Document:

EMPLOYMENT AGREEMENT
                              --------------------

     AGREEMENT (this "Agreement") made as of July 11, 2005, between G-III
Apparel Group, Ltd., a Delaware corporation, with an office at 512 Seventh
Avenue, New York, New York 10018 (the "Company"), and Sammy Aaron, an individual
residing at 17 Ormond Park Road, Brookville, New York 11545 (the "Executive").
Capitalized terms used herein and not otherwise defined shall have the meanings
given them in that certain Stock Purchase Agreement of even date herewith among
the Company, Executive, and the other owners of J. Percy for Marvin Richards,
Ltd. and related companies (the "Purchase Agreement").

                              W I T N E S S E T H:
                              --------------------

     WHEREAS, the Company desires that Executive be employed to serve with the
Division that will be created by the Company to operate the Acquired Companies
and the membership interests in Fabio, and Executive desires to be so employed
by the Company, upon the terms and subject to the conditions herein set forth.

     NOW, THEREFORE, in consideration of the premises and of the mutual
promises, representations and covenants herein contained, the parties hereto
agree as follows:

     1. EMPLOYMENT.

     The Company hereby employs Executive as the President of the Division and
Vice Chairman of the Company, and Executive hereby accepts such employment,
subject to the terms and conditions herein set forth. Executive hereby agrees to
accept such employment, to diligently, faithfully and competently perform such
services consistent with such position as shall from time to time be reasonably
assigned to him by the Company's Board of Directors or its Chief Executive
Officer, and to diligently, faithfully and competently devote his entire
business time, skill and attention to the performance of his duties and
responsibilities to the Company. Executive shall report directly to the
Company's Chief Executive Officer. The Company shall, subject to the procedures
and requirements of the Nominating Committee of its Board of Directors,
recommend Executive for election as a director of the Company.

     2. TERM.

     The term of employment under this Agreement shall begin on the date hereof
and shall continue until January 31, 2009, subject to prior termination in
accordance with the terms hereof (the "Initial Term"). The Initial Term of this
Agreement shall be automatically extended for successive one (1) year periods
(each a "Renewal Period") unless the Company or the Executive gives written
notice to the other at least ninety (90) days prior to the expiration of the
Initial Term, or ninety (90) days prior to the expiration of a Renewal Period,
of such party's election not to extend this Agreement. References herein to the
"Term" shall mean the Initial Term as it may be so extended by one or more
Renewal Periods.

     3. COMPENSATION.

     As compensation for the employment services to be rendered by Executive
hereunder, the Company agrees to pay, or cause to be paid, to Executive, and
Executive agrees to accept, payable in accordance with Company normal payroll
policy at the time in effect, a salary at the rate of Five Hundred Thousand
Dollars ($500,000) per year. Executive shall not be entitled to any additional
compensation for any service as a director of the Company, unless and to the
extent that any other employee of the Company who serves as a director is
compensated for such service.

     4. EXPENSES.

     The Company shall pay or reimburse Executive, upon presentment of suitable
vouchers, for all reasonable business and travel expenses which may be incurred
or paid by Executive in connection with his employment hereunder in accordance
with Company policy. Executive shall comply with such requirements and shall
keep such records as the Company may deem necessary to meet the requirements of
the Internal Revenue Code of 1986, as amended from time to time (the "Code"),
and regulations promulgated thereunder.

     5. OTHER BENEFITS.

     Executive shall be entitled to four (4) weeks paid vacation per year, and
to participate in the benefit plans and arrangements and receive any other
benefits customarily provided by the Company to its senior executive personnel
(including any profit sharing, pension, disability insurance, hospital, major
medical insurance and group life insurance plans in accordance with the terms of
such plans) (the "Benefit Plans"), provided, however, that the employee share of
major medical premiums for Executive shall be paid by the Company from the date
hereof through December 31, 2005. If requested by the Company, Executive agrees
to undergo a physical examination at the Company's expense in connection with
the Company obtaining "key man" life insurance with respect to Executive. The
Company agrees to provide to Executive $2.0 million of term life insurance while
employed by the Company. When traveling on business, Executive shall be entitled
to air travel on the same basis as other senior executives of the Company. To
the fullest extent permitted by Delaware law, the Company shall indemnify the
Executive and hold him harmless from any and all claims, losses, liabilities and
expenses, including reasonable fees and disbursements of counsel selected by the
Company, arising out of the acts and omissions of Executive as an officer or
director of the Company.

     6. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION.

          (a) Executive's employment hereunder shall terminate upon the first to
occur of the following:

               (i) upon thirty (30) days' prior written notice to Executive upon
the determination by the Board of Directors of the Company that Executive's
employment shall be terminated for any reason which would not constitute
"justifiable cause" (as hereinafter defined);

               (ii) upon written notice to Executive upon the determination by
the Board of Directors of the Company that there is justifiable cause for such
termination;

                                       2

               (iii) automatically upon the death of Executive;

               (iv) in accordance with the terms of subsection (e) hereof upon
the "disability" (as hereinafter defined) of Executive;

               (v) upon thirty (30) days' prior written notice by Executive to
the Company of the Executive's voluntary termination of employment; or

               (vi) upon thirty (30) days' prior written notice by Executive to
the Company of the Executive's termination of his employment for "good reason"
(as hereinafter defined).

          (b) For the purposes of this Agreement:

               (i) the term "disability" shall mean the inability of Executive,
due to illness, accident or any other physical or mental incapacity,
substantially to perform the material functions of his duties for a period of
three (3) consecutive months or for a total of four (4) months (whether or not
consecutive) in any twelve (12) month period during the term of this Agreement,
as reasonably determined by the Company in good faith; provided that the Company
may not terminate Executive's employment for disability unless it has first
given Executive written notice of such termination and, within fifteen (15) days
after receipt of such notice, Executive has not returned to the performance of
his duties.

               (ii) the term "justifiable cause" shall mean: (1) Executive's
repeated failure or refusal to perform his duties pursuant to, or Executive's
material breach of, this Agreement where such conduct or material breach shall
not have ceased or been remedied within ten (10) days following written warning
from the Company; (2) Executive's conviction of, or plea of guilty or no contest
to, a felony, whether or not involving money or property of the Company or any
of its affiliates (collectively, the "G-III Group"); (3) Executive's material
dishonesty in the course of his employment or performance of any act or his
failure to act which constitutes fraud upon the Company or a breach of a
fiduciary trust towards the Company, including without limitation,
misappropriation of funds or a misrepresentation of the Company's or the
Division's operating results or financial condition; (4) any intentional
unauthorized disclosure by Executive to any person, firm or corporation other
than the members of the G-III Group and their respective directors, managers,
officers and employees, of any confidential information or trade secret of the
G-III Group; (5) any action by Executive to secure any personal profit (other
than (A) de minimis amounts or (B) through his ownership of equity in the
Company or payments due to him under the Purchase Agreement) in connection with
the business of the G-III Group (for example, without limitation, using G-III
Group assets to pursue other interests, diverting any business opportunity
belonging to the G-III Group to himself or to a third party, insider trading or
taking bribes or kickbacks); (6) Executive's engagement in misconduct materially
damaging to the property, business or reputation of the G-III Group; (7)
Executive's illegal use of controlled substances; (8) any act or omission by
Executive involving willful malfeasance or gross negligence in the performance
of Executive's duties to the material detriment of the G-III Group; or (9) the
entry of any order of a court that remains in effect and is not discharged for a
period of at least sixty (60) days, which enjoins or otherwise limits or
restricts the performance by Executive under this Agreement, relating to any
contract, agreement

                                       3

or commitment made by or applicable to Executive in favor of any former employer
or any other person; and

               (iii) the term "good reason" shall mean any of the following
events that occur, after expiration of any remedy or cure period, (A) a material
diminution of Executive's duties and responsibilities that result in a material
adverse effect on Executive's status and authority, which continues unremedied
for a period of thirty (30) days after Executive has given written notice to the
Company specifying in detail the material diminution and material adverse
effect, (B) a change in the Executive's office location to a location more than
fifty (50) miles outside of New York City, except for such travel as the Company
may reasonably require, (C) failure to timely pay Executive any component of
compensation provided for in this Agreement and the Company's failure to cure
such failure within a period of ten (10) days after written notice of such
failure has been given by the Executive to the Company; or (D) failure by the
Buyer to pay any amount due to Executive under Section 2.3 of the Purchase
Agreement within 30 days of the due date specified therein, and any failure by
the Buyer to pay any adjusted amount due to Executive under Section 2.4 of the
Purchase Agreement within thirty (30) days of the determination of such adjusted
amount by the Independent Firm.

          (c) Upon termination of Executive's employment by the Company for
justifiable cause or voluntarily by Executive, Executive shall not be entitled
to any amounts or benefits hereunder other than such portion of Executive's
annual salary, accrued leave, reimbursement of expenses pursuant to Section 4
hereof and any amounts payable to Executive under the terms of the Benefit
Plans, each as have been accrued through the date of his termination of
employment.

          (d) If Executive should die during the term of his employment
hereunder, this Agreement shall terminate immediately. In such event, the estate
of Executive shall thereupon be entitled to receive such portion of Executive's
annual salary, accrued leave and reimbursement of expenses pursuant to Section 4
as has been accrued through the date of his death. Executive's estate also shall
be entitled to any amounts or benefits payable to Executive under the terms of
the Benefit Plans.

          (e) Upon Executive's disability, the Company shall have the right to
terminate Executive's employment. Any termination pursuant to this subsection
(e) shall be effective on the date thirty (30) days after which Executive shall
have received written notice of the Company's election to terminate. In such
event, Executive shall thereupon be entitled to receive such portion of
Executive's annual salary, accrued leave and reimbursement of expenses pursuant
to Section 4 as has been accrued through the date on which Executive's
employment is terminated by reason of his disability. Executive shall also be
entitled to any amounts or benefits payable under the terms of the Benefit
Plans.

          (f) In the event that Executive's employment is terminated during the
Term by the Company without justifiable cause or by the Executive for good
reason, the Company shall continue to pay compensation to Executive under
Section 3 and to provide benefits under Section 5 for the Term. The Company's
obligation to continue to pay such compensation and provide such benefits shall
be conditional upon (1) Executive executing a general release in the form of
Exhibit A attached hereto in favor of the Company waiving claims pertaining to
the

                                       4

termination of his employment and other customary employment-related claims and
(2) Executive's compliance with his obligations under Sections 8, 9, 10 and 11
hereof.

          (g) Upon Executive's termination of his employment hereunder, this
Agreement (other than Sections 4, 6(g), 8, 9, 10, 11 and 14, which shall survive
in accordance with their terms) shall terminate. In such event, except as
provided in Section 6(f), Executive shall be entitled to receive such portion of
Executive's annual salary and vacation as has been accrued to date and shall be
entitled to reimbursement of expenses pursuant to Section 4 hereof and to
continue to participate in the Benefit Plans to the extent participation by
former employees is required by law or permitted by such plans, with the expense
of such participation to be as specified in such plans for former employees.
Executive shall also be entitled to any amounts or benefits payable under the
terms of the Benefit Plans. For the avoidance of doubt, if the Executive's
employment is terminated by the Executive for good reason, the first sentence of
this Section 6(g) and the provisions of Section 6(f) shall be applicable
thereto.

          (h) Upon the Company giving notice of termination pursuant to Section
6(a)(i) or (ii) or Executive giving notice of termination pursuant to Section
6(a)(v) or (vi), the Company may require that Executive immediately leave the
Company's premises, but such requirement shall not affect the effective date of
termination of employment.

     7. REPRESENTATIONS AND AGREEMENTS OF EXECUTIVE.

     Executive represents and warrants that he is free to enter into this
Agreement and to perform the duties required hereunder, and that there are no
employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of his duties
hereunder.

     8. NON-COMPETITION.

          (a) In view of the unique and valuable services expected to be
rendered by Executive to the Company, Executive's knowledge of the trade secrets
and other proprietary information relating to the business of the Company and
the Division and in consideration of the compensation to be received hereunder,
Executive agrees that until the later of (i) January 31, 2009 and (ii) a period
of one (1) year following the termination of Executive's employment hereunder
(the "Non-Competition Period"), Executive shall not, whether for compensation or
without compensation, directly or indirectly, as an owner, principal, partner,
member, shareholder, independent contractor, consultant, joint venturer,
investor, licensor, lender or in any other capacity whatsoever, alone, or in
association with any other Person, carry on, be engaged or take part in, or
render services (other than services which are generally offered to third
parties) or advice to, own, share in the earnings of, invest in the stocks,
bonds or other securities of, or otherwise become financially interested in, any
Person engaged in the manufacture, distribution, sale, design, production or
promotion of men's outerwear, women's outerwear or women's suits; provided,
however, that if Executive voluntarily terminates his employment, the
Non-Competition Period under this Agreement shall end one (1) year following
such voluntary termination of employment. The record or beneficial ownership by
Executive of up to the lesser of (i) $400,000 or (ii) 1.0% of the shares of any
corporation whose shares are publicly traded on a national securities exchange
or in the over-the-counter market shall not of

                                       5

itself constitute a breach hereunder. In addition, Executive shall not, directly
or indirectly, during the Non-Competition Period, request or cause any customers
with whom the G-III Group has a business relationship to cancel or terminate any
such business relationship with any member of the G-III Group or solicit,
interfere with, entice from or hire from any member of the G-III Group any
employee (or former employee) of any member of the G-III Group.

          (b) If any portion of the restrictions set forth in this Section 8
should, for any reason whatsoever, be declared invalid by a court of competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.

          (c) Executive acknowledges that the provisions of this Section 8 were
a material inducement to the Company to enter into this Agreement, and that the
Company would not enter into this Agreement but for the agreements and covenants
contained herein. Executive further acknowledges that the limitations set forth
in this Section 8 are reasonable and properly required for the adequate
protection of the business of the G-III Group. Executive hereby waives, to the
extent permitted by law, any and all right to contest the validity of this
Section 8 on the grounds of breadth of its geographic or product or service
coverage or length of term. In the event any such limitation hereunder is deemed
to be unreasonable by a court of competent jurisdiction, Executive agrees to the
reduction of the territorial or time limitation to the area or time period which
such court shall deem reasonable.

          (d) Nothing contained in this Agreement shall require the Company to
utilize Executive's services under this Agreement, the Company's only obligation
to Executive being payment of his compensation, benefits and expenses under this
Agreement during the Initial Term.

     9. INVENTIONS AND DISCOVERIES.

          (a) Executive shall promptly and fully disclose to the Company, with
all necessary detail for a complete understanding of the same, all developments,
know-how, improvements, concepts, ideas, designs, sketches, writings, processes
and methods (whether copyrightable, patentable or otherwise) made, received,
conceived, developed, acquired or written during working hours, or otherwise, by
Executive (whether or not at the request or upon the suggestion of the Company)
during the Employment Term, solely or jointly with others, using the G-III
Group's resources, or relating to any current or proposed business or activities
of the G-III Group known to him as a consequence of his employment or the
rendering of services hereunder (collectively, the "Subject Matter").

          (b) Executive hereby assigns and transfers, and agrees to assign and
transfer, to the Company all his rights, title and interest in and to the
Subject Matter, and Executive further agrees to deliver to the Company any and
all drawings, notes, specifications and data relating to the Subject Matter, and
to execute, acknowledge and deliver all such further papers, including
applications for trademarks, copyrights or patents, as may be necessary to
obtain trademarks, copyrights and patents for the Subject Matter in any and all
countries and to vest title thereto in the Company. Executive shall assist the
Company in obtaining such trademarks, copyrights or patents during the term of
this Agreement, and any time thereafter on reasonable notice and at mutually
convenient times, and Executive agrees to testify in any prosecution or

                                       6

litigation involving any of the Subject Matter; provided, however, that
following termination of employment Executive shall be reasonably compensated
for his time and reimbursed his reasonable out-of-pocket expenses incurred in
rendering such assistance or giving or preparing to give such testimony if it is
required after the Non-Competition Period.

     10. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.

          (a) Executive shall not, during the term of this Agreement, or at any
time following expiration or termination of this Agreement, directly or
indirectly, disclose or permit to be known (other than as is required in the
regular course of his duties (including without limitation disclosures to the
Company's advisors and consultants) or as is required by law (in which case
Executive shall give the Company prior written notice of such required
disclosure) or with the prior written consent of the Company, to any person,
firm or corporation, any Confidential Information (as hereinafter defined)
acquired by him during the course of, or as an incident to, his employment
hereunder, relating to the G-III Group, any client of the G-III Group, or any
corporation, partnership or other entity owned or controlled, directly or
indirectly, by any of the foregoing, or in which any of the foregoing has a
beneficial interest, including, but not limited to, the business affairs of each
of the foregoing ("G-III Confidential Information"). As used herein, the term
"Confidential Information" shall mean proprietary technology, trade secrets,
designs, sketches, know-how, market studies and forecasts, competitive analyses,
pricing policies, employee lists, personnel policies, manufacturing sources, the
substance of agreements with customers, suppliers and others, marketing
arrangements, licensing agreements, servicing and training programs and
arrangements, customer lists and any other documents embodying such confidential
information. This confidentiality obligation shall not apply to any G-III
Confidential Information which becomes publicly available other than in
violation of this Section 10.

          (b) All information and documents relating to the G-III Group as
hereinabove described shall be the exclusive property of the G-III Group, and
Executive shall use his reasonable best efforts to prevent any publication or
disclosure thereof. Upon termination of Executive's employment with the Company,
all documents, records, reports, writings and other similar documents containing
confidential information, including copies thereof, then in Executive's
possession or control shall be returned and left with the Company.

     11. SPECIFIC PERFORMANCE.

     Executive agrees that if he breaches, or threatens to commit a breach of,
any of the provisions of Sections 8, 9 or 10 (the "Restrictive Covenants"), the
Company shall have, in addition to, and not in lieu of, any other rights and
remedies available to the Company under law and in equity, the right to
injunctive relief and/or to have the Restrictive Covenants specifically enforced
by a court of competent jurisdiction, without the posting of any bond or other
security, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the G-III Group and that
money damages would not provide an adequate remedy to the Company.
Notwithstanding the foregoing, nothing herein shall constitute a waiver by
Executive of his right to contest whether a breach or threatened breach of any
Restrictive Covenant has occurred.

                                       7

     12. AMENDMENT OR ALTERATION.

     No amendment or alteration of the terms of this Agreement shall be valid
unless made in writing and signed by both of the parties hereto.

     13. GOVERNING LAW.

     This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
therein.

     14. SEVERABILITY.

     The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect.

     15. WITHHOLDING.

     The Company may deduct and withhold from the payments to be made to
Executive hereunder any amounts required to be deducted and withheld by the
Company under the provisions of any applicable statute, law, regulation or
ordinance now or hereafter enacted.

     16. NOTICES.

     Any notices required or permitted to be given hereunder shall be sufficient
if in writing, and if delivered by hand or overnight courier, or sent by
certified mail, return receipt requested, to the addresses set forth above or
such other address as either party may from time to time designate in writing to
the other, and shall be deemed given as of the date of the delivery or at the
expiration of three days in the event of a mailing.

     17. COUNTERPARTS AND FACSIMILE SIGNATURES.

     This Agreement may be signed in counterparts with the same effect as if the
signatures to each counterpart were upon a single instrument, and all such
counterparts together shall be deemed an original of this Agreement. For
purposes of this Agreement, a facsimile copy of a party's signature shall be
sufficient to bind such party.

     18. WAIVER OR BREACH.

     It is agreed that a waiver by either party of a breach of any provision of
this Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.

     19. ENTIRE AGREEMENT AND BINDING EFFECT.

     This Agreement contains the entire agreement of the parties with respect to
the subject matter hereof, supersedes all prior and contemporaneous agreements,
both written and oral, between the parties with respect to the subject matter
hereof, other than provisions of the Purchase Agreement, and may be modified
only by a written instrument signed by each of the

                                       8

parties hereto. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, heirs,
distributors, successors and assigns; provided, however, that Executive shall
not be entitled to assign or delegate any of his rights or obligations hereunder
without the prior written consent of the Company. It is intended that Sections
8, 9, 10 and 11 benefit each of the Company and each other member of the G-III
Group, each of which is entitled to enforce the provisions of Sections 8, 9, 10
and 11.

     20. SURVIVAL.

     The termination of Executive's employment hereunder or the expiration of
this Agreement shall not affect the enforceability of Sections 8, 9, 10 and 11
hereof.

     21. FURTHER ASSURANCES.

     The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.

     22. CONSTRUCTION OF AGREEMENT.

     No provision of this Agreement or any related document shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of such party having or being
deemed to have structured or drafted such provision.

     23. HEADINGS.

     The Section headings appearing in this Agreement are for the purposes of
easy reference and shall not be considered a part of this Agreement or in any
way modify, demand or affect its provisions.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

                                    G-III APPAREL GROUP, LTD.

                                    By: /s/ WAYNE S. MILLER
                                       -----------------------------------------
                                       Name:  Wayne S. Miller
                                       Title: Senior Vice President

                                       /s/ SAMMY AARON
                                    --------------------------------------------
                                          Sammy Aaron

                                       9

                                                                       EXHIBIT A

                    [Letterhead of G-III Apparel Group, Ltd.]

                                            [Date]
[Executive]
[Address]

Dear [Executive]:

     This will confirm that your employment with G-III Apparel Group, Ltd.. (the
"Company") has been terminated as of [date]. In exchange for your general
release and fulfillment of all of your commitments in this Agreement, which are
set forth below, the Company will pay you the amounts (the "Severance Payments")
set forth in Section 6(f) of your employment agreement with the Company (the
"Employment Agreement"). In addition, you agree (i) to comply with the terms of
Sections 8, 9 and 10 of the Employment Agreement, (ii) not to disparage the
Company or any of its subsidiaries (collectively, the "G-III Group") or make or
cause to be made any statement that is critical of or otherwise maligns the
business reputation of the G-III Group and (iii) not to tortiously interfere in
any manner with the present or future business activities of the G-III Group.
The Company agrees not to disparage you or make or cause to be made any
statement that is critical of or otherwise maligns your business reputation and
not to tortiously interfere in any manner with your future business activities.

     The foregoing voluntary payment is given in return for your discharge and
release of all claims, obligations, and demands which you have, ever had, or in
the future may have, against the Company, any affiliated entities and any of its
or their stockholders, officers, directors, employees, or agents, arising out of
or relating to your employment and the termination thereof up to the date of
this Release, including, but not limited to, claims under Title VII of the Civil
Rights Act of 1964, the Fair Labor Standards Act, applicable New York State law,
the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the
Older Workers Benefits Protection Act, the Employee Retirement Income Security
Act of 1974, the Americans With Disabilities Act, and all other federal, state,
and local discrimination laws, and claims for wrongful discharge. You further
waive and release any claimed right to reemployment, or employment in the future
with the Company or any other member of the G-III Group. You do not, however,
waive or release any claims which arise after the date that you execute this
agreement or any claims to enforce your rights to the Severance Payments under
the Employment Agreement.

     The Company has advised you to consult with an attorney and/or governmental
agencies prior to executing this agreement. By executing this agreement you
acknowledge that you have been provided an opportunity to consult with an
attorney or other advisor of your choice regarding the terms of this agreement,
that you have been given a minimum of twenty-one days in which to consider
whether you wish to enter into this agreement, and that you have elected to
enter into this

                                       10

agreement knowingly and voluntarily. You may revoke your assent to this
agreement within seven days of its execution by you (the "Revocation Period"),
and the agreement will not become effective or enforceable until the Revocation
Period has expired.

     If this is in accordance with our agreement, please sign and return to us
the enclosed copy of this letter, which shall then be a binding agreement
between us.

                                    G-III APPAREL GROUP, LTD.

                                    By:
                                       --------------------------------------

                                    Title:
                                          -----------------------------------

Agreed and Accepted:

-----------------------------

                                       11exv4w1

 

Exhibit 4.1

	 	 	 
	 

ACCO BRANDS CORPORATION

and

[                    ], as

Rights Agent

RIGHTS AGREEMENT

Dated as of [          ], 2005

	 	 	 
	 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	Section 1. Certain Definitions
	 	 	1	 
	Section 2. Appointment of Rights Agent
	 	 	6	 
	Section 3. Issue of Right Certificates
	 	 	6	 
	Section 4. Form of Right Certificates
	 	 	8	 
	Section 5. Countersignature and Registration
	 	 	8	 
	Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates
	 	 	9	 
	Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	10	 
	Section 8. Cancellation and Destruction of Right Certificates
	 	 	11	 
	Section 9. Availability of Preferred Shares
	 	 	11	 
	Section 10. Preferred Shares Record Date
	 	 	12	 
	Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights
	 	 	12	 
	Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	19	 
	Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	19	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	20	 
	Section 15. Rights of Action
	 	 	21	 
	Section 16. Agreement of Right Holders
	 	 	21	 
	Section 17. Right Holder Not Deemed a Stockholder
	 	 	22	 
	Section 18. Concerning the Rights Agent
	 	 	22	 
	Section 19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	23	 
	Section 20. Duties of Rights Agent
	 	 	23	 
	Section 21. Change of Rights Agent
	 	 	26	 
	Section 22. Issuance of New Right Certificates
	 	 	27	 
	Section 23. Redemption
	 	 	27	 
	Section 24. Exchange
	 	 	28	 
	Section 25. Notice of Certain Events
	 	 	29	 
	Section 26. Notices
	 	 	30	 
	Section 27. Supplements and Amendments
	 	 	31	 
	Section 28. Successors
	 	 	31	 
	Section 29. Benefits of this Agreement
	 	 	31	 
	Section 30. Severability
	 	 	32	 
	Section 31. Governing Law
	 	 	32	 
	Section 32. Counterparts
	 	 	32	 
	Section 33. Descriptive Headings
	 	 	32	 

Exhibit A - Form of Right Certificate

i

 

RIGHTS AGREEMENT

          Rights Agreement, dated as of [     ], 2005, between Acco Brands Corporation, a Delaware
corporation (the “Company”), and [          ], a [          ],
as Rights Agent (the “Rights Agent”).

          The Board of Directors of the Company has authorized and declared a dividend of one preferred
share purchase right (a “Right”) for each share of Common Stock (as hereinafter defined) to
be outstanding immediately prior to the pro rata distribution of shares of Common Stock (the
“Spin-Off”) by Fortune Brands, Inc., a Delaware corporation (“Fortune”), to
Fortune’s stockholders, each Right representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right with respect to each share
of Common Stock that shall become outstanding between the effective date of the Spin-Off (the
“Record Date”) and the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are hereinafter defined); provided, however, that
Rights may be issued with respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date in
accordance with the provisions of Section 22 hereof.

          Accordingly, in consideration of the premises and the mutual agreements herein set forth, the
parties hereby agree as follows:

          Section 1. Certain Definitions. For purposes of this Agreement, the following terms
have the meanings indicated:

     (a) “Acquiring Person” shall mean any Person (as such term is hereinafter
defined) who or which on or after the Record Date, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the shares of Common Stock
then outstanding, but shall not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan of Fortune, the Company or
any Subsidiary of Fortune or the Company, or any entity holding Common Stock for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, (i) no Person shall
become an “Acquiring Person” as the result of an acquisition of shares of Common Stock by
the Company which, by reducing the number of shares of Common Stock outstanding, increases
the proportionate number of shares of Common Stock beneficially owned by such Person to 15%
or more of the shares of Common Stock then outstanding; provided, however,
that if a Person shall become the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional

 

 

shares of Common Stock (other than an acquisition that does not directly or indirectly
increase the proportionate share of the shares of Common Stock then outstanding
beneficially owned by such Person), then such Person shall be deemed to be an “Acquiring
Person”, (ii) upon and following the consummation of the merger contemplated by the Merger
Agreement, none of Lane Industries, Inc., a Delaware corporation (“Lane”) or its
Affiliates and Associates shall be an “Acquiring Person”, if and for so long as (1) Lane
and its Affiliates and Associates are and continue to be the Beneficial Owners of 15% or
more of the shares of Common Stock then outstanding and (2) Lane and its Affiliates and
Associates do not acquire, in the aggregate, Beneficial Ownership of an additional number
of shares of Common Stock equal to 1% or more of the shares of Common Stock then
outstanding and (iii) a Person shall not become an Acquiring Person solely by reason of the
acquisition of shares of Common Stock from Lane as part of the exercise of remedies under
the Amended and Restated Pledge Agreement dated as of April 26, 2002, as amended, between
Lane and Harris Trust and Savings Bank, as agent (the “Pledge Agreement”) following
an Event of Default (as such term is used in the Pledge Agreement). Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith that a Person
who would otherwise be an “Acquiring Person”, as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an “Acquiring Person”, as defined pursuant to the foregoing provisions
of this paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for
any purposes of this Agreement. Notwithstanding the foregoing provisions of this paragraph
(a), neither Fortune nor any Affiliate or Associate of Fortune shall be deemed to be an
Acquiring Person as a result of its ownership of capital stock of the Company prior to the
Spin-Off.

     (b) “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on
the date of this Agreement.

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

     (i) which such Person or any of such Person’s Affiliates or Associates
beneficially owns, directly or indirectly;

     (ii) which such Person or any of such Person’s Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,

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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 fide public offering of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities 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 securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any security
if the agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2) is not
also then reportable on Schedule 13D or 13G under the Exchange Act (or any
comparable or successor report); or

     (iii) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person’s Affiliates or Associates has
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 fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to Section
l(c)(ii)(B)) or disposing of any securities of the Company.

Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the
phrase “then outstanding”, when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.

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

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

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     (f) “Common Shares” when used with reference to any Person other than the
Company shall mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.

     (g) “Common Stock” shall mean the common stock, par value $.01 per share, of
the Company.

     (h) “Company” shall have the meaning set forth in the first paragraph of the
Preamble hereof.

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

     (j) “Designated Office” shall have the meaning set forth in Section 5 hereof.

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

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

     (m) “Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof.

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

     (o) “Merger Agreement” shall mean the Agreement and Plan of Merger, dated as
of March 15, 2005, by and among Fortune, the Company, Gemini Acquisition Sub, Inc. and
General Binding Corporation.

     (p) “Nasdaq” shall have the meaning set forth in Section 11(d)(i) hereof.

     (q) “Person” shall mean any individual, firm, corporation, limited liability
company, partnership, trust, association or other entity, and shall include any successor
(by merger or otherwise) of such entity.

     (r) “Preferred Shares” shall mean shares of Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the rights and preferences
set forth in the Certificate of Designation attached to the Restated Certificate of
Incorporation of the Company and, to the extent that

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there are not a sufficient number of shares of Series A Junior Participating Preferred
Stock authorized to permit the full exercise of the Rights, any other series of preferred
stock of the Company designated for such purpose containing terms substantially similar to
the terms of the Series A Junior Participating Preferred Stock.

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

     (t) “Record Date” shall have the meaning set forth in the second paragraph of
the Preamble hereof.

     (u) “Redemption Date” shall have the meaning set forth in Section 7(b) hereof.

     (v) “Redemption Price” shall have the meaning set forth in Section 23(a)
hereof.

     (w) “Right” shall have the meaning set forth in the second paragraph of the
Preamble hereof.

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

     (y) “Rights Agent” shall have the meaning set forth in the first paragraph of
the Preamble hereof.

     (z) “Security” shall have the meaning set forth in Section 11(d)(i) hereof.

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

     (bb) “Spin-Off” shall have the meaning set forth in the second paragraph of
the Preamble hereof.

     (cc) “Subsidiary” of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity interest is
beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such
Person.

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

          Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable. The Rights Agent shall have no duty to supervise,
and in no event shall be liable for, the acts or omissions of any such co-Rights Agent.

          Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the tenth
Business Day after the Shares Acquisition Date or (ii) the tenth Business Day (or such later date
as may be determined by action of the Board of Directors of the Company prior to such time as any
Person becomes an Acquiring Person) after the date of the commencement by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding shares of Common Stock for or pursuant to the terms
of any such plan) of, or the first public announcement of the intention of any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding shares of Common Stock for or pursuant to the terms
of any such plan) to commence, a tender or exchange offer the consummation of which would result in
any Person becoming an Acquiring Person (the earlier of such dates being herein referred to as the
“Distribution Date”), (x) the Rights will be evidenced by (subject to the provisions of
Section 3(b) hereof) the shares of Common Stock (whether in book-entry, uncertificated or
certificated form) issued and outstanding and the Rights will be owned by the registered holders of
the shares of Common Stock and will not be evidenced by separate Right Certificates, and (y) any
transfer of shares of Common Stock (or any interest therein, including the creation of a security
interest) will also effect a transfer of the associated Rights (or the equivalent interest therein)
and neither the Rights nor any interest therein may be transferred otherwise than by transfer of
the associated shares of Common Stock (or the equivalent interest therein). As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (or the Rights Agent will, if requested
and provided with a list of the relevant holders of Common Stock by the Company, send) by
first-class, insured, postage-prepaid mail, to each record holder of shares of Common Stock as of
the Close of Business on the Distribution Date, at the address of such holder shown on the records
of the Company, a Right Certificate, in substantially the form of Exhibit A hereto (a “Right
Certificate”), evidencing one Right for each share of Common Stock so held, subject, in the
case of shares of Common Stock held in uncertificated form on the Distribution Date, to the rights
provided by law to a registered pledgee whose security interest has been duly registered with the
Company. As of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

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          (b) Until the earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date, certificates for shares of Common Stock shall have impressed on, printed on, written on or
otherwise affixed to them substantially the following legend:

This certificate also evidences and entitles the holder hereof to certain Rights
as set forth (and as defined) in a Rights Agreement between Acco Brands
Corporation and [          ], as Rights Agent, dated as of [          ],
2005, as it may be amended from time to time (the “Rights Agreement”), the terms
of which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of Acco Brands Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Acco Brands Corporation will mail to the holder of this certificate
a copy of the Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the Rights Agreement,
Rights beneficially owned by any Person (as defined in the Rights Agreement) who
becomes an Acquiring Person (as defined in the Rights Agreement) may become null
and void.

With respect to such certificates containing the foregoing legend, until the Distribution Date, the
Rights associated with the shares of Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the shares of Common Stock
represented thereby.

          (c) Until the earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date, confirmations and account statements sent to holders of shares of Common Stock in book-entry
form and initial transaction statements relating to the registration, pledge or release from pledge
of shares of Common Stock in uncertificated form shall have impressed on, printed on, written on or
otherwise affixed to them substantially the following legend:

The shares of Common Stock, par value $.01 per share, of Acco Brands Corporation
to which this statement relates also evidence and entitle the holder thereof to
certain Rights as set forth (and as defined) in a Rights Agreement between Acco
Brands Corporation and [          ], as Rights Agent, dated as of [          ], 2005, as it may be amended from time to time (the “Rights Agreement”), the
terms of which are hereby incorporated herein by reference and a copy of which is
on file at the principal executive offices of Acco Brands Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by the

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shares to which this statement relates. Acco Brands Corporation will mail to the
holder of the shares to which this statement relates and any registered pledgee
of uncertificated shares a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances, as set forth
in the Rights Agreement, Rights beneficially owned by any Person (as defined in
the Rights Agreement) who becomes an Acquiring Person (as defined in the Rights
Agreement) may become null and void.

With respect to shares of Common Stock in book-entry form for which there has been sent a
confirmation or account statement and shares of Common Stock in uncertificated form for which there
has been sent an initial transaction statement containing the foregoing legend, until the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date, the Rights associated
with such shares of Common Stock shall be evidenced by such shares of Common Stock alone, and the
registration of transfer or pledge, or the release from pledge, of any such shares of Common Stock
shall also constitute the registration of transfer or pledge, or the release from pledge, as the
case may be, of the Rights associated with such shares of Common Stock.

          (d) In the event that the Company purchases or acquires any shares of Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such shares of Common
Stock shall be deemed canceled and retired so that the Company shall not be entitled to exercise
any Rights associated with the shares of Common Stock which are no longer outstanding.

          Section 4. Form of Right Certificates. Subject to the provisions of Section 22
hereof, the Right Certificates (and the forms of election to purchase Preferred Shares and of
assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit A
hereto and may have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate (but which do not affect the
rights, duties or responsibilities of the Rights Agent) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed or the National Association of Securities Dealers,
Inc., or to conform to usage.

          Section 5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Company by its Chief Executive Officer, any of its Vice Presidents, or
its Treasurer, either manually or by facsimile signature, shall have affixed thereto the Company’s
seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be
valid for any purpose unless countersigned. In case

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any officer of the Company who shall have signed any of the Right Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such person was not such
an officer.

          Following the Distribution Date and receipt by the Rights Agent of notice to that effect and
other reasonably necessary information provided by the Company, the Rights Agent will keep or cause
to be kept, at an office designated for such purpose (the “Designated Office”), books for
registration and transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date of each of the Right
Certificates.

          Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 14 hereof,
at any time after the Close of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate
or Right Certificates (other than Right Certificates representing Rights that have become null and
void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24
hereof) may be transferred, split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder of the Rights evidenced thereby to purchase a like
number of one one-hundredths of a Preferred Share as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall make such request
in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the Designated Office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the Person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of Right Certificates.
The Rights Agent is not responsible or obligated to inquire as to whether the Company required that
any such taxes or charges be paid or whether the payment of any such taxes or charges has been
made.

          Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right

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Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.

          Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) Each
Right (other than Rights that have become null and void pursuant to Section 11(a)(ii) hereof or
that have been exchanged pursuant to Section 24 hereof) shall initially entitle the registered
holder thereof to purchase one one-hundredth of a Preferred Share, subject to adjustment from time
to time as provided in Section 11 or 13 hereof. The purchase price (the “Purchase Price”)
for each one one-hundredth of a Preferred Share purchasable pursuant to the exercise of a Right
shall initially be $[ ], and shall be subject to adjustment from time to time as provided in
Section 11 or 13 hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.

          (b) The registered holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate evidencing such Rights, with the form of election to
purchase on the reverse side thereof duly and properly executed, to the Rights Agent at the
Designated Office of the Rights Agent, together with payment of the Purchase Price for each one
one-hundredth of a Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on the tenth anniversary of the Record Date (the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the “Redemption Date”) or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.

          (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed and properly completed, accompanied by payment of the Purchase
Price for the shares to be purchased and an amount equal to any applicable tax or charge required
to be paid by the holder of the Rights evidenced by such Right Certificate in accordance with
Section 9 hereof by certified check, cashier’s check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B)
if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-hundredths of a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent

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for the Preferred Shares with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of the Rights evidenced by such Right
Certificate, registered in such name or names as may be designated by such holder and (iv) when
appropriate, after receipt, deliver such cash to or upon the order of the registered holder of the
Rights evidenced by such Right Certificate.

          (d) In case the registered holder of the Rights evidenced by any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Rights or to his duly authorized assigns, subject to the provisions of
Sections 6 and 14 hereof.

          Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent
shall deliver all canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.

          Section 9. Availability of Preferred Shares. The Company covenants and agrees that it
will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or
any Preferred Shares held in its treasury, the number of Preferred Shares that will be sufficient
to permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof. The
Company covenants and agrees that it will take all such action as may be necessary to ensure that
all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.

          The Company further covenants and agrees that it will pay when due and payable any and all
taxes and charges which may be payable in respect of the issuance or delivery of the Rights or the
Right Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any tax or charge which may be payable in respect of any transfer or
delivery of Rights or Right

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Certificates to a Person other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Shares in a name other than that of, the registered holder of the Rights
evidenced by Right Certificates surrendered for exercise or to issue or to deliver any certificates
or depositary receipts for Preferred Shares upon the exercise of any Rights until any such tax or
charge shall have been paid (any such tax or charge being payable by the holder of such Rights at
the time of surrender of the related Right Certificates) or until it has been established to the
Company’s reasonable satisfaction that no such tax or charge is due.

          Section 10. Preferred Shares Record Date. Each Person in whose name any Preferred
Shares are issued upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such Preferred Shares on, and the date of issuance of such Preferred Shares and
the date of any certificate for such Preferred Shares shall be, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any
applicable taxes or charges pursuant to Section 9) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Preferred Shares transfer
books of the Company are closed, such Person shall be deemed to have become the record holder of
such shares on, and the date of issuance of such Preferred Shares and the date of any such
certificate shall be, the next succeeding Business Day on which the Preferred Shares transfer books
of the Company are open. Prior to the exercise of any Rights, the holder thereof shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings
of the Company, except as provided herein.

          Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The
Purchase Price, the number of Preferred Shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11.

          (a) (i) In the event the Company shall at any time after the Record Date (A) declare a
dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving entity), except as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of capital stock which, if such Right had
been exercised immediately prior to such date and at a time when the

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Preferred Shares transfer books of the Company were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right.

          (ii) (A) Subject to clause (B) of this subparagraph (ii) and Section 23 and Section 24 of this
Agreement, in the event any Person becomes an Acquiring Person, each registered holder of a Right
shall thereafter have a right to receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of
such number of Preferred Shares for which a Right is then exercisable, such number of shares of
Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price
by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (y) 50% of the then Current Per Share Market Price of the shares of Common
Stock (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event.
In the event that any Person shall become an Acquiring Person, subject to Section 23 and Section 24
of this Agreement, the Company shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights.

          (B) From and after the occurrence of such event, any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
shall be null and void and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement. No Right Certificate shall be issued pursuant
to Section 3 hereof that evidences Rights beneficially owned by an Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) whose Rights would be null and void pursuant to
the preceding sentence and any Right Certificate evidencing Rights beneficially owned by any such
Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall be null and void.
No Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring
Person (or any Associate or Affiliate of such Acquiring Person) whose Rights would be null and void
pursuant to the second preceding sentence or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring
Person (or any Associate or Affiliate of such Acquiring Person) whose Rights would be null and void
pursuant to the second preceding sentence shall be canceled.

          (iii) In the event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exercise of the Rights. In the event
the Company shall, after good faith

13

 

effort, be unable to take all such action as may be necessary to authorize such additional shares
of Common Stock, the Company shall substitute, for each share of Common Stock that would otherwise
be issuable upon exercise of a Right, a number of Preferred Shares or fraction thereof such that
the Current Per Share Market Price of one Preferred Share multiplied by such number or fraction is
equal to the Current Per Share Market Price of one share of Common Stock as of the date of issuance
of such Preferred Shares or fraction thereof.

          (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares
having the same rights, privileges and preferences as the Preferred Shares (“Equivalent
Preferred Shares”)) or securities convertible into Preferred Shares or Equivalent Preferred
Shares at a price per Preferred Share or Equivalent Preferred Share (or having a conversion price
per share, if a security convertible into Preferred Shares or Equivalent Preferred Shares) less
than the then Current Per Share Market Price of the Preferred Shares on such record date, the
Purchase Price to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or
Equivalent Preferred Shares so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market price and the
denominator of which shall be the number of Preferred Shares outstanding on such record date plus
the number of additional Preferred Shares and/or Equivalent Preferred Shares to be offered for
subscription or purchase (or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In case such subscription price may be
paid in a consideration part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and shall be binding
and conclusive on the Rights Agent and the holders of the Rights. Preferred Shares owned by or
held for the account of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record date had not been
fixed.

          (c) In case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving entity) of evidences of
indebtedness or assets (other than a regular quarterly

14

 

cash dividend or a dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the then Current Per Share
Market Price of the Preferred Shares on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding and conclusive on the Rights Agent and
the holders of the Rights) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such Current Per Share Market Price of the Preferred Shares;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect if such record date
had not been fixed.

          (d) (i) For the purpose of any computation hereunder, the “Current Per Share Market
Price” of any security (a “Security” for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing prices per share of such Security for
the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to but not
including such date; provided, however, that in the event that the Current Per
Share Market Price of the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading Days after but not
including the ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the Current Per Share
Market Price shall be appropriately adjusted to reflect the current market price per share
equivalent of such Security; and provided, further, that in the event that the
Current Per Share Market Price of the shares of Common Stock is determined as of a date prior to
the expiration of 30 Trading Days following the Record Date, the Current Per Share Market Price of
the shares of Common Stock shall be deemed to be the average of the daily closing prices per share
of Common Stock for the period of Trading Days commencing with the Record Date and ending
immediately prior to such date. The closing price of a Security for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange or national market

15

 

automated quotation system on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities exchange or national
market automated quotation system, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by the Nasdaq Stock
Market, Inc. (“Nasdaq”) or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security selected by the Board of
Directors of the Company. The term “Trading Day” shall mean a day on which the principal
national securities exchange or national market automated quotation system on which the Security is
listed or admitted to trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange or national market automated
quotation system, a Business Day.

          (ii) For the purpose of any computation hereunder, the “Current Per Share Market Price” of the
Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the “Current Per Share Market Price” of the
Preferred Shares shall be conclusively deemed to be the Current Per Share Market Price of the
shares of Common Stock as determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after the date hereof),
multiplied by one hundred. If neither the shares of Common Stock nor the Preferred Shares are
publicly held or so listed or traded, “Current Per Share Market Price” shall mean the fair value
per share as determined in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be binding and conclusive
on the Rights Agent and the holders of the Rights.

          (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or
to the nearest one one-millionth of a Preferred Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier of (i) three years
from the date of the transaction which requires such adjustment or (ii) the Final Expiration Date.

          (f) If as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any shares of capital stock of the
Company other than Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Shares

16

 

contained in Section 11(a) through (c), inclusive, and the provisions of Sections 7, 9, 10 and
13 with respect to the Preferred Shares shall apply on like terms to any such other shares.

          (g) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.

          (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths
of a Preferred Share (calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one one-hundredths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

          (i) The Company may elect on or after the date of any adjustment of the Purchase Price to
adjust the number of Rights, in substitution for any adjustment in the number of one one-hundredths
of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company shall make a
public announcement and give prompt notice to the Rights Agent of its election to adjust the number
of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to registered holders of Rights on such record
date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such registered holders in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates evidencing all the

17

 

Rights to which such holders shall be entitled after such adjustment. Right Certificates so
to be distributed shall be issued, executed and countersigned in the manner provided for herein and
shall be registered in the names of the registered holders of the Rights on the record date
specified in the public announcement.

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

          (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
one one-hundredth of the then par value, if any, of the Preferred Shares issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid and nonassessable
Preferred Shares at such adjusted Purchase Price.

          (l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
(and shall promptly notify the Rights Agent of any such elections) until the occurrence of such
event the issuing to the registered holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder’s right to receive such additional
shares upon the occurrence of the event requiring such adjustment.

          (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred Shares, issuance wholly
for cash of any Preferred Shares at less than the current market price, issuance wholly for cash of
Preferred Shares or securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by the Company to
holders of its Preferred Shares shall not be taxable to such stockholders.

          (n) In the event that at any time after the Record Date and prior to the Distribution Date,
the Company shall (i) declare or pay any dividend on the Common Stock payable in shares of Common
Stock or (ii) effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of

18

 

dividends in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in any such case (A) the number of one one-hundredths of a Preferred Share purchasable
after such event upon proper exercise of each Right shall be determined by multiplying the number
of one one-hundredths of a Preferred Share so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of shares of Common Stock outstanding immediately
before such event and the denominator of which is the number of shares of Common Stock outstanding
immediately after such event, and (B) each share of Common Stock outstanding immediately after such
event shall have issued with respect to it that number of Rights which each share of Common Stock
outstanding immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such a dividend is declared
or paid or such a subdivision, combination or consolidation is effected.

          Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Stock or the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof to each registered
holder of a Right in accordance with Section 25 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment or statement therein contained and shall
have no duty or obligation with respect to, and shall not be deemed to have knowledge of, any
adjustment unless and until it shall have received such a certificate.

          Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. In
the event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a)
the Company shall consolidate with, or merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the Company and the Company shall be the
continuing or surviving entity of such merger and, in connection with such merger, all or part of
the shares of 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 (c) 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 or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company
or one or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each registered holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving entity) as shall equal the result obtained by (A) multiplying
the

19

 

then current Purchase Price by the number of one one-hundredths of a Preferred Share for which
a Right is then exercisable and dividing that product by (B) 50% of the then Current Per Share
Market Price of the Common Shares of such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or transfer; (ii) the
issuer of such Common Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such steps (including, without limitation, the reservation
of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with
such consummation as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares thereafter deliverable
upon the exercise of the Rights. The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such issuer shall have executed and delivered
to the Rights Agent a supplemental agreement so providing. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales or other transfers.

          Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not be
required to issue fractions of Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the
Rights with regard to which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right. For the purposes of this
Section 14(a), the current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities listed on the
principal national securities exchange or national market automated quotation system on which the
Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange or national market automated quotation system, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights selected by the
Board of

20

 

Directors of the Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by the Board of
Directors of the Company shall be used.

          (b) The Company shall not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of
the Rights or to distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided, that such agreement shall
provide that the holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred Shares represented by
such depositary receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, the Company shall pay to the registered holders of
Rights at the time such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For the purposes of this Section
14(b), the current market value of a Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.

          (c) The holder of a Right by the acceptance of the Right expressly waives such holder’s right
to receive any fractional Rights or any fractional shares upon exercise of a Right (except as
provided above).

          Section 15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action expressly given to the Rights Agent under this Agreement, are vested
in the respective registered holders of the Rights and any registered holder of any Right, without
the consent of the Rights Agent or of the holder of any other Right, may, in such holder’s own
behalf and for such holder’s own benefit, 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 the Rights registered in such holder’s name in the manner provided in the Right
Certificates and in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.

          Section 16. Agreement of Right Holders. Every holder of a Right, by accepting the
same, consents and agrees with the Company and the Rights Agent and with every other holder of a
Right that:

21

 

     (a) prior to the Distribution Date, the Rights will be transferable only in connection
with the transfer of the shares of Common Stock;

     (b) after the Distribution Date, the Rights are transferable only on the registry
books of the Rights Agent upon surrender of the Right Certificates evidencing such Rights
at the Designated Office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and

     (c) the Company and the Rights Agent shall deem and treat the Person in whose name the
Right is registered as the absolute owner thereof (notwithstanding any notations of
ownership or writing on the Right Certificates evidencing such Rights or any certificate
for the associated shares of Common Stock made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary, except as required by law.

          Section 17. Right Holder Not Deemed a Stockholder. No holder, as such, of any Right
shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the
Preferred Shares or any other securities of the Company which may at any time be issuable on the
exercise of such Rights, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right, 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
25 hereof), or to receive dividends or subscription rights, or otherwise, until such Right or
Rights shall have been exercised in accordance with the provisions hereof.

          Section 18. Concerning the Rights Agent. The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the execution, delivery, administration and amendment 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 legal counsel) incurred without gross negligence, bad faith or willful misconduct (as
each is finally determined by a court of competent jurisdiction) on the part of the Rights Agent,
for any action taken, suffered or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending against any claim
of liability. The indemnity, exculpation and compensation provided for in this Agreement shall
survive the termination of this Agreement, the termination and expiration of the Rights, and the
resignation or removal of the Rights Agent.

22

 

          The Rights Agent shall be authorized to rely on, and shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or shares of Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter, instruction, 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 opinion of counsel as set forth in Section 20 hereof.

          Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any Person
into which the Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer,
corporate trust powers or shareholder services business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto; provided,
that such Person would be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases the Rights evidenced by such Right Certificates shall
have the full force provided in the Right Certificates and in this Agreement.

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

          Section 20. Duties of Rights Agent. The Rights Agent undertakes only the duties and
obligations expressly imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Rights, by their acceptance thereof, shall be bound:

23

 

     (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent and the Rights Agent shall incur no liability for or in
respect of any action taken, suffered or omitted by it in good faith and in accordance with
such opinion.

     (b) Whenever in the performance of its duties under this Agreement the Rights Agent
shall deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of an Acquiring Person and the determination of the Current Per
Share Market Price of any security) be proved or established by the Company prior to
taking, suffering or omitting any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the Chief
Executive Officer, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full 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 in good faith by it under the provisions
of this Agreement in reliance upon such certificate.

     (c) The Rights Agent shall be liable hereunder to the Company and any other Person
only for its own gross negligence, bad faith or willful misconduct (as each is finally
determined by a court of competent jurisdiction). Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special, indirect,
consequential or incidental loss or damage of any kind whatsoever (including, without
limitation, lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage.

     (d) The Rights Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.

     (e) The Rights Agent shall not be under any responsibility in respect of the validity
of this Agreement or the execution and delivery hereof (except the due execution hereof by
the Rights Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts
that would

24

 

require any such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and nonassessable.

     (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this Agreement.

     (g) The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Chief Executive
Officer, any Vice President, the Secretary or the Treasurer of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and it shall not be
liable for any action taken, suffered or omitted by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for those
instructions.

     (h) The Rights Agent and any stockholder, Affiliate, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or for any
other legal entity.

     (i) The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself (through its authorized directors,
officers or employees) or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company or any other Person resulting from any
such act, default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.

     (j) No provision of this Agreement shall require the Rights Agent to expend or risk
its own funds in the performance of any of its duties hereunder or in the exercise of its
rights if it reasonably believes in good faith that repayment of such funds as required by
this Agreement is not reasonably assured to it.

25

 

     (k) If, with respect to any Right Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an Affiliate or Associate
thereof), the Rights Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.

          Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing
mailed to the Company and to each transfer agent of the shares of Common Stock or Preferred Shares
by registered or certified mail, and to the registered holders of the Rights by first-class mail.
The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the shares of Common Stock or Preferred Shares by registered or certified mail,
and to the registered holders of the Rights by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the registered holder of a Right
(which holder shall, with such notice, submit such holder’s Right Certificate, if any, or such
holder’s certificate, if any, for the associated shares of Common Stock for inspection by the
Company), then the registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (i) a Person organized and doing business
under the laws of the United States or of the State of New York (or of any other state of the
United States so long as such Person is authorized to do business as a banking institution in the
State of New York), in good standing, having an office in the State of New York, which is
authorized under such laws to exercise corporate trust, stock transfer or shareholder services
powers and is subject to supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million,
or (ii) an Affiliate of the Person described in clause (i) of this sentence. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the shares of Common Stock or Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Rights. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or validity of the

26

 

resignation or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.

          Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions
of this Agreement or of the Right Certificates to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as may be approved by the Board of
Directors of the Company to reflect any adjustment or change in the Purchase Price and the number
or kind or class of shares or other securities or property purchasable upon exercise of a Right
made in accordance with the provisions of this Agreement. In addition, in connection with the
issuance or sale of shares of Common Stock following the Distribution Date and prior to the earlier
of the Redemption Date and the Final Expiration Date, the Company (a) shall with respect to shares
of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement in existence prior to the Distribution Date, or upon the exercise, conversion
or exchange of securities, notes or debentures (pursuant to the terms thereof) issued by the
Company and in existence prior to the Distribution Date, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) the Company shall not be obligated to issue any such
Right Certificates if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued or would create a significant risk of such
options or employee plans or arrangements failing to qualify for otherwise available special tax
treatment, and (ii) no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

          Section 23. Redemption. (a) The Board of Directors of the Company may, at its
option, at any time prior to the close of business on the tenth Business Day following the Shares
Acquisition Date, redeem all but not less than all the then outstanding Rights at a redemption
price of $[.01] per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”). The redemption of the Rights by the Board of
Directors of the Company may be made effective at such time, on such basis and with such conditions
as the Board of Directors of the Company in its sole discretion may establish.

          (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23, and without any further
action and without any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice and notice to the Rights Agent of any such redemption;
provided, however, that the failure to

27

 

give, or any defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors of the Company ordering the redemption
of the Rights, the Company shall mail a notice of redemption to all the registered holders of the
then outstanding Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for
the shares of Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any
time in any manner other than that specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of shares of Common Stock prior to the
Distribution Date.

          Section 24. Exchange. (a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have become null and void
pursuant to the provisions of Section 11(a)(ii) hereof) for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right, appropriately adjusted pursuant to Section 11(i) to
reflect any stock split, stock dividend or similar transaction occurring after the Record Date
(such exchange ratio being hereinafter referred to as the “Exchange Ratio”).
Notwithstanding the foregoing, the Board of Directors of the Company shall not be empowered to
effect such exchange at any time after the Record Date if any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of Fortune, the Company or any Subsidiary of
Fortune or the Company, any entity holding shares of Common Stock for or pursuant to the terms of
any such plan, or, prior to the Spin-Off, Fortune), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding.

          (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice and notice to the Rights Agent of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of
the registered holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of

28

 

Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.

          (c) In the event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the Rights. In the event
the Company shall, after good faith effort, be unable to take all such action as may be necessary
to authorize such additional shares of Common Stock, the Company shall substitute, for each share
of Common Stock that would otherwise be issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof such that the Current Per Share Market Price of one Preferred Share
multiplied by such number or fraction is equal to the Current Per Share Market Price of one share
of Common Stock as of the date of issuance of such Preferred Shares or fraction thereof.

          (d) The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, the Company shall pay to the registered holders of the Rights
with regard to which such fractional shares of Common Stock would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of a whole share of Common Stock.
For the purposes of this paragraph (d), the current market value of a whole share of Common Stock
shall be the closing price of a share of Common Stock (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.

          Section 25. Notice of Certain Events. (a) In case at any time after the Record Date
the Company shall propose (i) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its Preferred Shares
(other than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares
of stock of any class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Stock payable in shares of Common Stock or to effect a subdivision,
combination or consolidation of the shares of Common Stock (by reclassification or otherwise than
by payment of dividends in shares of Common Stock), then, in each such

29

 

case, the Company shall give to each registered holder of a Right, in accordance with Section
26 hereof, a notice of such proposed action, which shall specify the record date for the purposes
of such stock dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is
to take place and the date of participation therein by the holders of the shares of Common Stock
and/or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Shares for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Common Stock and/or Preferred Shares,
whichever shall be the earlier.

          (b) In case the event set forth in Section 11(a)(ii) hereof shall occur, then the Company
shall as soon as practicable thereafter give to each registered holder of a Right, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

          Section 26. Notices. Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Right to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:

Acco Brands Corporation

300 Tower Parkway

Lincolnshire, Illinois 60069

Attention: Corporate Secretary

Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement
to be given or made by the Company or by the holder of any Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:

[           ]

[Address]

[Address]

Attention: [            ]

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Right shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown on the registry
books of the Company or the registry books of the holders of the Rights maintained by the Rights
Agent after the Distribution Date as herein provided.

30

 

Any notice or demand given prior to the Distribution Date by the Company or the Rights Agent to the
holders of the Rights shall also be given to any registered pledgee of any uncertificated share of
Common Stock by first-class mail, postage prepaid, addressed to such registered pledgee at the
address of such registered pledgee as shown on the registry books of the Company.

          Section 27. Supplements and Amendments. The Company may from time to time supplement
or amend this Agreement without the approval of any holders of Rights in order to cure any
ambiguity, to correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions with respect to the
Rights or in regard to matters or questions arising hereunder which the Company may deem necessary
or desirable, any such supplement or amendment to be evidenced by a writing signed by the Company
and the Rights Agent; provided, however, that nothing herein shall obligate the
Rights Agent to execute such a supplement or amendment if such supplement or amendment changes or
increases the rights, duties, or obligations of the Rights Agent; and further
provided that from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would adversely affect the interests of the
holders of Rights (other than an Acquiring Person or any Associate or Affiliate of such Acquiring
Person). Without limiting the foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower the thresholds set forth in
Section 1(a) to not less than the greater of (i) the sum of .001% and the largest percentage of the
outstanding shares of Common Stock then known by the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company, Lane, any Person that beneficially owns
shares of Common Stock acquired in the manner set forth in Section 1(a)(iii), any employee benefit
plan of Fortune, the Company or any Subsidiary of Fortune or the Company, or any entity holding
shares of Common Stock for or pursuant to the terms of any such plan) and (ii) 10% (it being agreed
and understood that in the event of any such amendment, all references to “15%” in Section 1(a)
shall be replaced with the new threshold established by the Company). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute and
deliver such supplement or amendment.

          Section 28. Successors. All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.

          Section 29. Benefits of this Agreement. Nothing in this Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the registered holders of the
Rights any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders
of the Rights.

31

 

          Section 30. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth Business Day following the date of such
determination by the Board of Directors. Without limiting the foregoing, if any provision
requiring a specific group of directors to act is held by any court of competent jurisdiction or
other authority to be invalid, void or unenforceable, such determination shall then be made by the
Board of Directors of the Company in accordance with applicable law and the Company’s Restated
Certificate of Incorporation and ByLaws.

          Section 31. Governing Law. This Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes
shall be governed by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.

          Section 32. 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.

          Section 33. Descriptive Headings. Descriptive headings of the several Sections of
this Agreement are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

32

 

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

	 	 	 	 	 	 	 
	 	 	 	 	ACCO BRANDS CORPORATION
	 
	 	 	 	 	 	 
	Attest:	 	 	 	 
	 
	 	 	 	 	 	 
	By

	 	 	 	By	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Name:
	 

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	 	 	[                    ], as Rights Agent
	 
	 	 	 	 	 	 
	Attest:	 	 	 	 
	 
	 	 	 	 	 	 
	By

	 	 	 	By	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Name:
	 

	 	 	 	 	 	Title:

 

 

Exhibit A

Form of Right Certificate

	 	 	 
	Certificate No. R-	 	_____ Rights

NOT EXERCISABLE AFTER [          ], 2015 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $[.01] PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

Right Certificate

[Acco Brands Corporation]

     This certifies that _______________, or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of [               ], 2005 (the “Rights
Agreement”), between Acco Brands Corporation, a Delaware corporation (the “Company”), and [          
], a [                ], as Rights Agent (the “Rights Agent”), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M., New York City time, on [                ], 2015 at the Designated Office (as such term is
defined in the Rights Agreement of the Rights Agent, or at the office of its successor as Rights
Agent, one one-hundredth of a fully paid non-assessable share of Series A Junior Participating
Preferred Stock, par value $.01 per share (the “Preferred Shares”), of the Company, at a purchase
price of $[                ] per one one-hundredth of a Preferred Share (the “Purchase Price”), upon
presentation and surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of ___, 2005,
based on the Preferred Shares as constituted at such date. As provided in the Rights Agreement,
the Purchase Price and the number of one one-hundredths of a Preferred Share which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.

     This Right Certificate is subject to all of the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby

A-1

 

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.
Copies of the Rights Agreement are on file at the principal executive offices of the Company and
the above-mentioned offices of the Rights Agent.

     This Right Certificate, with or without other Right Certificates, upon surrender at the
principal office of the Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If the Rights evidenced by
this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not
exercised.

     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Right
Certificate (i) may be redeemed by the Company at a redemption price of $[.01] per Right or (ii)
may be exchanged in whole or in part for Preferred Shares or shares of the Company’s Common Stock,
par value $.01 per share.

     No fractional Preferred Shares will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.

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

     This Right Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.

A-2

 

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

Dated as of                                         .

	 	 	 	 	 	 	 
	ATTEST:	 	ACCO BRANDS CORPORATION
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 
	 
	 	 	 	 	 	 
	Countersigned:	 	 	 	 
	 
	 	 	 	 	 	 
	[                                                                                                                        ],	 	 	 	 
	 

	 	as Rights Agent	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Authorized Signature	 	 	 	 

A-3

 

Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights evidenced by this Right Certificate.)

     FOR VALUE RECEIVED                                                     hereby sells, assigns and transfers unto
                                                            

 

(Please print name and address of transferee)

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

Dated:                                                                                

	 	 	 
	 

	 	 
	 

	 	Signature

Signature Guaranteed:

     Signatures must be guaranteed by a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States, in each case, participating in a
Medallion program approved by the Securities Transfer Association, Inc.

 

     The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).

	 	 	 
	 

	 	 
	 

	 	Signature

 

A-4

 

Form of Reverse Side of Right Certificate — continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise

Rights evidenced by the Right Certificate.)

To: Acco Brands Corporation

     The undersigned hereby irrevocably elects to exercise                                                                                 Rights evidenced by
this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights
and requests that certificates for such Preferred Shares be issued in the name of:

	 	 	 
	Please insert social security

or other identifying number

	 	 

 

(Please print name and address)

 

     If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a
new Right Certificate for the balance remaining of such Rights shall be registered in the name of
and delivered to:

	 	 	 
	Please insert social security

or other identifying number

	 	 

 

(Please print name and address)

 

Dated:                                                             

	 	 	 
	 

	 	 
	 

	 	Signature

Signature Guaranteed:

A-5

 

Form of Reverse Side of Right Certificate — continued

 

     Signatures must be guaranteed by a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States, in each case, participating in a
Medallion program approved by the Securities Transfer Association, Inc.

     The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).

	 	 	 
	 

	 	 
	 

	 	Signature

 

NOTICE

     The signature in the Form of Assignment or Form of Election to Purchase, as the case may be,
must conform to the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.

     In the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will
deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.

A-6

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