferred Stock for each share of Common
Stock so issuable, as appropriately adjusted to reflect adjustments in the voting rights of the Preferred Stock pursuant to the terms thereof, so that the fraction of a share of Preferred Stock delivered in lieu of each share of Common Stock shall
have the same voting rights as one share of Common Stock. 
  

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 (e) In the event that there shall not be sufficient treasury shares or authorized but unissued shares of
Common Stock or Preferred Stock of the Company to permit the exercise or exchange in full of the Rights in accordance with Section 3.1(a) or if the Company so elects to make the exchange referred to in Section 3.1(c), the Company shall
either (i) call a meeting of stockholders seeking approval to cause sufficient additional shares to be authorized (provided that if such approval is not obtained the Company will take the action specified in clause (ii) of this sentence)
or (ii) take such action as shall be necessary to ensure and provide, to the extent permitted by applicable law and any agreements or instruments in effect on the Stock Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company’s option, either (A) in return for the Exercise Price, debt or equity securities or other assets (or a combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as otherwise required by applicable law), debt or equity securities or other assets (or a combination thereof) having a fair value equal to the Exercise Price, or (y) if the Board of Directors
of the Company elects to exchange the Rights in accordance with Section 3.1(c), debt or equity securities or other assets (or a combination thereof) having a fair value equal to the product of the Market Price of a share of Common Stock on the
Flip-in Date times the Exchange Ratio in effect on the Flip-in Date, where in any case set forth in (x) or (y) above the fair value of such debt or equity securities or other assets shall be as determined in good faith by the Board of
Directors of the Company, after consultation with a nationally recognized investment banking firm. 
 3.2 Flip-over. (a) Prior to
the Expiration Time, the Company shall not enter into any agreement with respect to, consummate or permit to occur any Flip-over Transaction or Event unless and until it shall have entered into a supplemental agreement with the Flip-over 

  

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Entity, for the benefit of the holders of the Rights, providing that, upon consummation or occurrence of the Flip-over Transaction or Event (i) each
Right shall thereafter constitute the right to purchase from the Flip-over Entity, upon exercise thereof in accordance with the terms hereof, that number of shares of Flip-over Stock of the Flip-over Entity having an aggregate Market Price on the
date of consummation or occurrence of such Flip-over Transaction or Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such right to be appropriately adjusted in order to protect the interests of the holders
of Rights generally in the event that after such date of consummation or occurrence any of the events described in Section 2.3(a) or (b), or any analogous event, shall have occurred with respect to the Flip-over Stock) and (ii) the
Flip-over Entity shall thereafter be liable for, and shall assume, by virtue of such Flip-over Transaction or Event and such supplemental agreement, all the obligations and duties of the Company pursuant to this Agreement. The provisions of this
Section 3.2 shall apply to successive Flip-over Transactions or Events. 
 (b) Prior to the Expiration Time, the Company shall not enter
into any agreement with respect to, consummate or permit to occur any Flip-over Transaction or Event if at the time thereof there are any rights, warrants or securities outstanding or any other arrangements, agreements or instruments that would
eliminate or otherwise diminish in any material respect the benefits intended to be afforded by this Rights Agreement to the holders of Rights upon consummation of such transaction. 
 ARTICLE IV 
 THE RIGHTS AGENT 
 4.1 General. (a) 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 

  

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hereby accepts such appointment. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation, 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 loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense, (including, without limitation, the
reasonable fees and expenses of counsel) 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 order,
judgment, decree or ruling of a court of competent jurisdiction), for any action taken, suffered or omitted to be done by the Rights Agent in connection with the acceptance, administration, exercise and performance of its duties under this
Agreement, including, without limitation, the costs and expenses of defending against and appealing any claim of liability arising therefrom, directly or indirectly. The indemnity provided herein shall survive termination of this Agreement and the
termination, exercise or expiration of the Rights and the resignation, replacement or removal of the Rights Agent. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company. Anything to the contrary
contained herein notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, incidental or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any liability of the Rights Agent under this Rights Agreement will be limited to the amount of fees paid by the Company to the Rights Agent. 
  

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 (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 the acceptance and administration of this Agreement and the exercise and performance of its duties hereunder in reliance upon any certificate for securities (or registration on the stock
transfer books of the Company) purchasable upon exercise of Rights, Rights Certificate, certificate for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons or otherwise upon the advice or opinion of counsel as
set forth in Section 4.3. 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 in writing. 
 4.2 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 is a party, or any Person succeeding to the shareholder services business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 4.4 hereof. In case at the time such successor Rights
Agent succeeds to the agency created by this Agreement any of the Rights Certificates have been countersigned but not delivered, any such 

  

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successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates have not 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 will 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 is 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. 
 4.3 Duties of Rights Agent. The
Rights Agent undertakes to perform only the duties and obligations expressly imposed by this Agreement (and no implied duties) upon the following terms and conditions, 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 (who may be legal counsel for the Company or an
employee of the Rights Agent), and the advice or opinion of such counsel will 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 in accordance with such advice or opinion. 
  

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 (b) Whenever in the performance of its duties under this Agreement the Rights Agent deems it necessary or
desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of Market Price) be proved or established by the Company prior to taking, suffering or omitting to take 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 a Person believed by the Rights Agent to be the Chairman
of the Board, the President or any Vice President and by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate will 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 will be liable hereunder only for its own gross negligence, bad faith or willful misconduct (as determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). 
 (d) The Rights Agent will not be liable for or by
reason of any of the statements of fact or recitals contained in this Agreement or in the certificates, if any, for securities purchasable upon exercise of Rights or the Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to have been made by the Company only. 
 (e) The Rights Agent
shall not have any liability 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 

  

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of any certificate, if any, for securities purchasable upon exercise of Rights or Rights Certificate (except its countersignature thereof); nor will it be
responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible for any change in the exercisability of the Rights (including the Rights becoming null and
void pursuant to this Agreement) or any change or adjustment in the terms of the Rights including the manner, method or amount thereof provided for in Sections 2.3, 3.1 or 3.2 hereof or the ascertaining of the existence of facts that would require
any such change or adjustment (except with respect to the exercise of Rights after receipt of the certificate contemplated by Section 2.3 describing any such change or adjustment upon which the Rights Agent may rely); nor will it by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation of any securities purchasable upon exercise of Rights or any Rights or as to whether any securities purchasable upon exercise of Rights will, when
issued, be duly and validly authorized, executed, issued and delivered and fully paid and nonassessable. 
 (f) The Company agrees that it
will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement. 
 (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any Person believed by the Rights Agent to be the Chairman of the Board, the President or any Vice President or the Secretary or any Assistant Secretary or the Treasurer or
any Assistant Treasurer of the Company, and to apply to such Persons 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 incur no

  

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liability for or in respect of any action taken, suffered or omitted by it in accordance with instructions of any such Person 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 by any such officer. 
 (h) The Rights Agent and any member, affiliate, stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent or any such member, affiliate, stockholder, 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 will 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, bad faith or willful misconduct in the continued employment thereof (each as determined by a final, non-appealable order, judgment, decree or ruling 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 believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it. 
  

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 4.4 Change of Rights Agent. The Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days’ notice (or such lesser notice as is acceptable to the Company) in writing mailed to the Company and to each transfer agent of Common Stock known to the Rights Agent by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9. The Company may remove the Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent and to each transfer agent of the Common Stock known to the Rights Agent by
registered or certified mail, and to the holders of the Rights in accordance with Section 5.9. If the Rights Agent should resign or be removed or otherwise become incapable of acting, the Company will appoint a successor to the Rights Agent. If
the Company fails to make such appointment within a period of 30 days after 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 any Rights
(which holder shall, with such notice, submit such holder’s Rights Certificate for inspection by the Company), then the holder of any Rights or the Rights Agent 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 Person (or an affiliate of such a Person) organized and doing business under the laws of the United States or any state of the United States,
in good standing, which is authorized under such laws to exercise the powers of the Rights Agent contemplated by this Agreement and is subject to supervision or examination by federal or state authority and which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Rights Agent will be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any 

  

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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 will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the holders of the Rights. Failure to
give any notice provided for in this Section 4.4, 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.

 ARTICLE V 
 MISCELLANEOUS

 5.1 Redemption. (a) The Board of Directors of the Company may, at its option, at any time prior to the Flip-in Date, elect to
redeem all (but not less than all) the then outstanding Rights at the Redemption Price and the Company, at its option, may pay the Redemption Price either in cash or shares of Common Stock or other securities of the Company deemed by the Board of
Directors, in the exercise of its sole discretion, to be at least equivalent in value to the Redemption Price. 
 (b) Immediately upon the
action of the Board of Directors of the Company electing to redeem the Rights (or, if the resolution of the Board of Directors electing to redeem the Rights states that the redemption will not be effective until the occurrence of a specified future
time or event, upon the occurrence of such future time or event), without any further action and without any notice, the right to exercise the Rights will terminate and each Right, whether or not previously exercised, will thereafter represent only
the right to receive the Redemption Price in cash or securities, as determined by the Board of Directors. Promptly after the Rights are redeemed, the Company shall give notice of such redemption to the Rights Agent 

  

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and the holders of the then outstanding Rights by mailing such notice in accordance with Section 5.9. 
 5.2 Expiration. The Rights and this Agreement shall expire at the Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or redeemed, as provided in Sections 3.1 or 5.1 hereof, respectively. 
 5.3 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 its Board of Directors to reflect any adjustment or change in the number or kind or class of shares of stock purchasable upon exercise of Rights made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock by the Company following the Separation Time and prior to the Expiration Time pursuant to the terms of securities convertible or redeemable into shares of Common Stock or to
options, in each case issued or granted prior to, and outstanding at, the Separation Time, the Company shall issue to the holders of such shares of Common Stock, Rights Certificates representing the appropriate number of Rights in connection with
the issuance or sale of such shares of Common Stock; provided, however, in each case, (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 to the Person to whom such Rights Certificates would be issued, (ii) no such Rights Certificates shall be issued if, and to the extent that, appropriate adjustment
shall have otherwise been made in lieu of the issuance thereof, and (iii) the Company shall have no obligation to distribute Rights Certificates to any 

  

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Acquiring Person or Affiliate or Associate of an Acquiring Person or any transferee of any of the foregoing. 
 5.4 Supplements and Amendments. Subject to the last sentence of this Section 5.4, the Company may, and the Rights Agent, if so directed by
the Company, shall from time to time supplement or amend this Agreement without the approval of any holders of Rights (i) prior to the Flip-in Date, in any respect and (ii) on or after the Flip-in Date, to make any changes that the Company
may deem necessary or desirable and which shall not materially adversely affect the interests of the holders of Rights generally (other than an Acquiring Person and its Affiliates and Associates) or in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be inconsistent with any other provisions herein or otherwise defective. The Rights Agent will, upon the delivery of a certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment complies with this Section 5.4, duly execute and deliver any supplement or amendment hereto requested by the Company which satisfies the terms of the preceding sentence. Notwithstanding anything contained in
this Agreement to the contrary, the Rights Agent may, but shall not be obligated to, enter into any supplement or amendment that affects the Rights Agent’s own rights, duties or immunities under this Agreement and it shall not be bound by any
such supplement or amendment not executed by it. 
 5.5 Fractional Shares. If the Company elects not to issue certificates
representing (or register on the stock transfer books of the Company) fractional shares upon exercise or redemption of Rights, the Company shall, in lieu thereof, in the sole discretion of the Board of Directors, either (a) evidence such
fractional shares by depositary receipts issued pursuant to an appropriate agreement between the Company and a depositary selected by it, 

  

 -36- 

 
providing that each holder of a depositary receipt shall have all of the rights, privileges and preferences to which such holder would be entitled as a
beneficial owner of such fractional share, or (b) pay to the registered holder of such Rights the appropriate fraction of the Market Price per share in cash. 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 payment 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. 
 5.6 Rights of Action. Subject to the terms of this Agreement (including Sections 3.1(b) and
5.14), rights of action in respect of this Agreement, other than rights of action vested solely in the Rights Agent, are vested in the respective holders of the Rights; and any holder of any Rights, without the consent of the Rights Agent or of the
holder of any other Rights, may, on such holder’s own behalf and for such holder’s own benefit and the benefit of other holders of Rights, enforce, and may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder’s right to exercise such holder’s Rights in the manner provided in such holder’s 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 

  

 -37- 

 
law for any breach by the Company of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against
actual or threatened violations by the Company of, the obligations of any Person subject to this Agreement. 
 5.7 Holder of Rights Not
Deemed a Stockholder. No holder, as such, of any Rights shall be entitled to vote, receive dividends or be deemed for any purpose the holder of shares or any other securities which may at any time be issuable on the exercise of such Rights, nor
shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 5.8 hereof), or to receive
dividends or subscription rights, or otherwise, until such Rights shall have been exercised or exchanged in accordance with the provisions hereof. 
 5.8 Notice of Proposed Actions. In case the Company shall propose on or after the Separation Time and prior to the Expiration Time (i) to effect or permit a Flip-over Transaction or Event or (ii) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company shall give to each holder of a Right, in accordance with Section 5.9 hereof, a notice of such proposed action, which shall specify the date on which such Flip-over
Transaction or Event, liquidation, dissolution, or winding up is to take place, and such notice shall be so given at least 20 Business Days prior to the date of the taking of such proposed action. 
 5.9 Notices. Notices or demands authorized or required by this Agreement to be given or made by the Rights Agent or by the holder of any Rights to
or on the Company shall 

  

 -38- 

 
be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows: 
 Zep Inc. 
 4401 Northside Parkway, Suite 700 
 Atlanta, Georgia 30327-3093 
 Attention: Corporate Secretary 
 with a copy to: 
 Zep Inc. 
 4401 Northside Parkway, Suite 700 
 Atlanta, Georgia 30327-3093 
 Attention: General Counsel 
 Any notice or demand authorized or required by this Agreement to be given or made by the Company or by the holder of any Rights to or on the Rights Agent shall be
sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: 
 Mellon Investor Services LLC 
 480 Washington Boulevard 
 Jersey City, NJ 07310 
 Attention: General Counsel 
 Notices or
demands authorized or required by this Agreement to be given or made by the Company or the Rights Agent to or on the holder of any Rights shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as it appears upon the registry books of the Rights Agent or, prior to the Separation Time, on the registry books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. 
  

 -39- 

 5.10 Suspension of Exercisability. To the extent that the Company determines in good faith that
some action will or need be taken pursuant to Section 3.1 or to comply with federal or state securities laws, the Company may suspend the exercisability of the Rights for a reasonable period in order to take such action or comply with such
laws. In the event of any such suspension, the Company shall issue as promptly as practicable a public announcement with prompt written notice to the Rights Agent stating that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required. 
 Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder. 
 5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon exercise of Rights fails to fulfill any of its obligations pursuant to this Agreement, then the Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce such holder’s rights pursuant to any Rights or this Agreement. 
 5.12 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. 
 5.13 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 holders of the Rights any legal or equitable right, remedy or claim under this Agreement and this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the holders of the Rights (and, prior to the Separation
Date, the Common Stock holders). 
  

 -40- 

 5.14 Determination and Actions by the Board of Directors, etc. The Board of Directors of the
Company 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. All such actions,
interpretations, calculations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) done or made by the Board 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 of Directors of the Company to any liability to the holders of the Rights. The Rights Agent shall always be entitled to assume that the Board of Directors of
the Company acted in good faith and shall be fully protected and incur no liability in reliance thereon. 
 5.15 Descriptive Headings.
Descriptive headings appear herein for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 
 5.16 GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED, HOWEVER, THAT ALL PROVISIONS REGARDING THE RIGHTS, OBLIGATIONS AND DUTIES OF THE RIGHTS AGENT SHALL BE 

  

 -41- 

 
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
 5.17 Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and the same instrument. 
 5.18 Severability. If any term
or provision hereof or the application thereof to any circumstance shall, in any jurisdiction and to any extent, be invalid or unenforceable, such term or provision shall be ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining terms and provisions hereof or the application of such term or provision to circumstances other than those as to which it is held invalid or unenforceable; provided,
however, that if such excluded provision shall affect the rights, immunities, duties or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately. 
 5.19 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 malfunction of computer facilities, or loss of data due to
power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest. 
  

 -42- 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date
first above written. 
  

			
	ZEP INC.
		
	 By:
	 	 /s/ John K. Morgan

	 Name:
	 	John K. Morgan
	 Title:
	 	President, Chief Executive Officer
	
	MELLON INVESTOR SERVICES LLC,
	as Rights Agent
		
	 By:
	 	 /s/ Christopher Coleman

	 Name:
	 	Christopher Coleman
	 Title:
	 	Vice President

  

 [Signature Page to Stockholder Protection Rights Agreement] 

 EXHIBIT A 
 [Form of Rights Certificate] 

			
	Certificate No. W-                    	 	             Rights

 THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE NULL AND VOID. 

Rights Certificate 
 ZEP INC. 

This certifies that
                                        ,
or registered assigns, is the registered holder of the number of Rights set forth above, each of which entitles the registered holder thereof, subject to the terms, provisions and conditions of the Stockholder Protection Rights Agreement, dated as
of October 30, 2007 (as amended from time to time, the “Rights Agreement”), between Zep Inc., a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited liability company, as Rights Agent
(the “Rights Agent”, which term shall include any successor Rights Agent under the Rights Agreement), to purchase from the Company at any time after the Separation Time (as such term is defined in the Rights Agreement) and prior to the
Close of Business on October 31, 2017, one one-hundredth of a fully paid share of Participating Preferred Stock, $.01 par value (the “Preferred Stock”), of the Company (subject to adjustment as provided in the Rights Agreement) at the
Exercise Price referred to below, upon presentation and surrender of this Rights Certificate with the Form of Election to Exercise duly executed and properly completed at the office of the Rights Agent 

 designated for such purposes. The Exercise Price shall initially be $55.00 per Right and shall be subject to adjustment
in certain events as provided in the Rights Agreement. 
 In certain circumstances described in the Rights Agreement, the Rights evidenced
hereby may entitle the registered holder thereof to purchase securities of an entity other than the Company or securities or assets of the Company other than Preferred Stock, all as provided in the Rights Agreement. 
 This Rights Certificate is subject to all of the terms, covenants and restrictions of the Rights Agreement, which terms, covenants and restrictions 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 exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are
on file at the principal office of the Company and are available without cost upon written request. 
 This Rights Certificate, with or
without other Rights Certificates, upon surrender at the office of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights Certificate shall be exercised in part, the registered 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,
each Right evidenced by this Certificate may be (a) redeemed by the Company under certain circumstances, at its option, at a 
  

 -2- 

 redemption price of $0.01 per Right or (b) exchanged by the Company under certain circumstances, at its option, for
one share of Common Stock or one one-hundredth of a share of Preferred Stock per Right (or, in certain cases, other securities or assets of the Company), subject in each case to adjustment in certain events as provided in the Rights Agreement.

 No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of
Common Stock or of any other securities which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised or exchanged 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. 
  

 -3- 

 WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. 

Date:                      
  

							
	ATTEST:	 		 	ZEP INC.
				
	  
	 		 	 By
	 	  

	 Secretary
	 		 		 	

 Countersigned: 
  

			
	MELLON INVESTOR SERVICES LLC
		
	 By
	 	  

		 	 Authorized Signature

  

 -4- 

 [Form of Reverse Side of Rights Certificate] 
 FORM OF ASSIGNMENT 
 (To be executed by the registered holder if such 

holder desires to transfer this Rights Certificate.) 
  

					
	 FOR VALUE RECEIVED
                                        
hereby sells, assigns and transfers unto
	 	
	                                      
                                        
                                        this Rights
Certificate, together with all right, title and
	 (Please print name and address of transferee)

	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:
                    ,          
  

			
	Signature Guaranteed:	  	  

		  	Signature
		  	(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever)

 Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved signature guarantee Medallion program), pursuant to Exchange Act Rule 17Ad-15. 
  

			
	  
	 	
	(To be completed if true)	 	

 The undersigned hereby represents, for the benefit of all holders of Rights and shares of Common Stock, that the
Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). 
  

			
		  	  

		  	Signature

 NOTICE 
 In the event the certification set forth above is not completed in connection with a purported assignment, the Company will deem the Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) or a transferee of any of the foregoing and accordingly will deem the Rights evidenced by such Rights Certificate to be null and void and not transferable or
exercisable. 
  

 -2- 

 [To be attached to each Rights Certificate] 
 FORM OF ELECTION TO EXERCISE 
 (To be executed if holder desires to 

exercise the Rights Certificate.) 
 TO: ZEP INC.

 The undersigned hereby irrevocably elects to exercise
                                        
                     whole Rights represented by the attached Rights Certificate to purchase the shares of Participating Preferred Stock issuable
upon the exercise of such Rights and requests that certificates for such shares be issued in the name of: 
  

									
	  
	  		  	
	Address:	 	  
	  		  	
	  
	  		  	
	Social Security or Other Taxpayer	  		  	
	Identification Number:	 	  
	  		  	

 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: 
  

									
	  
	  		  	
	Address:	 	  
	  		  	
	  
	  		  	
	Social Security or Other Taxpayer	  		  	
	Identification Number:	 	  
	  		  	

 Dated:
                    ,          

			
	Signature Guaranteed:	  	  

		  	Signature
		  	(Signature must correspond to name as written upon the face of the attached Rights Certificate in every particular, without alteration or enlargement or any change
whatsoever)

 Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved signature guarantee Medallion program), pursuant to Exchange Act Rule 17Ad-15. 
  

			
	  
	 	
	 (To be completed if true)

 The undersigned hereby represents, for the benefit of all holders of Rights and shares of Common Stock, that the
Rights evidenced by the attached Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). 

 

			
		  	  

		  	Signature

  

			
	  
	 	

 NOTICE 
 In the event the certification set forth above is not completed in connection with a purported exercise, the Company will deem the Beneficial Owner of the Rights evidenced by the attached Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) or a transferee of any of the foregoing and accordingly will deem the Rights evidenced by such Rights Certificate to be null and void and not transferable or
exercisable. 
  

 -2- 

 EXHIBIT B 
 FORM OF ARTICLE IV. C TO RESTATED CERTIFICATE OF INCORPORATION 
 OF ZEP INC. (SETTING FORTH TERMS OF

 PARTICIPATING PREFERRED STOCK OF ZEP INC.) 
 C. PARTICIPATING PREFERRED STOCK 
 There is hereby established a series of Preferred Stock, $.01 par value, of the Corporation, and
the designation and certain terms, powers, preferences and other rights of the shares of such series, and certain qualifications, limitations and restrictions thereon, are hereby fixed as follows: 
 (i) The distinctive serial designation of this series shall be “Participating Preferred Stock” (hereinafter called “this Series”).
Each share of this Series shall be identical in all respects with the other shares of this Series except as to the dates from and after which dividends thereon shall be cumulative. 
 (ii) The number of shares in this Series shall be 5,000,000. Shares of this Series purchased by the Corporation shall be retired and the reissuance of
such shares as a part of this Series is prohibited. The Corporation shall take all such actions as are necessary to cause all such shares to become authorized but unissued shares of Preferred Stock. Shares of this Series may be issued in fractional
shares, which fractional shares shall entitle the holder, in proportion to such holder’s fractional share, to all rights of a holder of a whole share of this Series. 
 (iii) The holders of full or fractional shares of this Series shall be entitled to receive, when and as declared by the Board of Directors, but only out of funds legally available therefor, dividends, (A) on each
date that dividends or other distributions (other than dividends or distributions payable in Common Stock of the Corporation) are payable on or in respect of Common Stock comprising part of the Reference Package (as defined below), in an amount per
whole share of this Series equal to the aggregate amount of dividends or other distributions (other than dividends or distributions payable in Common Stock of the Corporation) that would be payable on such date to a holder of the Reference Package
and (B) on the last day of March, June, September and December in each year, in an amount per whole share of this Series equal to the excess (if any) of $25.00 over the aggregate dividends paid per whole share of this Series during the three
month period ending on such last day. Each such dividend shall be paid to the holders of record of shares of this Series on the date, not exceeding sixty days preceding such dividend or distribution payment date, fixed for the purpose by the Board
of Directors in advance of payment of each particular dividend or distribution. Dividends on each full and each fractional share of this Series shall be cumulative from the date such full or fractional share is originally issued; provided that any
such full or fractional share originally issued after a dividend record date and on or prior to the dividend payment date to which such record date relates shall not be entitled to receive the dividend payable on such dividend payment date or any
amount in respect of the period from such original issuance to such dividend payment date. 
 The term “Reference Package” shall
initially mean 100 shares of Common Stock, par value 

 
$.01 per share (“Common Stock”), of the Corporation. In the event the Corporation shall at any time after the Close of Business on November 1,
2007 (A) declare or pay a dividend on any Common Stock payable in Common Stock, (B) subdivide any Common Stock or (C) combine any Common Stock into a smaller number of shares, then and in each such case the Reference Package after
such event shall be the Common Stock that a holder of the Reference Package immediately prior to such event would hold thereafter as a result thereof. 
 Holders of shares of this Series shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of full cumulative dividends, as herein provided on this Series. 
 So long as any shares of this Series are outstanding, no dividend (other than a dividend in Common Stock or in any other stock ranking junior to this
Series as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other distribution declared or made upon the Common Stock or upon any other stock ranking junior to this Series as to dividends or upon liquidation,
unless the full cumulative dividends (including the dividend to be paid upon payment of such dividend or other distribution) on all outstanding shares of this Series shall have been, or shall contemporaneously be, paid. When dividends are not paid
in full upon this Series and other stock ranking on a parity as to dividends with this Series, all dividends declared upon shares of this Series and any other stock ranking on a parity as to dividends shall be declared pro rata so that in all cases
the amount of dividends declared per share on this Series and such other stock shall bear to each other the same ratio that accumulated dividends per share on the shares of the Series and such other stock bear to each other. Neither the Common Stock
nor any other stock of the Corporation ranking junior to or on a parity with this Series as to dividends or upon liquidation shall be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any shares of any such stock) by the Corporation (except by conversion into or exchange for stock of the Corporation ranking junior to this Series as to dividends and upon liquidation), unless the full cumulative
dividends (including the dividend to be paid upon payment of such dividend, distribution, redemption, purchase or other acquisition) on all outstanding shares of this Series shall have been, or shall contemporaneously be, paid. 
 (iv) In the event of any merger, consolidation, reclassification or other transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such case the shares of this Series shall at the same time be similarly exchanged or changed in an amount per whole share equal to the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may be, that a holder of the Reference Package would be entitled to receive as a result of such transaction. 
 (v) Except as otherwise provided by law, in the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the holders of full and fractional shares of
this Series shall be entitled, before any distribution or payment is made on any date to the holders of the Common Stock or any other stock of the Corporation ranking junior to this Series upon liquidation, to be paid in full an amount per whole
share of this Series equal to the greater of (A) $5,500.00 or (B) the aggregate amount distributed or to be distributed prior to such date in connection with such liquidation, dissolution or winding up to a holder of the Reference Package
(such greater amount being hereinafter referred to as the “Liquidation 

  

 -2- 

 
Preference”), together with accrued dividends to such distribution or payment date, whether or not earned or declared. If such payment shall have been
made in full to all holders of shares of this Series, the holders of shares of this Series as such shall have no right or claim to any of the remaining assets of the Corporation. 
 Except as otherwise provided by law, in the event the assets of the Corporation available for distribution to the holders of shares of this Series upon
any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such holders are entitled pursuant to the first paragraph of this Section (v), no such
distribution shall be made on account of any shares of any other class or series of Preferred Stock ranking on a parity with the shares of this Series upon such liquidation, dissolution or winding up unless proportionate distributive amounts shall
be paid on account of the shares of this Series, ratably in proportion to the full distributable amounts for which holders of all such parity shares are respectively entitled upon such liquidation, dissolution or winding up. 
 Except as otherwise provided by law, upon the liquidation, dissolution or winding up of the Corporation, the holders of shares of this Series then
outstanding shall be entitled to be paid out of assets of the Corporation available for distribution to its stockholders all amounts to which such holders are entitled pursuant to the first paragraph of this Section (v) before any payment shall
be made to the holders of Common Stock or any other stock of the Corporation ranking junior upon liquidation to this Series. 
 For the
purposes of this Section (v), the consolidation or merger of, or binding share exchange by, the Corporation with any other corporation shall not be deemed to constitute a liquidation, dissolution or winding up of the Corporation. 
 (vi) The shares of this Series shall not be redeemable. 
 (vii) In addition to any other vote or consent of stockholders required by law or by the Restated Certificate of Incorporation, as amended, of the Corporation, each whole share of this Series shall, on any matter,
vote as a class with any other capital stock comprising part of the Reference Package and voting on such matter and shall have the number of votes thereon that a holder of the Reference Package would have. 
  

 -3-Tax Disaffiliation Agreement, dated October 31, 2007

 Exhibit 10.1 
 TAX DISAFFILIATION AGREEMENT 
 TAX DISAFFILIATION AGREEMENT dated as of October 31, 2007
(this “Agreement”), between ACUITY BRANDS, INC., a Delaware corporation (“Parent”), and Zep Inc., a Delaware corporation (“SpinCo”). 
 WHEREAS, as of the date of this Agreement, Parent is the common parent of an affiliated group of corporations within the meaning of Section 1504(a)
of the Internal Revenue Code of 1986, as amended (the “Code”), which currently files consolidated federal income tax returns, and SpinCo is a member of such affiliated group; 
 WHEREAS, pursuant to the Agreement and Plan of Distribution dated October 31, 2007 (the “Distribution Agreement”), by and between
Parent and SpinCo, after engaging in certain Corporate Transactions (as defined in the Distribution Agreement), Parent shall distribute to its stockholders all of the outstanding shares of stock of SpinCo, together with associated preferred stock
purchase rights, on a pro rata basis (the “Distribution”); 
 WHEREAS, Parent and SpinCo intend that the Distribution will
qualify as a distribution described in Section 355 of the Code and will not result in the recognition of any taxable gain or income to Parent, SpinCo or any of their respective stockholders; 
 WHEREAS, as a result of the Distribution, SpinCo and its subsidiaries shall cease to be members of the Parent affiliated group for all applicable tax
purposes; 
 WHEREAS, Parent and SpinCo desire, on behalf of themselves, their subsidiaries and their successors, to set forth their rights
and obligations with respect to Taxes due for periods before and after the Distribution and to address certain other Tax matters; 
 NOW,
THEREFORE, in consideration of the transactions recited above and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 
 ARTICLE I 
 Definitions

 Section 1.1 Definition of Terms. The following terms shall have the following meanings. All section references are to this
Agreement unless otherwise stated. 
 “Active Trade or Business” means the active conduct by SpinCo of the businesses
conducted by the members of the SpinCo Group as of the Distribution Date (determined in accordance with Section 355(b) of the Code). 
 “Acuity Canada” means Acuity Holdings, Inc., a Canadian corporation, which historically has conducted part of both the Parent Business and the SpinCo Business. 
 “Affiliate” means, when used with respect to any specified person, a person that directly or indirectly controls, is controlled by, or
is under common control with such specified person, in 

 
each case after the Distribution. As used herein, “control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the ownership of voting securities or other interests, by contract or otherwise. For the avoidance of doubt, SpinCo is not an Affiliate of Parent for purposes of this
Agreement. 
 “Agreement” has the meaning set forth in the recitals. 
 “Ancillary Agreement” has the meaning set forth in the Distribution Agreement. 
 “Applicable Rate” has the meaning set forth in the Distribution Agreement. 
 “Business Day” has the meaning set forth in the Distribution Agreement. 
 “Code” has the meaning set forth in the recitals. 
 “Distribution” has the meaning set forth in the recitals. 
 “Distribution
Date” has the meaning set forth in the Distribution Agreement. 
 “Final Determination” means the final resolution
of liability for any Tax for any taxable period by or as a result of (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a final settlement with the IRS, a closing agreement
or accepted offer in compromise under Section 7121 or 7122 of the Code, or a comparable arrangement under the laws of another jurisdiction; (iii) any allowance of a refund in respect of an overpayment of Tax, but only after the expiration
of all periods during which such amount may be recovered by the Taxing Authority imposing the Tax; or (iv) any other final disposition, including by reason of the expiration of the applicable statute of limitations. 
 “Foreign Income Tax Basket” has the meaning set forth in Section 2.2(e). 
 “Group” means the Parent Group or the SpinCo Group, or both, as the context requires. 
 “Income Taxes” means all federal, state, local, and foreign income Taxes or other Taxes based on income or net worth. 
 “Income Tax Return” means any Tax Return relating to Income Taxes. 
 “Indemnitee” has the meaning set forth in Section 5.1. 
 “Indemnifying Party” has the meaning set forth in Section 5.1. 
 “IRS” means the U.S. Internal Revenue Service. 
 “Joint Return” means (i) any Tax Return that includes both a member of the Parent Group and a member of the SpinCo Group and (ii) any Tax Return of Acuity Canada for a Pre-Distribution Tax
Period and for the Straddle Period. 
 “Non-Income Taxes” means any Taxes other than Income Taxes. 
 “Parent Assets” has the meaning set forth in the Distribution Agreement. 
 “Parent Business” has the meaning set forth in the Distribution Agreement. 
 “Past Practices” has the meaning set forth in Section 3.3(a). 
 “Post-Distribution Tax Period” means any taxable period beginning after the Distribution Date and the portion of any Straddle Period
beginning after the Distribution Date. 
  

 2 

 “Pre-Distribution Tax Period” means any taxable period ending on or before the close of
the Distribution Date and the portion of any Straddle Period ending on the Distribution Date. 
 “Proposed Acquisition
Transaction” has the meaning set forth in Section 4.2(b). 
 “Reportable Transaction” means a listed
transaction or other reportable transaction as defined in the Treasury Regulations under Section 6011 of the Code. 
 “Restricted Period” means the period beginning on the Distribution Date and ending on, and including, the last day of the two year period following the Distribution Date. 
 “Ruling Documents” means the request for a ruling under Section 355 and various other Sections of the Code filed with the IRS in
connection with the Distribution, together with any supplemental filings or ruling requests or other materials subsequently submitted to the IRS on behalf of Parent, its subsidiaries and shareholders to the IRS, the appendices and exhibits thereto,
and any rulings issued by the IRS to Parent in connection with the Distribution. 
 “Satisfactory Guidance” means either a
ruling from the IRS or an Unqualified Tax Opinion, at the election of SpinCo, in either case reasonably satisfactory to Parent in both form and substance, including with respect to any underlying assumptions or representations. 
 “Separate Return” means (i) in the case of the SpinCo Group, a Tax Return of any member of that Group (including any consolidated,
combined, affiliated or unitary Return) that does not include, for all or any portion of the relevant taxable period, any member of the Parent Group and (ii) in the case of the Parent Group, a Tax Return of any member of that Group (including
any consolidated, combined, affiliated or unitary Return) that does not include, for all or any portion of the relevant taxable period, any member of the SpinCo Group. Notwithstanding the foregoing, the Tax Returns of Acuity Canada for
Pre-Distribution Tax Periods and for the Straddle Period shall be treated as Joint Returns and not as Separate Returns for purposes of this Agreement. 
 “SpinCo” has the meaning set forth in the recitals. 
 “SpinCo Assets” has
the meaning set forth in the Distribution Agreement. 
 “SpinCo Business” has the meaning set forth in the Distribution
Agreement. 
 “SpinCo Capital Stock” means (i) all classes or series of capital stock of SpinCo, including common stock
and all other instruments treated as equity in SpinCo for U.S. federal income tax purposes and (ii) all options, warrants and other rights to acquire such capital stock. 
 “SpinCo Group” means SpinCo and its Affiliates. 
 “Straddle Period” means, with respect to a given entity, any taxable period beginning on or before the Distribution Date and ending after the Distribution Date; provided, however, that
the term “Straddle Period” shall not include any U.S. federal income taxable period of the Parent Group. 
 “Taxes” means all forms of taxation or duties imposed, or required to be collected or withheld, including charges, together with any related interest, penalties or other additional amounts. For the avoidance of doubt, the
term “Taxes” does not include amounts to be paid to any governmental authority pursuant to escheat law. 
  

 3 

 “Taxing Authority” means any national, municipal, governmental, state, federal, foreign,
or other body, or any quasi-governmental or private body, having jurisdiction over the assessment, determination, collection or imposition of any Tax. 
 “Tax Advisor” means a tax counsel or other tax advisor of recognized standing reasonably acceptable to both parties. 
 “Tax Benefit” means the amount of the reduction in the Tax liability of an entity (or of the consolidated or combined group of which it is a member), whether temporary or permanent, for any taxable
period that arises, or may arise in the future, as a result of any adjustment to, or addition or deletion of, a Tax Item in the computation of the Tax liability of the entity (or the consolidated or combined group of which it is a member).

 “Tax Contest” means an audit, review, examination or any other administrative or judicial proceeding with the purpose or
effect of determining or redetermining Taxes. 
 “Tax Detriment” means the amount of the increase in the Tax liability of an
entity (or of the consolidated or combined group of which it is a member), whether temporary or permanent, for any taxable period that arises, or may arise in the future, as a result of any adjustment to, or addition or deletion of, a Tax Item in
the computation of the Tax liability of the entity (or the consolidated or combined group of which it is a member). 
 “Tax-Free
Status” means the qualification of the contribution of property to SpinCo and the Distribution together as a reorganization described in Sections 355 and 368(a)(1)(D) of the Code in which the SpinCo stock distributed is “qualified
property” for purposes of Section 361(c) of the Code and that qualifies for tax-free treatment under comparable provisions of state, local and foreign law. For the avoidance of doubt, recognition of income or gain that relates to
intercompany items shall not cause the Distribution to fail to achieve Tax-Free Status. 
 “Tax Item” means any item of
income, gain, loss, deduction, credit, recapture of credit, or any other item (including the basis or adjusted basis of property) which increases or decreases Income Taxes paid or payable in any taxable period. 
 “Tax Opinion” means the opinion of King & Spalding LLP regarding the Tax-Free Status of the Distribution and any other opinion
issued to allow a party to take actions otherwise restricted by this Agreement. 
 “Tax Return” means any return, report,
certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated Tax) required or permitted
to be supplied to, or filed with, a Taxing Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax. 
 “Transactions” means the Distribution, the Corporate Transactions, any other transactions contemplated by the Distribution Agreement and
any other transfer of assets (whether by contribution, sale or otherwise) between any member of the Parent Group and the SpinCo Group in connection with the Distribution (including without limitation the transfer by Acuity Canada to a Parent
Affiliate of the assets of Acuity Canada relating to the Parent Business). 
  

 4 

 “Transaction Taxes” means all (i) Taxes of any member of the Parent Group or the
SpinCo Group resulting from, or arising in connection with, the failure of the contribution of property to SpinCo and/or the Distribution to have Tax-Free Status, (ii) Taxes of the type described in clause (i) of any third party for which
any member of the Parent Group or SpinCo Group becomes liable, and (iii) reasonable out of pocket legal, accounting and other advisory and court fees in connection with liability for Taxes described in clauses (i) or (ii). 
 “Unqualified Tax Opinion” means an unqualified “will” opinion of a Tax Advisor that permits reliance by Parent. The Tax
Advisor, in issuing its opinion, shall be permitted to rely on the validity and correctness, as of the date given, of any previously issued Tax Opinion or Ruling Document, unless such reliance would be unreasonable under the circumstances.

 ARTICLE II 
 Tax
Sharing 
 Section 2.1 Responsibility and Indemnification for Taxes. 
 (a) From and after the Distribution Date, without duplication, each of Parent and SpinCo shall be responsible for, and shall pay its
respective share of, the liability for Taxes of Parent, SpinCo and their respective Affiliates, as provided in this Agreement. Parent shall indemnify and hold harmless SpinCo and its Affiliates from any Taxes for which Parent is responsible under
this Agreement. SpinCo shall indemnify and hold harmless Parent and its Affiliates from any Taxes for which SpinCo is responsible pursuant to this Agreement. 
 (b) Payments to Taxing Authorities and between the parties, as the case may be, shall be made in accordance with the provisions of this
Agreement. 
 Section 2.2 SpinCo’s Liability for Taxes. SpinCo shall be liable for the following Taxes: 
 (a) except as provided for in Section 2.3(e), all Non-Income Taxes incurred with respect to any SpinCo Separate Return or otherwise
with respect to the SpinCo Assets or the SpinCo Business for any taxable period; 
 (b) any Transaction Taxes that are
attributable to: 
 (i) any inaccurate statement or representation of fact or intent (or omission to state a material fact)
made by SpinCo in Section 4.1; 
 (ii) any inaccurate statement or representation of fact or intent (or omission to state
a material fact) in a letter or certificate that is provided by any member of the SpinCo Group and that forms the basis for the Tax Opinion; 
 (iii) any action or omission by any member of the SpinCo Group after the date of this Agreement inconsistent with the covenants set forth in this Agreement; or 
  

 5 

 (iv) any other action or omission by any member of the SpinCo Group after the date of
this Agreement, including any action or omission that would have resulted in SpinCo being in breach of Section 4.2(b) but for the receipt by SpinCo of a ruling of the IRS, an Unqualified Tax Opinion, or a waiver; 
 (c) any increase in the U.S. federal, state, local or foreign Income Tax liability of Parent, SpinCo or any member of either of their
respective Groups with respect to any Pre-Distribution Tax Period, but only if, and then to the extent that, such increased Income Tax liability is attributable to either (i) SpinCo’s willful misconduct or material breach of its
obligations under this Agreement or (ii) a change in any item of income, gain, deduction, loss, credit or other allowance from that which was reported on, or omitted from, an Income Tax Return as originally filed for a Pre-Distribution Tax
Period, whether that change arises from a Tax Contest, amended Tax Return, claim for refund or otherwise, that increases the amount of income or gain attributable to SpinCo or any SpinCo Affiliate in a Pre-Distribution Tax Period and correspondingly
decreases the amount of income or gain attributable to SpinCo or any SpinCo Affiliate in a Post-Distribution Tax Period or that decreases the amount of deductions, losses, credits or other allowances attributable to SpinCo or a SpinCo Affiliate in a
Pre-Distribution Tax Period and correspondingly increases the amount of deductions, losses, credits or other allowances attributable to SpinCo or any SpinCo Affiliate in a Post-Distribution Tax Period; 
 (d) the amount, if any, by which the aggregate foreign Income Taxes attributable to SpinCo Separate Returns for the portion of the
Straddle Period ending on the Distribution Date exceed the estimated amount payable by Parent with respect thereto under Section 2.4(c); 
 (e) the first $100,000, in the aggregate, of additional foreign Income Taxes owed by SpinCo and the SpinCo Affiliates as a result of amendments to, or Tax Contests involving, SpinCo Separate Returns for taxable
periods that end on or before the Distribution Date (the “Foreign Income Tax Basket”); and 
 (f) all Taxes incurred
with respect to SpinCo and any SpinCo Affiliate for any Post-Distribution Tax Period. 
 Section 2.3 Parent’s Liability for
Taxes. Parent shall be liable for the following Taxes: 
 (a) all Non-Income Taxes incurred with respect to any Parent
Separate Return or otherwise with respect to the Parent Assets or the Parent Business for any taxable period; 
 (b) except as
provided for in Sections 2.2(b) and (c), all U.S. federal, state and local Income Taxes incurred by Parent, SpinCo, or any member of their respective Groups with respect to any Pre-Distribution Tax Period; 
 (c) except as provided for in Section 2.2(c), all foreign Income Taxes (i) that are required to be reported on a Parent Separate
Return for any taxable period, (ii) of Acuity Canada that are attributable to any Pre-Distribution Tax Period (including the portion of 

  

 6 

 
the Straddle Period ending on the Distribution Date), (iii) that are shown as due on any SpinCo Separate Return as originally filed for any taxable
period that ends on or before the Distribution Date (excluding Straddle Periods), and/or (iv) that exceed the Foreign Income Tax Basket and result from amendments to, or Tax Contests involving, SpinCo Separate Returns for taxable periods that
end on or before the Distribution Date; 
 (d) all Taxes incurred with respect to Parent and any Parent Affiliate for any
Post-Distribution Tax Period; and 
 (e) any stamp, sales, use, gross receipts, value-added, withholding, real estate transfer
or other similar Taxes imposed in connection with the Transactions. 
 Section 2.4 Payment of Allocable Taxes. 
 (a) With respect to each payment of Tax that is due after the Distribution Date in connection with the filing of any Tax Return, including
estimated tax installments and payments made in connection with extension requests, the party responsible for filing such Tax Return under Article III shall notify the other party in writing of the amount of the tax sharing payment due from such
other party, if any, calculated under the principles of this Agreement, and such other party shall make its tax sharing payment to the first party (to the extent not previously paid or credited); provided, however, that neither party shall be
required to make a tax sharing payment to the other party under this Section 2.4(a) until five (5) days after the applicable Tax payment is made to the applicable Taxing Authority. Tax sharing payments made under this Section 2.4(a),
as well as tax sharing payments made by, or credited to, a party prior to the Distribution Date, shall be adjusted when each applicable Tax Return and the calculation of the applicable Tax liability is finalized. 
 (b) If any Tax Return for a Pre-Distribution Tax Period is examined by a Taxing Authority and such examination results in additional Taxes
due, the party responsible for such additional Taxes under Section 2.2 or 2.3, as applicable, shall pay or cause its Affiliate to pay the indemnified amount to the other party within five (5) days after such other party makes payment of
such additional Taxes following a Final Determination. 
 (c) Section 2.4(a) shall not apply to any payment of foreign
Income Tax that is due after the Distribution Date in connection with the filing of any SpinCo Separate Return for any Straddle Period. Rather, within sixty (60) days after the Distribution Date, Parent shall provide a statement to SpinCo
containing a reasonably detailed estimate of the amount of such foreign Income Taxes attributable to the portion of the Straddle Period ending on the Distribution Date. Parent and SpinCo shall cooperate with each other in good faith to reach
agreement on such estimated amount within thirty (30) days after Parent provides such statement to SpinCo. Within five (5) days after the estimated amount is finally determined by agreement of the parties or pursuant to Article VI, Parent
shall pay such finally determined amount to SpinCo. There shall be no “true up” or other adjustment payable by, or refundable to, Parent when the Straddle Period foreign Income Tax Returns described in this Section 2.4(a) are
finalized and filed, and Parent shall not be liable for any additional foreign Income Taxes due, and shall not be entitled to receive 

  

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any refunds of foreign Income Taxes, resulting from any amendment to, or Tax Contest involving, SpinCo Separate Returns for any Straddle Period, except to
the extent that any such additional Taxes due are attributable to Parent’s willful misconduct or material breach of its obligations under this Agreement. For the avoidance of doubt, this Section 2.4(c) does not apply to Income Tax Returns
of Acuity Canada for the Straddle Period. 
 Section 2.5 Allocation of Certain Income Taxes and Income Tax Items. 
 (a) If Parent, SpinCo or any of their respective Affiliates is permitted but not required under applicable Tax laws to treat the
Distribution Date as the last day of a taxable period, then the parties shall treat such day as the last day of a taxable period under such applicable Tax law and shall file any elections necessary or appropriate to such treatment, provided that
this Section 2.5(a) shall not be construed to require Parent to change its taxable year. 
 (b) Transactions occurring,
or actions taken, on the Distribution Date but after the Distribution outside the ordinary course of business by, or with respect to, SpinCo or any of its Affiliates shall be deemed subject to the “next day rule” of Treasury Regulation
Section 1.1502-76(b)(1)(ii)(B) (and under any comparable or similar provision under state, local or foreign laws or regulations, provided that if there is no comparable or similar provision under state, local or foreign laws or regulations,
then the transaction will be deemed subject to the “next day rule” and as such shall for purposes of this Agreement be treated (and consistently reported by the parties) as occurring in a Post-Distribution Tax Period of SpinCo or a SpinCo
Affiliate, as appropriate). 
 (c) Any Taxes for a Straddle Period shall, for purposes of this Agreement, be apportioned
between the portion of the period ending on and including the Distribution Date and the portion of the period beginning after the Distribution Date, and each such portion of such period shall be deemed to be a taxable period (whether or not it is in
fact a taxable period). Any allocation of income or deductions required to determine any Income Taxes for a Straddle Period shall be made by means of a closing of the books and records of SpinCo and its Affiliates as of the close of business on the
Distribution Date, provided that (i) Parent may elect to allocate Tax Items (other than any extraordinary Tax Items) ratably in the month in which the Distribution occurs (and if Parent so elects, SpinCo shall so elect) as described in Treasury
Regulations Section 1.1502-76(b)(2)(iii) and corresponding provisions of state, local, and foreign Tax laws; and (ii) subject to clause (i), exemptions, allowances or deductions that are calculated on an annual basis, and not on a closing
of the books method (including, but not limited to, depreciation and amortization deductions) shall be allocated between the period ending on and including the Distribution Date and the period beginning after the Distribution Date based on the
number of days for the portion of the Straddle Period ending on and including the Distribution Date, on the one hand, and the number of days for the portion of the Straddle Period beginning after the Distribution Date, on the other hand. 

(d) Tax attributes determined on a consolidated or combined basis for taxable periods ending before or including the Distribution Date
shall be allocated to Parent and its Affiliates, and SpinCo and its Affiliates, in accordance with the Code and the Treasury 

  

 8 

 
Regulations (and any applicable state, local, or foreign law or regulation). Parent shall reasonably determine the amounts and proper allocation of such
attributes. Parent and SpinCo agree to compute their Tax liabilities for taxable periods after the Distribution Date consistent with that determination and allocation, and treat the Tax Items as reflected on any federal (or applicable state, local
or foreign) Income Tax Return filed by the parties as presumptively correct. 
 Section 2.6 Tax Refunds. Except as provided in
Section 2.7: 
 (a) Parent shall be entitled to all refunds (including refunds paid by means of a credit against other or
future Tax liabilities) and credits with respect to any Tax for which Parent is responsible under this Agreement. SpinCo shall be entitled to all refunds (including refunds paid by means of a credit against other or future Tax liabilities) and
credits with respect to any Tax for which SpinCo is responsible under this Agreement. 
 (b) Parent and SpinCo shall each
forward to the other party, or reimburse such other party for, any refunds received by the first party and due to such other party pursuant to this Section. Where a refund is received in the form of a credit against other or future Tax liabilities,
reimbursement with respect to such refund shall be due in each case on the due date for payment of the Tax against which such refund has been credited. All payments made pursuant to this Section 2.6 shall describe in reasonable detail the basis
for the calculation of the amount being paid. 
 (c) If one party reasonably so requests, the other party (at the first
party’s expense) shall file for and pursue any refund to which the first party is entitled under this Section, provided that the other party need not pursue any refund on behalf of the first party unless the first party provides the other party
a certification by an appropriate officer of the first party setting forth the first party’ s belief (together with supporting analysis) that the Tax treatment of the Tax Items on which the entitlement to such refund is based is more likely
than not correct, and is not a Tax Item arising from a Reportable Transaction. 
 (d) If the other party pays any amount to
the first party under this Section 2.6 and, as a result of a subsequent Final Determination, the first party is not entitled to some or all of such amount, the other party shall notify the first party of the amount to be repaid to the other
party, and the first party shall then repay such amount to the other party, together with any interest, fines, additions to Tax, penalties or any other additional amounts imposed by a Taxing Authority relating thereto. 
 Section 2.7 Carrybacks. 
 (a) Notwithstanding anything in this Agreement, SpinCo shall file (or cause to be filed) on a timely basis any available election to waive the carryback of net operating losses, Tax credits or other Tax Items by SpinCo or any Affiliate from
a Post-Distribution Tax Period to a Straddle Period or Pre-Distribution Tax Period. 
 (b) If, notwithstanding the provisions
of Section 2.7(a), SpinCo is required to carry back losses or credits, SpinCo shall be entitled to any refund of any Tax obtained 

  

 9 

 
by Parent or a Parent Affiliate as a result of the carryback of losses or credits of SpinCo or a SpinCo Affiliate from any Post-Distribution Tax Period to
any Pre-Distribution Tax Period or Straddle Period. Such refund is limited to the net amount received by Parent or a Parent Affiliate (by refund, offset against other Taxes, or otherwise), net of any Tax Detriment incurred by Parent or such
Affiliate resulting from such refund. Upon request by SpinCo, Parent shall advise SpinCo of an estimate of any Tax Detriment Parent projects will be associated with any carryback of losses or credits of SpinCo and its Affiliates provided in this
Section 2.7(b). 
 (c) If SpinCo has a Tax Item that must be carried back to any Pre-Distribution Tax Period, SpinCo
shall notify in writing Parent that such Tax Item must be carried back. Such notification shall include a description in reasonable detail of the grounds for the refund and the amount thereof, and a certification by an appropriate officer of SpinCo
setting forth SpinCo’s belief (together with supporting analysis) that the Tax treatment of such Tax Item is more likely than not correct, and is not a Tax Item arising from a Reportable Transaction. 
 (d) If Parent pays any amount to SpinCo under Section 2.7(b) and, as a result of a subsequent Final Determination, SpinCo is not
entitled to some or all of such amount, Parent shall notify SpinCo of the amount to be repaid to Parent, and SpinCo shall then repay such amount to Parent, together with any interest, fines, additions to Tax, penalties or any other additional
amounts imposed by a Taxing Authority relating thereto. 
 ARTICLE III 
 Preparation and Filing of Tax Returns 
 Section 3.1 Parent
Responsibility. 
 (a) Subject to paragraph (b) below, Parent shall make all determinations with respect to, have
ultimate control over the preparation of, and file or cause to be filed, as it determines to be mandatory or advisable, all (i) Joint Returns for all taxable periods (except for Tax Returns with respect to Acuity Canada for the Straddle Period,
which shall be SpinCo’s responsibility to file), (ii) Parent Separate Returns for all taxable periods, and (iii) SpinCo Separate Returns relating to Income Taxes for periods that end on or prior to the Distribution Date (i.e.,
excluding Straddle Periods, which shall be SpinCo’s responsibility to file). 
 (b) Parent shall submit to SpinCo the
portions of any Tax Returns described in Section 3.1 that include SpinCo, a SpinCo Affiliate, the SpinCo Assets or the SpinCo Business or that involve Taxes for which SpinCo is potentially liable under this Agreement, no later than forty five
(45) days prior to the due date (including extensions) for filing of any such Tax Returns (or if such due date is within 45 days following the Distribution Date, as promptly as practicable following the Distribution Date). Within fifteen
(15) days after delivery of any such portions of any Tax Return, SpinCo shall provide comments to Parent in writing to the extent SpinCo objects to any item reflected 

  

 10 

 
in such Tax Return. Such SpinCo comments shall be incorporated into the Tax Return upon the consent of Parent, not to be unreasonably withheld. If SpinCo
does not so notify Parent of any objection, SpinCo shall be considered to have consented to the filing of such Tax Return. 
 (c) Parent shall prepare and provide to SpinCo all tax information relating to the Parent Assets and the Parent Business that is required by SpinCo to complete any Income Tax Return of Acuity Canada for the Straddle Period, in the format
reasonably requested by SpinCo, and at least 100 days before the due date (including extensions) for the filing of any such Income Tax Return. 
 (d) The dates for submissions of Tax Returns or tax information to SpinCo required in this section may be modified by mutual agreement of the parties. 
 Section 3.2 SpinCo Responsibility. 
 (a) Subject to paragraph (b) below, SpinCo shall make all determinations with respect to, have ultimate control over the preparation of, and file all Tax Returns (other than those described in Section 3.1)
for the SpinCo Group as it determines to be mandatory or advisable and for all tax periods. 
 (b) SpinCo shall submit to
Parent any Tax Return of Acuity Canada for any Pre-Distribution Tax Period, and any other Tax Return described in Section 3.2(a) that includes Parent, a Parent Affiliate, the Parent Assets or the Parent Business or that otherwise involves Taxes
for which Parent could be liable under this Agreement, no later than forty five (45) days prior to the due date (including extensions) for filing of any such Tax Return (or if such due date is within 45 days following the Distribution Date, as
promptly as practicable following the Distribution Date). Within fifteen (15) days after delivery of any such Tax Returns, Parent shall provide comments to SpinCo in writing to the extent Parent objects to any item reflected in such Tax Return.
Such Parent comments shall be incorporated into the Tax Return upon the consent of SpinCo, not to be unreasonably withheld. If Parent does not notify SpinCo of any objection, Parent shall be considered to have consented to the filing of such Tax
Return. 
 (c) SpinCo shall prepare and provide to Parent all tax information related to members of the SpinCo Group required
to complete any Joint Return or SpinCo Separate Return required to be prepared by Parent, in the format reasonably requested by Parent and consistent with past practices, and at least 110 days before the due date (including extensions) of the
relevant federal Joint Return and at least 100 days before the due date (including extensions) of any other Joint Return or SpinCo Separate Return required to be filed by Parent. 
 (d) The dates for submissions of Tax Returns or tax information to Parent required in this section may be modified by mutual agreement of
the parties. 
 Section 3.3 Tax Accounting Practices. 
  

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 (a) Except as provided in Section 3.3(b), any Tax Return for any Pre-Distribution
Tax Period, to the extent it relates to members of the SpinCo Group, shall be prepared in accordance with practices, accounting methods, elections, conventions and Tax positions used with respect to the Tax Return in question for periods prior to
the Distribution (“Past Practices”), and, in the case of any item the treatment of which is not addressed by Past Practices, in accordance with generally acceptable Tax accounting practices. Parent and SpinCo shall notify each
other, in connection with the submissions of Tax Returns for review under Section 3.1(b) or 3.2(b), as applicable, with respect to any material item that is proposed to be reported in a manner that is not consistent with Past Practices.
Notwithstanding the foregoing, for any Tax Return described in this Section 3.3(a), (i) a party will not be required to follow Past Practices with either the written consent of the other party (not to be unreasonably withheld) or a
“should” level opinion from a Tax Advisor that the proposed method of reporting is correct and (ii) Parent shall have the right to determine which entities will be included in any Joint Return that it is responsible for filing.

 (b) The parties shall report the Transactions for all Tax purposes in a manner consistent with the Ruling Documents and the
Tax Opinion, unless, and only to the extent, an alternative position is required pursuant to a Final Determination. Parent shall determine the Tax treatment to be reported on any Tax Return of any Tax issue relating to the Transactions that is not
covered by the Ruling Documents or the Tax Opinion. 
 Section 3.4 Right to Review Tax Returns. Upon request, each party shall
provide to the other party the portion of any Tax Return for a Pre-Distribution Tax Period that relates to the other party’s Group that the first party is responsible for preparing under this Article III. 
 ARTICLE IV 
 Tax-Free Status of
Distribution 
 Section 4.1 Representations. 
 (a) SpinCo, for itself and the SpinCo Affiliates, represents and warrants that: 
 (i) SpinCo has reviewed the information and representations made in the Ruling Documents submitted to the IRS prior to the date of this
Agreement and the representations made by SpinCo in the certificate that forms the basis for the Tax Opinion and, to the knowledge and belief of SpinCo, all of such information or representations that relate to SpinCo or any SpinCo Affiliate, or the
business or operations of either, are true, correct and complete; and 
 (ii) to the knowledge and belief of SpinCo, no
officer or director of SpinCo or any SpinCo Affiliate (nor any person acting with the permission of any such officer or director) has participated in any “agreement, understanding, arrangement or substantial negotiations” (as those terms
are used in Treasury Regulations section 1.355-7(h)) with respect to any transaction involving the issuance or other acquisition of SpinCo Capital Stock (excluding for this purpose (x) issuances of SpinCo Capital Stock meeting the requirements
of Safe Harbor 

  

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VIII of Treasury Regulation Section 1.355-7(d) (relating to certain compensatory transfers of stock), (y) transfers on an established market of
SpinCo Capital Stock described in Safe Harbor VII of Treasury Regulation Section 1.355-7(d) or (z) issuances of SpinCo Capital Stock described in Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury
Regulation Section 1.355-7(d)), or any merger or acquisition involving all or substantially all of the assets of SpinCo or a SpinCo Affiliate. 
 (b) Parent, for itself and the Parent Affiliates, represents and warrants that: 
 (i) Parent
has reviewed the information and representations made in the Ruling Documents submitted to the IRS prior to the date of this Agreement and the representations made by Parent in the certificate that forms the basis for the Tax Opinion and, to the
knowledge and belief of Parent, all of such information or representations are true, correct and complete; and 
 (ii) to the
knowledge and belief of Parent, no officer or director of Parent or any Parent Affiliate (nor any person acting with the permission of any such officer or director) has participated in any “agreement, understanding, arrangement or substantial
negotiations” (as those terms are used in Treasury Regulations section 1.355-7(h)) with respect to any transaction involving the issuance or other acquisition of SpinCo Capital Stock (excluding for this purpose (x) issuances of SpinCo
Capital Stock meeting the requirements of Safe Harbor VIII of Treasury Regulation Section 1.355-7(d) (relating to certain compensatory transfers of stock), (y) transfers on an established market of SpinCo Capital Stock described in Safe
Harbor VII of Treasury Regulation Section 1.355-7(d) or (z) issuances of SpinCo Capital Stock described in Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d)), or
any merger or acquisition involving all or substantially all of the assets of SpinCo or a SpinCo Affiliate. 
 Section 4.2
Covenants. 
 (a) Each of SpinCo and Parent will not take or fail to take, or permit its Affiliates to take or fail to
take, any action where that action or omission would (i) violate, be inconsistent with or cause to be untrue any covenant, representation or statement in the Ruling Documents, any Tax Opinion or a letter or certificate that forms the basis
therefor, or (ii) prevent, or be reasonably likely to prevent, the Tax-Free Status. 
 (b) Neither SpinCo nor any SpinCo
Affiliate will, directly or indirectly: 
 (i) enter into, or otherwise be a party to, any transaction or arrangement
(including, without limitation, stock issuances, stock acquisitions, and transactions involving the stock or substantially all of the assets of SpinCo or any SpinCo Affiliate) pursuant to which one or more persons acquire stock of SpinCo or any
SpinCo Affiliate representing a “50-percent or greater interest” within the 

  

 13 

 
meaning of Section 355(d)(4) of the Code that would cause Section 355(e) of the Code to apply to the Distribution; 
 (ii) take or fail to take any other action (including, without limitation, any voluntary cessation or disposition of its Active Trade or
Business) that would cause the contribution of property to SpinCo and/or the Distribution to fail to have Tax-Free Status; 
 (iii) during the Restricted Period, permit any transaction or series of transactions (or any agreement, understanding or arrangement to enter into a transaction or series of transactions) as determined for purposes of Section 355(e) of
the Code, in connection with which any person would (directly or indirectly) acquire, or have the right to acquire, from any other person, any interest in SpinCo Capital Stock which, when aggregated with all other such specified transactions
undertaken during the Restricted Period, would involve the acquisition (determined under the principles of Section 355(e) of the Code) by one or more persons of more than forty percent (40%) (by vote or by value) of the SpinCo Capital
Stock (a “Proposed Acquisition Transaction”). For these purposes, any recapitalization, repurchase or redemption of SpinCo Capital Stock shall be treated as an indirect acquisition of such stock by any non-exchanging shareholder to
the extent such shareholder’s percentage interest in SpinCo Capital Stock increases by vote or value. Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not include (w) the adoption by SpinCo of a shareholder rights
plan that meets the requirements of IRS Revenue Ruling 90-11, (x) issuances of SpinCo Capital Stock meeting the requirements of Safe Harbor VIII of Treasury Regulation Section 1.355-7(d) (relating to certain compensatory transfers of
stock), (y) transfers on an established market of SpinCo Capital Stock described in Safe Harbor VII of Treasury Regulation Section 1.355-7(d) or (z) issuances of SpinCo Capital Stock described in Safe Harbor IX (relating to
acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d); 
 (iv) during the
Restricted Period, permit any transaction or series of transactions (or any agreement, understanding or arrangement to enter into a transaction or series of transactions) as determined for purposes of Section 355(e) of the Code, in connection
with which any member of the SpinCo Group would merge or consolidate with any person (other than any other member of the SpinCo Group) or transfer its assets to such a person in a transaction described in Section 355(e)(3)(B) of the Code and as
a result of which, after taking into account any acquisition of SpinCo Capital Stock required to be taken into account for purposes of clause (iii) above, the stockholders of SpinCo immediately after the Distribution would continue to own,
directly or indirectly, less than sixty percent (60%) (by vote or by value) of the capital stock or other ownership interests in the acquiring person; or 
  

 14 

 (v) during the Restricted Period, liquidate or partially liquidate, including by way of
merger or consolidation, SpinCo or any corporation that constitutes a SpinCo Affiliate immediately after the Distribution; 
 (c) Notwithstanding paragraph (b), clauses (iii) through (v) of paragraph (b) shall not apply upon the prior written consent of Parent, which consent may not be withheld if Parent determines in good faith that SpinCo has
provided it with Satisfactory Guidance that the proposed actions will not result in Transaction Taxes. In addition, in the event that SpinCo intends to consummate any Proposed Acquisition Transaction or any transaction described in clause
(iv) of paragraph (b) more than one year after the Distribution Date, then SpinCo shall be permitted to consummate such proposed transaction, provided that SpinCo shall provide Parent with an unconditional certification that it did not
have any agreement, understanding, arrangement, or substantial negotiations, within the meaning of Treasury Regulations Section 1.355-7(h), with the counterparty to such transaction within 12 months after the Distribution Date, and Parent after
reasonable investigation is satisfied with the correctness of such certification. 
 Section 4.3 Procedures Regarding Opinions and
Rulings. 
 (a) If SpinCo may take certain actions conditioned upon the receipt of Satisfactory Guidance, Parent, at the
request of SpinCo, shall use commercially reasonable efforts to obtain expeditiously, or to assist SpinCo in obtaining, such Satisfactory Guidance. Parent shall not be required to take any action pursuant to this Section 4.3(a) if SpinCo fails
to certify, upon request, that all information and representations relating to any member of the SpinCo Group in the relevant documents are true, correct and complete. SpinCo shall reimburse Parent for all reasonable out-of-pocket costs and expenses
incurred by Parent in obtaining Satisfactory Guidance. 
 (b) Parent shall have the right to obtain a ruling from the IRS (or
any other Taxing Authority) or an Unqualified Tax Opinion at any time in its sole discretion. Parent shall reimburse SpinCo for all reasonable out-of-pocket costs and expenses incurred by the SpinCo Group in obtaining such a ruling or Unqualified
Tax Opinion. 
 ARTICLE V 
 Tax Contests; Indemnification; Cooperation 
 Section 5.1 Notice. 
 (a) Within 15 Business Days after a party (the “Indemnitee”) becomes aware of the existence of a Tax Contest that may give rise
to an indemnification claim under this Agreement by it against the other party (the “Indemnifying Party”), the Indemnitee shall promptly notify the Indemnifying Party of the Tax Contest, and thereafter shall promptly forward or make
available to the Indemnifying Party copies of notices and communications with a Taxing Authority relating to such Tax Contest. 
 (b) The Indemnifying Party shall not be responsible for any increase in amounts to which the Indemnitee is otherwise entitled to the extent that such increase results 

  

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solely from the failure of the Indemnitee to provide timely notice as required pursuant to Section 5.1(a). 
 Section 5.2 Control of Tax Contests. 
 (a) Except as otherwise provided in paragraph (b): 
 (i) Parent may elect to control, and to
have sole discretion in handling, settling or contesting, any Tax Contest relating to any Joint Returns, any Parent Separate Returns, any SpinCo Separate Returns relating to U.S. state and local Income Taxes for taxable periods ending on or before
the Distribution Date (i.e., excluding Straddle Periods), or the Tax treatment of the Transactions, provided that (x) Parent shall act in good faith in connection with its control of any such Tax Contests and (y) SpinCo shall have
the right to participate in and advise on (including, without limitation, the opportunity to review and comment upon Parent’s communications with the Taxing Authority, which comments shall be incorporated upon the consent of Parent, not to be
unreasonably withheld) such items for which SpinCo could be liable under Article II as a result of such Tax Contest; and 
 (ii) If SpinCo disagrees with Parent’s decision to settle a Tax Contest that may reasonably be expected to affect amounts for which it is liable under Article II, it shall have the right to contest its liability to Parent under Article
II notwithstanding the settlement. SpinCo shall provide written notice to Parent of its intention to contest its liability as a result of any settlement (and its irrevocable election described below) prior to the time such settlement is entered
into. Any such contest by SpinCo shall be made under the procedures set forth in Article VI. Under those procedures, SpinCo may irrevocably elect, in its sole discretion, to require the Tax Advisor or the arbitrator to determine either (x) the
amount of a settlement with the relevant Taxing Authority that would most accurately reflect the litigation risk of the relevant issue, or (y) the most likely outcome of the issue if it were litigated without a settlement. In either such case,
SpinCo shall be liable to Parent, or Parent shall be liable to SpinCo, based solely on the determination of the Tax Advisor or the arbitrator as if a settlement or litigation implementing such determination had actually occurred, without regard to
the actual settlement. For the avoidance of doubt, this clause (ii) shall not limit Parent’s ability to settle a Tax Contest. 
 (b) Parent and SpinCo shall jointly control Tax Contests relating to Tax liability arising from the failure of the Distribution to qualify for tax-free treatment under Section 355 of the Code, if SpinCo
potentially would be liable to Parent under Article II as a result of such Tax Contest. Neither party shall have the right to settle any such Tax Contest without the consent of the other party. 
 (c) SpinCo shall have sole control over any Tax Contest relating to the SpinCo Separate Returns (other than U.S. state and local Income
Tax Returns for taxable periods 

  

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ending on or before the Distribution Date); provided, however, that if Parent is responsible under this Agreement for any Taxes relating to
such Tax Contest, then: 
 (i) SpinCo may elect to control, and to have sole discretion in handling, settling or contesting
such Tax Contest, provided that (x) SpinCo shall act in good faith in connection with its control of any such Tax Contest and (y) Parent shall have the right to participate in and advise on (including, without limitation, the opportunity
to review and comment upon SpinCo’s communications with the Taxing Authority, which comments shall be incorporated upon the consent of SpinCo, not to be unreasonably withheld) such items for which Parent could be liable under Article II as a
result of such Tax Contest; and 
 (ii) If Parent disagrees with SpinCo’s decision to settle such Tax Contest, it shall
have the right to contest its liability to SpinCo under Article II notwithstanding the settlement. Parent shall provide written notice to SpinCo of its intention to contest its liability as a result of any settlement (and its irrevocable election
described below) prior to the time such settlement is entered into. Any such contest by Parent shall be made under the procedures set forth in Article VI. Under those procedures, Parent may irrevocably elect, in its sole discretion, to require the
Tax Advisor or the arbitrator to determine either (x) the amount of a settlement with the relevant Taxing Authority that would most accurately reflect the litigation risk of the relevant issue, or (y) the most likely outcome of the issue
if it were litigated without a settlement. In either such case, Parent shall be liable to SpinCo, or SpinCo shall be liable to Parent, based solely on the determination of the Tax Advisor or the arbitrator as if a settlement or litigation
implementing such determination had actually occurred, without regard to the actual settlement. For the avoidance of doubt, this clause (ii) shall not limit SpinCo’s ability to settle a Tax Contest. 
 (d) Any out-of-pocket expenses incurred in handling, settling or contesting any Tax Contest shall be borne ratably by the parties based on
their ultimate liability under this Agreement for the Taxes to which the Tax Contest relates; provided, however, that (x) if SpinCo contests a settlement made by Parent as provided in clause (ii) of paragraph (a), Parent
shall bear the costs relating to SpinCo’s contest of such settlement unless Parent substantially prevails in such contest and (y) if Parent contests a settlement made by SpinCo as provided in clause (ii) of paragraph (c), SpinCo shall
bear the costs related to Parent’s contest of such settlement unless SpinCo substantially prevails in such contest. 
 Section 5.3
Indemnification Payments. 
 (a) An Indemnitee shall be entitled to make a claim for payments pursuant to this
Agreement when the Indemnitee determines that it is entitled to such payment and the amount of such payment. The Indemnitee shall provide to the Indemnifying Party notice of such claim within ten (10) days of the date on which it first becomes
so entitled to claim such payment, including a description of such claim and a detailed calculation of the amount of the indemnification payment that is claimed; provided, however, that no 

  

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delay on the part of the Indemnitee in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party is actually and materially prejudiced thereby. Except as provided in paragraph (b), the Indemnifying Party shall make the claimed payment to the Indemnitee within ten (10) days after receiving such
notice, unless the Indemnifying Party reasonably disputes its liability for, or the amount of, such payment. 
 (b) If the
Indemnitee will be obligated to make the payment described in paragraph (a) to a Taxing Authority or other third party (including expenses reimbursable under this Agreement), the Indemnifying Party shall not be obligated to pay the Indemnitee
more than five (5) days before the Indemnitee incurs such expense or makes such payment. If the Indemnitee’s claim for payment arises from a payment that the Indemnifying Party will receive from a third party, such as a refund, the
Indemnifying Party shall not be obligated to pay the Indemnitee until five (5) days after the Indemnifying Party receives such payment. 
 (c) In the case of a claim under Article II where no payment will be made to or received from a Taxing Authority, paragraph (b) shall be applied to the payments that would be made to or from a Taxing Authority if
the SpinCo Group were treated as a standalone group for all taxable periods. 
 Section 5.4 Interest. If either party fails to make an indemnification payment required by this Agreement within ten (10) Business Days after receipt of notice and demand for payment under the terms of this Agreement, such
party also shall be required to pay interest on the amount of such indemnification payment, accruing from the date of notice and demand for payment (or, if later, accruing from the date on which the payment is due under this Agreement) to, but not
including, the date of payment, at (a) prior to the tenth (10th) Business Day following a final determination or agreement of the parties
pursuant to the terms of this Agreement with respect to the amount of the indemnity payment, the Applicable Rate and (b) on or after such tenth (10th) Business Day, the Applicable Rate plus four percent (4%). 
 Section 5.5 Treatment of Payments. The
amount of all indemnification obligations under this Agreement shall be decreased to take into account the Tax Benefits to the Indemnitee of the deductibility or creditability of any indemnified item and shall be increased where necessary so that,
after all the required deductions have been made and Taxes imposed, the Indemnitee receives the net amount it would have been entitled to receive under this Agreement in the absence of such deductions and Taxes. Any payments made to one party by
another party pursuant to this Agreement shall be treated by the parties for all Tax purposes as a distribution by, or capital contribution to, SpinCo, as the case may be, made immediately prior to the Distribution, except to the extent otherwise
required by a Final Determination. 
 Section 5.6 Expenses. Except as otherwise provided herein, each party and its Affiliates
shall bear their own expenses incurred in connection with the preparation of Tax Returns, Tax Contests, and all other matters under this Agreement. 
 Section 5.7 Cooperation. Each member of the Parent Group and the SpinCo Group shall cooperate fully with all reasonable requests from the other party in connection with the 

  

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preparation and filing of Tax Returns, Tax Contests, and all other matters covered by this Agreement. 
 (a) Such cooperation shall include: 
 (i) the retention until the expiration of the applicable statute of limitations, and the provision upon request, of Tax Returns, books, records (including information regarding ownership and Tax basis of property),
documentation and other information relating to Tax Returns, including accompanying schedules, related workpapers, and documents relating to rulings or other determinations by Taxing Authorities; 
 (ii) the execution of any document that may be necessary or reasonably helpful in connection with any Tax Contest, the filing of a Tax
Return by a member of the Parent Group or the SpinCo Group, obtaining a tax opinion or private letter ruling, or other matters covered by this Agreement, including certification (provided in such form as may be required by applicable law or
reasonably requested and made to the best of a party’s knowledge) of the accuracy and completeness of the information it has supplied; 
 (iii) the use of the parties’ reasonable best efforts to obtain any documentation that may be necessary or reasonably helpful in connection with any of the foregoing; 
 (iv) the use of the parties’ reasonable best efforts to make the applicable party’s current or former officers, employees,
agents and facilities available on a reasonable and mutually convenient basis in connection with the foregoing matters; and 
 (v) making determinations with respect to actions described in Section 4.2(c) as promptly as practicable including, without limitation, making determinations within 10 days with respect to modifications and amendments of employee stock
purchase agreements or equity compensation plans under Section 4.2(b)(i)(x). 
 (b) If a party fails to comply with any
of its obligations set forth in this Section 5.7 upon reasonable request and notice by the other party, and such failure results in the imposition of additional Taxes, the nonperforming party shall be liable in full for such additional Taxes.

 Section 5.8 Confidentiality. Any information or documents provided under this Agreement shall be kept confidential by the
recipient, except as may otherwise be necessary in connection with the filing of Tax Returns or with any Tax Contest. In addition, if Parent or SpinCo determines that providing such information could be commercially detrimental, violate any law or
agreement or waive any privilege, the parties shall use reasonable best efforts to permit compliance with the obligations under this Agreement in a manner that avoids any such harm or consequence. 
  

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 Section 5.9 Retention of Tax Records. SpinCo may request from Parent and retain copies of
(i) with respect to any Joint Return, all pro forma federal and state Tax Returns, supporting schedules and workpapers related to members of the SpinCo Group, and (ii) any Separate Returns for any SpinCo Group members, including supporting
schedules and workpapers. If either Parent or SpinCo intends to dispose of documentation with respect to any Pre-Distribution Tax Period, including books, records, Tax Returns and all supporting schedules and information relating thereto (after the
expiration of the applicable statute of limitations), of any member of the other Group, or in the case of the SpinCo Group any member included in a Joint Return, they shall provide written notice to the other party describing the documentation to be
disposed of 30 days prior to taking such action. The other party may arrange to take delivery of the documentation described in the notice at its own expense during the succeeding 30 day period. 
 ARTICLE VI 
 Resolution of Disputes

 Any controversy, dispute or claim arising out of, in connection with, or in relation to the interpretation, performance, nonperformance, validity or
breach of this Agreement or otherwise arising out of, or in any way related to this Agreement shall be resolved under dispute resolution procedures similar to those contained in Article V of the Distribution Agreement; provided,
however, that if the dispute is to be referred to non-binding mediation under such procedures, a mediator who qualifies as a Tax Advisor shall be selected, or the parties shall select a Tax Advisor in lieu of selecting a mediator. 

ARTICLE VII 
 Miscellaneous
Provisions 
 Section 7.1 Notice. All payments, notices and other communications hereunder shall be in writing, shall
reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) (and, as a courtesy and not a requirement, shall also be sent by electronic message transmission) to the parties at the
following addresses (or at such other addresses for a party as shall be specified by like notice) and will be deemed given on the date on which such notice is received): 
  

			
	To Parent:	  	
		
		  	Acuity Brands, Inc.
		  	1170 Peachtree Street, N.E. Suite 2400 Atlanta, Georgia 30309
		  	Attention: Barry R. Goldman
		  	Telephone: 404-853-1400
		  	Email: barry.goldman@acuitybrands.com
		
	To SpinCo:	  	

  

 20 

			
		
		 	Zep Inc.
		 	4401 Northside Parkway Suite 700 Atlanta, Georgia 30327
		 	Attention: C. Francis Whitaker, III
		 	Telephone: 404-352-1680
		 	Email: frank.whitaker@acuitysp.com

 Section 7.2 Severability. If any provision of this Agreement is determined to be
invalid, illegal or unenforceable, the remaining provisions of this Agreement will remain in full force, as long as the essential terms and conditions of this Agreement for each party remain valid, binding and enforceable. 
 Section 7.3 Integration; Amendments. Except as expressly stated herein, this Agreement embodies the entire understandings among the parties
with respect to such matters. No promises, covenants or representations of any kind, other than those expressly stated herein, have been made to induce any party to enter into this Agreement. All prior tax sharing agreements among any of the parties
or their respective Affiliates are hereby terminated. This Agreement shall not be modified or terminated except by a writing duly signed by each of the parties hereto, and no waiver of any provisions of this Agreement shall be effective unless in a
writing duly signed by the party sought to be bound. If, and to the extent, the provisions of this Agreement conflict with the Distribution Agreement or any Ancillary Agreement, the provisions of this Agreement shall control. 
 Section 7.4 Construction. The language of this Agreement shall be construed according to its fair meaning and shall not be strictly construed
for or against any party. Notwithstanding the foregoing, the purposes of Article IV are to ensure the Tax-Free Status and, accordingly, the parties agree that the language thereof shall be interpreted in a manner that serves this purpose to the
greatest extent possible. Headings of sections in this Agreement are inserted for convenience only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 
 Section 7.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same. 
 Section 7.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF GEORGIA. 
 Section 7.7 Jurisdiction. Without limiting the provisions of Article VI hereof, each of the parties irrevocably submits to the exclusive jurisdiction of (a) the state courts of the State of Georgia, located in the City
of Atlanta, and (b) the United States District Court for the Northern District of Georgia, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. Each of the parties agrees
to commence any action, suit or proceeding relating hereto either in the United States District Court for the 

  

 21 

 
Northern District of Georgia or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the state courts of
the State of Georgia, located in the City of Atlanta. Each of the parties irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated
hereby or thereby in (i) the state courts of the State of Georgia, located in the City of Atlanta, or (ii) the United States District Court for the Northern District of Georgia, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. 
 Section 7.8 Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any dispute arising out of this Agreement.

 Section 7.9 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other party; provided, however, that no such consent shall be required in the event of a merger,
consolidation or sale of either Parent or SpinCo. Subject to the preceding sentence, this Agreement shall be binding on, and shall injure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns.

 Section 7.10 Affiliates. Each of the parties hereto shall cause to be performed, and hereby guarantees the performance of, all
actions, agreements and obligations set forth herein to be performed by any Affiliate of such party or by any entity that is contemplated to be an Affiliate of such party on and after the Distribution Date. 
 Section 7.11 Injunctions. Nothing in this Agreement (including Article VI) will prevent any party from seeking injunctive relief as it deems
necessary or appropriate. 
 Section 7.12 Survival. Except with respect to Sections 5.6, 5.7, 5.8 and 5.9, which shall remain in
effect without limitation as to time, the provisions in this Agreement shall be unconditional and absolute and shall remain in effect until the expiration of the statute of limitations for all taxable periods that end before or include
August 31 of the calendar year in which the Distribution occurs and the resolution of all disputes under this Agreement that arose during those periods. 
  

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 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the respective officers as
of the date set forth above. 
  

			
	ACUITY BRANDS, INC.
		
	By	 	 /s/ Vernon J. Nagel

	Name:	 	Vernon J. Nagel
	Title:	 	President and Chief Executive Officer
	
	ZEP INC.
		
	By	 	 /s/ John K. Morgan

	Name:	 	John K. Morgan
	Title:	 	President and Chief Executive Officer

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