Ashland Globals By-laws require shareholders seeking to nominate persons for election as directors at an annual or
special meeting of shareholders, or to bring other business before an annual or special meeting, to provide timely notice, in proper form, to Ashland Globals corporate secretary. To be timely in the case of an annual meeting, a
shareholders notice generally must be received between 90 and 120 days prior to the first anniversary of the date of the immediately preceding annual meeting; provided, however, if the annual meeting of the shareholders is more than 30 days
earlier or more than 60 days later than such anniversary date, notice by the shareholder must be received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the 10th day following the day on which
public announcement of such meeting is first made. To be timely in the case of a special meeting, a shareholders notice must be received no later than the close of business on the 10th day following the date on which public announcement of
such meeting is first made.
Such notice must be in proper written form and must set forth certain information described in
Ashland Globals By-laws related to the shareholder giving the notice, any other beneficial owner of Ashland Global capital stock owned by such shareholder and certain affiliates of the foregoing.
Subject to any
restrictions in the certificate of incorporation, the DGCL permits a corporation to declare and pay dividends out of surplus or, if there is no surplus, out of its net profits for the fiscal year in which the dividend is
declared and/or the preceding fiscal year. Surplus is defined as the excess of the net assets of the corporation over the amount determined to be the capital of the corporation by the board of directors. The capital of the corporation
cannot be less than the aggregate par value of all issued shares of capital stock. Net assets equals total assets minus total liabilities. The DGCL also provides that dividends may not be paid out of net profits if, after the payment of the
dividend, capital is less than the capital represented by the outstanding stock of all classes having a preference upon the distribution of assets.
Under Ashland Globals Certificate, subject to applicable law and any preference of any outstanding series of preferred
stock, dividends may be declared and paid on the common stock at such times and in such amounts as the Ashland Global Board in its discretion shall determine.
The DGCL provides that amendments to the certificate of incorporation generally require the board of directors to adopt a
resolution setting forth the proposed amendment, which must then be approved by the affirmative vote of a majority of the voting power of outstanding stock entitled to vote thereon and a majority of the voting power of outstanding stock of each
class entitled to vote thereon separately as a class. However, a corporations certificate of incorporation may provide for a greater vote.
In addition to any vote required by law, Ashland Globals Certificate requires the affirmative vote of holders of at least
80% of the voting power of the then outstanding voting stock of Ashland Global, voting together as a single class, to amend, alter, change, or repeal or to adopt any provision inconsistent with the provisions regarding (i) this 80% voting
requirement; (ii) the board size, vacancies and terms of office and election and nomination of directors; (iii) action by written consent of the shareholders and (iv) the adoption, amendment or repeal of by-laws.
Ashland Globals Certificate also provides that, except as otherwise required by law, holders of common stock, as such,
shall not be entitled to vote on any amendment to Ashland Globals Certificate (including any certificate of designation relating to any series of
preferred stock) that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the
holders of one or more other such series, to vote thereon pursuant to Ashland Globals Certificate (including any certificate of designation relating to any series of preferred stock) or pursuant to the DGCL.
Under the DGCL, the power to adopt, alter and repeal by-laws is vested in the shareholders, except to the extent that a
corporations certificate of incorporation vests concurrent power in the board of directors.
Ashland Globals
Certificate expressly authorize the Ashland Global Board to adopt, repeal, alter or amend Ashland Globals By-laws by the vote of a majority of the entire Ashland Global Board or such greater vote as shall be specified in the By-laws.
Ashland Globals Certificate expressly provides that for shareholders to adopt, alter, amend or repeal by-laws, the
affirmative vote of the holders of at least 80% of the then outstanding voting power of Ashland Global, voting as a single class, is required.
Under the DGCL, a merger, consolidation or sale of all or substantially all of
a corporations assets must be approved by the board of directors and by a majority of the outstanding stock of the corporation entitled to vote thereon.
However, no vote of shareholders of a constituent corporation surviving a merger is required under the DGCL, unless the
corporation provides otherwise in its certificate of incorporation, if: (i) the merger agreement does not amend the certificate of incorporation of the surviving corporation; (ii) each share of stock of the surviving corporation
outstanding before the merger is an identical outstanding or treasury share after the merger; and (iii) either no shares of common stock of the surviving corporation are to be issued or delivered pursuant to the merger or, if such common stock
will be issued or delivered, it will not increase the number of shares of common stock outstanding immediately before the merger by more than 20%.
The DGCL
provides shareholders of a corporation involved in a merger the right to demand and receive payment in cash of the fair value of their stock in certain mergers if the shareholder continuously holds such shares through the effective date of the
merger and has neither voted in favor of the merger nor consented thereto in writing. As a general matter, appraisal rights are not available with respect to shares:
unless holders of shares are required to accept in the merger anything other than any combination of:
Ashland Global will be subject to Section 203 of the DGCL, which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination (as defined below) with any interested stockholder (as defined below) for a period of three years following the date that such stockholder became an interested
stockholder, unless: (i) prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) on consummation of
the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding those shares owned (a) by persons who are directors and also officers and (b) by employee stock plans in which employee participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange offer; or (iii) on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of
shareholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.
Section 203 of the DGCL defines business combination to include: (i) any merger or consolidation
involving the corporation and the interested stockholder; (ii) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (iii) subject to certain exceptions, any
transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (iv) any transaction involving the corporation that has the effect of increasing the proportionate share of
the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (v) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation. In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person
affiliated with or controlling or controlled by such entity or person.
The Delaware standards of conduct for directors have developed through written opinions of the Delaware courts. Generally,
directors of Delaware corporations are subject to a duty of loyalty and a duty of care. The duty of care requires that directors act in an informed and deliberate manner and inform themselves, before making a business decision, of all relevant
material information reasonably available to them. The duty of care also requires that directors exercise care in overseeing and investigating the conduct of corporate employees. The duty of loyalty may be summarized as the duty to act in good
faith, not out of self-interest, and in a manner that the director reasonably believes to be in the best interests of the corporation and its shareholders. When directors act consistently with their duties of loyalty and care, their decisions
generally are presumed to be valid under the business judgment rule.
Under Delaware law, a member of the board
of directors, or a member of any committee designated by the board of directors, will, in the performance of such members duties, be fully protected in relying in good faith upon the records of the corporation and upon such information,
opinions, reports or statements presented to the corporation by any of the corporations officers or employees, or committees of the board of directors, or by any other person as to matters the member reasonably believes are within such other
persons professional or expert competence and who has been selected with reasonable care by or on behalf of the corporation.
Delaware law permits a corporation to adopt a provision in its certificate of incorporation
eliminating or limiting the personal liability of a director to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, except that such provision may not limit the liability of a director for
(i) any breach of the directors duty of loyalty to the corporation or its shareholders, (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) unlawful payment of
dividends or stock purchases or redemptions or (iv) any transaction from which the director derived an improper personal benefit.
Ashland Globals Certificate provides that, to the fullest extent that the DGCL or any other law of the State of Delaware
permits the limitation or elimination of the liability of directors, no director of Ashland Global shall be liable to Ashland Global or its shareholders for monetary damages for breach of fiduciary duty as a director.
The DGCL provides that a corporation may indemnify any individual made, or threatened to be made, a party to any type of
proceeding because he or she is or was an officer, director, employee or agent of the corporation, or was serving at the request of the corporation as an officer, director, employee or agent of another corporation or entity, against expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the
corporation or, in the case of a criminal proceeding, he or she had no reasonable cause to believe that his or her conduct was unlawful. In the case of an action brought by or in the right of the corporation, known as a derivative action,
indemnification will be denied if the individual is liable to the corporation, unless otherwise determined by a court.
A
corporation must indemnify a present or former director or officer who successfully defends himself or herself in a proceeding to which he or she was a party because he or she was a director or officer of the corporation against expenses actually
and reasonably incurred by him or her. Expenses incurred by an officer or director, or any employees or agents as deemed appropriate by the board of directors, in defending civil or criminal proceedings may be paid by the corporation in advance of
the final disposition of such proceedings upon receipt of an undertaking to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified.
In general, Ashland Globals Certificate permits, and Ashland Globals By-laws require, such indemnification with
respect to directors and officers, to the fullest extent permitted under Delaware or other applicable law. Ashland Global is required by its By-laws to advance expenses that will be incurred by a director, officer, employee or agent of Ashland
Global, or any person that is or was serving at the request of Ashland Global as a director, officer, employee or agent of another entity (a Covered Person) in connection with any such Proceeding.
Ashland
Globals By-laws provide that, unless Ashland Global consents in writing to the selection of another forum, the Court of Chancery of the State of Delaware shall be the exclusive forum for: (i) any derivative action or proceeding brought on
Ashland Globals behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or employee to Ashland Global or its shareholders, (iii) any action asserting a claim pursuant to the DGCL or
(iv) any action asserting a claim governed by the internal affairs doctrine. In the event the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such
action or proceeding shall be another state or federal court located within the State of Delaware. Ashland Globals By-laws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be
deemed to have notice of and to have consented to this provision. Although we believe this provision benefits Ashland Global by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the
provision may have the effect of discouraging lawsuits against Ashland Globals directors and officers.
We expect that the transfer agent for Ashland Global common stock will be Wells Fargo.
We expect
that Ashland Global common stock will be listed on the NYSE under the trading symbol ASH.
After consummation of the Reorganization, former Ashland shareholders will hold shares of Ashland Global common
stock and the rights of such holders will be governed by the DGCL and Ashland Globals Organizational Documents. The rights that will be afforded to Ashland Global shareholders under Ashland Globals Organizational Documents and the DGCL
are substantially similar to the rights afforded to Ashland shareholders under Ashlands Organizational Documents and the KBCA, respectively. There are differences, however, that are listed below and you should carefully review this summary in
deciding how to vote on the reorganization proposal. This summary is not complete and is qualified by reference to the full text of Ashlands Certificate, filed as Exhibit 3.2 to Ashlands Form 8-K filed on February 4, 2014, and
incorporated by reference herein, Ashlands By-laws, filed as Exhibit 3.3 to Ashlands Form 8-K filed on February 4, 2014, and incorporated by reference herein, Ashland Globals Certificate, the form of which is attached as Annex
II to this proxy statement/prospectus, and Ashland Globals By-laws, the form of which is attached as Annex III to this proxy statement/prospectus.
The following unaudited pro forma condensed consolidated financial information consists of unaudited pro forma condensed
consolidated statements of operations information for the six months ended March 31, 2016 and for the years ended September 30, 2015, 2014 and 2013, and unaudited pro forma condensed consolidated balance sheet information as of
March 31, 2016. For accounting purposes, the historical consolidated financial statements of Ashland will become the historical consolidated financial statements of Ashland Global following the Reorganization. Accordingly, the unaudited pro
forma condensed consolidated financial information presented below has been derived by application of pro forma adjustments to Ashlands historical financial statements.
The following unaudited pro forma condensed consolidated financial information is based upon the historical financial
statements of Ashland and its consolidated subsidiaries, adjusted to reflect the Final Separation. The following unaudited pro forma condensed consolidated financial information of Ashland Global should be read in conjunction with the related notes
and with the historical consolidated financial statements of Ashland and the related notes, which are incorporated by reference into this proxy statement/prospectus. The unaudited pro forma condensed consolidated statements of operations give effect
to the Final Separation as if it occurred on October 1, 2012, the beginning of the earliest period presented, while the unaudited pro forma condensed consolidated balance sheet gives effect to the Final Separation of Valvoline as if it occurred
on March 31, 2016. The pro forma adjustments, described in the related notes, are based on the best available information and certain assumptions that Ashland management believe are reasonable. Excluded from the pro forma adjustments are
amounts that are non-recurring in nature, including, but not limited to, Separation-related legal and advisory fees, or amounts that are not material.
The unaudited pro forma condensed consolidated financial information is provided for illustrative purposes only and are not
necessarily indicative of the operating results or financial position that would have occurred had the Final Separation been completed on October 1, 2012 for the unaudited pro forma condensed consolidated statements of operations or on
March 31, 2016 for the unaudited pro forma condensed consolidated balance sheet. For example, this financial information does not reflect any potential earnings or other impacts from the use of the proceeds from the disposition or cost
reductions of previously allocated corporate costs and potential subsequent restructuring charges. Readers should not rely on the unaudited pro forma condensed consolidated financial information as being indicative of the historical operating
results that Ashland Global would have achieved or any future operating results or financial position that it will experience after the transaction closes. In addition, there is no assurance the Final Separation will occur even if the reorganization
proposal is approved by Ashland shareholders. The pro forma adjustments made in connection with the Final Separation are calculated assuming the reorganization proposal is approved by Ashland shareholders. In addition, the preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are preliminary and have been made solely for purposes of developing this unaudited pro forma condensed
consolidated financial information. Actual results could differ, perhaps materially, from these estimates and assumptions.
Ashland Globals unaudited pro forma condensed consolidated financial information has been prepared to reflect adjustments
to Ashlands historical financial information that are (1) directly attributable to the Final Separation; (2) factually supportable; and (3) with respect to the unaudited pro forma condensed consolidated statements of operations,
expected to have a continuing impact on Ashland Globals results.
Valvoline expects to complete the initial public offering (IPO) of its common stock, through which it is expected to sell a
minority portion of its outstanding common stock. Total net proceeds from the initial public offering are expected to aggregate $500 million. As a result of the initial public offering, Ashland will establish a noncontrolling interest on its
consolidated balance sheet for the carrying value of the public ownership in Valvoline. The initial public offering has been accounted for as an equity transaction, since Ashland will retain a controlling financial interest and continue to
consolidate Valvoline until the Final Separation occurs.
Ashland expects that the IPO will be consummated pursuant to a
firm commitment underwriting. Consistent with customary practices, at the time of pricing the IPO, Valvoline and the underwriters will enter into an underwriting agreement for the sale of the Valvoline common stock to the underwriters, subject to
customary limited conditions. As of the date of this proxy statement/prospectus, Valvoline and the underwriters are not party to an underwriting agreement and do not expect to become party to any such agreement until following the Special Meeting.
Accordingly, the foregoing adjustments in connection with the proposed IPO reflect our base case assumptions, though actual offering size, price or proceeds could vary from these assumptions. For an illustration of different offering size scenarios
refer to note (L) below. The IPO and its terms are subject to numerous contingencies, including satisfactory market conditions, receipts of SEC and other required approvals, the future performance of Valvoline and investors expectations with
respect to the value of Valvoline common stock. In addition, there is no assurance the IPO will occur even if the reorganization proposal is approved by Ashland shareholders. The pro forma adjustments made in connection with the IPO are calculated
assuming the reorganization proposal is approved by Ashland shareholders.
Subsequent to the IPO of Valvoline, Ashland will own the majority of the outstanding shares of Valvoline common stock. Upon
expiration of the IPO lock-up (180 days after completion of the IPO), Ashland intends to dispose of the remaining amount of the shares of Valvoline common stock that it owned by means of a pro rata distribution of the common stock of Valvoline to
the Ashland Global shareholders on a tax-free basis. As a result, Valvoline will be accounted for as a discontinued operation of Ashland as the disposition reflects the culmination of Ashland Globals strategic shift to a specialty chemical
company.
The deconsolidation adjustments eliminate the operating results of Valvoline as if the Final Separation occurred
on October 1, 2012 for the unaudited pro forma condensed consolidated statements of operations or on March 31, 2016 for the unaudited pro forma condensed consolidated balance sheet. These adjustments include the reversal of
(i) the historical assets and liabilities and results of operations of Valvoline, including the related tax impact, (ii) consolidation entries and (iii) previously eliminated transactions between Valvoline and subsidiaries of Ashland,
as a result of the completion of the Separation. Certain allocations of corporate expenses included in selling, general and administrative expenses have been excluded from the deconsolidation adjustments of Valvoline. Allocation of corporate
overhead remaining with Ashland Global may not be allocated to discontinued operations for financial statement presentation.
Certain executives were granted performance-based restricted shares of Ashland in
October 2015 in order to provide an incentive to remain employed with us in the period after the Final Separation. The expense is not recognized until the Final Separation occurs and will be recognized ratably over the vesting period, which is
generally three years. The unaudited pro forma condensed consolidated statement of operations reflects the assumption that the Final Separation occurred on October 1, 2012 and that the median amount of potential shares to be awarded will be
earned and expensed over the service period, therefore our estimate of the fair value of the awards resulted in expense of $5 million for each of the years ended September 30, 2015, 2014, and 2013 and $2 million for the six months
ended March 31, 2016, respectively.
The unaudited pro forma condensed consolidated balance sheet reflects the incurrence of the following events as if they
occurred on March 31, 2016. During July 2016, Valvoline, through a financing subsidiary, entered into a credit agreement providing for new five-year senior secured term loans and expects to draw an aggregate principal amount of $875 million. The
senior secured term loans are assumed to bear interest at LIBOR plus 2.375% per annum based on the executed credit agreement. Valvoline, through a financing subsidiary, also issued new 5.500% senior unsecured notes due 2024 in an aggregate
principal amount of $375 million. A 0.25% increase or decrease in the annual interest rates of the senior secured term loans and the senior unsecured notes would increase or decrease interest expense for the instruments by approximately $3 million
annually.
The net proceeds of these Valvoline financings, after estimated debt issuance
costs of $25 million, will be transferred to Ashland through intercompany transfers. Ashland will use the approximately $1,225 million of net proceeds received from Valvoline to repay existing debt. Upon completing the IPO, Valvoline will use
$500 million of net proceeds of the IPO to repay Valvoline indebtedness that was incurred prior to the IPO as described herein. Valvolines $450 million revolving credit agreement and expected $125 million trade receivables securitization
facility are assumed to have no amounts outstanding as of March 31, 2016. In the event that the IPO is completed with a different offering size, offering price or offering proceeds than presented in this pro forma, the amounts of Valvoline existing
debt repayment and Ashland existing debt repayment may vary. Refer to note (L) for an illustration of certain alternative scenarios.
The unaudited pro forma condensed consolidated statements of operations reflect an adjustment for the
reduction in interest expense, as if Ashland repaid $1,225 million of existing debt on October 1, 2012, of $55 million for the year ended September 30, 2015, $60 million for each of the years ended September 30, 2014 and 2013, and $25 million for
the six months ended March 31, 2016.
Reflects the reduction of net pension and other postretirement plan liabilities that will be transferred to Valvoline by
Ashland as part of the Separation. Plans transferred to Valvoline by Ashland include a substantial portion of the largest U.S. qualified pension plan and non-qualified U.S. pension plans. This adjustment includes a $35 million adjustment to accrued
expenses and other liabilities, an $835 million adjustment to employee benefit obligations and a $50 million adjustment, net of tax of $35 million, to accumulated other comprehensive income (loss) as of March 31, 2016. A reduction of $330 million in
deferred tax assets related to these obligations is recognized in both the deferred tax assets and deferred tax liabilities as a result of jurisdictional netting. The reduction or increase in expense, split between cost of sales and selling, general
and administrative expense captions, related to these transferring plans was a reduction in expense of $175 million and $270 million for the years ended September 30, 2015 and 2014, respectively, and an increase in expense of $380 million and $8
million for the year ended September 30, 2013 and six months ended March 31, 2016, respectively.
Represents certain Ashland legacy assets and liabilities that are expected to transfer to Valvoline as a result of the
Separation. These assets to be transferred principally relate to deferred compensation and tax attributes and the liabilities to be transferred primarily consist of deferred compensation, certain Ashland legacy business insurance reserves and
certain trade payables. This adjustment includes $2 million of accounts receivable, $4 million of property, plant and equipment, net, $30 million of tax attributes, $40 million of other noncurrent assets, $30 million of trade and other payables, $20
million of accrued expenses and other liabilities, $5 million of capitalized lease obligations and $25 million of other noncurrent liabilities as of March 31, 2016.
Represents $50 million of cash that will be transferred from Ashland to Valvoline once the Separation occurs.
There were no adjustments to the weighted-average basic shares outstanding for the years ended September 30, 2015, 2014
and 2013 and six months ended March 31, 2016.
The weighted-average diluted shares outstanding for the years ended and
six months ended September 30, 2015, 2014 and 2013 and March 31, 2016, respectively, have been adjusted for the dilutive impact of shares granted for the Executive Performance Incentive and Retention Program discussed in Note (C). Ashland
has made an estimate on the impact of potential changes to nonvested stock-based compensation awards as a result of the Separation related to weighted-average diluted shares outstanding.
Reflects an income tax expense adjustment and deferred tax asset and liability adjustments for the items noted in
(A) through (G), or adjustments related to the Tax Matters Agreement and stand alone effects within the respective jurisdictions. Ashlands pro forma tax benefit for all periods presented reflects the impact of certain discrete items
recorded in each period within Ashlands historical consolidated financial statements.
Valvoline has been included in Ashlands U.S. federal consolidated group tax
return, and will remain part of the U.S. federal consolidated group tax return through the date of Final Separation. The pro forma tax adjustments reflect Ashlands historical blended marginal tax rates. This rate may change upon Final
Separation and will be dependent upon the final legal entity structure. A change in the marginal tax rate could have a material impact on Ashlands reported deferred tax balances and income tax provision.
No additional U.S. tax provision has been accrued on foreign earnings within the pro forma financial statements as Ashland
intends to indefinitely reinvest those earnings in its non-U.S. businesses. Ashland also believes sufficient taxable income of the appropriate character will allow for the utilization of its deferred tax assets on a pro forma basis. Accordingly, no
additional valuation allowance has been established within the pro forma financial statements as a result of the Final Separation.
Represents the balancing entry to reflect the effect of the pro forma
adjustments.
Ashland Global expects to complete the initial phase of the Separation by causing Valvoline to complete an initial public
offering of a minority portion of its common stock. Prior to and in conjunction with the initial public offering of Valvolines common stock, Valvoline has entered into and expects to enter into a series of debt financings more fully described
in Note (D) to the pro forma financial information, including a new senior secured term loan, new senior unsecured notes, a new senior secured revolving credit facility and a trade receivables securitization. The net proceeds of
Valvolines pre-IPO debt financings will be transferred to Ashland through intercompany transfers.
The unaudited
condensed consolidated pro forma financial information was prepared on the basis of an initial public offering of Valvolines common stock which would give rise to approximately $500 million of net proceeds to Valvoline to be applied by
Valvoline to repay the Valvoline debt that was incurred prior to the IPO as described herein (the Base Case). In the event that Valvoline completes an initial public offering resulting in net proceeds in excess of $500 million, Valvoline
would seek to incur certain short-term indebtedness immediately prior to the closing of the initial public offering and transfer the net proceeds thereof to a subsidiary of Ashland Global. Ashland Global would then use the contributed proceeds to
repay existing debt of Ashland.
Upon closing the initial public offering, Valvoline would apply the net proceeds of the
initial public offering to repay in full the short-term indebtedness and to reduce the Valvoline senior secured term loan to a principal balance of $375 million. Alternatively, Ashland Global could complete the Separation with an initial public
offering of Valvoline common stock resulting in less than $500 million of net proceeds. In this case, Valvoline would still transfer the net proceeds of the Valvoline debt financings to Ashland Global to repay short-term or long-term debt of Ashland
Global, and Valvoline would use the net proceeds of the IPO to repay Valvoline debt (with a dollar-for-dollar reduction in the amount of Valvoline debt repayment based on the amount of net IPO proceeds less than $500 million). Alternatively, Ashland
Global could complete the Separation without an initial public offering of Valvoline by means of a pro rata distribution of 100% of the common stock of Valvoline to Ashland Globals shareholders (a 100% Spin), in which case, similar
to an IPO scenario resulting in less than $500 million of IPO proceeds, the net proceeds of the Valvoline debt financings would be transferred to Ashland Global to repay short-term and long-term debt of Ashland Global, with no reduction of Valvoline
debt in the absence of IPO proceeds.
The following unaudited pro forma financial information is not necessarily
indicative of the actual offering size, offering price or offering proceeds that Ashland Global could realize in the Base Case or any other particular scenario, including a 100% Spin. In addition the unaudited pro forma financial information
summarizes the potential impact of a $100 million increase or decrease in IPO proceeds on Ashland Globals and Valvolines pro forma debt levels as compared to the Base Case. Any IPO and its terms are subject to numerous contingencies,
including satisfactory market conditions, receipt of SEC and other required approvals, the future performance of Valvoline and investors expectations with respect to the value of Valvoline common stock. In addition, there is no assurance that
any IPO will occur, or that in the absence of an IPO, a 100% Spin will occur, even if the reorganization proposal is approved by Ashland shareholders. The pro forma information is calculated assuming the reorganization proposal is approved by
Ashland shareholders.
The following table lists the names and addresses of the only shareholders known by us on December 31, 2015 to have owned
beneficially more than five percent of our common stock outstanding, the number of shares they beneficially own, and the percentage of outstanding shares such ownership represents, based upon the most recent reports filed with the SEC. Except as
indicated in the footnotes, such shareholders have sole voting and dispositive power over shares they beneficially own.
The following table shows as of April 30, 2016, the beneficial ownership of Ashland Common Stock by each Ashland director
and Ashlands Chief Executive Officer, Chief Financial Officer and each of the other three most highly compensated executive officers in fiscal 2015 and the beneficial ownership of Ashland Common Stock by the directors and executive officers of
Ashland as a group.
As of April 30, 2016, there were 62,071,615 shares of Ashland Common Stock
outstanding. All directors and executive officers as a group owned 792,321 shares of Ashland Common Stock, which equaled 1.27% of the Ashland Common Stock outstanding as of April 30, 2016. Shares deemed to be beneficially owned are included in
the number of shares of Ashland Common Stock outstanding on April 30, 2016, for computing the percentage ownership of the applicable person and the group, but shares are not deemed to be outstanding for computing the percentage ownership of any
other person.
CERTAIN TRANSACTIONS WITH RELATED PARTIES
The following related party transaction information is in addition to the related party transaction information described
in Ashlands Annual Report on Form 10-K for the year ended September 30, 2015, filed with the SEC on November 20, 2015, including information specifically incorporated by reference therein from Ashlands Proxy Statement on
Schedule 14A filed with the SEC on December 4, 2015, incorporated by reference herein.
Relationship between Ashland
Global and Valvoline Following the Separation
To govern their relationship following the Separation, Ashland Global
and Valvoline will enter into various agreements described in this section, including:
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a separation agreement;
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a transition services agreement;
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a reverse transition services agreement;
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a tax matters agreement;
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a registration rights agreement;
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an employee matters agreement; and
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a shared environmental liabilities agreement.
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This section describes the material terms that Ashland currently expects, as of the date of this proxy statement/prospectus,
will be included in the foregoing agreements, and accordingly, these terms are subject to change.
Separation Agreement
Ashland Global will enter into a separation agreement with Valvoline before the initial Separation. The separation agreement
will set forth the agreements between Ashland Global and Valvoline regarding the principal actions to be taken in connection with the Separation. It will also set forth other agreements that govern aspects of the relationship between Ashland Global
and Valvoline following the initial Separation.
Transfer of Assets and Assumption of
Liabilities.
The separation agreement will identify certain transfers of assets and assumptions of liabilities that are necessary in advance of the Separation so that Ashland Global and Valvoline retain the assets of, and
the liabilities associated with, their respective businesses.
However, certain liabilities that are not associated
with the Ashland Global businesses or the Valvoline business will be allocated regardless of which business they are associated with (if any). For example, Ashland Global will retain, or assume from Valvoline, substantially all liabilities arising
from or relating to the exposure of any person to asbestos from the manufacture, production, sale, distribution, conveyance or placement in the stream of commerce on or prior to the date of the Separation of any product or other item, as well as
from repair, use, abatement or disposal on or prior to the date of the Separation of any building material or equipment containing asbestos, regardless of whether related to the Ashland Global businesses or the Valvoline business. In addition,
Ashland Global will retain, or assume from Valvoline, all environmental liabilities, known or unknown, arising from or relating to the Ashland Global businesses or any other historical business of Ashland Inc., other than the Valvoline business,
arising or relating to events, conduct or conditions occurring prior to, on or after the date of the Separation.
The
separation agreement will also provide for the settlement or extinguishment of certain liabilities and other obligations between Ashland Global and Valvoline.
Internal Transactions.
The separation agreement will describe certain internal transactions
related to the Separation that will occur prior to the Separation.
Intercompany
Arrangements
. All agreements, arrangements, commitments and understandings, including most intercompany accounts payable or accounts receivable, between Ashland Global, on the one hand, and Valvoline, on the other hand,
will terminate effective as of the Separation, except specified agreements and arrangements that are intended to survive the Separation.
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Shared Liabilities
. The tax matters agreement,
employee matters agreement and shared environmental liabilities agreement will describe certain current and future liabilities that will be shared between Ashland Global and Valvoline following the
Separation.
These agreements will
respectively specify the portion of the economic costs of such liabilities between Ashland Global and Valvoline and will establish a process for managing, defending and resolving, as well as sharing the costs related to, such liabilities as between
Ashland Global and Valvoline.
Credit Support
. Valvoline will agree to use reasonable
best efforts to arrange, prior to the Separation, for the replacement of all guarantees, covenants, indemnities, surety bonds, letters of credit or similar assurances of credit support currently provided by or through Ashland or any of its
affiliates for the benefit of the Valvoline business.
Representations and
Warranties
. In general, neither Ashland Global nor Valvoline will make any representations or warranties regarding any assets or liabilities transferred or assumed, any consents or approvals that may be required in
connection with these transfers or assumptions, the value or freedom from any lien or other security interest of any assets transferred, the absence of any defenses relating to any claim of either party or the legal sufficiency of any conveyance
documents. Except as expressly set forth in the separation agreement, all assets will be transferred on an as is, where is basis.
Further Assurances
. Ashland Global and Valvoline will use reasonable best efforts to affect any
transfers contemplated by the separation agreement that have not been consummated prior to the Separation as promptly as practicable following the initial Separation. In addition, Ashland Global and Valvoline will use reasonable best efforts to
affect any transfer or re-transfer of any asset or liability that was improperly transferred or retained as promptly as practicable following the Separation.
The Initial Public Offering
. The separation agreement will govern Ashland Globals and
Valvolines respective rights and obligations regarding the proposed IPO. Prior to the completion of the IPO, Valvoline will take all actions reasonably requested by
Ashland in connection with the IPO. Ashland Global will have the sole
and absolute discretion to determine the terms of, and whether to proceed with, the IPO and any subsequent spin-off or disposition of Valvoline stock by Ashland Global.
Conditions
. The separation agreement will also provide that several conditions must be satisfied
or waived by Ashland Global in its sole and absolute discretion before the Separation can occur.
Ashland Global
will have the right not to complete the Separation if, at any time, the Ashland Global Board determines, in its sole and absolute discretion, that the Separation is not in the best interests of Ashland Global or its shareholders or is otherwise not
advisable.
Exchange of Information
. Ashland Global and Valvoline will agree to provide each
other with information reasonably necessary to comply with reporting, disclosure, filing or other requirements of any national securities exchange or governmental authority, for use in judicial, regulatory, administrative and other proceedings and
to satisfy audit, accounting, regulatory, litigation and other similar requests. Ashland Global and Valvoline will also agree to use reasonable best efforts to retain such information in accordance with Ashland Globals record retention
policies as in effect on the date of the separation agreement. Each party will also agree to use its reasonable best efforts to assist the other with its financial reporting and audit obligation for an agreed period of time.
Termination
. The Ashland Global Board, in its sole and absolute discretion, will be able to
terminate the separation agreement at any time prior to the initial Separation.
Release of
Claims
. Ashland Global and Valvoline will each agree to release the other and its affiliates, successors and assigns, and all persons that prior to the Separation have been the others shareholders, directors,
officers, agents and employees, and their respective heirs, executors, administrators, successors and assigns, from any claims against any of them that arise out of or relate to events, circumstances or actions occurring or failing to occur or any
conditions existing at or prior to the time of the Separation. These releases will be subject to exceptions set forth in the separation agreement.
Indemnification
. Ashland Global and Valvoline will each agree to indemnify the other and each of
the others current and former directors, officers and employees, and each of the heirs, administrators, executors, successors and assigns of any of them, against certain liabilities incurred in connection with the separation of the Ashland
Global and Valvoline businesses. The amount of either Ashland Globals or Valvolines indemnification obligations will be reduced by any insurance proceeds the party being indemnified receives. The separation agreement will also specify
procedures regarding claims subject to indemnification.
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Transition Services Agreement
In order to help ensure an orderly transition, Ashland Global intends to enter into a transition services agreement pursuant to
which it will, for a limited time following the completion of this offering, provide Valvoline with various corporate support services, including certain accounting, human resources, information technology, office and building, risk, security, tax
and treasury services. Ashland Global may also provide Valvoline with additional services that Ashland Global and Valvoline may identify from time to time in the future. In general, the services will begin following the initial Separation and cover
a period not expected to exceed 24 months.
Ashland Global will agree to perform the services with the same standard of
quality and care as it uses in servicing its own business, and in any event with at least the same level of quality and care as such services were provided to the Valvoline business during the preceding year. Ashland Global and Valvoline will agree
to cooperate in connection with the performance of the services, provided that such cooperation does not unreasonably disrupt Ashland Globals or Valvolines operations, and Ashland Global will agree to use commercially reasonable efforts,
at Valvolines expense, to obtain any third-party consents required for the performance of the services.
The services
will be provided by Ashland Global without representation or warranty of any kind. Ashland Global will have no liability with respect to its furnishing of the services except to the extent occasioned by its bad faith, willful misconduct, fraud,
gross negligence or willful breach of the agreement.
Under the transition services agreement, Ashland Global and Valvoline
will each be obligated to maintain the confidentiality of the others confidential information for five years following the termination of the transition services agreement, subject to certain exceptions. Ashland Global and Valvoline will
retain all rights, title and interest in and to their respective intellectual property used in the provision of services under the agreement.
The transition services agreement will specify the costs to Valvoline for the services. These costs will be consistent with
expenses that Ashland has historically allocated or incurred with respect to such services, plus a mark-up of five percent.
Reverse Transition
Services Agreement
In order to help ensure an orderly transition, Valvoline intends to enter into a transition
services agreement pursuant to which it will, for a limited time following the completion of this offering, provide Ashland Global with various corporate support services, including certain human resources, information technology, office and
building, security and tax services, as well as certain regulatory compliance services required during the period in which Valvoline remains a majority-owned subsidiary of Ashland Global. Valvoline may also provide Ashland Global with additional
services that Valvoline and Ashland Global may identify from time to time in the future. In general, the services will begin following the initial Separation and cover a period not expected to exceed 24 months.
Valvoline will agree to perform the services with the same standard of quality and care as it uses in servicing its own
business, and in any event with at least the same level of quality and care as such services were provided to the Ashland Global businesses during the preceding year. Valvoline and Ashland Global will agree to cooperate in connection with the
performance of the services, provided that such cooperation does not unreasonably disrupt Valvolines or Ashland Globals operations, and Valvoline will agree to use commercially reasonable efforts, at Ashland Globals expense, to
obtain any third-party consents required for the performance of the services.
The services will be provided by Valvoline
without representation or warranty of any kind. Valvoline will have no liability with respect to its furnishing of the services except to the extent occasioned by its bad faith, willful misconduct, fraud, gross negligence or willful breach of the
agreement.
Under the transition services agreement, Valvoline and Ashland Global will each be obligated to maintain the
confidentiality of the others confidential information for five years following the termination of the transition services agreement, subject to certain exceptions. Valvoline and Ashland Global will retain all rights, title and interest in and
to their respective intellectual property used in the provision of services under the agreement.
The transition services
agreement will specify the costs to Ashland Global for the services. These costs will be consistent with expenses that Ashland has historically allocated or incurred with respect to such services, plus a mark-up of five percent.
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Tax Matters Agreement
Ashland and Valvoline intend to enter into a tax matters agreement that will govern the rights, responsibilities and
obligations of Ashland and Valvoline after the closing of the IPO with respect to all tax matters (including tax liabilities, tax attributes, tax returns and tax contests) (the Tax Matters Agreement).
Valvoline will be included in the U.S. federal consolidated group tax return, and possibly certain combined or similar group
tax returns, with Ashland (the Ashland Group Returns) for the period starting approximately on the date of the closing of the IPO and through the date of the Final Separation (the Interim Period). Under the Tax Matters
Agreement, Ashland will generally make all necessary tax payments to the relevant tax authorities with respect to Ashland Group Returns, and Valvoline will make tax sharing payments to Ashland. The amount of Valvolines tax sharing payments
will generally be determined as if Valvoline and each of its relevant subsidiaries included in the Ashland Group Returns filed its own consolidated, combined or separate tax returns for the Interim Period that include only Valvoline and/or its
relevant subsidiaries, as the case may be.
For taxable periods that begin on or after the day after the date of the Final
Separation, Valvoline will no longer be included in any Ashland Group Returns and will file tax returns that include only Valvoline and/or its subsidiaries, as appropriate. Valvoline will not be required to make tax sharing payments to Ashland for
those taxable periods. Nevertheless, Valvoline has (and will continue to have following the Final Separation) joint and several liability with Ashland to the IRS for the consolidated U.S. federal income taxes of the Ashland consolidated group for
the taxable periods in which Valvoline was part of the Ashland consolidated group.
The Tax Matters Agreement will also
generally provide that Valvoline will indemnify Ashland for the following taxes:
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Taxes of Valvoline for all taxable periods that begin on or after the day after the date of the Final
Separation;
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Taxes of Valvoline Inc. for the Interim Period, and taxes of subsidiaries of Valvoline Inc. for all taxable
periods that end on or before the date of the Final Separation, that are not attributable to Ashland Group Returns;
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Taxes for any tax period prior to the closing of the IPO (the Pre-IPO Period) that arise on audit
or examination and are directly attributable to the Valvoline business;
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Certain U.S. federal, state or local taxes for the Pre-IPO Period of Ashland and/or its subsidiaries for that
period that arise on audit or examination and are directly attributable to neither the Valvoline business nor the Ashland Global businesses; and
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Transaction Taxes (as described below) that are allocated to Valvoline under the Tax Matters Agreement.
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The Tax Matters Agreement will also provide that Valvoline will indemnify Ashland for any taxes (and
reasonable expenses) resulting from the failure of the Final Separation to qualify for non-recognition of gain and loss or certain reorganization transactions related to the Separation or the Final Separation to qualify for their intended tax
treatment (Transaction Taxes), where the taxes result from (1) breaches of covenants that Valvoline will agree to in connection with these transactions (including covenants containing the restrictions described below that are designed to
preserve the tax-free nature of the Final Separation), (2) the application of certain provisions of U.S. federal income tax law to the Final Separation with respect to acquisitions of Valvolines common stock or (3) any other actions that
Valvoline knows or reasonably should expect would give rise to such taxes. The Tax Matters Agreement will also require Valvoline to indemnify Ashland for a portion of certain other Transaction Taxes allocated to Valvoline based on Valvolines
market capitalization relative to the market capitalization of Ashland.
Valvoline will generally have either sole control,
or joint control with Ashland, over any audit or examination related to taxes for which Valvoline is required to indemnify Ashland.
The Tax Matters Agreement will impose certain restrictions on Valvoline and Valvolines subsidiaries (including
restrictions on share issuances or repurchases, business combinations, sales of assets, and similar transactions) that will be designed to preserve the tax-free nature of the Final Separation. These restrictions will apply for the two-year period
after the Final Separation. However, Valvoline will be able to engage in an otherwise restricted action if Valvoline obtains an appropriate opinion from counsel or ruling from the IRS.
Registration Rights Agreement
Prior to the initial Separation, Ashland Global and Valvoline expect to enter into a registration rights agreement with
customary representations, warranties and covenants, pursuant to which Valvoline will grant Ashland Global and its affiliates certain registration rights with respect to Valvolines common stock owned by Ashland Global.
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Employee Matters Agreement
Ashland and Valvoline intend to enter into an employee matters agreement that will address employment, compensation and
benefits matters, including the allocation and treatment of assets and liabilities relating to Valvolines employees and the compensation and benefit plans and programs in which Valvolines employees participate prior to the Final
Separation, as well as other human resources, employment and employee benefit matters.
Employment-Related
Liabilities
. On or prior to the closing of the IPO, Valvoline generally will assume responsibility for all employment-related liabilities of or relating to Valvolines current and former employees, former employees who were employed by a
terminated, divested or discontinued Valvoline business, former U.S. employees of any other terminated, divested or discontinued business and former U.S. employees of a shared resource group.
Benefit and Welfare Plans
. Following the closing of the IPO and prior to the Final Separation, Valvoline will establish
benefit plans for its employees that generally will recognize all service, compensation and other factors affecting benefit determinations to the same extent recognized under the corresponding Ashland benefit plan. Until such time, claims incurred
by Valvolines employees will continue to be covered under Ashlands benefit plans, and Valvoline will reimburse Ashland for such costs if they are not otherwise charged to Valvoline in the ordinary course.
Pension and Retirement Plans
. Prior to the closing of the IPO, Valvoline will assume responsibility for certain Ashland
qualified and nonqualified pension and retirement plans as well as a portion of the trusts or other funding vehicles that have been established to fund such plans. Specifically, prior to the IPO, Valvoline will assume all liabilities and assets
relating to the Ashland Hercules pension plan, other than liabilities and assets relating to active employees who are covered by the Hopewell collective bargaining agreement, which will be retained by Ashland. In addition, Valvoline will assume
responsibility for certain Ashland excess benefit and supplemental pension plan liabilities, as well as the portions of the Ashland nonqualified deferred compensation plans that relate to Valvolines employees and our non-employee directors.
Following the IPO and prior to the Final Separation, Valvoline will establish one or more defined contributions plans that will accept a trust-to-trust transfer of its employees account balances from the Ashland Global 401(k) plan.
Labor Matters
. Valvoline will assume and comply with any collective bargaining arrangements that cover its employees.
Long-Term Incentive Equity Compensation.
No adjustments will be made to outstanding Ashland long-term incentive
equity compensation awards in connection with the IPO. Outstanding Ashland long-term incentive equity compensation awards held by Valvolines employees at the time of the Final Separation will be converted entirely into equivalent awards with
respect to Valvoline common stock at the time of the Final Separation, with adjustments designed to preserve the aggregate value of the award. In addition, outstanding 2015-2017 LTIP performance units held by Valvolines employees at the time
of the Final Separation will be converted into Valvoline time-based restricted stock units, based on performance achieved as of the Final Separation. Any outstanding 2016-2018 LTIP performance units and any performance units granted following the
IPO that are held by Valvolines employees at the time of the Final Separation will be converted into Valvoline time-based restricted stock units based on performance achieved through the end of the applicable performance period, in accordance
with the terms of the award. Outstanding 2014-2016 LTIP performance units will vest in November 2016 and will be settled in Ashland common stock in accordance with their terms. Long-term incentive awards granted outside of the U.S. will generally be
treated as described above, except to the extent otherwise required by local law.
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Cravath, Swaine & Moore LLP will pass upon the validity of the shares of Ashland Global common stock offered by this
proxy statement/prospectus.
The consolidated financial statements of Ashland Inc. and Consolidated Subsidiaries as of September 30, 2015 and for the year
then ended, appearing in Ashland Inc.s Annual Report (Form 10-K) for the year ended September 30, 2015, and the effectiveness of Ashland Inc. and Consolidated Subsidiaries internal control over financial reporting as of September 30,
2015, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Ashland Inc. as of September 30, 2014 and for each of the two years in the period
ended September 30, 2014 incorporated in this proxy statement/prospectus by reference to Ashland Inc.s Annual Report on Form 10-K for the year ended September 30, 2015 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The independent reserve estimates for future asbestos claims and related costs given various assumptions (which is included in
Financial Statements and Supplementary Data) incorporated in this proxy statement/prospectus by reference to Ashland Inc.s Annual Report on Form 10-K for the year ended September 30, 2015, have been so incorporated in reliance on estimates
provided by Hamilton, Rabinovitz & Associates, Inc.
SHAREHOLDER PROPOSALS FOR THE 2017 ANNUAL MEETING
Shareholders interested in presenting a proposal for consideration at the 2017 Annual Meeting may do so by following the
procedures prescribed in SEC Rule 14a-8 of the Securities Exchange Act of 1934, as amended, and Ashlands By-laws. To be eligible for inclusion in the proxy statement for the 2017 Annual Meeting, shareholder proposals must be received by
Ashlands Secretary no later than August 12, 2016.
Ashlands By-laws provide that for business to be
properly brought before an annual meeting by a shareholder, the shareholder must give written notice (as specified below) to the Secretary of Ashland not later than ninety days in advance of the annual meeting (provided that if the annual meeting of
shareholders is held earlier than the last Thursday in January, such notice must be given within ten days after the first public disclosure of the date of the annual meeting) (such applicable notice deadline, the By-law Notice Deadline).
The first public disclosure of that date may be a public filing with the SEC. Such notice must set forth as to each matter the shareholder proposes to bring before the annual meeting:
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A brief description of the business desired to be brought before the meeting and the reasons for conducting
such business at the meeting and, in the event that such business includes a proposal to amend either the Articles or By-laws of Ashland, the language of the proposed amendment;
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The name and address of the shareholder proposing such business;
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A representation that the shareholder is a holder of record of Ashland Common Stock entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to propose such business;
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Any material interest of the shareholder in such business; and
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A representation as to whether or not the shareholder will solicit proxies in support of the proposal.
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Ashlands By-laws further provide that no business shall be conducted at any annual meeting except
in accordance with the foregoing procedures and that the chair of any such meeting may refuse to permit any business to be brought before an annual meeting that is not made in compliance with the procedures described above or if the shareholder
fails to comply with the representations set forth in the notice.
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For any shareholder proposal that is not submitted for inclusion in next
years proxy statement pursuant to SEC Rule 14a-8, but is instead sought to be considered as timely and presented directly at the 2017 Annual Meeting, SEC rules permit management to vote proxies in its discretion if: (1) Ashland receives
written notice of the proposal before the By-law Notice Deadline, and Ashland advises shareholders in the 2017 Annual Meeting Proxy Statement about the nature of the matter and how management intends to vote on such matter; or (2) Ashland does
not receive notice of the proposal prior to the By-law Notice Deadline.
Note that if the reorganization proposal is
approved by shareholders and the Reorganization is consummated, the 2017 Annual Meeting will be the annual meeting of Ashland Global, instead of Ashland, but the same procedures for presenting a proposal as those described above will apply.
Individual shareholders sharing an address with one or more other shareholders may elect to household the mailing
of the proxy statement. This means that only one proxy statement will be sent to that address unless one or more shareholders at that address specifically elect to receive separate mailings. Shareholders who participate in householding will continue
to receive separate proxy cards. Also, householding will not affect dividend check mailings. We will promptly send a separate proxy statement to a shareholder at a shared address on request. Shareholders with a shared address may also request us to
send separate proxy statements in the future, or to send a single copy in the future if we are currently sending multiple copies to the same address.
Requests related to householding should be mailed to Ashland Inc., P.O. Box 391, Covington, KY 41012-0391, Attn: Investor
Relations or by calling (859) 815-3527. If you are a shareholder whose shares are held by a bank, broker or other nominee, you can request information about householding from your bank, broker or other nominee.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Ashland Global filed a registration statement on Form S-4 to register with the SEC the shares of Ashland Global common stock
that our shareholders will receive in connection with the Reorganization if the Reorganization is completed. This proxy statement/prospectus is a part of that registration statement and constitutes a prospectus of Ashland Global and a proxy
statement of Ashland for its Special Meeting.
This proxy statement/prospectus does not contain all of the information we
have included in the registration statement and the accompanying exhibits and schedules in accordance with the rules and regulations of the SEC and we refer you to the omitted information. The statements this proxy statement/prospectus makes
pertaining to the content of any contract, agreement or other document that is an exhibit to the registration statement necessarily are summaries of their material provisions and do not describe all exceptions and qualifications contained in those
contracts, agreements or documents. You should read those contracts, agreements or documents for information that may be important to you. The registration statement, exhibits and schedules are available at the SECs public reference room or
through its website.
We file annual, quarterly and current reports, proxy statements and other information with the SEC
under the Exchange Act. You may read and copy any of this information at the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC
at 1-800-SEC-0330 or 202-942-8090. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information about issuers who file electronically with the SEC. The address of that site is www.sec.gov.
These reports, proxy statements and other information may also be inspected at the offices of the NYSE at 20 Broad Street, New York, New York 10005. General information about us, including our annual reports on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K, as well as any amendments and exhibits to those reports, are available free of charge through our website at www.ashland.com as soon as reasonably practicable after we file them with, or furnish them to, the
SEC. Information on our website is not incorporated into this proxy statement/prospectus or our other securities filings and is not a part of these filings.
The SEC allows us to incorporate by reference into this proxy statement/prospectus information we file with the
SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is deemed to be part of this proxy statement/prospectus except for any information superseded by
information in this proxy statement/prospectus or in any document subsequently filed with the SEC that is also incorporated by reference. This proxy statement/
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prospectus incorporates by reference the documents set forth below that we have previously filed with the SEC. These documents contain important information about us and our financial condition.
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Ashlands Annual Report on Form 10-K for the year ended September 30, 2015;
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Ashlands Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016 and December 31,
2015; and
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Ashlands Proxy Statement on Schedule 14A, filed on December 4, 2015.
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Ashlands Current Reports on Form 8-K, filed October 1, 2015, October 6, 2015, October 9, 2015, November
3, 2015, November 18, 2015, December 28, 2015, February 1, 2016, March 22, 2016, April 13, 2016, May 31, 2016, June 7, 2016, June 20, 2016, July 11, 2016, July 12, 2016, July 13, 2016, July 20, 2016 (two separate Current Reports) and July 26,
2016.
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In addition, all documents filed by us or Ashland Global under Section 13(a), 13(c), 14 or
15(d) of the Exchange Act from the date of this proxy statement/prospectus and prior to the date of the Special Meeting shall also be deemed to be incorporated in this proxy statement/prospectus by reference. These documents include annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, as well as proxy statements.
Following the
Reorganization described in this proxy statement/prospectus, Ashland Global will become subject to the same informational requirements that Ashland is subject to prior to the Reorganization, and will file annual, quarterly and current reports, proxy
statements and other information with the SEC in accordance with the Exchange Act and with the NYSE pursuant to the Exchange Act and NYSE Listing Rules.
You can obtain any documents incorporated by reference, without charge, from Ashland Inc. by calling us at (859) 815-3527
or writing us at the following address:
Ashland Inc.
P.O. Box 391
Covington, KY
41012-0391
Attention: Investor Relations
Exhibits to the filings will not be sent, unless those exhibits have been specifically incorporated by reference in this
prospectus.
If you would like to request documents from us, please do so by August 23, 2016 to receive them before the
Special Meeting. We will send requested documents by first-class mail within one business day after receiving the request.
You should rely only on the information contained or incorporated by reference in this proxy statement/prospectus and the
registration statement of which this proxy statement/prospectus is a part to vote on the proposals. No one has been authorized to provide you with information that is different from what is contained in this proxy statement/prospectus or in the
incorporated documents.
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Ashland is soliciting the proxies to which this proxy statement relates. All costs of soliciting proxies, including the cost
of preparing and mailing the Notice and the proxy statement and any accompanying material, will be borne by Ashland. Expenses associated with this solicitation may also include charges and expenses of banks, brokerage houses and other custodians,
nominees or fiduciaries for forwarding proxies and proxy materials to beneficial owners of shares. Solicitations may be made by mail, telephone, facsimile, electronic means and personal interview, and by officers and employees of Ashland, who will
not be additionally compensated for such activity. Ashland has arranged for the services of Georgeson LLC (Georgeson) to assist in the solicitation of proxies. Georgesons fees will be paid by Ashland and are estimated to be
$17,500, excluding out-of-pocket expenses.
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Annex I
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this
Agreement
), dated as of May 31,
2016, is by and among Ashland Inc., a Kentucky corporation (
Ashland
), Ashland Global Holdings Inc., a Delaware corporation and a direct, wholly owned subsidiary of Ashland (
Ashland Global
), and Ashland Merger
Sub Corp., a Kentucky corporation and a direct, wholly owned subsidiary of Ashland Global (
Merger Sub
).
RECITALS
WHEREAS Ashland Global and Merger Sub are newly formed entities organized for the purpose of participating in the
transactions contemplated by this Agreement;
WHEREAS as of the date hereof, (i) Ashland holds all of the issued and
outstanding shares of common stock of Ashland Global (
Ashland Global Common Stock
) and (ii) Ashland Global holds all of the issued and outstanding shares of common stock of Merger Sub (
Merger Sub Common
Stock
);
WHEREAS the Board of Directors of Ashland has determined that it is advisable and in the best interests
of Ashlands shareholders to reorganize to create a new holding company structure by merging Merger Sub with and into Ashland (the
Merger
), with Ashland being the surviving corporation (sometimes referred to herein as the
Surviving Corporation
), and converting each outstanding share of common stock of Ashland (
Ashland Common Stock
) into one share of Ashland Global Common Stock;
WHEREAS the Board of Directors of Ashland has determined that, among other things, the Merger will help facilitate the
previously-announced plan to pursue the separation of Ashland into two independent, publicly-traded companies (one company comprising Ashlands specialty ingredients and performance materials businesses and the other comprising the Valvoline
business) (the
Separation
);
WHEREAS the Boards of Directors of each of Ashland, Ashland Global and
Merger Sub have approved this Agreement and the Merger, subject to the terms and conditions set forth in this Agreement;
WHEREAS the Board of Directors of Ashland unanimously has determined to submit this Agreement and the Merger for approval by
Ashlands shareholders, in accordance with the provisions of the Kentucky Business Corporation Act (the
KBCA
), at a special meeting of Ashland shareholders;
WHEREAS Ashland Global, as the sole shareholder of Merger Sub, has approved this Agreement and the Merger; and
WHEREAS the parties intend, by executing this Agreement, to adopt a plan of reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended (the
Code
), and to cause the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code or a transfer described in
Section 351(a) of the Code (the
Intended Tax Treatment
).
NOW, THEREFORE, in consideration of the
foregoing and the covenants and agreements contained in this Agreement, and intending to be legally bound hereby, Ashland, Ashland Global and Merger Sub hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1
The Merger.
Upon the terms and subject to the conditions set forth in this Agreement and in accordance with
the applicable provisions of the KBCA, at the Effective Time, Merger Sub will be merged with and into Ashland and the separate existence of Merger Sub will cease. Ashland will continue as the Surviving Corporation as a wholly owned subsidiary of
Ashland Global and will continue to be governed by the laws of the Commonwealth of Kentucky. At the Effective Time, the effect of the Merger will be as provided in Section 271B.11-060 of the KBCA.
SECTION 1.2
Effective Time.
The Merger shall become effective upon the
filing of Articles of Merger with the Secretary of State of the Commonwealth of Kentucky pursuant to Section 271B.11-050 of the KBCA or at such later date as may be specified therein (the
Effective Time
).
SECTION 1.3
Organizational Documents of the Surviving Corporation
. From and after the Effective Time, the Fourth
Restated Articles of Incorporation of Ashland, as in effect immediately prior to the Effective Time, shall continue in full force and effect as the Fourth Restated Articles of Incorporation of the Surviving Corporation until thereafter amended as
provided therein or by applicable law. From and after the Effective Time, the Bylaws of Ashland, as in effect immediately prior to the Effective Time, shall continue in full force and effect as the Bylaws of the Surviving Corporation until
thereafter amended as provided therein or by applicable law.
SECTION 1.4
Directors and Officers of the Surviving
Corporation.
The directors and officers of Merger Sub immediately prior to the Effective Time shall be the initial directors and officers of the Surviving Corporation and shall hold office from the Effective Time until their successors are duly
elected or appointed and qualified in the manner provided in the Bylaws of the Surviving Corporation or as otherwise provided by law.
SECTION 1.5
Directors and Officers of Ashland Global.
Prior to the Effective Time, Ashland, in its capacity as the sole
shareholder of Ashland Global, shall take or cause to be taken all such actions as are necessary to cause those persons serving as the directors and officers of Ashland immediately prior to the Effective Time to be elected or appointed as the
directors and officers of Ashland Global, each such person to have the same position(s) with Ashland Global (and the same committee memberships in the case of directors) as he or she held with Ashland immediately prior to the Effective Time, with
the directors serving until the earlier of the next meeting of the Ashland Global shareholders at which an election of directors is held and until their successors are elected or appointed or their earlier death, resignation or removal.
SECTION 1.6
Additional Actions.
Subject to the terms and conditions of this Agreement, the parties hereto shall take
all such reasonable and lawful action as may be necessary or appropriate in order to effectuate the Merger and to comply with the requirements of the KBCA. If, at any time after the Effective Time, the Surviving Corporation shall consider or be
advised that any other actions or things are necessary or desirable in connection with the Merger or to otherwise carry out this Agreement, the officers of the Surviving Corporation shall be authorized to take and do, in the name and on behalf of
each of Merger Sub and Ashland, all such other actions and things as may be necessary or desirable to carry out this Agreement.
SECTION 1.7
Effect on Capital Stock.
At the Effective Time, by virtue of the Merger and without any action on the part
of Ashland, Ashland Global, Merger Sub or the holders of any securities of Ashland, Ashland Global or Merger Sub:
(a)
Conversion of Ashland Common Stock.
Each share of Ashland Common Stock issued and outstanding immediately prior to the Effective Time (other than shares to be cancelled pursuant to Section 1.7(b) and other than Dissenting Shares (as
defined below)) shall automatically be converted into one duly issued, fully paid and nonassessable share of Ashland Global Common Stock.
(b)
Cancellation of Treasury Stock.
Each share of Ashland Common Stock held in the treasury of Ashland immediately
prior to the Effective Time shall automatically be cancelled and retired and shall cease to exist.
(c)
Conversion of
Merger Sub Common Stock.
Each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall automatically be converted into one share of common stock of the Surviving Corporation.
(d)
Cancellation of Ashland Global Common Stock.
Each share of Ashland Global Common Stock issued and outstanding
immediately prior to the Effective Time shall automatically be cancelled and retired and shall cease to exist.
SECTION
1.8
Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the contrary, shares of Ashland Common
Stock issued and outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger or consented thereto in writing and who has otherwise satisfied the requirements of Section 271B.13-210 of the
KBCA (the
Dissenting Shares
) shall not be converted into shares of Ashland Global Common Stock and holders of such Dissenting Shares will be entitled only to receive payment of the fair value of such Dissenting Shares, plus
accrued interest, in accordance with the provisions of Section 271B.13-250
Annex I-2
of the KBCA, unless such holder fails to perfect, withdraws or otherwise loses the right to dissent. If, after the Effective Time, such holder fails to perfect, withdraws or otherwise loses the
right to dissent, such shares shall be treated as if they had been converted as of the Effective Time into shares of Ashland Global Common Stock pursuant to Section 1.7, without interest.
(b) No later than ten (10) days after the date that Ashlands shareholders approve the Merger, Ashland or the
Surviving Corporation shall notify each holder of Dissenting Shares of: (i) the approval of the Merger, (ii) the availability of dissenters rights for such shares and (iii) such additional matters as the Surviving Corporation
deems appropriate and as required by
Section 271B.13-220
of the KBCA. The Surviving Corporation shall include in such notice a copy of Chapter 271B.13 of the KBCA.
SECTION 1.9
No Required Surrender of Stock Certificates.
(a) At and after the Effective Time, (i) each certificate which, immediately prior to the Effective Time, represented
outstanding shares of Ashland Common Stock (an
Ashland Certificate
) shall be deemed for all purposes to evidence ownership of, and to represent, the number of shares of Ashland Global Common Stock into which the shares of Ashland
Common Stock represented by such Ashland Certificate immediately prior to the Effective Time have been converted pursuant to Section 1.7 and (ii) where no Ashland Certificate has been issued in the name of a holder of shares of Ashland
Common Stock, a book-entry (i.e., a computerized or manual entry) shall be made in the shareholder records of Ashland Global to evidence the issuance to such holder of the number of uncertificated shares of Ashland Global Common Stock
into which such shares of Ashland Common Stock have been converted pursuant to Section 1.7.
(b) The registered
holder of any Ashland Certificate outstanding immediately prior to the Effective Time, as such holder appears in the books and records of Ashland, or of the transfer agent in respect of the shares of Ashland Common Stock, immediately prior to the
Effective Time, shall, until such Ashland Certificate is surrendered for transfer or exchange, have and be entitled to exercise any voting and other rights with respect to, and to receive any dividends or other distributions on, the shares of
Ashland Global Common Stock into which the shares of Ashland Common Stock represented by any such Ashland Certificate have been converted pursuant to Section 1.7, subject to the KBCA and the Delaware General Corporation Law, each as applicable.
(c) If any Ashland Certificate shall have been lost, stolen or destroyed, Ashland Global may, in its discretion and as a
condition to the issuance of any Ashland Global Certificate or uncertificated shares of Ashland Global Common Stock in book-entry form, require the owner of such lost, stolen or destroyed Ashland Certificate to post a bond, in such reasonable and
customary amount as Ashland Global may direct, as indemnity against any claim that may be made against Ashland Global or the Surviving Corporation with respect to such Ashland Certificate.
(d) If any Ashland Global Certificate is to be issued in a name other than that in which the Ashland Certificate surrendered
for exchange is registered, such exchange shall be conditioned upon (i) the Ashland Certificate so surrendered being properly endorsed or otherwise in proper form for transfer and (ii) the person requesting such exchange either paying any
transfer or other taxes required by reason of the issuance of the Ashland Global Certificate in a name other than that of the registered holder of the Ashland Certificate surrendered, or establishing to the satisfaction of Ashland Global, or the
transfer agent in respect of the Ashland Global Common Stock, that such tax has been paid or is not applicable.
SECTION
1.10
Stock Transfer Books.
At the Effective Time, the stock transfer books of Ashland shall be closed and thereafter there shall be no further registration of transfers of shares of Ashland Common Stock theretofore outstanding on the records
of Ashland.
SECTION 1.11
Plan of Reorganization.
This Agreement is intended to constitute a plan of
reorganization within the meaning of Treasury Regulations Section 1.368-2(g). Each party hereto shall use its reasonable best efforts to cause the Merger to qualify, and will not knowingly take any actions or cause any actions to be taken
which could reasonably be expected to prevent the Merger from qualifying, as a reorganization within the meaning of Section 368(a) of the Code, and a transfer described in Section 351 of the Code.
SECTION 1.12
Successor Issuer.
It is the intent of the parties hereto that Ashland Global be deemed a successor
issuer of Ashland in accordance with Rule 12g-3 under the Securities Exchange Act of 1934, as amended (the
Exchange Act
), and Rule 414 under the Securities Act of 1933, as amended (the
Securities
Act
). At or after the Effective Time, Ashland Global shall file (i) an appropriate report on Form 8-K describing the Merger and (ii) appropriate pre-effective and/or post-effective amendments, as applicable, to any registration
statements of Ashland on Form S-8.
Annex I-3
ARTICLE II
ACTIONS TO BE TAKEN IN CONNECTION WITH THE MERGER
SECTION 2.1
Assumption of Ashland Plans and Awards.
At the Effective Time, Ashland Global shall assume each Ashland
equity incentive and deferred compensation plan (collectively, the
Ashland Plans
), including (i) all unexercised and unexpired options to purchase shares of Ashland Common Stock (
Ashland Options
) and all
stock appreciation rights, performance share awards, restricted share awards, restricted stock equivalents, restricted stock units, common stock units, deferred stock units and other incentive awards and deferrals covering shares of Ashland Common
Stock, whether or not vested (collectively,
Ashland Awards
) that are then outstanding under each such Ashland Plan and (ii) the remaining unallocated reserve of shares of Ashland Common Stock issuable under each such Ashland
Plan. At the Effective Time, the reserve of shares of Ashland Common Stock under each such Ashland Plan, whether allocated to outstanding Ashland Awards or unallocated at that time, shall be converted on a one-share-for-one-share basis into a
reserve of shares of Ashland Global Common Stock, and each Ashland Award assumed by Ashland Global shall continue to have, and be subject to, the same terms and conditions as set forth in the applicable Ashland Plan and the agreement(s) evidencing
each such award as in effect immediately prior to the Effective Time (including, without limitation, the vesting schedule and applicable issuance dates (without acceleration thereof by virtue of the Merger and the transactions contemplated hereby),
the per share exercise price, the expiration date and other applicable termination provisions and the tax withholding procedures), except that each Ashland stock appreciation right and Ashland Option will be exercisable (or will become exercisable
in accordance with its terms) for, and each other Ashland Award shall be denominated with reference to and shall be issuable as to, that number of shares of Ashland Global Common Stock equal to the number of shares of Ashland Common Stock that were
subject to each such Ashland stock appreciation right and Ashland Option and other Ashland Award immediately prior to the Effective Time.
SECTION 2.2
Assignment and Assumption of Agreements.
Effective as of the Effective Time, Ashland hereby assigns to
Ashland Global, and Ashland Global hereby assumes and agrees to perform, all obligations of Ashland pursuant to the Ashland Plans and each stock option agreement, stock appreciation right award agreement, performance unit (LTIP) award agreement,
restricted stock award agreement, restricted stock equivalent award agreement, restricted stock unit award agreement and performance-based restricted stock award agreement evidencing an outstanding Ashland Award under the Ashland Plans. Effective as
of the Effective Time, Ashland Global shall become the successor issuer of securities under the Ashland Plans and shall, as soon as practicable following the Effective Time, file a post-effective amendment to each existing S-8 registration statement
covering the Ashland Plans, pursuant to which Ashland Global as successor to Ashland shall expressly adopt such S-8 registration statements as its own in accordance with Rule 414 issued under the Securities Act.
SECTION 2.3
Non-U.S Jurisdictions.
In the event that Ashland and Ashland Global are not able to assign or assume any
Ashland Plans, Ashland Awards or applicable award agreements, in each case as contemplated by Sections 2.1 and 2.2, due to a conflict with applicable law or regulation in any non-U.S. jurisdiction, then both parties shall use their reasonable best
efforts to enter into any lawful arrangement substantially consistent with the intent of Sections 2.1 and 2.2 or to otherwise cooperate in good faith to preserve the benefits and obligations of such Ashland Plans, Ashland Awards and applicable award
agreements after giving effect to the Merger.
SECTION 2.4
Reservation of Shares.
On or prior to the Effective
Time, Ashland Global shall reserve sufficient shares of Ashland Global Common Stock to provide for the issuance of Ashland Global Common Stock upon the exercise or other settlement of all Ashland Awards and to cover any additional shares of Ashland
Global Common Stock that may become issuable under future awards made with respect to the remaining share reserves under the assumed Ashland Plans that are, in accordance with the foregoing provisions of this Agreement, converted into reserves of
shares of Ashland Global Common Stock.
SECTION 2.5
Registration Statement; Proxy/Prospectus.
Promptly following
the execution of this Agreement, Ashland shall prepare and file with the Securities and Exchange Commission (the
SEC
) a proxy statement in preliminary form relating to the Shareholders Meeting (as defined below) (together
with any amendments thereof or supplements thereto, the
Proxy Statement
) and Ashland Global shall prepare and file with the SEC a registration statement on Form S-4 (together with all amendments thereto, the
Registration
Statement
and the prospectus contained in the Registration Statement together with the Proxy Statement, the
Proxy/Prospectus
), in connection with the registration under the Securities Act of the shares of Ashland Global
Common Stock to be issued to the shareholders of Ashland pursuant to the Merger. Each of Ashland Global and Ashland shall use its reasonable best efforts to cause the Registration Statement to become effective and the Proxy/Prospectus to be cleared
by the SEC as promptly as practicable,
Annex I-4
and, prior to the effective date of the Registration Statement, Ashland Global shall take all actions reasonably required under any applicable federal securities laws or state blue sky laws in
connection with the issuance of shares of Ashland Global Common Stock pursuant to the Merger. As promptly as reasonably practicable after the Registration Statement shall have become effective and the Proxy/Prospectus shall have been cleared by the
SEC, Ashland shall mail or cause to be mailed or otherwise make available in accordance with the Securities Act and the Exchange Act, the Proxy/Prospectus to its shareholders;
provided
,
however
, that the parties shall consult and
cooperate with each other in determining the appropriate time for mailing or otherwise making available to Ashlands shareholders the Proxy/Prospectus in light of the date set for the Shareholders Meeting.
SECTION 2.6
Meeting of Ashland Shareholders; Board Recommendation.
Ashland shall take all action necessary in
accordance with the KBCA and its governing documents to call, hold and convene a meeting of its shareholders to consider the approval of this Agreement and the Merger (the
Shareholders Meeting
). Ashland shall use its
reasonable best efforts to solicit from its shareholders proxies in favor of the approval of this Agreement and the Merger. Ashland may adjourn or postpone the Shareholders Meeting to the extent necessary to ensure that any necessary
supplement or amendment to the Proxy/Prospectus is provided to its shareholders in advance of any vote on this Agreement and the Merger if as of the time for which the Shareholders Meeting is originally scheduled (as set forth in the
Proxy/Prospectus), there are insufficient shares of Ashland Common Stock voting in favor of the approval of this Agreement and the Merger or represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such
Shareholders Meeting.
SECTION 2.7
Section 16 Matters.
Prior to the Effective Time, the Boards of
Directors of Ashland and Ashland Global or an appropriate committee of non-employee directors (as such term is defined for purposes of Rule 16b-3 promulgated under the Exchange Act) shall adopt resolutions consistent with the interpretive guidance
of the SEC so that the disposition by any officer or director of Ashland or Ashland Global who is a covered person for purposes of Section 16(a) of the Exchange Act of shares of Ashland Common Stock (or derivative securities) and the receipt of
shares of Ashland Global Common Stock (or derivative securities) in exchange therefor by virtue of this Agreement and the Merger will be an exempt transaction for purposes of Section 16(b) of the Exchange Act.
SECTION 2.8
Other Employee Benefit Plans and Arrangements.
Ashland Global shall assume each of Ashlands other
employee benefit plans and arrangements and the obligations of Ashland thereunder upon the same terms and conditions as set forth in such plans and arrangements as in effect at the Effective Time.
ARTICLE III
CONDITIONS OF
MERGER
SECTION 3.1
Conditions Precedent.
The obligations of the parties to this Agreement to consummate the
Merger and the transactions contemplated by this Agreement shall be subject to the satisfaction or waiver by the parties hereto at or prior to the Effective Time of each of the following conditions:
(a) The Registration Statement shall have been declared effective by the SEC under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have been issued by the SEC and no proceeding for that purpose shall have been initiated or, to the knowledge of Ashland Global or Ashland, threatened by the SEC and not concluded or
withdrawn. No similar proceeding with respect to the Proxy/Prospectus shall have been initiated or, to the knowledge of Ashland Global or Ashland, threatened by the SEC and not concluded or withdrawn.
(b) This Agreement and the Merger shall have been approved by the affirmative vote of at least a majority of all issued and
outstanding shares of Ashland Common Stock in accordance with the KBCA.
(c) The Ashland Global Common Stock to be issued
pursuant to the Merger shall have been approved for listing by the New York Stock Exchange (the
NYSE
).
(d) No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order that is in
effect shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality that prohibits or makes illegal the consummation of the Merger or the transactions contemplated hereby.
Annex I-5
(e) Ashland shall have received a legal opinion of Cravath, Swaine &
Moore LLP in form and substance reasonably satisfactory to it indicating the Merger should qualify for the Intended Tax Treatment.
(f) All material approvals, licenses and certifications from, and notifications and filings to, governmental entities and
non-governmental third parties shall have been obtained or made, as applicable.
(g) Ashland shall have received relief
from the SEC confirming that Ashland Global shall be deemed a successor issuer of Ashland in accordance with Rule 12g-3 under the Exchange Act and Rule 414 under the Securities Act and confirming such other matters as may be requested by
Ashland.
ARTICLE IV
COVENANTS
SECTION 4.1
Listing of Ashland Global Common Stock.
Ashland and Ashland Global shall use their reasonable best efforts
to obtain, at or before the Effective Time, confirmation of listing on the NYSE of the Ashland Global Common Stock issuable pursuant to the Merger.
SECTION 4.2
Expenses.
Ashland and Ashland Global shall pay their own expenses in connection with the transactions
contemplated by this Agreement.
SECTION 4.3
Activities of Ashland Global and Merger Sub.
Prior to the Effective
Time, Ashland Global and Merger Sub shall not conduct any business activities and shall not conduct any other activities except as necessary to effectuate the transactions contemplated by this Agreement.
ARTICLE V
TERMINATION AND
AMENDMENT
SECTION 5.1
Termination.
This Agreement may be terminated and the Merger contemplated hereby may be
abandoned at any time prior to the Effective Time by action of the Board of Directors of Ashland if such Board of Directors should determine that, for any reason, the completion of the transactions provided for herein would be inadvisable or not in
the best interest of Ashland or its shareholders. In the event of such termination and abandonment, this Agreement shall become void and none of Ashland, Ashland Global or Merger Sub nor their respective shareholders, members, directors or officers
shall have any liability with respect to such termination and abandonment.
SECTION 5.2
Amendment.
At any time
prior to the Effective Time, this Agreement may, to the extent permitted by the KBCA, be supplemented, amended or modified by the mutual written consent of the parties to this Agreement.
ARTICLE VI
MISCELLANEOUS
PROVISIONS
SECTION 6.1
Governing Law.
This Agreement shall be governed by and construed and enforced under the
laws of the Commonwealth of Kentucky.
SECTION 6.2
Counterparts.
This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but all of which shall constitute one and the same agreement.
Annex I-6
SECTION 6.3
Entire Agreement.
This Agreement constitutes the entire
agreement, and supersedes all other agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.
SECTION 6.4
Severability.
The provisions of this Agreement are severable, and in the event any provision hereof is
determined to be invalid or unenforceable, such invalidity or unenforceability shall not in any way affect the validity or enforceability of the remaining provisions hereof.
SECTION 6.5
No Third-Party Beneficiaries.
Nothing contained in this Agreement is intended by the parties hereto to
confer upon any person other than the parties hereto any rights or remedies hereunder.
SECTION 6.6
Tax Matters.
Each of Ashland and Ashland Global will comply with the recordkeeping and information reporting requirements of the Code that are imposed as a result of the transactions contemplated hereby, and will provide information reporting statements to
holders of shares of Ashland Common Stock at the time and in the manner prescribed by the Code and applicable Treasury Regulations.
[Signature page follows]
Annex I-7
IN WITNESS WHEREOF, Ashland, Ashland Global and Merger Sub have caused this
Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
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ASHLAND INC.
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By:
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/s/Peter J. Ganz
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Name:
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Peter J. Ganz
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Title:
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Senior Vice President, General Counsel and Secretary, Chief Compliance Officer
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ASHLAND GLOBAL HOLDINGS INC.
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By:
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/s/Peter J. Ganz
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Name:
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Peter J. Ganz
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Title:
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Senior Vice President, General Counsel and Secretary, Chief Compliance Officer
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ASHLAND MERGER SUB CORP.
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By:
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/s/Michael S. Roe
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Name:
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Michael S. Roe
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Title:
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President
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Annex I-8
Annex II
FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF ASHLAND GLOBAL
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ASHLAND GLOBAL
HOLDINGS INC.
ASHLAND GLOBAL HOLDINGS INC., a corporation organized and existing under the laws of the State of
Delaware, DOES HEREBY CERTIFY AS FOLLOWS:
1. The name of the corporation is Ashland Global Holdings Inc. The original
Certificate of Incorporation of the corporation was filed with the Secretary of State of the State of Delaware on May 6, 2016 (as amended and in effect immediately prior to the adoption and effectiveness hereof, the
Original
Certificate of Incorporation
), and the name under which the corporation was originally incorporated is
Ashland Global Holdings Inc.
2. This Amended and Restated Certificate of Incorporation (this
Certificate
) has been duly adopted in
accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the
DGCL
) and shall be effective as of [Time] Eastern [Standard/Daylight] Time on [Date], 2016.
3. The Original Certificate of Incorporation is hereby amended and restated to read in its entirety as follows:
ARTICLE I
NAME
SECTION 1.01. The name of the corporation (hereinafter called the
Corporation
) is Ashland Global Holdings
Inc.
ARTICLE II
REGISTERED OFFICE; REGISTERED AGENT
SECTION 2.01. The address of the Corporations registered office in the State of Delaware is [Street Address], City of
[City], County of [County], Delaware [Zip Code]. The name of the Corporations registered agent at such address is [Registered Agent].
ARTICLE III
PURPOSE
SECTION 3.01. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be
organized under the DGCL.
ARTICLE IV
CAPITAL STOCK
SECTION 4.01.
Authorized Capital Stock.
The total number of shares of all classes of stock which the Corporation shall
have authority to issue is 230,000,000 shares, consisting of (1) 30,000,000 shares of Preferred Stock, having no par value (
Preferred Stock
), and (2) 200,000,000 shares of Common Stock, par value $0.01 per share
(
Common Stock
).
The number of authorized shares of either the Preferred Stock or the Common Stock
may be increased or decreased (but not below the number of shares thereof then outstanding) by the authorization of the Board of Directors of the Corporation (the Board) and the affirmative vote of the holders of a majority in voting
power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of either the Preferred Stock or the Common Stock
voting separately as a class shall be required therefor.
SECTION 4.02.
Preferred Stock.
(a) The Board is
hereby expressly authorized, by resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the
designation of such series, the voting powers (if any) of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the
shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding.
(b) Except as otherwise required by law, holders of a series of Preferred
Stock, as such, shall be entitled only to such voting rights, if any, as shall expressly be granted to such holders by this Certificate (including any Certificate of Designation relating to such series).
SECTION 4.03.
Common Stock.
(a)
Ranking
. The voting, dividend and liquidation rights of the holders of the
Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board upon any issuance of the Preferred Stock of any series.
(b)
Voting Rights
. Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock
held of record by such holder on all matters on which stockholders generally are entitled to vote;
provided
,
however
, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any
amendment to this Certificate (including any Certificate of Designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are
entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate (including any Certificate of Designation relating to any series of Preferred Stock) or pursuant to the DGCL.
(c)
Dividends
. Subject to applicable law and the rights, if any, of the holders of any outstanding series of
Preferred Stock, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board in its discretion shall determine.
(d)
Liquidation and Other Events
. Upon the dissolution, liquidation or winding up of the Corporation, subject to the
rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of the Common Stock, as such, shall be entitled to receive the assets of the Corporation available for distribution to its stockholders ratably in proportion to
the number of shares held by them.
ARTICLE V
BOARD OF DIRECTORS
SECTION 5.01.
Size of Board.
The business and affairs of the Corporation shall be managed by or under the direction of
the Board. Except as otherwise fixed pursuant to the terms of any outstanding series of Preferred Stock pursuant to this Certificate (including any Certificate of Designation relating to such series of Preferred Stock), the number of directors of
the Corporation shall be fixed from time to time by or pursuant to the By-laws of the Corporation (the
By-laws
).
SECTION 5.02.
Election of Directors.
(a) The directors, other than those who may be elected by the holders of any
series of Preferred Stock voting separately pursuant to this Certificate (including any Certificate of Designation relating to such series of Preferred Stock), shall be elected by the stockholders entitled to vote thereon at each annual meeting of
the stockholders and shall hold office until the next annual meeting of stockholders and until each of their successors shall have been elected and qualified. The election of directors need not be by written ballot. No decrease in the number of
directors constituting the Board shall shorten the term of any incumbent director.
Annex II-2
(b) The vote required for the election of directors by stockholders, other than
in a contested election of directors, shall be the affirmative vote of a majority of the votes cast with respect to a director nominee. For purposes of this paragraph, a majority of the votes cast shall mean that the number of votes cast
for a director must exceed the number of votes cast against that director. In any contested election of directors, the nominees receiving the greatest number of the votes cast for their election, up to the number of directors
to be elected in such election, shall be deemed elected. Abstentions and broker non-votes will not count as votes either for or against a nominee. Any incumbent director who fails to receive a majority of
the votes cast in an uncontested election shall submit an offer to resign from the Board no later than two weeks after the certification by the Corporation of the voting results. An uncontested election is one in which the number of individuals who
have been nominated for election as a director is equal to, or less than, the number of directors constituting the Whole Board (as defined below). A contested election is one in which the number of persons nominated exceeds the number of directors
to be elected as of the date that is ten days prior to the date that the Corporation first mails its notice of meeting for such meeting to the stockholders. The term
Whole Board
shall mean the total number of authorized directors,
whether or not there exist any vacancies on the Board.
SECTION 5.03.
Vacancies and Newly Created Directorships.
Except as otherwise provided for or fixed by or pursuant to the provisions of this Certificate relating to the rights of the holders of any outstanding series of Preferred Stock (including any Certificate of Designation relating to such series of
Preferred Stock), newly created directorships resulting from any increase in the number of directors may be filled by the Board, or as otherwise provided in the By-laws, and any vacancies on the Board resulting from death, resignation, removal or
other cause shall only be filled by the Board, and not by the stockholders, by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board, or by a sole remaining director, or as
otherwise provided in the By-laws. Any director elected in accordance with the preceding sentence of this Section 5.03 shall hold office until the next annual meeting of stockholders and until such directors successor shall have been
elected and qualified.
ARTICLE VI
STOCKHOLDERS
SECTION 6.01.
Action by Unanimous Written Consent.
Subject to the rights of the holders of any outstanding series of
Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation may be effected by the written consent of the stockholders of the Corporation in lieu of a duly called annual or special meeting of stockholders of
the Corporation,
provided
that such written consent is unanimously granted by the holders of 100% of voting power of the voting stock of the Corporation, voting together as a single class, that would be entitled to vote on such action at a
duly called annual or special meeting of stockholders of the Corporation.
ARTICLE VII
ADOPTION, AMENDMENT OR REPEAL OF BY-LAWS
SECTION 7.01.
Board of Directors.
In furtherance and not in limitation of the powers conferred upon it by law, the
Board is expressly authorized to adopt, repeal, alter or amend the By-laws, by the vote of a majority of the entire Board or such greater vote as shall be specified in the By-laws, that the Board may deem necessary or desirable for the efficient
conduct of the affairs of Corporation, including, but not limited to, provisions governing the conduct of, and the matters which may properly be brought before, annual or special meetings of the stockholders and provisions specifying the manner and
extent to which prior notice shall be given of the submission of proposals to be considered at any such meeting or of nominations for election of directors to be held at any such meeting.
SECTION 7.02.
Stockholders.
The stockholders shall also have power to adopt, repeal, alter or amend the By-laws;
provided, however, that in addition to any requirements of law and any other provision of this Certificate (and notwithstanding the fact that a lesser percentage may be specified by law, this Certificate or the Bylaws), the affirmative vote of the
holders of at least 80% of the voting power of the then outstanding voting stock of the Corporation, voting together as a single class, shall be required for stockholders to adopt, amend, alter or repeal any provision of the By-laws. As used in this
Certificate, voting stock shall mean shares of capital stock of the Corporation entitled to vote generally in an election of directors.
Annex II-3
ARTICLE VIII
AMENDMENTS
SECTION 8.01. The Corporation reserves the right to amend, alter, adopt or repeal any provision contained in this Certificate,
in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are subject to this reservation. Notwithstanding anything contained in this Certificate to the contrary (and in addition to any vote required by
law), the affirmative vote of the holders of at least 80% of the voting power of the then outstanding voting stock of the Corporation, voting together as a single class, shall be required to amend, alter, change, or repeal or to adopt any provision
inconsistent with Article V, Article VI, Article VII and this Article VIII.
ARTICLE IX
LIMITATION ON DIRECTOR LIABILITY; INDEMNIFICATION
SECTION 9.01.
Limitation on Director Liability.
To the fullest extent that the DGCL or any other law of the State of
Delaware as it exists or as it may hereafter be amended permits, the limitation or elimination of the liability of directors, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director.
SECTION 9.02.
Indemnification.
To the fullest extent that the DGCL or any other law
of the State of Delaware as it exists or as it may hereafter be amended permits, the Corporation may provide indemnification of (and advancement of expenses to) its current and former directors, officers and agents (and any other persons to which
the DGCL permits the Corporation to provide indemnification) through By-law provisions, agreements with such agents or other persons, votes of stockholders or disinterested directors or otherwise.
SECTION 9.03.
Effect of Amendment or Repeal.
No amendment to or repeal of any Section of this Article IX, nor the
adoption of any provision of this Certificate inconsistent with this Article IX, shall eliminate or reduce the effect of this Article IX in respect of any matter occurring, or any action or proceeding accruing or arising, prior to such amendment,
repeal or adoption of an inconsistent provision. This Article IX is not intended to eliminate or limit any protection otherwise available to the directors or officers of the Corporation.
Annex II-4
Annex III
FORM OF AMENDED AND RESTATED BY-LAWS OF ASHLAND GLOBAL
BY-LAWS
OF
ASHLAND GLOBAL HOLDINGS INC.
Amended and restated as of [DATE], 2016
ARTICLE I
Offices
SECTION 1.01.
Registered Office.
The registered office of Ashland Global Holdings Inc. (hereinafter called the
Corporation
) in the State of Delaware shall be at [Street Address], City of [City], County of [County], Delaware [Zip Code], and the registered agent shall be [Registered Agent], or such other office or agent as the Board of
Directors of the Corporation (the
Board
) shall from time to time select.
SECTION 1.02.
Other
Offices.
The Corporation may also have an office or offices, and keep the books and records of the Corporation, except as may otherwise be required by law, at such other place or places, either within or outside of the State of Delaware, as the
Board may from time to time determine or the business of the Corporation may require.
ARTICLE II
Meetings of Stockholders
SECTION 2.01.
Place of Meeting.
All meetings of the stockholders of the Corporation (the
stockholders
) shall be held at a place, either within or outside of the State of Delaware, to be determined by the Board. If no designation is made by the Board, the place of meeting shall be the principal executive offices of the
Corporation. The Board may, in its sole discretion, determine that the meetings shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the General Corporation Law of
the State of Delaware (the
DGCL
) (or any successor provision thereto).
SECTION 2.02.
Annual
Meetings.
The annual meeting of the stockholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on such date and at such time as shall from time to time be fixed
by the Board. Any previously scheduled annual meeting of the stockholders may be postponed by action of the Board taken prior to the time previously scheduled for such annual meeting of the stockholders.
SECTION 2.03.
Special Meetings.
Except as otherwise required by law or the Certificate of Incorporation of the
Corporation (the
Certificate
), and subject to the rights of the holders of any outstanding series of preferred stock (the
Preferred Stock
), special meetings of the stockholders for any purpose or purposes may be
called by the Chairman of the Board, the President of the Corporation ( the President) or a majority of the Board. Only such business as is specified in the Corporations notice of any special meeting of stockholders shall come
before such meeting. A special meeting shall be held at such place, if any, and on such date and at such time as shall be fixed by the Board.
SECTION 2.04.
Notice of Meetings.
(a) Except as otherwise provided by law, notice of each meeting of the
stockholders, whether annual or special, shall be given by the Corporation to each stockholder of record entitled to notice of the meeting not less than 10 days nor more than 60 days before the date of the meeting. If mailed, such notice shall be
deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholders address as it appears on the records of the Corporation. Each such notice shall state the place, if any, date and hour of
the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if
such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.
(b) Notice of adjournment of a meeting of the stockholders need not be given if
the place, if any, date and hour to which it is adjourned, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, are announced at such meeting, unless
the adjournment is for more than 30 days or, after adjournment, a new record date is fixed for the adjourned meeting. If the adjournment is for more than 30 days, notice of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting. If after adjournment a new record date is fixed for the adjourned meeting, the Board shall fix a new record date for notice of each adjourned meeting in accordance with the DGCL and notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at such meeting. Such further notice shall be given as may be required by law.
SECTION 2.05.
Quorum.
Except as otherwise required by law, the Certificate or these by-laws of the Corporation
(By-laws), the holders of a majority of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereat, present in person or by proxy, shall constitute a quorum at any meeting of the stockholders;
provided
,
however
, that in the case of any vote to be taken by classes or series, the holders of a majority of the votes entitled to be cast by the stockholders of a particular class or series, present in person or by proxy, shall
constitute a quorum of such class or series. To the fullest extent permitted by law, the stockholders present at a duly organized meeting may continue to transact any business for which a quorum existed at the commencement of such meeting until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
SECTION 2.06.
Adjournments.
The chairman of the meeting or the stockholders, by the affirmative vote of the holders of a majority of the voting power of the shares of capital stock entitled to vote thereat, who are present in person or by proxy, may
adjourn the meeting from time to time whether or not a quorum is present (or, in the case of specified business to be voted on by a class or series, the chairman of the meeting or the stockholders, by the affirmative vote of the holders of a
majority of the voting power of the outstanding shares of such class or series so represented, may adjourn the meeting with respect to such specified business). At any such adjourned meeting at which a quorum may be present, any business may be
transacted which might have been transacted at the meeting as originally called.
SECTION 2.07.
Order of Business;
Stockholder Proposals.
(a) At each meeting of the stockholders, the Chairman of the Board or, in the absence of the Chairman of the Board, the President or, in the absence of the Chairman of the Board and the President, such person as shall
be selected by the Board or the executive committee of the Board shall act as chairman of the meeting. The order of business at each such meeting shall be as determined by the chairman of the meeting. The chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the
maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof and the opening and closing of
the voting polls.
(b) At any annual meeting of the stockholders, only such business shall be conducted as shall have been
brought before the annual meeting (i) by or at the direction of the chairman of the meeting or (ii) by any stockholder who is a holder of record at the time of the giving of the notice provided for in this Section 2.07, who is
entitled to vote at the meeting and who complies with the procedures set forth in this Section 2.07.
(c) For
business properly to be brought before an annual meeting of stockholders by a stockholder, the stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation (the
Secretary
). To be
timely, a stockholders notice must be delivered to or mailed and received by the Secretary at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the date of the
immediately preceding annual meeting;
provided
,
however
, that in the event that the date of the annual meeting is more than 30 days earlier or more than 60 days later than such anniversary date, notice by the stockholder to be timely
must be so delivered or received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting and the 10th day following the day on which public
announcement of the date of such meeting is first made. In no event shall an adjournment or postponement of an annual meeting commence a new time period for the giving of a stockholders notice as described in this Section 2.07. As used in
these By-laws,
public announcement
shall mean disclosure (i) in a press release reported by the Dow Jones Newswire, Business Wire, Reuters Information Service or any similar or successor news wire service or (ii) in a
communication distributed generally to stockholders and in a document publicly filed by the Corporation with the Securities and Exchange Commission (the
SEC
) pursuant to Sections 13, 14 or 15(d) of the Securities Exchange Act of
1934, as amended, or any successor provisions thereto.
Annex III-2
(d) To be in proper written form, a stockholders notice to the Secretary
shall set forth in writing as to each matter the stockholder proposes to bring before the annual meeting:
(1) (the name and address of the each stockholder proposing such business, as they appear on the
Corporations books;
(2) as to each stockholder proposing such business, the name and address of
(i) any other beneficial owner of stock of the Corporation that are owned by such stockholder and (ii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control
with, the stockholder or such beneficial owner (each, a
Stockholder Associated Person
);
(3) as to each stockholder proposing such business and any Stockholder Associated Person, (i) the class or
series and number of shares of stock directly or indirectly held of record and beneficially by the stockholder proposing such business or Stockholder Associated Person, (ii) the date such shares of stock were acquired, (iii) a description
of any agreement, arrangement or understanding, direct or indirect, with respect to such business between or among the stockholder proposing such business, any Stockholder Associated Person or any others (including their names) acting in concert
with any of the foregoing, (iv) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions and borrowed or loaned shares) that has been entered
into, directly or indirectly, as of the date of such stockholders notice by, or on behalf of, the stockholder proposing such business or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or
benefit of share price changes for, or increase or decrease the voting power of the stockholder proposing such business or any Stockholder Associated Person with respect to shares of stock of the Corporation (a
Derivative
),
(v) a description in reasonable detail of any proxy (including revocable proxies), contract, arrangement, understanding or other relationship pursuant to which the stockholder proposing such business or Stockholder Associated Person has a right
to vote any shares of stock of the Corporation, (vi) any rights to dividends on the stock of the Corporation owned beneficially by the stockholder proposing such business or Stockholder Associated Person that are separated or separable from the
underlying stock of the Corporation, (vii) any proportionate interest in stock of the Corporation or Derivatives held, directly or indirectly, by a general or limited partnership in which the stockholder proposing such business or Stockholder
Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (viii) any performance-related fees (other than an asset-based fee) that the stockholder proposing such business or
Stockholder Associated Person is entitled to based on any increase or decrease in the value of stock of the Corporation or Derivatives thereof, if any, as of the date of such notice (the information specified in Section 2.07(d)(1) to
(3) is referred to herein as
Stockholder Information
);
(4) a representation that
each such stockholder is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such business;
(5) a brief description of the business desired to be brought before the annual meeting, the text of the
proposal (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend these By-laws, the text of the proposed amendment) and the reasons for conducting such business at the
meeting;
(6) any material interest of the stockholder and any Stockholder Associated Person in such
business;
(7) a representation as to whether such stockholder intends (i) to deliver a proxy
statement and form of proxy to holders of at least the percentage of the Corporations outstanding capital stock required to approve or adopt such business or (ii) otherwise to solicit proxies from the stockholders in support of such
business;
(8) all other information that would be required to be filed with the SEC if the stockholder or
any Stockholder Associated Person were participants in a solicitation subject to Section 14 of the Exchange Act; and
(9) a representation that the stockholder shall provide any other information reasonably requested by the
Corporation.
(e) Such stockholders shall also provide any other information reasonably requested by the Corporation
within five business days after such request.
(f) In addition, such stockholder shall further update and supplement the
information provided to the Corporation in the notice or upon the Corporations request pursuant to Section 2.07(e) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that
is the later of 10 business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the principal executive offices of the Corporation, addressed to
the Secretary, by no later than five business days after the record date for the meeting (in the
Annex III-3
case of the update and supplement required to be made as of the record date), and not later than seven business days before the date for the meeting (in the case of the update and supplement
required to be made as of 10 business days before the meeting or any adjournment or postponement thereof).
(g) The
foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his or her intention to present a proposal at an annual meeting and such stockholders proposal has been included in a
proxy statement that has been prepared by management of the Corporation to solicit proxies for such annual meeting;
provided
,
however
, that if such stockholder does not appear or send a qualified representative to present such proposal
at such annual meeting, the Corporation need not present such proposal for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation; and
provided
,
further
, that the
foregoing shall not imply any obligation beyond that required by applicable law to include a stockholders proposal in a proxy statement prepared by management of the Corporation. Notwithstanding anything in these By-laws to the contrary, no
business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 2.07.
(h) The chairman of an annual meeting may refuse to permit any business to be brought before an annual meeting, which fails to
comply with this Section 2.07 or, in the case of a stockholder proposal, if the stockholder solicits proxies in support of such stockholders proposal without having made the representation required by Section 2.07(d)(7).
(i) The provisions of this Section 2.07 shall govern all business related to stockholder proposals at the annual meeting
of stockholders;
provided
that business related to the election or nomination of directors shall be governed by the provisions of Section 3.03 and not by this Section 2.07.
SECTION 2.08.
List of Stockholders.
It shall be the duty of the Secretary or other officer who has charge of the stock
ledger to prepare and make, at least 10 days before each meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares
registered in such stockholders name. Such list shall be produced and kept available at the times and places required by law.
SECTION 2.09.
Voting.
(a) Except as otherwise provided by law or by the Certificate, each stockholder of record of
any series of Preferred Stock shall be entitled at each meeting of the stockholders to such number of votes, if any, for each share of such stock as may be fixed in the Certificate or in the resolution or resolutions adopted by the Board providing
for the issuance of such stock, and each stockholder of record of Common Stock shall be entitled at each meeting of the stockholders to one vote for each share of such stock, in each case, registered in such stockholders name on the books of
the Corporation:
(1) on the date fixed pursuant to Section 7.06 as the record date for the
determination of stockholders entitled to vote at such meeting; or
(2) if no such record date shall have
been so fixed, then at the close of business on the day immediately before the day on which notice of such meeting is given, or, if notice is waived, at the close of business on the day immediately before the day on which the meeting is held.
(b) Each stockholder entitled to vote at any meeting of the stockholders may authorize not in excess of three persons to act
for such stockholder by proxy. Any such proxy shall be delivered to the secretary of such meeting at or prior to the time designated for holding such meeting, but in any event not later than the time designated in the order of business for so
delivering such proxies. No such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.
(c) Except as otherwise required by law and except as otherwise provided in the Certificate or these By-laws, at each meeting
of the stockholders, all corporate actions to be taken by vote of the stockholders shall be authorized by a majority of the votes cast by the stockholders entitled to vote thereon who are present in person or by proxy, and where a separate vote by
class or series is required, a majority of the votes cast by the stockholders of such class or series who are present in person or by proxy shall be the act of such class or series.
(d) Unless required by law or determined by the chairman of the meeting to be advisable, the vote on any matter, including the
election of directors, need not be by written ballot. Any written ballot shall be signed by the stockholder voting, or by such stockholders proxy, and shall state the number of shares voted.
Annex III-4
SECTION 2.10.
Inspectors.
The chairman of the meeting shall appoint one or
more inspectors to act at any meeting of the stockholders. Such inspectors shall perform such duties as shall be required by law or specified by the chairman of the meeting. Inspectors need not be stockholders. No director or nominee for the office
of director shall be appointed such inspector.
ARTICLE III
Board of Directors
SECTION 3.01.
General Powers.
The business and affairs of the Corporation shall be managed by or under the direction of
the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate directed or required to be exercised or done by the stockholders.
SECTION 3.02.
Number, Term of Office, Qualification and Election.
(a)
Number of Directors.
Subject to the
rights of holders of any outstanding series of Preferred Stock with respect to the election of directors, the number of directors of the Corporation shall be fixed from time to time by resolution adopted by the Board. However, no decrease in the
number of directors constituting the Board shall shorten the term of any incumbent director. Directors of the Corporation need not be stockholders.
(b)
Term of Office.
Directors, other than any who may be elected by the holders of any series of Preferred Stock
pursuant to the provisions set forth in the Certificate (including any Certificate of Designation relating to such series of Preferred Stock), shall hold office until the next annual meeting of the stockholders and until each of their successors
shall have been duly elected and qualified.
(c)
Director Qualification.
Unless the Board determines otherwise, to
be eligible to be a nominee for election or reelection as a director, a person must deliver (in accordance with the time periods prescribed for delivery of notice by the Board) to the Secretary at the principal executive offices of the Corporation a
written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written
request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (i) any agreement, arrangement or understanding with, and has not
given any commitment or assurance to, any person or entity as to how such person will act or vote as a director on any issue or question (a
Voting Commitment
) that has not been disclosed to the Corporation or (ii) any Voting
Commitment that could limit or interfere with such persons ability to comply with such persons fiduciary duties as a director under applicable law, (B) is not and will not become a party to any agreement, arrangement or
understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein and
(C) in such persons individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, and will comply with all applicable publicly disclosed corporate governance, conflict of
interest, confidentiality and stock ownership and trading and other policies and guidelines of the Corporation that are applicable to directors.
(d)
Election.
Directors shall be elected in the manner provided in Section 5.02 of the Certificate.
SECTION 3.03.
Notification of Nominations.
(a) Subject to the rights of the holders of any outstanding series of
Preferred Stock, nominations for the election of directors may be made by (1) the Board or (2) by any stockholder who is a stockholder of record at the time of giving of the notice of nomination provided for in this Section 3.03 and
who is entitled to vote for the election of directors.
(b) Subject to the rights of the holders of any outstanding series
of Preferred Stock, any stockholder of record entitled to vote for the election of directors at a meeting may nominate persons for election as directors only if timely written notice of such stockholders intent to make such nomination is given
in proper written form to the Secretary. To be timely, a stockholders notice must be delivered to or mailed and received by the Secretary at the principal executive offices of the Corporation (i) with respect to an election to be held at
an annual meeting of the stockholders, not less than 90 days nor more than 120 days prior to the first anniversary of the date of the immediately preceding annual meeting;
provided
,
however
, that in the event that the date of the
annual meeting is more than 30 days earlier or more than 60 days later than such anniversary date, notice by the stockholder to be timely must be so delivered or received not earlier than the 120th day prior to such annual meeting and not later than
the close of business on the later of the 90th day prior to such annual meeting and the 10th day following the day on which public announcement of the date of such meeting is
Annex III-5
first made; and (ii) with respect to an election to be held at a special meeting of the stockholders for the election of directors, not earlier than the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day prior to such special meeting and the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees to be
elected at such meeting. In no event shall an adjournment or postponement, or public announcement of an adjournment or postponement of an annual or special meeting commence a new time period (or extend any time period) for the giving of a
stockholders notice as described in this Section 3.03.
(c) Each such notice shall set forth:
(1) the Stockholder Information with respect to such stockholder and any Stockholder Associated Persons
and the name and address of the person or persons to be nominated;
(2) a representation that the
stockholder is a holder of record of stock of the Corporation entitled to vote in the election of directors and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;
(3) a description of all arrangements or understandings between the stockholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder;
(4) a description of all direct and indirect compensation and other material monetary agreements, arrangements
and understandings during the past three years, and any other material relationships, between or among the stockholder and any Stockholder Associated Person or any of their respective affiliates or associates or other parties with whom they are
acting in concert, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder, Stockholder Associated Person or any person acting in concert therewith, were the
registrant for purposes of such rule and each nominee were a director or executive of such registrant;
(5) such other information regarding each nominee proposed by such stockholder and Stockholder Associated
Persons as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had each nominee been nominated, or intended to be nominated, by the Board and a completed signed
questionnaire, representation and agreement required by Section 3.02(b);
(6) a representation as to
whether such stockholder intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporations outstanding capital stock required to approve the nomination or (b) otherwise to solicit
proxies from stockholders in support of such nomination;
(7) a representation that the stockholder shall
provide any other information reasonably requested by the Corporation; and
(8) the executed written
consent of each nominee to serve as a director of the Corporation if so elected;
(d) Such stockholders shall also provide
any other information reasonably requested by the Corporation within five business days after such request.
(e) In
addition, such stockholders shall further update and supplement the information provided to the Corporation in the notice of nomination or upon the Corporations request pursuant to Section 3.03(d) as needed, so that such information shall
be true and correct as of the record date for the meeting and as of the date that is 10 business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received
at the principal executive offices of the Corporation, addressed to the Secretary, by no later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and
not later than seven business days before the date for the meeting (in the case of the update and supplement required to be made as of 10 business days before the meeting or any adjournment or postponement thereof).
(f) The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the
foregoing procedure or if the stockholder solicits proxies in favor of such stockholders nominee(s) without having made the representations required by Section 3.03(c)(6).
(g) If such stockholder does not appear or send a qualified representative to present such proposal at such meeting, the
Corporation need not present such proposal for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation.
Annex III-6
(h) Subject to the rights of the holders of any outstanding series of Preferred
Stock, only such persons who are nominated in accordance with the procedures set forth in this Section 3.03 shall be eligible to serve as directors of the Corporation.
(i) Notwithstanding anything in this Section 3.03 to the contrary, in the event that the number of directors to be
elected to the Board at an annual meeting of the stockholders is increased and there is no public announcement naming all of the nominees for directors or specifying the size of the increased Board made by the Corporation at least 90 days prior to
the first anniversary of the date of the immediately preceding annual meeting, a stockholders notice required by this Section 3.03 shall also be considered timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to or mailed to and received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first
made by the Corporation.
SECTION 3.04.
Quorum and Manner of Acting.
Except as otherwise provided by law, the
Certificate or these By-laws, (i) a majority of the Whole Board (as defined below) shall constitute a quorum for the transaction of business at any meeting of the Board, and (ii) the affirmative vote of a majority of the directors present
at any meeting at which a quorum is present shall be the act of the Board. The chairman of the meeting or a majority of the directors present may adjourn the meeting to another time and place whether or not a quorum is present. When a meeting is
adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At any adjourned meeting at
which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. The term
Whole Board
shall mean the total number of authorized directors pursuant to
Section 3.02(a), whether or not there exist any vacancies on the Board.
SECTION 3.05.
Place of Meetings.
Subject to Sections 3.06 and 3.07, the Board may hold its meetings at such place or places within or outside of the State of Delaware as the Board may from time to time determine or as shall be specified or fixed in the respective notices or waivers
of notice thereof.
SECTION 3.06.
Regular Meetings.
(a) As soon as practicable after each annual election of
directors, the Board shall meet for the purpose of organization and the transaction of other business.
(b) Regular
meetings of the Board shall be held at such times as the Board shall from time to time determine, at such locations as the Board may determine.
SECTION 3.07.
Special Meetings.
Special meetings of the Board shall be held whenever called by the Chairman of the
Board, the President or by a majority of directors then in office, and shall be held at such place, on such date and at such time as he, she or they, as applicable, shall fix.
SECTION 3.08.
Notice of Meetings.
Notice of regular meetings of the Board or of any adjourned meeting thereof need not
be given. Notice of each special meeting of the Board shall be given by overnight delivery service or mailed to each director, in either case addressed to such director at such directors residence or usual place of business, at least two days
before the day on which the meeting is to be held or shall be sent to such director at such place by telecopy or by electronic transmission or shall be given personally or by telephone, not later than two days before the meeting is to be held, but
notice need not be given to any director who shall, either before or after the meeting, submit a waiver of such notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to such director. Unless
otherwise required by these By-laws, every such notice shall state the time and place but need not state the purpose of the meeting.
SECTION 3.09.
Rules and Regulations.
The Board may adopt such rules and regulations not inconsistent with the
provisions of law, the Certificate or these By-laws for the conduct of its meetings and management of the affairs of the Corporation as the Board may deem proper.
SECTION 3.10.
Participation in Meeting by Means of Communications Equipment.
Any one or more members of the Board or
any committee thereof may participate in any meeting of the Board or of any such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other or as
otherwise permitted by law, and such participation in a meeting shall constitute presence in person at such meeting.
Annex III-7
SECTION 3.11.
Action Without Meeting.
Any action required or permitted to
be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all of the members of the Board or of any such committee consent thereto in writing, by electronic transmission or transmissions, or as otherwise
permitted by law and, if required by law, the writing or writings or electronic transmission or transmissions are filed with the minutes or proceedings of the Board or of such committee.
SECTION 3.12.
Resignations.
Any director of the Corporation may at any time resign by giving notice in writing or by
electronic transmission to the Board, the Chairman of the Board, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified therein, upon receipt thereof, and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to make it effective.
SECTION 3.13.
Vacancies.
Subject to the rights of the holders of any series of Preferred Stock with respect to the election of directors, newly created directorships resulting from any increase in the number of directors may be filled by the Board, and
vacancies on the Board resulting from death, resignation, disqualification, removal or other cause shall, unless otherwise determined by the Board, only be filled by the Board, and not by the stockholders, by the affirmative vote of a majority of
the remaining directors then in office or, if there is only one remaining director in office, by such sole remaining director, even though less than a quorum of the Board. Any director elected in accordance with the preceding sentence of this
Section 3.13 shall hold office until the next annual meeting of stockholders and until such directors successor shall have been duly elected and qualified.
SECTION 3.14.
Removal.
Subject to the rights of holders of any outstanding series of Preferred Stock with respect to
the removal of directors, a director may be removed from office by the Stockholders of the Corporation, with or without cause, by the affirmative vote of the holders of a majority in voting power of the outstanding shares of capital stock of the
Corporation entitled to vote thereon.