EXHIBIT 4.1
================================================================================
GOVERNANCE AGREEMENT
by and between
BRYLANE INC.
and
PINAULT PRINTEMPS-REDOUTE, S.A.
dated as of
______________ __, 1998
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE 1
Definitions
Section 1.1 Affiliate................................................ 1
Section 1.2 Agreement................................................ 1
Section 1.3 Beneficially Own......................................... 1
Section 1.4 Board.................................................... 2
Section 1.5 Common Stock............................................. 2
Section 1.6 Company.................................................. 2
Section 1.7 Covered Transaction...................................... 2
Section 1.8 Director................................................. 2
Section 1.9 Early Termination Event.................................. 2
Section 1.10 Group.................................................... 2
Section 1.11 Independent Director..................................... 2
Section 1.12 Investor................................................. 2
Section 1.13 Investor Nominees........................................ 2
Section 1.14 Key Committees........................................... 2
Section 1.15 Material Adverse Effect.................................. 2
Section 1.15 1933 Act................................................. 2
Section 1.16 1934 Act................................................. 3
Section 1.17 person................................................... 3
Section 1.19 Permitted Percentage..................................... 3
Section 1.20 Standstill Period........................................ 3
Section 1.21 Stock Purchase Agreements................................ 3
Section 1.22 13D Group................................................ 3
Section 1.23 Voting Securities........................................ 3
ARTICLE 2
Standstill Provisions
Section 2.1 Standstill Period........................................ 3
Section 2.2 Restrictions During Standstill Period.................... 4
Section 2.3 Waivers of Restrictions.................................. 5
ARTICLE 3
Other Covenants
Section 3.1 Maintenance of Ownership................................. 6
Page
----
Section 3.2 Actions Requiring Approval............................... 6
Section 3.3 Indemnification Agreements and Insurance................. 7
ARTICLE 4
Board of Directors
Section 4.1 Investor Nominees........................................ 7
Section 4.2 Committee Representation................................. 8
ARTICLE 5
Representations & Warranties
ARTICLE 6
Miscellaneous
Section 6.1 Counterparts............................................. 9
Section 6.2 Governing Law............................................ 9
Section 6.3 Entire Agreement......................................... 9
Section 6.4 Expenses................................................. 9
Section 6.5 Notices.................................................. 9
Section 6.6 Successors and Assigns................................... 10
Section 6.7 Headings................................................. 10
Section 6.8 Amendments and Waivers................................... 10
Section 6.9 Interpretation; Absence of Presumption................... 11
Section 6.10 Severability............................................. 11
Section 6.11 Further Assurances....................................... 11
Section 6.12 Specific Performance..................................... 11
Section 6.13 Fiduciary Dates.......................................... 11
Section 6.14 Confidentiality; Other Arrangements...................... 11
-ii-
THIS GOVERNANCE AGREEMENT (the "Agreement"), dated as of
---------
_________________ __, 1998, is made by and between Brylane Inc., a Delaware
corporation (the "Company"), and Pinault Printemps-Redoute, S.A., a societe
-------
anonyme organized under the laws of France ("Investor").
--------
RECITALS:
WHEREAS, the Investor and The Limited, Inc. ("The Limited") and
-----------
certain affiliates of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. (collectively, "FS," and together
--
with The Limited, the "Selling Stockholders") have each entered into individual
--------------------
Stock Purchase Agreements, dated as of February ___, 1998 (collectively, the
"Stock Purchase Agreements"), pursuant to which the Selling Stockholders are
--------------------------
selling, conveying, assigning and transferring, and Investor is purchasing,
certain shares of the common stock, par value $.01 per share, of the Company
(the "Common Stock") on the date hereof; and
------------
WHEREAS, it is a condition to the transactions contemplated by the
Stock Purchase Agreements and the parties believe it to be in their best
interests that they enter into this Agreement to provide for certain rights and
restrictions with respect to the investment by Investor in the Company and the
corporate governance of the Company; and
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein and for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
---------
DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the
following respective meanings:
Section 1.1 "Affiliate" shall have the meaning ascribed thereto in
---------
Rule 12b-2 promulgated under the 1934 Act, and as in effect on the date hereof.
Section 1.2 "Agreement" shall have the meaning set forth in the first
---------
paragraph hereof.
Section 1.3 "Beneficially Own" shall mean, with respect to any
----------------
security, having direct or indirect (including through any Subsidiary or
Affiliate) "beneficial ownership" of such security, as determined pursuant to
Rule 13d-3 under the 1934 Act, including pursuant to any agreement, arrangement
or understanding, whether or not in writing.
Section 1.4 "Board" shall mean the board of directors of the Company.
-----
Section 1.5 "Common Stock" shall have the meaning set forth in the
------------
second paragraph hereof.
Section 1.6 "Company" shall have the meaning set forth in the first
-------
paragraph hereof.
Section 1.7 "Covered Transaction" shall have the meaning set forth in
-------------------
Section 2.1(iv).
Section 1.8 "Director" shall mean a member of the Board.
--------
Section 1.9 "Early Termination Event" shall have the meaning set forth
-----------------------
in Section 2.1.
Section 1.10 "Group" shall mean a "group" as such term is used in
-----
Section 13(d)(3) of the 1934 Act.
Section 1.11 "Independent Director" shall mean ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
--------------------
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as well as any individual who is not a member of the
Company's management and is not affiliated with Investor, The Limited, or FS or
any of their respective affiliates (including any individual who in the past
three years has been an officer, employee, consultant or advisor of or to any of
the foregoing).
Section 1.12 "Investor" shall have the meaning set forth in the first
--------
paragraph hereof.
Section 1.13 "Investor Nominees" shall have the meaning set forth
-----------------
in Section 4.1.
Section 1.14 "Key Committees" shall have the meaning set forth in
--------------
Section 4.2.
Section 1.15 "Material Adverse Effect" shall mean a material adverse
-----------------------
effect on the results of operations, condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
Section 1.16 "1933 Act" shall mean the Securities Act of 1933,
--------
as amended.
Section 1.17 "1934 Act" shall mean the Securities Exchange Act of 1934,
--------
as amended.
Section 1.18 "person" shall mean any individual, corporation,
------
partnership, limited liability company, joint venture, trust, unincorporated
organization, other form of business or legal entity or government authority.
Section 1.19 "Permitted Percentage" shall have the meaning set forth
--------------------
in Section 2.2.
-2-
Section 1.20 "Standstill Period" shall have the meaning set forth in
-----------------
Section 2.1.
Section 1.21 "Stock Purchase Agreements" shall have the meaning set
-------------------------
forth in the second paragraph hereof.
Section 1.22 "13D Group" shall mean any group of persons acquiring,
---------
holding, voting or disposing of Voting Securities which would be required under
Section 13(d) of the 1934 Act and the rules and regulations thereunder (as in
effect, and based on legal interpretations thereof existing, on the date hereof)
to file a statement on Schedule 13D with the Securities and Exchange Commission
as a "person" within the meaning of Section 13(d)(3) of the 1934 Act if such
group beneficially owned Voting Securities representing more than 5% of any
class of Voting Securities then outstanding.
Section 1.23 "Voting Securities" shall mean at any time shares of any
-----------------
class of capital stock of the Company which are then entitled to vote generally
in the election of Directors.
ARTICLE 2
---------
STANDSTILL PROVISIONS
---------------------
Section 2.1 Standstill Period. The "Standstill Period" shall be the
----------------- -------------------
period commencing on the date of Closing and ending on the earlier of (x) the
date that is 36 months from the date thereof, or (y) the earliest of:
(i) the occurrence of any event of default on the part of the
Company or any subsidiary under any debt agreements, instruments, or
arrangements which event of default would reasonably be expected to result
in a Material Adverse Effect and, in the case of a non-monetary event of
default, which event of default cannot be, or is not, cured by the Company
within the applicable cure period under such debt agreement, instrument or
arrangement;
(ii) the acquisition by any person or Group other than Investor or
any Affiliate thereof of, or the announcement or commencement of a tender
or exchange offer by any person or Group other than Investor or any
Affiliate thereof to acquire, Beneficial Ownership of more than 20% of the
outstanding shares of Voting Securities;
(iii) the commencement by any person or Group (not affiliated with
Investor) of an "election contest" (as defined in Section 2.2) or the
seeking through other means of the removal of any Directors from office;
and
(iv) the written submission by any person or Group other than
Investor or any Affiliate thereof of a proposal to the Company (including
to the Board or any agent, representative or Affiliate of the Company) with
respect to, or
-3-
otherwise expressing an interest in pursuing, a merger, consolidation or
other business combination of the Company, sale of all or substantially
all of the assets of the Company or significant recapitalization or
significant reorganization of the Company (any of the foregoing, a "Covered
-------
Transaction"); provided, however, that the Standstill Period shall not
----------- -------- -------
terminate pursuant to this Section 2.1 (iv) if, as soon as practicable
after receipt of any such proposal, a majority of the Independent Directors
determines that such proposal is not in the best interest of the Company
and its shareholders and for so long as a majority of the Independent
Directors continues to reject such proposal as a result of such
determination.
Any event set forth in subsection (i), (ii), (iii) or (iv) of this Section
2.1 shall be an "Early Termination Event."
-----------------------
Section 2.2 Restrictions During Standstill Period. During the
-------------------------------------
Standstill Period, Investor will not, and will use its reasonable best efforts
to cause each of its Affiliates not to, directly or indirectly:
(i) act in concert with any other person or Group by becoming a
member of a 13D Group, other than any 13D Group comprised exclusively of
Investors and one or more of its Affiliates;
(ii) purchase or otherwise acquire shares of capital stock
(including Common Stock or other Voting Securities) (or options, rights or
warrants or other commitments to purchase and securities convertible into
(or exchangeable or redeemable for) shares of such capital stock or other
Voting Securities) as a result of which, after giving effect to such
purchase or acquisition, Investor and its Affiliates will Beneficially Own
more than the percentage of the outstanding shares of Voting Securities
(the "Permitted Percentage" represented by the sum of (i) 6,963,056
--------------------
shares of Common Stock sold pursuant to the Stock Purchase Agreements with
The Limited and FS, (ii) the 595,195 shares of Common Stock subject to tag-
along rights pursuant to that certain Stockholders' Agreement dated as of
February 26, 1997 among certain stockholders of the Company, (iii) the
374,365 shares of Common Stock beneficially owned by TJX and related
parties (including those underlying the convertible note held by TJX), (iv)
the 163,900 shares of Common Stock issued pursuant to certain subscription
agreements, and (v) the shares of Common Stock underlying certain
management options and related securities (i.e., 617,084 performance shares
and 68,500 redeemable preferred shares) (giving effect to the issuance and
exercise of such shares and options) divided by the 18,470,469 then
outstanding shares of Common Stock (which gives effect to the shares of
Common Stock issued upon exercise or conversion of the foregoing
securities);
(iii) solicit, encourage or publicly propose to effect any Covered
Transaction;
-4-
(iv) solicit, initiate, encourage or participate in any
"solicitation" of "proxies" or become a "participant" in any "election
contest" (as such terms are defined or used in Regulation 14A under the
1934 Act, disregarding clause (iv) of Rule 14a-1(l)(2) and including an
exempt solicitation pursuant to Rule 14a-2(b)(1)); call, or in any way
encourage or participate in a call for, any special meeting of shareholders
of the Company (or take any action with respect to acting by written
consent of the shareholders of the Company); request, or take any action to
obtain or retain any list of holders of any securities of the Company; or
initiate or propose any shareholder proposal or participate in or encourage
the making of, or solicit shareholders of the Company for the approval of,
one or more shareholder proposals; provided, however, that Investor shall
-------- -------
not be prohibited from communicating with a securityholder who is engaged
in any "solicitation" of "proxies" or who is a "participant" in any
"election contest"; or
(v) assist, advise, encourage or act in concert with any person
with respect to, or seek to do, any of the foregoing.
Section 2.3 Waivers of Restrictions. Notwithstanding anything to the
-----------------------
contrary contained herein, the Company may waive any of the foregoing
restrictions during the Standstill Period upon the approval of a majority of
Independent Directors.
ARTICLE 3
---------
OTHER COVENANTS
---------------
Section 3.1 Maintenance of Ownership. (a) From and after the date
------------------------
hereof, Investor shall have the ability to maintain its ownership of up to the
Permitted Percentage of the outstanding shares of Voting Securities through (i)
open market purchases or (ii) purchases of Common Stock directly from the
Company; provided, that any purchases directly from the Company pursuant to
--------
clause (ii) of this Section 3.1(a) shall be subject to the prior approval of a
majority of the Independent Directors.
(b) If, at any time following the termination of the Standstill Period,
Investor acquires more than 65% of the outstanding shares of Voting Securities,
Investor shall (i) commence a tender offer for all of the outstanding shares of
Common Stock held by stockholders other than Investor and its Affiliates at a
price per share equal to at least the greater of (a) the average closing price
of the Common Stock over the prior 365-day period or (b) the then-current market
price or (ii) shall engage in such other transaction approved by a majority of
the Independent Directors.
Section 3.2 Actions Requiring Prior Approval. (a) As long as at least
--------------------------------
two-ninths or an equivalent proportion of the Directors are Investor Nominees,
(i) any transaction with Investor or its Affiliates must be on arm's-length
terms and approved by a majority of the Independent Directors; (ii) any
amendment, repeal or other modification of this Agreement or any other agreement
or instrument of the Company, including the Company's charter or bylaws,
-5-
which would have the effect of altering the terms of this Agreement in any
manner adverse to the stockholders of the Company (other than Investor) must be
approved by a majority of the Independent Directors; (iii) dispositions, of any
assets of the Company or any business combination, spin-off or other transaction
pursuant to which Investor would receive consideration different from that
received by other holders of Common Stock must be approved by a majority of the
Independent Directors; and (iv) any corporate opportunity (merger or
acquisition) relating to the United States mail order business which Investor or
its Affiliates receives shall first be presented to and considered by the
Company. If, within 20 days of being presented with such opportunity , the
Company chooses not to pursue such opportunity or the Company chooses to pursue
such opportunity and fails to consummate a transaction with respect to such
opportunity within 45 days of being presented with the opportunity, Investor
and/or its Affiliates may pursue such opportunity. In addition, if any Investor
business that is primarily mail order desires to enter the United States mail
order business, then the Company shall be offered a right of first refusal with
respect to such business in the United States. If the Company does not pursue
any corporate opportunity (or Investor business) presented to it, Investor may
then pursue such opportunity. Investor will not interfere with any merger or
acquisition opportunities that the Company receives on its own (other than
through participating in any decision made by the Board). If, within 20 days of
being presented with such opportunity, the Company chooses not to pursue such
opportunity or the Company chooses to pursue such opportunity and fails to
consummate a transaction with respect to such opportunity within 45 days of
being presented with the opportunity, Investor and/or its Affiliates may pursue
such opportunity.
(b) From the date hereof until the first anniversary hereof, none of Mr.
Canzone, ▇▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇, ▇▇. ▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇ may be
terminated (other than for "cause" as defined in their respective employment
agreements) without the approval of two-thirds of the Directors then in office.
Section 3.3 Indemnification Agreements and Insurance. (a) Investor
----------------------------------------
shall use its reasonable best efforts to cause the Company to adopt
indemnification agreements with any Independent Directors.
(b) Investor shall use its reasonable best efforts to cause the Company to
maintain the director and officer insurance in place on the date hereof.
ARTICLE 4
---------
BOARD OF DIRECTORS
------------------
Section 4.1 Investor Nominees. The Company shall use its best efforts to
-----------------
have the Board include up to five nominees named by Investor in the slate of
nominees presented by the Board for election at each meeting of stockholders of
the Company at which Directors are to be elected (such nominees who become
Directors, "Investor Directors"); provided, however, if Investor's share
------------------
ownership falls below the percentages indicated below (without Investor buying
-6-
back up to the applicable percentage within 30 days), Investor agrees that the
number specified of Investor Nominees will resign, and Independent Directors
will be appointed in their places:
Number
of Directors
Ownership Percentage to Resign (Total)
-------------------- -----------------
40% 1
30% 2
20% 3
Investor and the Company shall each use their best efforts to assure that at all
times at least three members of the Board will be Independent Directors and that
the Company's Chief Executive Officer will also be a Director. Investor shall
vote all of its shares in favor of the election of its nominees, Independent
Directors and the Chief Executive Officer.
Section 4.2 Committee Representation. During such time as Investor is
------------------------
entitled pursuant to Section 4.1 to have at least two Investor Nominees included
in the slate of nominees, Investor and the Company shall use their best efforts
to assure that each committee of the Board shall include two Independent
Directors; provided that the following committees (the "Key Committees") shall
--------------
have the composition indicated:
Audit Committee: two Independent Directors;
---------------
Compensation Committee: two Investor Nominees, two
----------------------
Independent Directors (Chairman of Compensation Committee to be an
Investor Nominee); and
Strategic Planning Committee: two Investor Nominees; one
----------------------------
Independent Director, the Company's Chief Executive Officer;
Investor and the Company shall use their best efforts to assure that (i) any
members of any Key Committee who are Investor Nominees shall, in the event of
any vacancy in such membership, be replaced by a Director who is an Investor
Nominee elected by a majority of the Directors who are Investor Nominees; (ii)
any members of any Key Committee who are Independent Directors shall, in the
event of any vacancy in such membership, be replaced by an Independent Director
approved by a majority of the Independent Directors on the Board; and (iii) the
composition of any other committees of the Board (other than any committees of
Independent Directors formed to act with respect to any transactions involving
Investor (and/or its Affiliates) and the Company and/or its stockholders) shall
be appropriately reflective of the composition of the Board.
-7-
ARTICLE 5
---------
REPRESENTATIONS & WARRANTIES
----------------------------
[Reps from both parties as to good standing, due authority, due execution and no
consents or violations]
ARTICLE 6
---------
MISCELLANEOUS
-------------
Section 6.1 Counterparts. This Agreement may be executed in one
------------
or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party. Copies of
executed counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section, provided receipt of copies of such counterparts is
confirmed.
Section 6.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE
TO THE CHOICE OF LAW PRINCIPLES THEREOF.
Section 6.3 Entire Agreement. This Agreement hereto contains the entire
----------------
agreement between the parties with respect to the subject matter hereof and
there are no agreements, understandings, representations or warranties between
the parties other than those set forth or referred to herein. This Agreement is
not intended to confer upon any person not a party hereto (and their successors
and assigns) any rights or remedies hereunder.
Section 6.4 Expenses. Except as set forth in the Stock Purchase
--------
Agreement, all legal and other costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses.
Section 6.5 Notices. All notices and other communications hereunder
-------
shall be sufficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery service or, to the
extent receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. Notices to the
Company shall be addressed to:
Brylane Inc.
[address]
Attention:
Telecopy Number:
-8-
with a copy to:
Attention:
Telecopy Number:
or at such other address and to the attention of such other person as the
Company may designate by written notice to Investor. Notices to Investor shall
be addressed to:
Pinault Printemps-Redoute
▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ Cedex 08
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇-▇▇-▇▇-▇▇
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Section 6.6 Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the parties hereto and their respective
successors. Investor may assign its rights and obligations hereunder to one or
more majority-owned, direct or indirect subsidiaries or other affiliates.
Section 6.7 Headings. The Section, Article and other headings contained
--------
in this Agreement are inserted for convenience of reference only and will not
affect the meaning or interpretation of this Agreement. All references to
Sections or Articles contained herein mean Sections or Articles of this
Agreement unless otherwise stated.
Section 6.8 Amendments and Waivers. This Agreement may not be modified
----------------------
or amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Either
party hereto may, only by an instrument in writing, waive compliance by the
other party hereto with any term or provision hereof on the part of such other
party hereto to be performed or complied with. The waiver by either party hereto
of a breach of any term or provision hereof shall not be construed as a waiver
of any subsequent breach.
Section 6.9 Interpretation; Absence of Presumption. (a) For the purposes
--------------------------------------
hereof, (i) words in the singular shall be held to include the plural and vice
versa and words of one gender shall be held to include the other gender as the
context requires, (ii) the terms
-9-
"hereof", "herein", and "herewith" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Article, Section and paragraph
references are to the Articles, Sections and paragraphs to this Agreement unless
otherwise specified, (iii) the word "including" and words of similar import when
used in this Agreement shall mean "including, without limitation," unless the
context otherwise requires or unless otherwise specified, (iv) the word "or"
shall not be exclusive, and (v) provisions shall apply, when appropriate, to
successive events and transactions.
(b) This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.
Section 6.10 Severability. Any provision hereof which is invalid or
------------
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
Section 6.11 Further Assurances. The Company and Investor agree that,
------------------
from time to time, each of them will, and will cause their respective Affiliates
to, execute and deliver such further instruments and take such other action as
may be necessary to carry out the purposes and intents hereof.
Section 6.12 Specific Performance. The Company and Investor each
--------------------
acknowledge that, in view of the uniqueness of arrangements contemplated by this
Agreement, the parties hereto would not have an adequate remedy at law for money
damages in the event that this Agreement were not performed in accordance with
its terms, and therefore agree that the parties hereto shall be entitled to
specific enforcement of the terms hereof in addition to any other remedy to
which the parties hereto may be entitled at law or in equity.
Section 6.13 Fiduciary Duties. Nothing contained in this Agreement shall
----------------
be intended to limit actions taken by any Directors in the exercise of their
fiduciary duties.
Section 6.14 Confidentiality; Other Arrangements. Investor will not, and
-----------------------------------
will use its best efforts to cause the Investor Nominees not to, share
confidential business information which comes into its possession in connection
with its investment in the Company or through the Board. Investor intends,
through its investment in the Company, that Investor and the Company will enter
into mutually advantageous arrangements, providing for the expansion of their
respective businesses.
-10-
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
each of the parties hereto as of the day first above written.
BRYLANE, INC.
By:
----------------------------------
Name:
Title:
PINAULT PRINTEMPS-REDOUTE, S.A.
By:
---------------------------------
Name:
Title:
-11-
Schedule 6.3(h) to Purchase Agreement
Prior to or concurrent with closing, the Company's Board of Directors:
. shall receive the resignation of the Company directors representing The
Limited and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ effective the following day:
. acting pursuant to Section 223(d) of the Delaware General Corporation
Law, shall fill the vacancies created by such resignations with the PPR
nominees effective the following day; and
. shall amend the Company's by-laws to
1. fix the number of directors at nine ((S) 3,2);
2. include a definition of Independent Director (new by-law or add to
(S) 3.1);*
3. provide that vacancies in the position of Independent Director be
filled by the remaining Independent Directors ((S) 3.5); and
4. provide that during the Standstill Period (as defined in the
Governance Agreement), in addition to the vote required by (S) 3.9 of
the by-laws, the following actions also require approval of a
majority of the Independent Directors:
(i) adoption of annual capital expenditure budgets and
material deviations therefrom;
(ii) any amendment of the Company's certificate of
incorporation or by-laws;
(iii) any sale, lease, transfer or other disposition (other
than in the ordinary course of business consistent with past
practice), in one or more related transactions, of the assets of
the Company or any subsidiary thereof, the book value of which
assets exceeds 25% of the consolidated assets of the Company and
its subsidiaries; and
(iv) any merger, consolidation, liquidation or dissolution of
the Company or any subsidiary thereof, other than any such merger
or consolidation of any subsidiary of the Company with and into
the Company or another wholly owned Subsidiary of the Company.
--------------------------------
* An Independent Director shall mean Messrs. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ as well as any individual who is not a member of the Company's
management, and is not affiliated with PPR. The Limited or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co.
or any of their respective affiliates (including any individual who in the past
three years has been an officer, employee, consultant or advisor of or to any of
the foregoing).