Exhibit 4.4
--------------------------------------------------------------------------------
AMENDED AND RESTATED
RIGHTS AGREEMENT
THE NEIMAN MARCUS GROUP, INC.
and
MELLON INVESTOR SERVICES LLC
as Rights Agent
Dated as of August 8, 2002
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions..................................................................................3
Section 2. Appointment of Rights Agent.........................................................................13
Section 3. Issue of Right Certificates.........................................................................14
Section 4. Form of Right Certificates..........................................................................17
Section 5. Countersignature and Registration...................................................................18
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates........................................................18
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights.......................................20
Section 8. Cancellation and Destruction of Right Certificates..................................................22
Section 9. Availability of Shares of Preferred Stock...........................................................22
Section 10. Preferred Stock Record Date.........................................................................25
Section 11. Adjustment of Purchase Price, Number of Shares and Number of Rights.................................25
Section 12. Certificate of Adjusted Purchase Price or Number of Shares..........................................42
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earnings Power...............................43
Section 14. Fractional Rights and Fractional Shares.............................................................49
Section 15. Rights of Action....................................................................................51
Section 16. Agreement of Right Holders..........................................................................52
Section 17. Right Certificate Holder Not Deemed a Stockholder...................................................52
Section 18. Concerning the Rights Agent.........................................................................53
Section 19. Merger or Consolidation or Change of Name of Rights Agent...........................................54
Section 20. Duties of Rights Agent..............................................................................55
Section 21. Change of Rights Agent..............................................................................59
Section 22. Issuance of New Right Certificates,.................................................................61
Section 23. Redemption..........................................................................................61
i
PAGE
Section 24. Exchange...........................................................................................62
Section 25. Notice of Certain Events...........................................................................66
Section 26. Notices............................................................................................67
Section 27. Supplements and Amendments.........................................................................69
Section 28. Successors.........................................................................................69
Section 29. Benefits of this Agreement.........................................................................69
Section 30. Severability.......................................................................................70
Section 31. Governing Law......................................................................................70
Section 32. Counterparts.......................................................................................70
Section 33. Descriptive Headings...............................................................................71
Section 34. Administration.....................................................................................71
ii
RIGHTS AGREEMENT
Amended and Restated
Rights Agreement (the "Agreement"), dated
as of August 8, 2002, between The Neiman Marcus Group, Inc., a Delaware
corporation (the "Company"), and Mellon Investor Services LLC, a New Jersey
limited liability company (the "Rights Agent").
The Board of Directors of the Company on October 6, 1999
(i)(A) authorized the issuance and declared a dividend of one preferred share
purchase right (a "Class A Right") for each share of Class A Common Stock (as
hereinafter defined) outstanding as of the close of business (as defined below)
on October 18, 1999 (the "Record Date"), each Class A Right representing the
right to purchase one one-thousandth (subject to adjustment) of a share of
Series A Preferred Stock (as hereinafter defined), upon the terms and subject to
the conditions herein set forth in a
Rights Agreement, dated October 9, 1999,
between the Company and BankBoston, N.A., (the "
Rights Agreement"), and (B)
further authorized and directed the issuance of one Class A Right (subject to
adjustment as provided herein) with respect to each share of Class A Common
Stock that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are hereinafter defined); provided, however, that Class A Rights may
be issued with respect to shares of Class A Common Stock that shall become
outstanding after the Distribution Date and prior to the Redemption Date and the
Final Expiration Date in accordance with Section 22, (ii)(A) authorized the
issuance and declared a dividend of one preferred share purchase right (a "Class
B Right") for each share of Class B Common Stock (as hereinafter defined)
outstanding as of the close of business (as defined below) on the Record Date,
each Class B Right representing the right to purchase one one-thousandth
(subject to adjustment) of a share of Series B Preferred
2
Stock (as hereinafter defined), upon the terms and subject to the conditions set
forth in the
Rights Agreement, and (B) further authorized and directed the
issuance of one Class B Right (subject to adjustment as provided herein) with
respect to each share of Class B Common Stock that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined); provided, however, that Class B Rights may be issued with respect to
shares of Class B Common Stock that shall become outstanding after the
Distribution Date and prior to the Redemption Date and the Final Expiration Date
in accordance with Section 22 and (iii)(A) authorized and directed the issuance
of one preferred share purchase right (a "Class C Right" and together with the
Class A Rights and the Class B rights, the "Rights") (subject to adjustment as
provided herein) with respect to each share of Class C Common Stock (as
hereinafter defined) that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are hereinafter defined), each Class C Right
representing the right to purchase one one-thousandth (subject to adjustment) of
a share of Series C Preferred Stock (as hereinafter defined), upon the terms and
subject to the conditions herein set forth; provided, however, that Class C
Rights may be issued with respect to shares of Class C Common Stock that shall
become outstanding after the Distribution Date and prior to the Redemption Date
and the Final Expiration Date in accordance with Section 22.
The Board of Directors of the Company, desiring to appoint
Mellon Investor Services LLC as successor Rights Agent, desire to restate and
amend the terms of the Agreement herein as so amended.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
3
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as
such term is hereinafter defined) of (a) 15% or more of the shares of
Class B Common Stock (as such term is hereinafter defined) then
outstanding or (b) shares of Common Stock representing, in the
aggregate, 15% or more of the total number of votes entitled to be cast
generally (other than in an election of directors) by the holders of
the Common Stock then outstanding, but shall not include an Exempt
Person (as such term is hereinafter defined); provided, however, that
if the Board of Directors of the Company determines in good faith that
a Person who would otherwise be an "Acquiring Person" has become such
inadvertently (including, without limitation, because (i) such Person
was unaware that it beneficially owned a percentage of Common Stock
that would otherwise cause such Person to be an "Acquiring Person" or
(ii) such Person was aware of the extent of its Beneficial Ownership of
Common Stock but had no actual knowledge of the consequences of such
Beneficial Ownership under this
Rights Agreement) and without any
intention of changing or influencing control of the Company, and such
Person as promptly as practicable divested or divests himself or itself
of Beneficial Ownership of a sufficient number of shares of Common
Stock so that such Person would no longer be an Acquiring Person, then
such Person shall not be deemed to be or to have become an "Acquiring
Person" for any purposes of this Agreement. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result
of an acquisition of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, increases
4
the proportionate number of shares beneficially owned (or votes
entitled to be cast) by such Person to (a) 15% or more of the shares of
Class B Common Stock then outstanding or (b) shares of Common Stock
representing, in the aggregate, 15% or more of the total number of
votes entitled to be cast generally (other than in an election of
directors) by the holders of the Common Stock then outstanding;
provided, however, that if a Person shall become the Beneficial Owner
of (a) 15% or more of the shares of Class B Common Stock then
outstanding or (b) shares of Common Stock representing, in the
aggregate, 15% or more of the total number of votes entitled to be cast
generally (other than in an election of directors) by the holders of
the Common Stock then outstanding by reason of such share acquisitions
by the Company and thereafter become the Beneficial Owner of any
additional shares of Class B Common Stock, in the case of clause (a)
above, or Common Stock, in the case of clause (b) above, then such
Person shall be deemed to be an "Acquiring Person" unless upon the
consummation of the acquisition of such additional shares of Class B
Common Stock or Common Stock, as the case may be, such Person does not
beneficially own (a) 15% or more of the shares of Class B Common Stock
then outstanding or (b) shares of Common Stock representing, in the
aggregate, 15% or more of the total number of votes entitled to be cast
generally (other than in an election of directors) by the holders of
the Common Stock then outstanding. The phrase "then outstanding", when
used with reference to a Person's Beneficial Ownership of securities of
the Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.
5
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall
be deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to beneficially own,
directly or indirectly within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with respect to
a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (x) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase, (y) securities which
such Person has a right to acquire on the exercise of Rights
at any time prior to the time a Person becomes an
6
Acquiring Person or (z) securities issuable upon exercise of
Rights from and after the time a Person becomes an Acquiring
Person if such Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22
hereof ("original Rights") or pursuant to Section 11(i) or
Section 11(n) with respect to an adjustment to original
Rights; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, any security by reason of such agreement,
arrangement or understanding if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of any securities of the Company;
provided, however, that notwithstanding anything else contained in this
Section 1(c):
7
(1) no ▇▇▇▇▇ Holder shall be deemed to be the Beneficial Owner
of securities beneficially owned by any other Person that is not a ▇▇▇▇▇ Holder
solely by reason of such other Person's status as an Affiliate or Associate of
any ▇▇▇▇▇ Holder or any other Person, other than Harcourt General, Inc. or its
subsidiaries unless (A) one or more ▇▇▇▇▇ Holders, collectively, beneficially
owns fifty percent or more of the voting power of such other Person or such
other Person beneficially owns fifty percent or more of the voting power of a
▇▇▇▇▇ Holder that is not a natural person, (B) a majority of the board of
directors or other governing body of such other Person is comprised of ▇▇▇▇▇
Holders or such other Person has the power to nominate a majority of the board
of directors or other governing body of a ▇▇▇▇▇ Holder that is not a natural
person, (C) such other Person is a spouse or lineal descendant of a grandparent
of a ▇▇▇▇▇ Holder (or any spouse of a lineal descendent of a grandparent of a
▇▇▇▇▇ Holder) or (D) a primary purpose of such other Person becoming an
Affiliate or Associate of a ▇▇▇▇▇ Holder or any other Person after the date of
this Agreement is to circumvent the purposes of this Agreement;
(2) no Person, other than Harcourt General, Inc. and its
subsidiaries, shall be deemed to be the Beneficial Owner of securities
beneficially owned by a ▇▇▇▇▇ Holder solely by reason of such Person's status as
an officer, director or employee of a ▇▇▇▇▇ Holder or any ▇▇▇▇▇ Holder's or
other Person's status as an Affiliate or Associate of such Person, unless (A)
one or more ▇▇▇▇▇ Holders, collectively, beneficially owns fifty percent or more
of the voting power of such Person, or such Person beneficially owns fifty
percent or more of the voting power of a ▇▇▇▇▇ Holder that is not a natural
person, (B) a majority of the board of directors or other governing body of such
Person is comprised of ▇▇▇▇▇ Holders or such Person has the power to nominate a
majority of the board of directors or other governing body of a
8
▇▇▇▇▇ Holder that is not a natural person, (C) such Person is a spouse or lineal
descendant of a grandparent of a ▇▇▇▇▇ Holder (or any spouse of a lineal
descendant of a grandparent of a ▇▇▇▇▇ Holder) or (D) a primary purpose of such
▇▇▇▇▇ Holder becoming an Affiliate or Associate of any other Person after the
date of this Agreement is to circumvent the purposes of this Agreement; and
(3) no bona fide financial institution that is a pledgee of a
▇▇▇▇▇ Holder (a "Pledgee") shall be deemed to the Beneficial Owner of securities
beneficially owned by a ▇▇▇▇▇ Holder solely by reason of such Pledgee's status
as a pledgee of a ▇▇▇▇▇ Holder and so long as such Pledgee may report the
ownership of those shares that are acquired pursuant to the pledge on a Schedule
13G (or any comparable or successor report) under the Exchange Act, provided
however, that if such Pledgee forecloses on any such pledge and a ▇▇▇▇▇ Holder
thus ceases to beneficially own such pledged shares, the Pledgee shall be deemed
to beneficially own such shares; unless such pledged shares are sold within
one-hundred and eighty (180) days of such foreclosure;
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the States of
New
York or New Jersey are authorized or obligated by law or executive
order to close.
(e) "Class A Common Stock" shall mean the Class A Common Stock,
par value $.01 per share, of the Company.
(f) "Class B Common Stock" shall mean the Class B Common Stock,
par value $.01 per share, of the Company.
(g) "Class C Common Stock" shall mean the Class C Common Stock,
par value $.01 per share, of the Company.
9
(h) "Class A Right" shall have the meaning set forth in the
Recitals hereto.
(i) "Class B Right" shall have the meaning set forth in the
Recitals hereto.
(j) "Class C Right" shall have the meaning set forth in the
Recitals hereto.
(k) "Class A Right Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(l) "Class B Right Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(m) "Class C Right Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(n) "Close of Business" on any given date shall mean 5:00 P.M.,
New York City time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M.,
New York City time, on
the next succeeding Business Day.
(o) "Common Stock" when used with reference to the Company shall
mean, collectively, the Class A Common Stock, the Class B Common Stock
and the Class C Common Stock. "Common Stock" when used with reference
to any Person other than the Company shall mean the capital stock (or,
in the case of an unincorporated entity, the equivalent equity
interest) with the greatest voting power of such other Person or, if
such other Person is a subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(p) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(q) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company, (iii)
any employee benefit plan of the
10
Company or of any Subsidiary of the Company, (iv) any entity or trustee
holding Common Stock for or pursuant to the terms of any such plan or
for the purpose of funding any such plan or funding other employee
benefits for employees of the Company or of any Subsidiary of the
Company, (v) Harcourt General, Inc., a Delaware corporation, but only
for the period beginning on the Record Date and ending at 12:01 a.m. on
October 23, 1999 or (vi) the ▇▇▇▇▇ Family Group, so long as the ▇▇▇▇▇
Family Group does not acquire beneficial ownership of (A) additional
shares of Class B Common Stock after the date of this Agreement (other
than shares of Common Stock, employee stock options or other equity
securities of the Company granted by the Company after this Agreement
to a member of the ▇▇▇▇▇ Family Group in his or her capacity as a
director, officer or employee of the Company, including shares issuable
upon the exercise or conversion of such employee stock options or other
equity securities) that would represent, together with all shares of
Class B Common Stock acquired by the ▇▇▇▇▇ Family Group after the date
of this Agreement, more than 6% of the outstanding shares of Class B
Common Stock then outstanding after giving effect to such acquisition
and (B) additional shares of Common Stock after the date of this
Agreement (other than shares of Common Stock, employee stock options or
other equity securities of the Company granted by the Company after the
date of this Agreement to a member of the ▇▇▇▇▇ Family Group in his or
her capacity as a director, officer or employee of the Company,
including shares issuable upon the exercise or conversion of such
employee stock options or other equity securities) that would
represent, together with all shares of Common Stock acquired by the
▇▇▇▇▇ Family Group after the date of this Agreement, more than 6% of
the total voting power of the Company represented by the votes entitled
to be cast
11
generally (other than in an election of directors) represented by the
total number of shares of Common Stock then outstanding.
Notwithstanding the foregoing, the ▇▇▇▇▇ Family Group shall
not cease to be an "Exempt Person" as a result of the acquisition of
shares of Class B Common Stock by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of
shares beneficially owned by the ▇▇▇▇▇ Family Group and acquired after
the date of this Agreement to exceed shares representing, in the
aggregate, 6% of the shares of Class B Common Stock then outstanding,
unless the ▇▇▇▇▇ Family Group thereafter acquires beneficial ownership
of any additional shares of Class B Common Stock. In addition, the
▇▇▇▇▇ Family Group shall not cease to be an "Exempt Person" as a result
of the acquisition of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate
voting power of the Company represented by the shares beneficially
owned by the ▇▇▇▇▇ Family Group and acquired after the date of this
Agreement to exceed shares representing, in the aggregate, 6% of the
total voting power of the Company represented by the votes entitled to
be cast generally (other than in an election of directors) by the
holders of the Common Stock then outstanding, unless the ▇▇▇▇▇ Family
Group thereafter acquires beneficial ownership of any additional shares
of Common Stock.
(r) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(s) "
New York Stock Exchange" shall mean the
New York Stock
Exchange, Inc.
12
(t) "Person" shall mean any individual, firm, corporation, limited
liability company or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(u) "Preferred Stock" shall mean, collectively, (i) the Series A
Junior Participating Preferred Stock, par value $.01 per share, of the
Company (the "Series A Preferred Stock"), (ii) the Series B Junior
Participating Preferred Stock, par value $.01 per share, of the Company
(the "Series B Preferred Stock") and (iii) the Series C Junior
Participating Preferred Stock, par value $.01 per share, of the Company
(the "Series C Preferred Stock"), in each case having the rights and
preferences set forth in the Form of Certificate of Designations
attached to this Agreement as Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ and Exhibit A-3,
respectively.
(v) "Redemption Date" shall have the meaning set forth in Section
7 hereof.
(w) "Right Certificate" shall mean collectively or severally, as
the context shall require, the Class A Right Certificate, the Class B
Right Certificate and/or the Class C Right Certificate.
(x) "Securities Act" shall mean the Securities Act of 1933, as
amended
(y) "▇▇▇▇▇ Family Group" shall mean (i) the parties to the
▇▇▇▇▇-▇▇▇▇▇/Marks Family Stockholders' Agreement, dated as of September
1, 1999 (as amended, supplemented, or otherwise modified from time to
time, provided that a primary purpose of any such amendment, supplement
or modification is not to circumvent the purposes of this Agreement,
the "Stockholders' Agreement"), any Person who is described in any of
clauses (i) through (v) (other than clause (i)(C)) of Section 4 of the
Stockholders' Agreement and Harcourt General, Inc. and its
subsidiaries, so long as Harcourt General,
13
Inc. is an Affiliate of any party to the Stockholders' Agreement
(collectively, the "▇▇▇▇▇ Holders") or (ii) any other Person, to the
extent such Person would be deemed to be the Beneficial Owner of Common
Stock beneficially owned by a ▇▇▇▇▇ Holder, solely by reason of such
Person's status as an Affiliate or Associate of a ▇▇▇▇▇ Holder or any
other Person on the date of this Agreement.
(z) "Stock Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such or such earlier date as a majority of the Board
of Directors shall become aware of the existence of an Acquiring
Person.
(aa) "Subsidiary" or "subsidiary" of any Person shall mean any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a majority
of the board of directors or other persons performing similar functions
are beneficially owned, directly or indirectly, by such Person, and any
corporation or other entity that is otherwise controlled by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable, upon ten (10) days' prior notice to the
Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no
event be liable for, the acts or omissions of any such co-Rights Agent.
14
Section 3. Issue of Right Certificates. (a) Until the earlier
of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth Business
Day (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than an Exempt Person) of, or of the first
public announcement of the intention of such Person (other than an Exempt
Person) to commence, a tender or exchange offer the consummation of which would
result in any Person becoming the Beneficial Owner of (a) shares of Class B
Common Stock aggregating 15% or more of the Class B Common Stock then
outstanding or (b) shares of Common Stock representing, in the aggregate, 15% or
more of the total number of votes entitled to be cast generally (other than in
an election of directors) by the holders of Common Stock then outstanding
(including any such date which is after the date of this Agreement and prior to
the issuance of the Rights; the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof and not by separate Right
Certificates and (y) the Rights will be transferable only in connection with the
transfer of Common Stock. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first-class, insured, postage-prepaid mail, (A) to each record holder
of Class A Common Stock as of the close of business on the Distribution Date
(other than any Acquiring Person or any Associate or Affiliate of an Acquiring
Person), at the address of such holder shown on the records of the Company, a
Class A Right Certificate, in substantially the form of Exhibit B-1 hereto (a
"Class A Right Certificate"), evidencing one Class A Right (subject to
adjustment as provided herein) for each share of Class A Common
15
Stock so held, (B) to each record holder of Class B Common Stock as of the close
of business on the Distribution Date (other than any Acquiring Person or any
Associate or Affiliate of an Acquiring Person), at the address of such holder
shown on the records of the Company, a Class B Right Certificate, in
substantially the form of Exhibit B-2 hereto (a "Class B Right Certificate"),
evidencing one Class B Right (subject to adjustment as provided herein) for each
share of Class B Common Stock so held and (C) to each record holder of Class C
Common Stock as of the close of business on the Distribution Date (other than
any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at
the address of such holder shown on the records of the Company, a Class C Right
Certificate, in substantially the form of Exhibit B-3 hereto (a "Class C Right
Certificate"), evidencing one Class C Right (subject to adjustment as provided
herein) for each share of Class C Common Stock so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Shares of
Preferred Stock, in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of Common
Stock as of the close of business on the Record Date (other than any Acquiring
Person or any Associate or Affiliate of any Acquiring Person), at the address of
such holder shown on the records of the Company. With respect to certificates
for Common Stock outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights. Until the Distribution Date
(or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Stock outstanding on the
Record
16
Date, with or without a copy of the Summary of Rights, shall also constitute the
transfer of the Rights associated with the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock, disposition of Common
Stock out of treasury stock or issuance or reissuance of Common Stock out of
authorized but unissued shares) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a
Rights Agreement between
The Neiman Marcus Group, Inc. and Mellon Investor Services
LLC, as successor Rights Agent to BankBoston, N.A., dated as
of October 6, 1999, as the same may be amended from time to
time (the "
Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of The Neiman Marcus
Group, Inc. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Neiman Marcus Group, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
Under certain circumstances, as set forth in the Rights
Agreement, Rights owned by or transferred to any Person who
becomes an Acquiring Person (as defined in the Rights
Agreement) and certain transferees thereof will become null
and void and will no longer be transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated
17
with such Common Stock shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Stock
which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend
shall not affect the enforceability of any part of this Agreement or the rights
of any holder of the Rights.
Section 4. Form of Right Certificates. The Class A Right
Certificates, the Class B Right Certificates and the Class C Right Certificates
(and the forms of election to purchase shares and of assignment to be printed on
the reverse thereof) shall be substantially in the form set forth in Exhibit
B-1, Exhibit B-2 and Exhibit B-3, respectively, hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate (but which do not affect the
rights, duties or responsibilities of the Rights Agent) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of the
New York Stock Exchange or of any
other stock exchange or automated quotation system on which the Rights may from
time to time be listed, or to conform to usage. Subject to the provisions of
Sections 11, 13 and 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-thousandths of a share of Preferred
Stock as shall be set forth therein at the price per one one-thousandth of a
share of Preferred Stock set forth therein (the "Purchase Price"), but the
number of such one one-thousandths of a share of Preferred Stock and the
Purchase Price shall be subject to adjustment as provided herein.
18
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by the Chairman of the
Board of Directors, the President, any of the Vice Presidents, the Treasurer or
the Controller of the Company, either manually or by facsimile signature, shall
have affixed thereto the Company's seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature,
and shall not be valid for any purpose unless countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates, had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company, by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at an office or agency designated for such purpose,
books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Sections
19
7(e), 11(a)(ii) and 14 hereof, at any time after the close of business on the
Distribution Date, and prior to the close of business on the earlier of the
Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-thousandths of a share of Preferred Stock as
the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office or agency of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at
any time after the Distribution Date and prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, upon receipt by the
Company and the Rights Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
them, and reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights
20
Agent for delivery to the registered holder in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights, Purchase Price; Expiration Date
of Rights. (a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the
office or agency of the Rights Agent designated for such purpose, together with
payment of the Purchase Price for each one one-thousandth of a share of
Preferred Stock as to which the Rights are exercised, at any time which is both
after the Distribution Date and prior to the earliest of (i) the close of
business on October 6, 2009 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date") or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The "Purchase Price" shall be initially (i)$ 100.00 for
each one one-thousandth of a share of Series A Preferred Stock, (ii) $100.00 for
each one one-thousandth of a share of Series B Preferred Stock and (iii) $100.00
for each one one-thousandth of a share of Series C Preferred Stock, in each case
purchasable upon the exercise of a Right. The Purchase Price and the number of
one one-thousandths of a share of Preferred Stock or other securities or
property to be acquired upon exercise of a Right shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof and shall be payable
in lawful money of the United States of America in accordance with paragraph (c)
of this Section 7.
21
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the number of one one-thousandths of a share of Preferred Stock to be
purchased and an amount equal to any applicable tax or governmental charge
required to be paid by the holder of such Right Certificate in accordance with
Section 9 hereof, in cash or by certified check, cashier's check or money order
payable to the order of the Company, the Rights Agent shall thereupon promptly
(i) (A) requisition from any transfer agent of the Preferred Stock certificates
for the number of one one-thousandths of a share of Preferred Stock to be
purchased (and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests), or (B) requisition from the depositary agent
depositary receipts representing interests in such number of one one-thousandths
of a share of Preferred Stock as are to be purchased (in which case certificates
for the Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) (and the Company hereby directs the
depositary agent to comply with such request), (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when necessary to comply with this Agreement, after receipt,
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate.
(d) Except as otherwise provided herein, in case the registered holder of any
Right Certificate shall exercise less than all the Rights evidenced thereby, a
new Right Certificate evidencing Rights equivalent to the exercisable Rights
remaining unexercised shall be
22
issued by the Rights Agent to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer or exercise of Rights pursuant to Section 6
hereof or this Section 7 unless such registered holder shall have (i) completed
and signed the certificate contained in the form of assignment or election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such transfer or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy, or cause to be destroyed, such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Availability of Shares of Preferred Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and
23
unissued shares of Preferred Stock or any shares of Preferred Stock held in its
treasury, the number of shares of Preferred Stock that will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the time that a Person becomes an Acquiring Person, shares of Common Stock and
other securities) issuable upon the exercise of Rights may be listed or admitted
to trading on the
New York Stock Exchange or listed on any other national
securities exchange or quotation system, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed or admitted to trading on the
New York
Stock Exchange or listed on any other exchange or quotation system upon official
notice of issuance upon such exercise.
(c) From and after such time as the Rights become exercisable,
the Company shall use its best efforts, if then necessary to permit the issuance
of shares of Preferred Stock (and following the time that a Person first becomes
an Acquiring Person, shares of Common Stock and other securities) upon the
exercise of Rights, to register and qualify such shares of Preferred Stock (and
following the time that a Person first becomes an Acquiring Person, shares of
Common Stock and other securities) under the Securities Act and any applicable
state securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Final Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it
24
to become effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect (and shall provide the Rights Agent with copies of such
announcements). Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
(and, following the time that a Person becomes an Acquiring Person, shares of
Common Stock and other securities) delivered upon exercise of Rights shall, at
the time of delivery of the certificates therefor (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all taxes and governmental charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock (or shares of Common Stock or other securities)
upon the exercise of Rights. The Company shall not, however, be required to pay
any tax or charge which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Stock (or shares of Common
Stock or other securities) in a name other than that of, the registered holder
of the Right Certificate evidencing Rights surrendered for exercise or to issue
or deliver any certificates or depositary receipts for Preferred Stock (or
shares of Common Stock or other securities) upon the exercise of any Rights
until any
25
such tax or charge shall have been paid (any such tax or charge being payable by
that holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is
due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Stock for which the Rights shall be exercisable, including, without
limitation, the right to vote or to receive dividends or other distributions,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares and
Number of Rights. The Purchase Price, the number of shares of Preferred Stock or
other securities or property purchasable upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on any series of Preferred Stock
payable in shares of Preferred Stock, (B) subdivide any series of outstanding
Preferred Stock, (C) combine the shares of any outstanding series of Preferred
Stock into a smaller number of shares of Preferred Stock or (D) issue any shares
of its capital stock in a reclassification of any series of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the
26
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the applicable Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date, the holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. So long as Class A Rights, Class B Rights
and Class C Rights are outstanding, the Corporation shall not effect any of the
actions set forth in Clauses (A), (B), (C) or (D) of this paragraph with respect
to either the Series A Preferred Stock, the Series B Preferred Stock or the
Series C Preferred Stock unless the Corporation shall also contemporaneously
effect a like transaction with respect to the other such series; provided,
however, that in the event that such a transaction is effected with respect to
one such series but no such shares of the other series are outstanding, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable upon such date, shall be
proportionately adjusted with respect to the holders of Rights exercisable for
shares of such series that are not outstanding as if such a dividend,
subdivision, combination or reclassification had been effected with respect to
the shares of such series.
27
(ii) Subject to Section 24 of this Agreement and
except as otherwise provided in this Section 11(a)(ii), in the
event any Person becomes an Acquiring Person, each holder of a
Right shall thereafter have the right to receive, upon
exercise thereof at a price equal to the then current
applicable Purchase Price multiplied by the number of one
one-thousandths of a share of Preferred Stock for which such
Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of shares of Preferred Stock, such
number of shares of Class A Common Stock (in the case of a
Class A Right), Class B Common Stock (in the case of a Class B
Right) or Class C Common Stock (in the case of a Class C
Right) (or at the option of the Company, such number of one
one-thousandths of a share of Series A Preferred Stock (in the
case of a Class A Right), Series B Preferred Stock (in the
case of a Class B Right) or Series C Preferred Stock (in the
case of a Class C Right)) as shall equal the result obtained
by (x) multiplying the then current applicable Purchase Price
by the number of one one-thousandths of a share of Preferred
Stock for which a Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price
of the Company's Class A Common Stock (in the case of a Class
A Right), Class B Common Stock (in the case of a Class B
Right) or Class C Common Stock (in the case of a Class C
Right) (determined pursuant to Section 11(d) hereof) on the
date of the occurrence of such event; provided, however, that
the applicable Purchase Price and the number of shares of
Common Stock so receivable upon exercise of a Right shall
thereafter be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof. Notwithstanding anything
in this
28
Agreement to the contrary, however, from and after the time
(the "invalidation time") when any Person first becomes an
Acquiring Person, any Rights that are beneficially owned by
(x) any Acquiring Person (or any Affiliate or Associate of any
Acquiring Person), (y) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who becomes a transferee
after the invalidation time or (z) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the
invalidation time pursuant to either (I) a transfer from the
Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (II) a
transfer which the Board of Directors has determined is part
of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of this paragraph, and
subsequent transferees of such Persons, shall be void without
any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such
Rights under any provision of this Agreement. The Company
shall use all reasonable efforts to ensure that the provisions
of this Section 11(a)(ii) are complied with, but shall have no
liability to any holder of Right Certificates or other Person
as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. From and after the invalidation
time, no Right Certificate shall be issued pursuant to Section
3 or Section 6 hereof that represents Rights that are or have
become void pursuant to the provisions of this paragraph, and
any Right Certificate delivered to the Rights Agent that
represents Rights that are or have
29
become void pursuant to the provisions of this paragraph shall
be cancelled. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore
have not been exercised pursuant to this Section 11(a)(ii)
shall thereafter be exercisable only in accordance with
Section 13 and not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a
share of Common Stock issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) such number or
fractions of shares of the applicable series of Preferred
Stock having an aggregate current market value equal to the
current per share market price of a share of the applicable
class of Common Stock. In the event that there shall not be
sufficient shares of Common Stock of any class issued but not
outstanding or authorized but unissued to permit the exercise
in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board of Directors shall, to the extent
permitted by applicable law and any material agreements then
in effect to which the Company is a party (A) determine the
excess of (1) the value of the shares of Common Stock issuable
upon the exercise of each Class A Right, each Class B Right
and each Class C Right in accordance with the foregoing
subparagraph (ii) (the "Current Values") over (2) the then
current applicable Purchase Price multiplied by the number of
one one-thousandths of shares of Preferred Stock for which
such Right was exercisable immediately prior to the time that
the Acquiring Person became such (such excess, the "Spread"),
and (B) with respect to each Right (other than Rights which
have become void pursuant to Section 11(a)(ii)), make adequate
provision to
30
substitute for the shares of Class A Common Stock, Class B
Common Stock or Class C Common Stock, as the case may be,
issuable in accordance with subparagraph (ii) upon exercise of
the Right and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the applicable Purchase Price, (3)
shares of Preferred Stock or other equity securities of the
Company (including, without limitation, shares or fractions of
shares of preferred stock which, by virtue of having dividend,
voting and liquidation rights substantially comparable to
those of the shares of Common Stock, are deemed in good faith
by the Board of Directors to have substantially the same value
as the shares of Class A Common Stock (in the case of a Class
A Right), Class B Common Stock (in the case of a Class B
Right) or Class C Common Stock (in the case of a Class C
Right) (such shares of Preferred Stock and shares or fractions
of shares of preferred stock are hereinafter referred to as
"Common Stock equivalents")), (4) debt securities of the
Company, (5) other assets or (6) any combination of the
foregoing, having a value which, when added to the value of
the shares of Common Stock actually issued upon exercise of
such Right, shall have an aggregate value equal to the Current
Value (less the amount of any reduction in the applicable
Purchase Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a
nationally recognized investment banking firm selected in good
faith by the Board of Directors; provided, however, if the
Company shall not make adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the date that the Acquiring Person became such (the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, to the
31
extent permitted by applicable law and any material agreements
then in effect to which the Company is a party, upon the
surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Class A Common Stock
(in the case of a Class A Right), Class B Common Stock (in the
case of a Class B Right) or Class C Common Stock (in the case
of a Class C Right) (to the extent available), and then, if
necessary, such number or fractions of shares of the
applicable series of Preferred Stock (to the extent available)
and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If, upon the date any
Person becomes an Acquiring Person, the Board of Directors
shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights,
then, if the Board of Directors so elects, the thirty (30) day
period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period"). To the
extent that the Company determines that some action need be
taken pursuant to the second and/or third sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to
Section 11(a)(ii) hereof and the last sentence of this Section
11(a)(iii) hereof, that such action shall apply uniformly to
all outstanding Class A Rights, Class B Rights and Class C
Rights and (y) may suspend the exercisability of the Class A
Rights, the Class B Rights and the Class C Rights until the
expiration of the Substitution Period in order to seek any
32
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
second sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Class A
Rights, the Class B Rights and the Class C Rights has been
temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the shares
of Class A Common Stock (in the case of a Class A Right),
Class B Common Stock (in the case of a Class B Right) or Class
C Common Stock (in the case of a Class C Right) shall be the
current per share market price (as determined pursuant to
Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and
the per share or fractional value of any "Common Stock
equivalent" shall be deemed to equal the current per share
market price of the Class A Common Stock (in the case of a
Class A Right), Class B Common Stock (in the case of a Class B
Right) or Class C Common Stock (in the case of a Class B
Right). The Board of Directors of the Company may, but shall
not be required to, establish procedures to allocate the right
to receive (a) shares of Class A Common Stock upon the
exercise of the Class A Rights among holders of Class A
Rights, (b) shares of Class B Common Stock upon the exercise
of the Class B Rights among holders of Class B Rights and (c)
shares of Class C Common Stock upon the exercise of the Class
C Rights among holders of Class C Rights, in each case,
pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within
33
45 calendar days after such record date) to subscribe for or purchase shares of
the applicable series of Preferred Stock (or shares having the same rights,
privileges and preferences as the applicable series of Preferred Stock
("equivalent preferred shares")) or securities convertible into the applicable
series of Preferred Stock or equivalent preferred shares at a price per share of
Preferred Stock or equivalent preferred shares (or having a conversion price per
share, if a security convertible into shares of Preferred Stock or equivalent
preferred shares) less than the then current per share market price of the
applicable series of Preferred Stock (determined pursuant to Section 11(d)
hereof) on such record date, the applicable Purchase Price to be in effect after
such record date shall be determined by multiplying the applicable Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of such series of Preferred
Stock and equivalent preferred shares outstanding on such record date plus the
number of shares of such series of Preferred Stock and equivalent preferred
shares which the aggregate offering price of the total number of shares of such
series of Preferred Stock and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the denominator
of which shall be the number of shares of such series of Preferred Stock and
equivalent preferred shares outstanding on such record date plus the number of
additional shares of such series of Preferred Stock and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such
34
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. Shares of Preferred Stock and equivalent preferred shares
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of any series of Preferred Stock (including any
such distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the applicable Purchase Price to be in effect after
such record date shall be determined by multiplying the applicable Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of the
applicable series of Preferred Stock (determined pursuant to Section 11(d)
hereof) on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of such series of Preferred Stock,
and the denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of such series of Preferred Stock;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be
35
less than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the applicable Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) (i) Except as otherwise provided herein, for the purpose
of any computation hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d)(i)) on any date
shall be deemed to be the average of the daily closing prices per share of such
Security for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to but not including such date; provided, however,
that in the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security, and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported by the principal consolidated transaction reporting system with respect
to securities
36
listed or admitted to trading on the
New York Stock Exchange or, if the Security
is not listed or admitted to trading on the
New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use,
or, if on any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of Directors
of the Company. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day.
(ii) For the purpose of any computation hereunder, if
any series of Preferred Stock is publicly traded, the "current
per share market price" of such series of Preferred Stock
shall be determined in accordance with the method set forth in
Section 11(d)(i). If any series of Preferred Stock is not
publicly traded but the corresponding series of Common Stock
is publicly traded, the "current per share market price" of
such series of Preferred Stock shall be conclusively deemed to
be the current per share market price of the corresponding
series of Common Stock as determined pursuant to Section
11(d)(i) multiplied by one thousand (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof). If neither the Common Stock
nor the corresponding Preferred Stock of any series is
publicly traded, "current per share market price" shall mean
the fair value per share as determined in good
37
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the applicable Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest one
ten-thousandth of a share of Preferred Stock or share of Common Stock or other
share or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which
requires such adjustment or (ii) the date of the expiration of the right to
exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Stock, thereafter the Purchase Price and the number of such other shares so
receivable upon exercise of a Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a),
11(b), 11(c), 11(e), 11(h), 11(i) and 11(m), and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable
38
from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a share of Preferred Stock (calculated to the nearest one
ten-thousandth of a share of Preferred Stock) of the applicable series obtained
by (i) multiplying (x) the number of one one-thousandths of a share covered by a
Right immediately prior to such adjustment by (y) the applicable Purchase Price
in effect immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the applicable Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-thousandths of a share of the
applicable series of Preferred Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the applicable Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the applicable Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of Rights,
indicating the record date for the
39
adjustment, and, if known at the time, the amount of the adjustment to be made
and shall promptly give the Rights Agent a copy of such announcement. This
record date may be the date on which the applicable Purchase Price is adjusted
or any day thereafter, but, if the Right Certificates have been issued, shall be
at least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company may, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the applicable
Purchase Price or the number of one one-thousandths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the applicable
Purchase Price and the number of one one-thousandths of a share of Preferred
Stock which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the Preferred
Stock or other shares of capital stock issuable upon exercise of the Rights, the
Company shall take any corporate action which
40
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Preferred Stock
or other such shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (and shall give prompt written
notice of such election to the Rights Agent) until the occurrence of such event
the issuing to the holder of any Right exercised after such record date of the
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price for any series of Preferred Stock, in addition to those
adjustments expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of any series of Preferred Stock, issuance wholly
for cash of any shares of any series of Preferred Stock at less than the current
market price, issuance wholly for cash or any series of Preferred Stock or
securities which by their terms are convertible into or exchangeable for any
series of Preferred Stock, dividends on any series of Preferred Stock payable in
shares of Preferred Stock or issuance of rights, options or warrants referred to
hereinabove in Section
41
11(b), hereafter made by the Company to holders of its Preferred Stock shall not
be taxable to such stockholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on any class of shares of Common Stock payable in Common Stock or (ii)
effect a subdivision, combination or consolidation of any class of Common Stock
(by reclassification or otherwise other than by payment of a dividend payable in
Common Stock) into a greater or lesser number of Common Stock, then in any such
case, the number of Rights associated with each share of Common Stock of such
class then outstanding, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock of such class following any such event shall equal
the result obtained by (A) in the case of the Class A Rights, multiplying the
number of Class A Rights associated with each share of Class A Common Stock
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Class A Common Stock outstanding immediately prior
to the occurrence of the event and the denominator of which shall be the total
number of shares of Class A Common Stock outstanding immediately following the
occurrence of such event, (B) in the case of the Class B Rights, multiplying the
number of Class B Rights associated with each share of Class B Common Stock
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Class B Common Stock outstanding immediately prior
to the occurrence of the event and the denominator of which shall be the total
number of shares of Class B Common Stock outstanding immediately following the
occurrence of such event and (C) in the case of the Class C Rights, multiplying
the number of Class C Rights associated with each share of Class C
42
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Class C Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Class C Common Stock outstanding
immediately following the occurrence of such event . The adjustments provided
for in this Section 11(n) shall be made successively to any class of Common
Stock whenever such a dividend is declared or paid or such subdivision,
combination or consolidation is effected on such class of Common Stock.
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except as
permitted by Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or eliminate the
benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares.
Whenever an adjustment is made as provided in Section 11
and/or 13 hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment, and a brief statement of the facts and computations
accounting for such adjustment, (b) file with the Rights Agent and with each
transfer agent for the Common Stock or the Preferred Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof (if so required under Section
25 hereof). The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of any such adjustment unless and until it shall have received
such certificate.
43
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earnings Power. (a) In the event, directly or indirectly, at any time
after any Person has become an Acquiring Person, (i) the Company shall merge
with and into any other Person, (ii) any Person shall consolidate with the
Company, or any Person shall merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (or of the
Company) or cash or any other property, or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more of
its wholly-owned Subsidiaries), then in each such case, proper provision shall
be made so that: (A) each holder of record of a Right (other than Rights which
have become void pursuant to Section 11(a)(ii)) shall thereafter have the right
to receive, upon the exercise thereof at a price equal to the then current
applicable Purchase Price multiplied by the number of one one-thousandths of a
share of Preferred Stock for which the applicable Right is then exercisable
(each as subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b),
11(c), 11(h), 11(i) and 11(m)), in accordance with the terms of this Agreement
and in lieu of Preferred Stock, such number of validly issued, fully paid and
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as defined herein) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right is then
exercisable (as subsequently adjusted thereafter pursuant to Sections 11(a)(i),
11(b), 11(c), 11(h),
44
11(i) and 11(m)) and (2) dividing that product by 50% of the then current per
share market price of the Common Stock of such Principal Party (determined
pursuant to Section 11(d)(i) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; provided, that the Purchase Price and
the number of shares of Common Stock of such Principal Party issuable upon
exercise of each Right shall be further adjusted as provided in Section 11(f) of
this Agreement to reflect any events occurring in respect of such Principal
Party after the date of such consolidation, merger, sale or transfer; (B) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (C) the term "Company" shall thereafter
be deemed to refer to such Principal Party; and (D) such Principal Party shall
take such steps (including, but not limited to, the reservation of a sufficient
number of its shares of Common Stock in accordance with Section 9 hereof) in
connection with such consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; provided, that, upon the subsequent
occurrence of any consolidation, merger, sale or transfer of assets or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the applicable Purchase Price as provided in this Section 13(a), such
cash, shares, rights, warrants and other property which such holder would have
been entitled to receive had such holder, at the time of such transaction, owned
the Common Stock of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the
45
Rights in accordance with the terms hereof for such cash, shares, rights,
warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clauses (i) or (ii) of the first sentence of Section 13(a)
hereof: (A) the Person that is the issuer of the securities
into which the shares of Common Stock are converted in such
merger or consolidation, or, if there is more than one such
issuer, the issuer of the shares of Common Stock of which have
the greatest aggregate market value of shares outstanding, or
(B) if no securities are so issued, (x) the Person that is the
other party to the merger, if such Person survives said
merger, or, if there is more than one such Person, the Person
the shares of Common Stock of which have the greatest
aggregate market value of shares outstanding or (y) if the
Person that is the other party to the merger does not survive
the merger, the Person that does survive the merger (including
the Company if it survives) or (z) the Person resulting from
the consolidation; and
(ii) in the case of any transaction described in
clause (iii) of the first sentence in Section 13(a) hereof,
the Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same
portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons
as is the issuer of Common Stock having the greatest aggregate
market value of shares outstanding;
46
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of all of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value of shares outstanding,
or (3) if such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the Person owned by
the joint venture was a Subsidiary of both or all of such joint venturers, and
the Principal Party in each such case shall bear the obligations set forth in
this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof unless prior
thereto the Company and the Principal Party involved therein shall have executed
and delivered to the Rights Agent an agreement confirming that the requirements
of Sections 13(a) and (b) hereof shall promptly be performed in accordance with
their terms and that such consolidation, merger, sale or transfer of assets
shall not result in a default by the Principal Party under this Agreement as the
same shall have been assumed by the Principal Party pursuant to Sections 13(a)
and (b) hereof and providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will:
47
(i) prepare and file a registration statement under
the Securities Act, if necessary, with respect to the Rights
and the securities purchasable upon exercise of the Rights on
an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and use its best efforts to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the Final Expiration Date, and similarly
comply with applicable state securities laws;
(i) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the
New York Stock Exchange or on another national securities
exchange, to list or admit to trading (or continue the listing
of) the Rights and the securities purchasable upon exercise of
the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Stock of the Principal Party shall
not be listed or admitted to trading on the New York Stock
Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the
Rights to be reported by such other system then in use;
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act; and
(iii) obtain waivers of any rights of first refusal
or preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of
outstanding Rights.
48
(d) In case the Principal Party has provision in any of its
authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders of
Rights pursuant to this Section 13), in connection with, or as a consequence of,
the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share thereof (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then current market price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of Section 13, then, in
such event, the Company hereby agrees with each holder of Rights that it shall
not consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any
time after a Person first becomes an Acquiring Person, enter into any
transaction of the type contemplated by clauses (i), (ii) or (iii) of Section
13(a) hereof if (x) at the time of or immediately after such consolidation,
merger, sale, transfer or other transaction there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale, transfer of other
49
transaction, the stockholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (z) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected
50
by the Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the Company shall
be used.
(b) The Company shall not be required to issue fractions of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). Interests in fractions of Preferred Stock in integral
multiples of one one-thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one share of Preferred Stock. For the
purposes of this Section 14(b), the current market value of a share of Preferred
Stock shall be the closing price of a share of the applicable series of
Preferred Stock (as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
51
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), on his own behalf and for his own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, such Common Stock) in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
52
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Stock or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to
53
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in this
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements incurred in the
preparation, administration, delivery, execution and amendment of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damage, judgment, fine, penalty, claim, demand, settlement,
cost or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent (each determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction) for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including,
without limitation, the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly. The costs and expenses
incurred in enforcing this right of indemnification shall be paid by the Company
unless it its determined by a final, non-appealable order, judgment, decree or
ruling of a court of competent jurisdiction that the Rights Agent is not
entitled to indemnification due to the Rights Agent's gross negligence, bad
faith or willful misconduct. The provisions of this Section 18 and Section 20
below shall survive the termination of this Agreement, the exercise or
expiration of the Rights and the resignation or removal of the Rights Agent.
54
(b) The Rights Agent shall be authorized and protected and
shall incur no liability for, or in respect of any action taken suffered or
omitted by it in connection with, its acceptance and administration of this
Agreement in reliance upon any rights Certificate or certificate for any series
of Preferred Stock or any class of Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advise of counsel as set forth in Section 20 hereof. The
Rights Agent shall not be deemed to have knowledge of any event of which it was
supposed to receive notice thereof hereunder, and the Rights Agent shall be
fully protected and shall incur no liability for failing to take any action in
connection therewith unless and until it has received such notice in writing.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
provided, that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
55
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes only the duties and obligations expressly imposed by this Agreement
(and no implied duties and obligations) upon the following terms and conditions,
by all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent, and the Rights Agent shall incur no liability for, or in
respect of, any action taken, suffered or omitted by it in accordance
with such advise or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or
56
established by the Company prior to taking, suffering or omitting to
take any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any
one of the Chairman of the Board of Directors, the President, any Vice
President, the Treasurer, the Controller or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall
be full authorization and protection to the Rights Agent for any action
taken, suffered or omitted by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or
willful misconduct (each as determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever
(including, but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any
liability of the Rights Agent under this Rights Agreement will be
limited to the amount of fees paid by the Company to the Rights Agent.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility or
have any liability in respect of the validity of this Agreement or the
execution and delivery hereof
57
(except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be responsible for any change
in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided
for in Sections 3, 11, 13, 23 and 24, or the ascertaining of the
existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right
Certificates after receipt of a certificate furnished pursuant to
Section 12, describing such change or adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Preferred Stock or
other securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Preferred Stock or other
securities will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board of Directors, the
Chief Executive Officer, the Chief Operating Officer, the
58
President, the Chief Financial Officer or the Secretary of the Company,
and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Agreement and the date on and/or after which
such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any
officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the
case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to
be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
59
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company or any other reason resulting from any such act,
default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct (each as determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction)
in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in
the form of assignment or the form of election to purchase set forth on
the reverse thereof, as the case may be, has not been completed to
certify the holder is not an Acquiring Person (or an Affiliate or
Associate thereof), the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of each class of Common Stock or each series of Preferred Stock
by registered or certified mail, and, following the Distribution Date, to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of each class of Common Stock or each series of Preferred
Stock by registered or certified mail, and, following the Distribution Date, to
the holders of the Right Certificates by first-class mail. If the
60
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a Person organized and doing
business under the laws of the United States or any State thereof, which is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million or (b) an Affiliate of a Person described in
clause (a). After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
any class of Common Stock or any series of Preferred Stock, and, following the
Distribution Date, mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
61
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such forms as may be approved by its Board of Directors to
reflect any adjustment or change in the applicable Purchase Price and the number
or kind or class of shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of any class of Common Stock
following the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company may, with respect to shares of Common
Stock of any class so issued or sold pursuant to (i) the exercise of stock
options, (ii) under any employee plan or arrangement, (iii) upon the exercise,
conversion or exchange of securities notes or debentures issued by the Company
or (iv) a contractual obligation of the Company in each case existing prior to
the Distribution Date, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at any time prior to such time as any Person first becomes an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at a redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (the redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the current market price of the
Common Stock at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
62
(b) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23 (or at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights (or such later time as
the Board of Directors may establish for the effectiveness of such redemption),
the Company shall give prompt written notice of such redemption to the Rights
Agent and shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
Section 24. Exchange. (a) The Board of Directors of the
Company may, at its option, at any time after any Person first becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for shares of Common Stock (or, at the
Company's option, Preferred Stock in accordance with Section 11(a)(iii)) at an
exchange ratio of one share of Class A Common Stock per Class A Right (or one
one-thousandth of a share of Series A Preferred Stock), one share of Class B
Common Stock per Class B Right (or one
63
one-thousandth of a share of Series B Preferred Stock) and one share of Class C
Common Stock per Class C Right (or one one-thousandth of a share of Series C
Preferred Stock) (adjusted to reflect any stock split, stock dividend or similar
transaction with respect to the applicable class of Common Stock occurring after
the date hereof; such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than an Exempt Person), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of (1) shares of Class B Common Stock
aggregating 50% or more of the shares of Class B Common Stock then outstanding
or (2) shares of Common Stock representing, in the aggregate, 50% or more of the
total number of votes entitled to be cast generally (other than in an election
of directors) by the holders of the Common Stock then outstanding. From and
after the occurrence of an event specified in Section 13(a) hereof, any Rights
that theretofore have not been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a). The exchange of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the exchange of any Rights pursuant
to paragraph (a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only right
thereafter of holders of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange (with prompt written notice thereof to the Rights Agent);
provided, however, that the failure to
64
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall promptly mail a notice of any such exchange to all
of the holders of the Rights so exchanged at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange of (a) Class A Rights shall be effected pro rata based on the
number of available shares of Class A Common Stock and the number of Class A
Rights (other than Class A Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Class A Rights,
(b) Class B Rights shall be effected pro rata based on the number of available
shares of Class B Common Stock and the number of Class B Rights (other than
Class B Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Class B Rights and (c) Class C Rights
shall be effected pro rata based on the number of available shares of Class C
Common Stock and the number of Class C Rights (other than Class C Rights which
have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by
each holder of Class C Rights.
(c) The Company may at its option substitute, and, in the
event that there shall not be sufficient shares of Class A Common Stock, Class B
Common Stock or Class C Common Stock, as the case may be, issued but not
outstanding or authorized but unissued to permit an exchange of Class A Rights,
Class B Rights or Class C Rights, as the case may be, for Class A Common Stock,
Class B Common Stock or Class C Common Stock as contemplated in accordance with
this Section 24, the Company may, in its discretion, take such action as may be
65
necessary to authorize additional shares of Class A Common Stock, Class B Common
Stock or Class C Common Stock for issuance upon exchange of the Class A Rights,
the Class B Rights or the Class C Rights. In the event that the Company shall
determine not to take such action or shall, after good faith effort, be unable
to take such action as may be necessary to authorize such additional shares of
Class A Common Stock, Class B Common Stock or Class C Common Stock, the Company
shall substitute, to the extent of such insufficiency, for each share of Class A
Common Stock, Class B Common Stock or Class C Common Stock that would otherwise
be issuable upon exchange of a Class A Right, Class B Right or Class C Right, a
number of shares of Series A Preferred Stock, Series B Preferred Stock, or
Series C Preferred Stock or fractions thereof (or equivalent preferred shares as
such term is defined in Section 11(b)) having an aggregate current per share
market price (determined pursuant to Section 11(d) hereof) equal to the current
per share market price of one share of Class A Common Stock, Class B Common
Stock or Class C Common Stock (determined pursuant to Section 11(d) hereof), as
the case may be, as of the date of issuance of such shares of Series A Preferred
Stock, Series B Preferred Stock or Series C Preferred Stock, as the case may be,
or fractions thereof (or equivalent preferred shares).
(d) The Company shall not, in connection with any exchange
pursuant to this Section 24, be required to issue fractions of shares of Common
Stock or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, the Company shall pay
to the registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of the
applicable class of Common Stock. For the purposes of this paragraph (d), the
current market value of a
66
whole share of Class A Common Stock, Class B Common Stock or Class C Common
Stock shall be the closing price of a share of Class A Common Stock, Class B
Common Stock and Class C Common Stock (as determined pursuant to the second
sentence of Section 11(d)(i) hereof), as applicable, for the Trading Day
immediately prior to but not including the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events. (a) In case the Company
shall at any time after the earlier of the Distribution Date or the Stock
Acquisition Date propose (i) to pay any dividend payable in stock of any class
to the holders of any series of its Preferred Stock or to make any other
distribution to the holders of any series of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of any series of
its Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of any series of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of any series of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding Preferred Stock),
(iv) to effect the liquidation, dissolution or winding up of the Company, or (v)
to declare or pay any dividend on any class of Common Stock payable in Common
Stock or to effect a subdivision, combination or consolidation of any class of
Common Stock (by reclassification or otherwise than by payment of dividends in
Common Stock), then, in each such case, the Company shall give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which such
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of such class or series of Common Stock
and/or Preferred Stock, if any such date is to be fixed, and such notice shall
be so given in the case of
67
any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Stock and/or Preferred Stock, whichever shall be
the earlier.
(b) In case any event described in Section 11(a)(ii) or
Section 13 shall occur then the Company shall as soon as practicable thereafter
give to each holder of a Right Certificate (or if occurring prior to the
Distribution Date, the holders of the Common Stock) in accordance with Section
26 hereof, a notice of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of Rights under Section
11(a)(ii) and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) or by facsimile transmission as follows:
The Neiman Marcus Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage
68
prepaid, addressed (until another address is filed in writing with the Company)
or by facsimile transmission as follows:
Mellon Investor Services LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Relationship Manager
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Mellon Investor Services LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
69
Section 27. Supplements and Amendments. Except as otherwise
provided for so long as the Rights are then redeemable, the Company may in its
sole and absolute discretion, and the Rights Agent shall if the Company so
directs but subject to the other provisions of this Section, supplement or amend
any provision of this Agreement in any respect without the approval of any
holders of the Rights. At any time when the Rights are no longer redeemable, no
such supplement or amendment shall be made if such supplement or amendment shall
adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no
such amendment may cause the Rights again to become redeemable or cause the
Agreement again to become amendable other than in accordance with this sentence.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, and provided that such supplement or amendment does not
change or increase the Rights Agent's rights, duties, liabilities or
obligations, the Rights Agent shall execute such supplement or amendment.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for
70
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement or applicable to this Agreement is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that all
provisions regarding the rights, duties, liabilities and obligations of the
Rights Agent shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed entirely
within such State.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
71
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 34. Administration. The Board of Directors of the
Company shall have the exclusive power and authority to: (i) administer and
interpret the provisions of this Agreement, including, without limiting the
generality of the foregoing, to administer and interpret the provisions of this
Agreement relating to Exempt Persons to effectuate the purpose of such
provisions, and (ii) to exercise all rights and powers specifically granted to
the Board of Directors or the Company or as may be necessary or advisable in the
administration of this Agreement. All such actions, calculations, determinations
and interpretations which are done or made by the Board of Directors in good
faith shall be final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights and all other parties and shall not subject the Board
of Directors to any liability to the holders of the Rights.
[The remainder of this page intentionally left blank.]
72
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
THE NEIMAN MARCUS GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. Bangs
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. Bangs
Title Senior Vice President and General Counsel
MELLON INVESTOR SERVICES LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Vice President
EXHIBIT A-1
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
THE NEIMAN MARCUS GROUP, INC.
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
----------
The Neiman Marcus Group, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "Company"), hereby certifies that the following resolution was duly
adopted by the Board of Directors of the Company as required by Section 151 of
the General Corporation Law of the State of Delaware at a meeting duly called
and held on October 6, 1999:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of the Company (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Company's
Restated Certificate of Incorporation, as amended to date (hereinafter called
the "Certificate of Incorporation"), the Board of Directors hereby creates a
series of Preferred Stock, par value $.01 per share (the "Preferred Stock"), of
the Company and hereby adopts the resolution establishing the designation,
number of shares, preferences, voting powers and other rights, and the
restrictions and limitations thereof, as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 100,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Company
convertible into Series A Preferred Stock.
A-1-1
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Class A Common Stock,
par value $.01 per share, of the Company ("Class A Common Stock"), Class B
Common Stock, par value $.01 per share, of the Company ("Class B Common Stock")
and Class C Common Stock, par value $.01 per share, of the Company ("Class C
Common Stock" and, together with the Class A Common Stock and Class B Common
Stock, the "Common Stock") and of any other stock of the Company ranking junior
to the Series A Preferred Stock, and on a pari passu basis with the Series B
Preferred Stock and the Series C Preferred Stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for such purpose, quarterly dividends payable in cash on the last day
of March, June, September and December in each year (each such date being
referred to herein as a "Dividend Payment Date"), commencing on the first
Dividend Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Class A Common Stock, declared on the Class A Common Stock
since the immediately preceding Dividend Payment Date or, with respect to the
first Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series A Preferred Stock. In the event the Company shall at any
time after October 18, 1999 declare or pay any dividend on the Class A Common
Stock payable in shares of Class A Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Class A Common Stock
(by reclassification or otherwise than by payment of a dividend in shares of
Class A Common Stock) into a greater or lesser number of shares of Class A
Common Stock, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Class A
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Class A Common Stock that were outstanding
immediately prior to such event.
(B) The Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Class A Common
Stock (other than a dividend payable in shares of Class A Common Stock);
provided, that, in the event no dividend or distribution shall have been
declared on the Class A Common Stock during the period between any Dividend
Payment Date and the next subsequent Dividend Payment Date, a dividend of $1 per
share on the Series A Preferred Stock shall nevertheless be payable, when, as
and if declared, on such subsequent Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative, whether
or not earned or declared, on outstanding shares of Series A Preferred Stock
from the Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for the
first Dividend Payment Date, in which case dividends on such shares shall
A-1-2
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights;
(A) Subject to the provision for adjustment hereinafter set
forth and except as otherwise provided in the Certificate of Incorporation or
required by law, each share of Series A Preferred Stock shall entitle the holder
thereof to a number of votes equal to 1,000 times the number of votes which each
share of Class A Common Stock is entitled to vote, on all matters upon which the
holders of the Class A Common Stock of the Company are entitled to vote. In the
event the Company shall at any time after October 18, 1999 declare or pay any
dividend on the Class A Common Stock payable in shares of Class A Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Class A Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Class A Common Stock) into a greater or lesser number
of shares of Class A Common Stock, then in each such case the number of votes
per share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of shares of Class A Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Class A Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in the Certificate
of Incorporation or in any other Certificate of Designations creating a series
of Preferred Stock or any similar stock, and except as otherwise required by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Class A Common Stock and any other capital stock of the Company having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Class A Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all
A-1-3
accrued and unpaid dividends and distributions, whether or not earned or
declared, on shares of Series A Preferred Stock outstanding shall have been paid
in full, the Company shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (as to
dividends) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (as
to dividends) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock, provided that the Company may at
any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Company ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series A Preferred Stock or
rights, warrants or options to acquire such junior stock;
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to the holders of the Common Stock or of shares of any other stock of
the Company ranking junior, upon liquidation, dissolution or winding up, to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not earned or
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be
A-1-4
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Class A Common Stock, or (B) to
the holders of shares of stock ranking on a parity upon liquidation, dissolution
or winding up with the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all such parity stock in proportion
to the total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. In the event the Company shall at
any time after October 18, 1999 declare or pay any dividend on the Class A
Common Stock payable in shares of Class A Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Class A Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Class A Common Stock) into a greater or lesser number of shares of Class A
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under the proviso in clause (A) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Class A Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Class A Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Class A Common Stock are converted into, exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series A Preferred Stock shall at the same time be
similarly converted into, exchanged for or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Class A Common Stock is converted, exchanged or converted. In the event the
Company shall at any time after October 18, 1999 declare or pay any dividend on
the Class A Common Stock payable in shares of Class A Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Class A Common Stock) into a greater or lesser number of shares of Class A
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the conversion, exchange or change of shares of Series
A Preferred Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Class A Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Class A Common Stock that were outstanding immediately prior
to such event.
Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable from any holder.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Company, pari passu with the
Series B and the Series C Preferred Stock, junior to all other series of
Preferred Stock and senior to all classes of Common Stock.
Section 10. Amendment. If any proposed amendment to the
Certificate of Incorporation (including this Certificate of Designations) would
alter, change or repeal any of the
A-1-5
preferences, powers or special rights given to the Series A Preferred Stock so
as to affect the Series A Preferred Stock adversely, then the holders of the
Series A Preferred Stock shall be entitled to vote separately as a class upon
such amendment, and the affirmative vote of two-thirds of the outstanding shares
of the Series A Preferred Stock, voting separately as a class, shall be
necessary for the adoption thereof, in addition to such other vote as may be
required by the General Corporation Law of the State of Delaware.
Section 11. Fractional Shares. The Series A Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Stock.
A-1-6
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Company by its ______________________this __day of
_____, 1999.
-----------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
THE NEIMAN MARCUS GROUP, INC.
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
----------
The Neiman Marcus Group, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "Company"), hereby certifies that the following resolution was duly
adopted by the Board of Directors of the Company as required by Section 151 of
the General Corporation Law of the State of Delaware at a meeting duly called
and held on October 6, 1999:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of the Company (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Company's
Restated Certificate of Incorporation, as amended to date (hereinafter called
the "Certificate of Incorporation"), the Board of Directors hereby creates a
series of Preferred Stock, par value $.01 per share (the "Preferred Stock"), of
the Company and hereby adopts the resolution establishing the designation,
number of shares, preferences, voting powers and other rights, and the
restrictions and limitations thereof, as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series B Junior Participating Preferred Stock" (the
"Series B Preferred Stock") and the number of shares constituting the Series B
Preferred Stock shall be 100,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series B Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Company
convertible into Series B Preferred Stock.
Section 2. Dividends and Distributions.
A-2-1
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series B Preferred Stock with respect to dividends, the holders of shares of
Series B Preferred Stock, in preference to the holders of Class A Common Stock,
par value $.01 per share, of the Company ("Class A Common Stock"), Class B
Common Stock, par value $.01 per share, of the Company ("Class B Common Stock")
and Class C Common Stock, par value $.01 per share, of the Company ("Class C
Common Stock" and, together with the Class A Common Stock and Class B Common
Stock, the "Common Stock") and of any other stock of the Company ranking junior
to the Series B Preferred Stock, and on a pari passu basis with the Series C
Preferred Stock and the Series A Preferred Stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for such purpose, quarterly dividends payable in cash on the last day
of March, June, September and December in each year (each such date being
referred to herein as a "Dividend Payment Date"), commencing on the first
Dividend Payment Date after the first issuance of a share or fraction of a share
of Series B Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Class B Common Stock, declared on the Class B Common Stock
since the immediately preceding Dividend Payment Date or, with respect to the
first Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series B Preferred Stock. In the event the Company shall at any
time after October 18, 1999 declare or pay any dividend on the Class B Common
Stock payable in shares of Class B Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Class B Common Stock
(by reclassification or otherwise than by payment of a dividend in shares of
Class B Common Stock) into a greater or lesser number of shares of Class B
Common Stock, then in each such case the amount to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Class B
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Class B Common Stock that were outstanding
immediately prior to such event.
(B) The Company shall declare a dividend or distribution on
the Series B Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Class B Common
Stock (other than a dividend payable in shares of Class B Common Stock);
provided, that, in the event no dividend or distribution shall have been
declared on the Class B Common Stock during the period between any Dividend
Payment Date and the next subsequent Dividend Payment Date, a dividend of $1 per
share on the Series B Preferred Stock shall nevertheless be payable, when, as
and if declared, on such subsequent Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative, whether
or not earned or declared, on outstanding shares of Series B Preferred Stock
from the Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for the
first Dividend Payment Date, in which case dividends on such shares shall begin
to accrue from the date of issue of such shares, or unless the date of issue is
a Dividend Payment Date or is a date after the record date for the determination
of holders of shares of
A-2-2
Series B Preferred Stock entitled to receive a quarterly dividend and before
such Dividend Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series B
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series B
Preferred Stock shall have the following voting rights;
(A) Subject to the provision for adjustment hereinafter set
forth and except as otherwise provided in the Certificate of Incorporation or
required by law, each share of Series B Preferred Stock shall entitle the holder
thereof to a number of votes equal to 1,000 times the number of votes which each
share of Class B Common Stock is entitled to vote, on all matters upon which the
holders of the Class B Common Stock of the Company are entitled to vote. In the
event the Company shall at any time after October 18, 1999 declare or pay any
dividend on the Class B Common Stock payable in shares of Class B Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Class B Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Class B Common Stock) into a greater or lesser number
of shares of Class B Common Stock, then in each such case the number of votes
per share to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of shares of Class B Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Class B Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock, and except as otherwise required by law,
the holders of shares of Series B Preferred Stock and the holders of shares of
Class B Common Stock and any other capital stock of the Company having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Class B Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not earned or declared, on shares of Series B
Preferred Stock outstanding shall have been paid in full, the Company shall not:
A-2-3
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (as to
dividends) to the Series B Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (as
to dividends) with the Series B Preferred Stock, except
dividends paid ratably on the Series B Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series B Preferred Stock, provided that the Company may at
any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Company ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series B Preferred Stock or
rights, warrants or options to acquire such junior stock;
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock, or any
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to the holders of the Common Stock or of shares of any other stock of
the Company ranking junior, upon liquidation, dissolution or winding up, to the
Series B Preferred Stock unless, prior thereto, the holders of shares of Series
B Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not earned or
declared, to the date of such payment, provided that the holders of shares of
Series B Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be distributed per share to holders of
shares of Class B Common Stock, or (B) to the holders of shares of stock ranking
on a parity upon liquidation, dissolution or winding up with the Series B
Preferred Stock, except
A-2-4
distributions made ratably on the Series B Preferred Stock and all such parity
stock in proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding up. In the event the
Company shall at any time after October 18, 1999 declare or pay any dividend on
the Class B Common Stock payable in shares of Class B Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Class B
Common Stock (by reclassification or otherwise than by payment of a dividend in
shares of Class B Common Stock) into a greater or lesser number of shares of
Class B Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (A) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Class B Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Class B Common
Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Class B Common Stock are converted into, exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series B Preferred Stock shall at the same time be
similarly converted into, exchanged for or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Class B Common Stock is converted, exchanged or converted. In the event the
Company shall at any time after October 18, 1999 declare or pay any dividend on
the Class B Common Stock payable in shares of Class B Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Class B Common Stock) into a greater or lesser number of shares of Class B
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the conversion, exchange or change of shares of Series
B Preferred Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Class B Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Class B Common Stock that were outstanding immediately prior
to such event.
Section 8. No Redemption. The shares of Series B Preferred
Stock shall not be redeemable from any holder.
Section 9. Rank. The Series B Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Company, pari passu with the
Series C and the Series A Preferred Stock, junior to all other series of
Preferred Stock and senior to all classes of Common Stock.
Section 10. Amendment. If any proposed amendment to the
Certificate of Incorporation (including this Certificate of Designations) would
alter, change or repeal any of the preferences, powers or special rights given
to the Series B Preferred Stock so as to affect the Series B Preferred Stock
adversely, then the holders of the Series B Preferred Stock shall be entitled to
vote separately as a class upon such amendment, and the affirmative vote of
two-thirds of the outstanding shares of the Series B Preferred Stock, voting
separately as a class,
A-2-5
shall be necessary for the adoption thereof, in addition to such other vote as
may be required by the General Corporation Law of the State of Delaware.
Section 11. Fractional Shares. The Series B Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series B Stock.
A-2-6
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Company by its _____________this __day of _____, 1999.
-----------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
THE NEIMAN MARCUS GROUP, INC.
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
----------
The Neiman Marcus Group, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "Company"), hereby certifies that the following resolution was duly
adopted by the Board of Directors of the Company as required by Section 151 of
the General Corporation Law of the State of Delaware at a meeting duly called
and held on October 6, 1999:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of the Company (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Company's
Restated Certificate of Incorporation, as amended to date (hereinafter called
the "Certificate of Incorporation"), the Board of Directors hereby creates a
series of Preferred Stock, par value $.01 per share (the "Preferred Stock"), of
the Company and hereby adopts the resolution establishing the designation,
number of shares, preferences, voting powers and other rights, and the
restrictions and limitations thereof, as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series C Junior Participating Preferred Stock" (the
"Series C Preferred Stock") and the number of shares constituting the Series C
Preferred Stock shall be 50,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series C Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Company
convertible into Series C Preferred Stock.
A-3-1
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series C Preferred Stock with respect to dividends, the holders of shares of
Series C Preferred Stock, in preference to the holders of Class A Common Stock,
par value $.01 per share, of the Company ("Class A Common Stock"), Class B
Common Stock, par value $.01 per share, of the Company ("Class B Common Stock")
and Class C Common Stock, par value $.01 per share, of the Company ("Class C
Common Stock" and, together with the Class A Common Stock and Class B Common
Stock, the "Common Stock") and of any other stock of the Company ranking junior
to the Series C Preferred Stock, and on a pari passu basis with the Series A
Preferred Stock and the Series B Preferred Stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for such purpose, quarterly dividends payable in cash on the last day
of March, June, September and December in each year (each such date being
referred to herein as a "Dividend Payment Date"), commencing on the first
Dividend Payment Date after the first issuance of a share or fraction of a share
of Series C Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Class C Common Stock, declared on the Class C Common Stock
since the immediately preceding Dividend Payment Date or, with respect to the
first Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series C Preferred Stock. In the event the Company shall at any
time after October 18, 1999 declare or pay any dividend on the Class C Common
Stock payable in shares of Class C Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Class C Common Stock
(by reclassification or otherwise than by payment of a dividend in shares of
Class C Common Stock) into a greater or lesser number of shares of Class C
Common Stock, then in each such case the amount to which holders of shares of
Series C Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Class C
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Class C Common Stock that were outstanding
immediately prior to such event.
(B) The Company shall declare a dividend or distribution on
the Series C Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Class C Common
Stock (other than a dividend payable in shares of Class C Common Stock);
provided, that, in the event no dividend or distribution shall have been
declared on the Class C Common Stock during the period between any Dividend
Payment Date and the next subsequent Dividend Payment Date, a dividend of $1 per
share on the Series C Preferred Stock shall nevertheless be payable, when, as
and if declared, on such subsequent Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative, whether
or not earned or declared, on outstanding shares of Series C Preferred Stock
from the Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for the
first Dividend Payment Date, in which case dividends on such shares shall
A-3-2
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series C Preferred Stock entitled to
receive a quarterly dividend and before such Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series C Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series C Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of Series C
Preferred Stock shall have the following voting rights;
(A) Subject to the provision for adjustment hereinafter set
forth and except as otherwise provided in the Certificate of Incorporation or
required by law, each share of Series C Preferred Stock shall entitle the holder
thereof to a number of votes equal to 1,000 times the number of votes which each
share of Class C Common Stock is entitled to vote, on all matters upon which the
holders of the Class C Common Stock of the Company are entitled to vote. In the
event the Company shall at any time after October 18, 1999 declare or pay any
dividend on the Class C Common Stock payable in shares of Class C Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Class C Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Class C Common Stock) into a greater or lesser number
of shares of Class C Common Stock, then in each such case the number of votes
per share to which holders of shares of Series C Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of shares of Class C Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Class C Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock, and except as otherwise required by law,
the holders of shares of Series C Preferred Stock and the holders of shares of
Class C Common Stock and any other capital stock of the Company having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series C Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Class C Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series C Preferred Stock as provided in Section 2
are in arrears, thereafter and until all
A-3-3
accrued and unpaid dividends and distributions, whether or not earned or
declared, on shares of Series C Preferred Stock outstanding shall have been paid
in full, the Company shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (as to
dividends) to the Series C Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (as
to dividends) with the Series C Preferred Stock, except
dividends paid ratably on the Series C Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series C Preferred Stock, provided that the Company may at
any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Company ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series C Preferred Stock or
rights, warrants or options to acquire such junior stock;
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series C Preferred Stock, or any
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series C
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series C Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to the holders of the Common Stock or of shares of any other stock of
the Company ranking junior, upon liquidation, dissolution or winding up, to the
Series C Preferred Stock unless, prior thereto, the holders of shares of Series
C Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not earned or
declared, to the date of such payment, provided that the holders of shares of
Series C Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment
A-3-4
hereinafter set forth, equal to 1,000 times the aggregate amount to be
distributed per share to holders of shares of Class C Common Stock, or (B) to
the holders of shares of stock ranking on a parity upon liquidation, dissolution
or winding up with the Series C Preferred Stock, except distributions made
ratably on the Series C Preferred Stock and all such parity stock in proportion
to the total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. In the event the Company shall at
any time after October 18, 1999 declare or pay any dividend on the Class C
Common Stock payable in shares of Class C Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Class C Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Class C Common Stock) into a greater or lesser number of shares of Class C
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under the proviso in clause (A) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Class C Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Class C Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Class C Common Stock are converted into, exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series C Preferred Stock shall at the same time be
similarly converted into, exchanged for or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Class C Common Stock is converted, exchanged or converted. In the event the
Company shall at any time after October 18, 1999 declare or pay any dividend on
the Class C Common Stock payable in shares of Class C Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Class C Common Stock) into a greater or lesser number of shares of Class C
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the conversion, exchange or change of shares of Series
C Preferred Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Class C Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Class C Common Stock that were outstanding immediately prior
to such event.
Section 8. No Redemption. The shares of Series C Preferred
Stock shall not be redeemable from any holder.
Section 9. Rank. The Series C Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Company, pari passu with the
Series A and the Series B Preferred Stock, junior to all other series of
Preferred Stock and senior to all classes of Common Stock.
Section 10. Amendment. If any proposed amendment to the
Certificate of Incorporation (including this Certificate of Designations) would
alter, change or repeal any of the preferences, powers or special rights given
to the Series C Preferred Stock so as to affect the
A-3-5
Series C Preferred Stock adversely, then the holders of the Series C Preferred
Stock shall be entitled to vote separately as a class upon such amendment, and
the affirmative vote of two-thirds of the outstanding shares of the Series C
Preferred Stock, voting separately as a class, shall be necessary for the
adoption thereof, in addition to such other vote as may be required by the
General Corporation Law of the State of Delaware.
Section 11. Fractional Shares. The Series C Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series C Stock.
A-3-6
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Company by its _____________this __day of _____, 1999.
----------------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
Form of Class A Right Certificate
Certificate No. R- ____
NOT EXERCISABLE AFTER OCTOBER 6, 2009 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE CLASS A RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER CLASS A RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH
IN THE RIGHTS AGREEMENT, CLASS A RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID
AND WILL NO LONGER BE TRANSFERABLE.
Class A Right Certificate
THE NEIMAN MARCUS GROUP, INC.
This certifies that ___________ or registered assigns, is the
registered owner of the number of Class A Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of October 6, 1999, as the same may be amended
from time to time (the "Rights Agreement"), between The Neiman Marcus Group,
Inc., a Delaware corporation (the "Company"), and BankBoston, N.A., a national
banking association, (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on October 6, 2009 at the
office or agency of the Rights Agent designated for such purpose, or of its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $.01 per share
(the "Series A Preferred Stock"), of the Company, at a purchase price of $100.00
per one one-thousandth of a share of Series A Preferred Stock (the "Purchase
Price"), upon presentation and surrender of this Class A Right Certificate with
the Form of Election to Purchase duly executed. The number of Class A Rights
evidenced by this Class A Right Certificate (and the number of one
one-thousandths of a share of Series A Preferred Stock which may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of October 18, 1999, based on the Series A
Preferred Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price, the number of one one-thousandths of a share of
Series A Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Class A Rights and the number of Class A
Rights evidenced by this Class A Right Certificate are subject to modification
and adjustment upon the happening of certain events.
Notwithstanding anything in the Rights Agreement to the
contrary, from and after the time (the "invalidation time") when any person
first becomes an Acquiring Person (as
B-1-1
defined in the Rights Agreement), the Class A Rights evidenced hereby
beneficially owned by (x) any Acquiring Person (or any Affiliate (as defined in
the Rights Agreement) or Associate (as defined in the Rights Agreement) of any
Acquiring Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the invalidation time or
(z) a transferee of any Acquiring Person (or any such Affiliate or Associate)
who became a transferee prior to or concurrently with the invalidation time
pursuant to either (I) a transfer from the Acquiring Person to holders of its
equity securities or to any person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Class A Rights or (II) a
transfer which the Board of Directors of the Company has determined is part of a
plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of Section 11(a)(ii) of the Rights Agreement, and subsequent
transferees of such persons, shall be void without any further action and any
holder hereof shall thereafter have no rights whatsoever with respect to the
Class A Rights evidenced hereby under any provision of the Rights Agreement.
This Class A Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Class A Right
Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned office or agency of the
Rights Agent. The Company will mail to the holder of this Class A Right
Certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor.
This Class A Right Certificate, with or without other Class A
Right Certificates, upon surrender at the office or agency of the Rights Agent
designated for such purpose, may be exchanged for another Class A Right
Certificate or Class A Right Certificates of like tenor and date evidencing
Class A Rights entitling the holder to purchase a like aggregate number of
shares of Series A Preferred Stock as the Class A Rights evidenced by the Class
A Right Certificate or Class A Right Certificates surrendered shall have
entitled such holder to purchase. If this Class A Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Class A Right Certificate or Class A Right Certificates for the number
of whole Class A Rights not exercised.
Subject to the provisions of the Rights Agreement, the Class A
Rights evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Class A Right or (ii) may be exchanged in whole or
in part for shares of Series A Preferred Stock or shares of the Company's Class
A Common Stock, par value $.01 per share.
No fractional shares of Series A Preferred Stock or Class A
Common Stock will be issued upon the exercise of any Class A Right or Class A
Rights evidenced hereby (other than fractions which are integral multiples of
one one-thousandth of a share of Series A Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
B-1-2
No holder of this Class A Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Series A Preferred Stock or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement) or to receive dividends or subscription
rights, or otherwise, until the Class A Right or Class A Rights evidenced by
this Class A Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Class A Right Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights
Agent.
B-1-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _____________.
ATTEST: THE NEIMAN MARCUS GROUP, INC.
By By
---------------------------- -----------------------------
Countersigned:
-----------------------,
as Rights Agent
By
----------------------------
Authorized Signature
B-1-4
Form of Reverse Side of Class A Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Class A Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells,
assigns and transfers unto ______________________________
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
Class A Rights represented by this Class A Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ___________________ Attorney, to transfer said Class A Rights on the
books of the within-named Company, with full power of substitution.
Dated:
------------------
------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
--------------------------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Class A Rights
evidenced by this Class A Right Certificate are not beneficially owned by, were
not acquired by the undersigned from, and are not being assigned to, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
------------------------------
Signature
B-1-5
Form of Reverse Side of Class A Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Class A Rights represented by the Class A Right Certificate)
To THE NEIMAN MARCUS GROUP, INC.
The undersigned hereby irrevocably elects to exercise
__________________ Class A Rights represented by this Class A Right Certificate
to purchase the shares of Series A Preferred Stock (or other securities or
property) issuable upon the exercise of such Class A Rights and requests that
certificates for such shares of Series A Preferred Stock (or such other
securities) be issued in the name of:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Class A Rights shall not be all the Class A Rights evidenced
by this Class A Right Certificate, a new Class A Right Certificate for the
balance remaining of such Class A Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated:
--------------------
----------------------------
Signature
(Signature must conform to holder specified on Class A Right Certificate)
B-1-6
Signature Guaranteed:
Signature must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States.
B-1-7
Form of Reverse Side of Class A Right Certificate -- continued
(To be completed)
--------------------------------------------------------------------------------
The undersigned certifies that the Class A Rights evidenced by
this Class A Right Certificate are not beneficially owned by, and were not
acquired by the undersigned from, an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement)
----------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Class A Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
Form of Class B Right Certificate
Certificate No. R- ____
NOT EXERCISABLE AFTER OCTOBER 6, 2009 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE CLASS B RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER CLASS B RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH
IN THE RIGHTS AGREEMENT, CLASS B RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID
AND WILL NO LONGER BE TRANSFERABLE.
Class B Right Certificate
THE NEIMAN MARCUS GROUP, INC.
This certifies that ___________ or registered assigns, is the
registered owner of the number of Class B Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of October 6, 1999, as the same may be amended
from time to time (the "Rights Agreement"), between The Neiman Marcus Group,
Inc., a Delaware corporation (the "Company"), and BankBoston, N.A., a national
banking association, (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on October 6, 2009 at the
office or agency of the Rights Agent designated for such purpose, or of its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable
share of Series B Junior Participating Preferred Stock, par value $.01 per share
(the "Series B Preferred Stock"), of the Company, at a purchase price of $100.00
per one one-thousandth of a share of Series B Preferred Stock (the "Purchase
Price"), upon presentation and surrender of this Class B Right Certificate with
the Form of Election to Purchase duly executed. The number of Class B Rights
evidenced by this Class B Right Certificate (and the number of one
one-thousandths of a share of Series B Preferred Stock which may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of October 18, 1999, based on the Series B
Preferred Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price, the number of one one-thousandths of a share of
Series B Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Class B Rights and the number of Class B
Rights evidenced by this Class B Right Certificate are subject to modification
and adjustment upon the happening of certain events.
Notwithstanding anything in the Rights Agreement to the
contrary, from and after the time (the "invalidation time") when any person
first becomes an Acquiring Person (as
B-2-1
defined in the Rights Agreement), the Class B Rights evidenced hereby
beneficially owned by (x) any Acquiring Person (or any Affiliate (as defined in
the Rights Agreement) or Associate (as defined in the Rights Agreement) of any
Acquiring Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the invalidation time or
(z) a transferee of any Acquiring Person (or any such Affiliate or Associate)
who became a transferee prior to or concurrently with the invalidation time
pursuant to either (I) a transfer from the Acquiring Person to holders of its
equity securities or to any person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Class B Rights or (II) a
transfer which the Board of Directors of the Company has determined is part of a
plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of Section 11(a)(ii) of the Rights Agreement, and subsequent
transferees of such persons, shall be void without any further action and any
holder hereof shall thereafter have no rights whatsoever with respect to the
Class B Rights evidenced hereby under any provision of the Rights Agreement.
This Class B Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Class B Right
Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned office or agency of the
Rights Agent. The Company will mail to the holder of this Class B Right
Certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor.
This Class B Right Certificate, with or without other Class B
Right Certificates, upon surrender at the office or agency of the Rights Agent
designated for such purpose, may be exchanged for another Class B Right
Certificate or Class B Right Certificates of like tenor and date evidencing
Class B Rights entitling the holder to purchase a like aggregate number of
shares of Series B Preferred Stock as the Class B Rights evidenced by the Class
B Right Certificate or Class B Right Certificates surrendered shall have
entitled such holder to purchase. If this Class B Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Class B Right Certificate or Class B Right Certificates for the number
of whole Class B Rights not exercised.
Subject to the provisions of the Rights Agreement, the Class B
Rights evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Class B Right or (ii) may be exchanged in whole or
in part for shares of Series B Preferred Stock or shares of the Company's Class
B Common Stock, par value $.01 per share.
No fractional shares of Series B Preferred Stock or Class B
Common Stock will be issued upon the exercise of any Class B Right or Class B
Rights evidenced hereby (other than fractions which are integral multiples of
one one-thousandth of a share of Series B Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
B-2-2
No holder of this Class B Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Series B Preferred Stock or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement) or to receive dividends or subscription
rights, or otherwise, until the Class B Right or Class B Rights evidenced by
this Class B Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Class B Right Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights
Agent.
B-2-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _____________.
ATTEST: THE NEIMAN MARCUS GROUP, INC.
By By
------------------------------- --------------------------------
Countersigned:
-----------------------,
as Rights Agent
By
-------------------------------
Authorized Signature
B-2-4
Form of Reverse Side of Class B Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Class B Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells,
assigns and transfers unto ___________________________
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
Class B Rights represented by this Class B Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ___________________ Attorney, to transfer said Class A Rights on the
books of the within-named Company, with full power of substitution.
Dated:
-----------------
------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
--------------------------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Class B Rights
evidenced by this Class B Right Certificate are not beneficially owned by, were
not acquired by the undersigned from, and are not being assigned to, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
------------------------------
Signature
B-2-5
Form of Reverse Side of Class B Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Class B Rights represented by the Class B Right Certificate)
To THE NEIMAN MARCUS GROUP, INC.
The undersigned hereby irrevocably elects to exercise
__________________ Class B Rights represented by this Class B Right Certificate
to purchase the shares of Series B Preferred Stock (or other securities or
property) issuable upon the exercise of such Class B Rights and requests that
certificates for such shares of Series B Preferred Stock (or such other
securities) be issued in the name of:
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
If such number of Class B Rights shall not be all the Class B Rights evidenced
by this Class B Right Certificate, a new Class B Right Certificate for the
balance remaining of such Class B Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
Dated:
-----------------
------------------------------
Signature
(Signature must conform to holder specified on Class B Right Certificate)
B-2-6
Signature Guaranteed:
Signature must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States.
B-2-7
Form of Reverse Side of Class B Right Certificate -- continued
(To be completed)
--------------------------------------------------------------------------------
The undersigned certifies that the Class B Rights evidenced by
this Class B Right Certificate are not beneficially owned by, and were not
acquired by the undersigned from, an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement)
----------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Class B Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
Form of Class C Right Certificate
Certificate No. R- ____
NOT EXERCISABLE AFTER OCTOBER 6, 2009 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE CLASS C RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER CLASS C RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH
IN THE RIGHTS AGREEMENT, CLASS C RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID
AND WILL NO LONGER BE TRANSFERABLE.
Class C Right Certificate
THE NEIMAN MARCUS GROUP, INC.
This certifies that ___________ or registered assigns, is the
registered owner of the number of Class C Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of October 6, 1999, as the same may be amended
from time to time (the "Rights Agreement"), between The Neiman Marcus Group,
Inc., a Delaware corporation (the "Company"), and BankBoston, N.A., a national
banking association, (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on October 6, 2009 at the
office or agency of the Rights Agent designated for such purpose, or of its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable
share of Series C Junior Participating Preferred Stock, par value $.01 per share
(the "Series C Preferred Stock"), of the Company, at a purchase price of $100.00
per one one-thousandth of a share of Series C Preferred Stock (the "Purchase
Price"), upon presentation and surrender of this Class C Right Certificate with
the Form of Election to Purchase duly executed. The number of Class C Rights
evidenced by this Class C Right Certificate (and the number of one
one-thousandths of a share of Series C Preferred Stock which may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of October 18, 1999, based on the Series C
Preferred Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price, the number of one one-thousandths of a share of
Series C Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Class C Rights and the number of Class C
Rights evidenced by this Class C Right Certificate are subject to modification
and adjustment upon the happening of certain events.
Notwithstanding anything in the Rights Agreement to the
contrary, from and after the time (the "invalidation time") when any person
first becomes an Acquiring Person (as
B-3-1
defined in the Rights Agreement), the Class C Rights evidenced hereby
beneficially owned by (x) any Acquiring Person (or any Affiliate (as defined in
the Rights Agreement) or Associate (as defined in the Rights Agreement) of any
Acquiring Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the invalidation time or
(z) a transferee of any Acquiring Person (or any such Affiliate or Associate)
who became a transferee prior to or concurrently with the invalidation time
pursuant to either (I) a transfer from the Acquiring Person to holders of its
equity securities or to any person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Class C Rights or (II) a
transfer which the Board of Directors of the Company has determined is part of a
plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of Section 11(a)(ii) of the Rights Agreement, and subsequent
transferees of such persons, shall be void without any further action and any
holder hereof shall thereafter have no rights whatsoever with respect to the
Class C Rights evidenced hereby under any provision of the Rights Agreement.
This Class C Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Class C Right
Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned office or agency of the
Rights Agent. The Company will mail to the holder of this Class C Right
Certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor.
This Class C Right Certificate, with or without other Class C
Right Certificates, upon surrender at the office or agency of the Rights Agent
designated for such purpose, may be exchanged for another Class C Right
Certificate or Class C Right Certificates of like tenor and date evidencing
Class C Rights entitling the holder to purchase a like aggregate number of
shares of Series C Preferred Stock as the Class C Rights evidenced by the Class
C Right Certificate or Class C Right Certificates surrendered shall have
entitled such holder to purchase. If this Class C Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Class C Right Certificate or Class C Right Certificates for the number
of whole Class C Rights not exercised.
Subject to the provisions of the Rights Agreement, the Class C
Rights evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Class C Right or (ii) may be exchanged in whole or
in part for shares of Series C Preferred Stock or shares of the Company's Class
C Common Stock, par value $.01 per share.
No fractional shares of Series C Preferred Stock or Class C
Common Stock will be issued upon the exercise of any Class C Right or Class C
Rights evidenced hereby (other than fractions which are integral multiples of
one one-thousandth of a share of Series C Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
B-3-2
No holder of this Class C Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Series C Preferred Stock or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement) or to receive dividends or subscription
rights, or otherwise, until the Class C Right or Class C Rights evidenced by
this Class C Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Class C Right Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights
Agent.
B-3-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _____________.
ATTEST: THE NEIMAN MARCUS GROUP, INC.
By By
-------------------------- ------------------------------
Countersigned:
-----------------------------,
as Rights Agent
By
--------------------------
Authorized Signature
B-3-4
Form of Reverse Side of Class C Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Class C Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells,
assigns and transfers unto _________________________
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
Class C Rights represented by this Class C Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ___________________ Attorney, to transfer said Class C Rights on the
books of the within-named Company, with full power of substitution.
Dated:
-----------------
------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
(To be completed)
The undersigned hereby certifies that the Class C Rights
evidenced by this Class C Right Certificate are not beneficially owned by, were
not acquired by the undersigned from, and are not being assigned to, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
------------------------------
Signature
B-3-5
Form of Reverse Side of Class C Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Class C Rights represented by the Class C Right Certificate)
To THE NEIMAN MARCUS GROUP, INC.
The undersigned hereby irrevocably elects to exercise
__________________ Class C Rights represented by this Class C Right Certificate
to purchase the shares of Series C Preferred Stock (or other securities or
property) issuable upon the exercise of such Class C Rights and requests that
certificates for such shares of Series C Preferred Stock (or such other
securities) be issued in the name of:
--------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------
If such number of Class C Rights shall not be all the Class C Rights evidenced
by this Class C Right Certificate, a new Class C Right Certificate for the
balance remaining of such Class C Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------
Dated:
--------------------
------------------------------
Signature
(Signature must conform to holder specified on Class C Right Certificate)
B-3-6
Signature Guaranteed:
Signature must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States.
B-3-7
Form of Reverse Side of Class C Right Certificate -- continued
(To be completed)
--------------------------------------------------------------------------------
The undersigned certifies that the Class C Rights evidenced by
this Class C Right Certificate are not beneficially owned by, and were not
acquired by the undersigned from, an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement)
------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Class C Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
B-3-8
EXHIBIT C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES
THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On October 6, 1999, the Board of Directors of The Neiman
Marcus Group, Inc. (the "Company") declared a dividend of (i) one preferred
stock purchase right (a "Class A Right") for each outstanding share of Class A
Common Stock, par value $.01 per share, of the Company (the "Class A Common
Stock") to stockholders of record as of the close of business on October 18,
1999 (the "Record Date"), each Class A Right representing the right to purchase
one one-thousandth of a share of Series A Junior Participating Preferred Stock,
par value $.01 per share, of the Company (the "Series A Preferred Stock") and
(ii) one preferred stock purchase right (a "Class B Right" and, collectively
with the Class A Rights, the "Rights") for each outstanding share of Class B
Common Stock, par value $.01 per share, of the Company (the "Class B Common
Stock" and, together with the Class A Common Stock, the "Common Stock") to
stockholders of record as of the Record Date, each Class B Right representing
the right to purchase one one-thousandth of a share of Series B Junior
Participating Preferred Stock, par value $.01 per share, of the Company (the
"Series B Preferred Stock" and, collectively with the Series A Preferred Stock,
the "Preferred Stock"). In the event that shares of Class C Common Stock, par
value $.01 per share, of the Company (the "Class C Common Stock") are issued,
they will be issued together with preferred stock purchase rights (the "Class C
Rights") to acquire shares of Series C Junior Participating Preferred Stock, par
value $.01 per share, of the Company ("Series C Preferred Stock"). The
description and terms of the Rights are set forth in a Rights Agreement, dated
as of October 6, 1999, as the same may be amended from time to time (the "Rights
Agreement"), between the Company and BankBoston, N.A., as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person"), other than an Exempt Person (as defined below), has
acquired beneficial ownership of (a) 15% or more of the outstanding shares of
Class B Common Stock or (b) shares of Common Stock representing, in the
aggregate, 15% or more of the total number of votes entitled to be cast
generally (other than in an election of directors) by the holders of the Common
Stock then outstanding or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of (a) 15% or more of the outstanding shares of
Class B Common Stock or (b) shares of Common Stock representing, in the
aggregate, 15% or more of the total number of votes entitled to be cast
generally (other than in an election of directors) by the holders of the Common
Stock
C-1
then outstanding (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common Stock
certificates outstanding as of the Record Date, by such Common Stock certificate
together with a copy of this Summary of Rights; provided, however, that if the
Board of Directors of the Company determines in good faith that a person who
would otherwise be an "Acquiring Person" has become such inadvertently and
without any intention of changing or influencing control of the Company, and
such person, as promptly as practicable divested or divests itself of beneficial
ownership of a sufficient number of shares of Common Stock so that such person
would no longer be an Acquiring Person, then such person shall not be deemed to
be or to have become an "Acquiring Person". No person will become an "Acquiring
Person" as the result of an acquisition of shares of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such person; provided, however, that if a
person shall become an "Acquiring Person" by reason of such share acquisitions
by the Company and thereafter become the beneficial owner of any additional
shares of Class B Common Stock, in the case of clause (a) of the definition of
"Acquiring Person" above, or Common Stock, in the case of clause (b) of the
definition of "Acquiring Person" above, then such person shall be deemed to be
an "Acquiring Person" unless upon the consummation of the acquisition of such
additional shares of Class B Common Stock or Common Stock, as the case may be,
such person does not own (a) 15% or more of the outstanding shares of Class B
Common Stock or (b) shares of Common Stock representing, in the aggregate, 15%
or more of the total number of votes entitled to be cast generally (other than
in an election of directors) by the holders of the Common Stock then
outstanding.
"Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary (as such term is defined in the Rights Agreement) of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary of the
Company, (iv) any entity or trustee holding Common Stock for or pursuant to the
terms of any such plan or for the purpose of funding any such plan or funding
other employee benefits for employees of the Company or of any Subsidiary of the
Company, (v) Harcourt General, Inc., a Delaware corporation, but only for the
period beginning on the Record Date and ending at 12:01 a.m. on October 23, 1999
or (vi) the "▇▇▇▇▇ Family Group" (as such term is defined in the Rights
Agreement and which, in general, includes ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman of the
Company, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇, Co-Chief Executive Officers of the
Company and certain members of their families and certain related entities) with
respect to the beneficial ownership of shares of Common Stock on the Record Date
and for so long as the ▇▇▇▇▇ Family Group does not, subject to certain
exceptions, acquire after the Record Date beneficial ownership of either an
additional 6% or more of the Class B Common Stock outstanding or shares of
Common Stock representing an additional 6% or more of the total voting power of
the Company represented by the shares of Common Stock outstanding.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common Stock certificates
issued after the Record Date upon transfer or new issuances of Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for shares of Common Stock
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights, will also constitute the transfer of the
C-2
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Class A Rights (the "Class A Right Certificates")
and Class B Rights (the "Class B Rights Certificates") will be mailed to holders
of record of the Class A Common Stock and Class B Common Stock, respectively, as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on October 6, 2009 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or unless the Rights are earlier redeemed
or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of the
applicable series of Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the applicable series of Preferred Stock,
(ii) upon the grant to holders of the applicable series of Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then-current market price of the applicable series of Preferred
Stock or (iii) upon the distribution to holders of the applicable series of
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights are also subject to
adjustment in the event of a stock split of the applicable class of Common Stock
or a stock dividend on the applicable class of Common Stock payable in shares of
Common Stock or subdivisions, consolidations or combinations of the applicable
class of Common Stock occurring, in any such case, prior to the Distribution
Date.
Shares of Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred Stock will be entitled,
when, as and if declared, to a minimum preferential quarterly dividend payment
of $1.00 per share but will be entitled to an aggregate dividend of 1,000 times
the dividend declared per share of the applicable class of Common Stock. In the
event of liquidation, the holders of the Preferred Stock will be entitled to a
minimum preferential liquidation payment of $1,000 per share (plus any accrued
but unpaid dividends) but will be entitled to an aggregate payment of 1,000
times the payment made per share of the applicable class of Common Stock. Each
share of Preferred Stock will have 1,000 times the number of votes each share of
the applicable class of Common Stock has on matters such class is entitled to
vote on, which shall be voted together with the applicable class of Common
Stock. Finally, in the event of any merger, consolidation or other transaction
in which shares of Common Stock are converted or exchanged, each share of the
applicable series of Preferred Stock will be entitled to receive 1,000 times the
amount received per share of the applicable class of Common Stock. These rights
are protected by customary antidilution provisions.
C-3
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth interest in a
share of Preferred Stock purchasable upon exercise of each Class A Right and
Class B Right, respectively, should approximate the value of one share of Class
A Common Stock and Class B Common Stock, respectively.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper provision will be made so
that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person or any affiliate or associate of the Acquiring Person or
certain other transferees (which will thereupon become void), will thereafter
have the right to receive upon exercise of a Right at the then current exercise
price of the Right, that number of shares of Class A Common Stock (in the case
of a Class A Right) or Class B Common Stock (in the case of a Class B Right), or
that number of one one-thousandths of a share of the applicable series of
Preferred Stock, having a market value of two times the exercise price of the
Right.
In the event that, after a person or group has become an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
(other than Rights beneficially owned by an Acquiring Person or any affiliate or
associate of the Acquiring Person or certain other transferees which will have
become void) will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of shares
of common stock of the person with whom the Company has engaged in the foregoing
transaction (or its parent), which number of shares at the time of such
transaction will have a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding shares of Class B Common Stock, the acquisition by such person
or group of shares of Common Stock representing, in the aggregate, 50% or more
of the total number of votes entitled to be cast generally (other than in an
election of directors) by the holders of the Common Stock then outstanding or
the occurrence of an event described in the prior paragraph, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group which will have become void), in whole or in part, at an
exchange ratio of one share of Class A Common Stock (in the case of a Class A
Right) or Class B Common Stock (in the case of a Class B Right), or one
one-thousandth of a share of Preferred Stock (or of a share of a class or series
of the Company's preferred stock having equivalent rights, preferences and
privileges), per Class A Right or Class B Right, as the case may be (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
C-4
At any time prior to the time an Acquiring Person becomes
such, the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then redeemable, the Company
may, except with respect to the Redemption Price, amend the Rights in any
manner. After the Rights are no longer redeemable, the Company may, except with
respect to the Redemption Price, amend the Rights in any manner that does not
adversely affect the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated October 15, 1999. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
C-5
