Class B Stockholders Agreement

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Exhibit 10.20

THIS AGREEMENT, dated as of the 1st day of September, 1999, is among The Neiman Marcus Group, Inc., a Delaware corporation (the "Company") and certain parties (herein individually referred to as a "Stockholder" and collectively as the "Stockholders") who are currently stockholders of Harcourt General, Inc., a Delaware corporation ("HGI") and anticipate a distribution of Class B Common Stock of the Company in accordance with the Amended and Restated Distribution Agreement between HGI and the Company dated July 1, 1999 (as amended, supplemented or otherwise modified from time to time, the "Distribution Agreement") and who, by executing this instrument, or a supplemental instrument, elect to become parties hereto and to subject the shares of Class B Common Stock identified herein (or in such supplemental instrument) to the terms and provisions hereof.

W I T N E S S E T H:

The following sets forth the background of this Agreement:

A. The Company's authorized capital stock consists of 200,000,000 shares, 150,000,000 of which are common stock, par value $.01 per share (the "Common Stock") and 50,000,000 of which are preferred stock, par value $.01 per share ("Preferred Stock"). As of the date hereof, 49,039,068 shares of Common Stock and no shares of Preferred Stock are issued and outstanding.

B. The Company, subject to stockholder approval, intends to, among other things, effect a recapitalization of its common stock to create two classes of common stock, the Class A Common Stock, par value $.01 per share ("Class A Common Stock") and the Class B Common Stock, par value $.01 per share ("Class B Common Stock"), while maintaining its Preferred Stock. 21,440,960 shares of Common Stock owned by HGI will be converted into 21,440,960 fully paid shares of Class B Common Stock. HGI's shares of Class B Common Stock will be distributed in a tax-free spinoff transaction (the "Distribution") to HGI's common stockholders, including the Stockholders. The date as of which the distribution of Class B Common Stock is effective to vest ownership thereof in distributees is the "Distribution Date" for purposes of this Agreement.

C. By reason of the Distribution, the Stockholders will on the Distribution Date be the holders of approximately 28% of the Class B Common Stock which will generally have the same rights and privileges as the Class A Common Stock except that the Class B Common Stock will be entitled to elect at least 82% of the members of the board of directors of the Company.

D. In the Distribution Agreement, HGI has agreed to use its commercially reasonable best efforts to procure the agreement of each of the Stockholders that, for a period of 180 days from the Distribution Date, each Stockholder shall not transfer any of the shares of Class B Common Stock distributed to such Stockholder on the Distribution Date ("Restricted Stock") other than, in accordance with the terms of this Agreement, to any other Stockholder or any other person to whom such Stockholder would be permitted to transfer shares of Class B Stock of HGI in accordance with the HGI Restated Certificate of Incorporation (including for bona fide estate planning or charitable purposes); provided, however, that such Stockholder shall be permitted to transfer shares of Restricted Stock pursuant to a bona fide tender offer, exchange offer, merger, consolidation or similar transaction in which the opportunity to transfer shares is made available on the same basis to all holders of Class B Common Stock. Annexed hereto, made a part hereof and hereby incorporated herein by reference is a Schedule of Stockholders (the "Schedule") which sets forth the Restricted Stock which it is anticipated will be owned by each of the Stockholders on the Distribution Date.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby severally acknowledged, the parties hereto agree as follows:

1. Each Stockholder agrees that he, she or it shall not sell, assign, encumber, hypothecate, pledge, transfer or otherwise dispose of or alienate in any way (any such disposition being herein referred to as a "Transfer" or, collectively, the "Transfers") all or any part of the Restricted Stock (or any interest therein) owned or controlled by him, her or it except upon and subject to the terms of this Agreement.

Nothing contained herein shall preclude a pledge of the Restricted Stock so long as the pledgee shall hold such pledge subject to the restrictions of this Agreement and satisfies each of the terms and conditions set forth in this Agreement.

2. Each Stockholder agrees that, except as otherwise provided in Paragraph 3 herein, he, she or it will not, directly or indirectly, sell, offer, contract to sell, grant any option to purchase or otherwise transfer or dispose of any Restricted Stock for a period of 180 days from the Distribution Date. Notwithstanding the foregoing, Restricted Stock which is transferred or distributed to a Permitted Transferee (as defined in Paragraph 3 herein) by reason of the death of a Stockholder (including Restricted Stock which is held by a revocable trust which has become irrevocable by reason of the death of a stockholder, provided that such trust is a Permitted Transferee) may thereafter be transferred free of the restrictions imposed by the immediately preceding sentence.

3. Notwithstanding the restrictions contained in Paragraph 2 of this Agreement, the following transfers ("Permitted Transfers") may be consummated at any time, provided that (except in the case of transfers described in subsections (i)(C), (vi) and (vii), below) the transferee in such Permitted Transfer (the "Permitted Transferee") shall execute such instruments as may be necessary or appropriate (a) to extend the terms, conditions and provisions of this Agreement to such Permitted Transferee while the owner of such Restricted Stock, (b) to agree to comply with and not to suffer any violation of this Agreement and (c) to agree that such Permitted Transferee shall not make or suffer to be made any Transfer of such Restricted Stock except upon compliance with the provisions of this Agreement:

(i) In the case of a Stockholder who is a natural person,

(A) To the spouse of such Stockholder, any descendant of a grandparent of such Stockholder, and any spouse of such lineal (which lineal descendants, their, the Stockholder, and his or her spouse, herein collectively referred to as the Stockholder's Family Members");

(B) To the trustee of a trust (including a trust) principally for the benefit of such and/or one or more of his or her Transferees described in each subclause this clause (i) other than this subclause (B), that such trust may also grant a general special power of appointment to one or more of Stockholder's Family Members and may permit assets to be used to pay taxes, legacies and obligations of the trust or of the estates one or more of such Stockholder's Family payable by reason of the death of any such Members;

(C) To an organization a contribution to is deductible for federal income, estate or tax purposes or any split-interest trust in Section 4947 of the Internal Revenue, as it may from time to time be amended (such or trust hereinafter called a Charitable Organization");

(D) To a corporation, a partnership or liability company if, in the case of a, a majority of its outstanding capital entitled to vote for the election of is owned by, or in the case of a, a majority of its partnership entitled to participate in the of the partnership are held by, or in case of a limited liability company, a of the membership interests in the liability company controlling management the limited liability company are held by, the or his or her Permitted Transferees under this clause (i); and

(E) To the estate of such Stockholder.)

ii) In the case of a Stockholder holding the of Restricted Stock in question as trustee to a trust (other than a trust which is a Organization or a trust described in clause (iii) below), "Permitted Transferee" means (A) any transferring Restricted Stock to such trust and (B) any Permitted Transferee of any such person pursuant to clause (i) above.

(iii) In the case of a Stockholder holding the of Restricted Stock in question as trustee to a trust (other than a Charitable) which is irrevocable on the date hereof, Permitted Transferee" means (A) any person to whom for whose benefit principal may be distributed during or at the end of the term of such trust by power of appointment or otherwise and (B) Permitted Transferee of any such person determined to clause (i) above.

(iv) In the case of a Stockholder which is a, partnership or limited liability company other than a Charitable Organization), "Permitted " means (A) any person (a "Prior ") who theretofore transferred such shares Restricted Stock to such corporation, partnership or liability company, (B) any Permitted Transferee the Prior Transferor and (C) the stockholders, or members, as the case may be, of the in connection with a distribution by the, so long as such stockholders, partners or (x) are stockholders, partners or members of corporation, partnership or limited liability on the date hereof or (y) would be Permitted of such stockholders, partners or members the date hereof pursuant to one of the other of this Paragraph 3.

(v) In the case of a Stockholder which is the of a deceased Stockholder, or which is the of a bankrupt or insolvent Stockholder, which record and beneficial ownership of the shares of Stock in question, "Permitted Transferee" a Permitted Transferee of such deceased, bankrupt insolvent Stockholder as determined pursuant to (i), (ii), (iii), (iv) or (v), above, as the may be.

(vi) Transfers of shares of Restricted Stock to a bona fide tender offer, exchange offer,, consolidation or similar transaction in which opportunity to transfer shares is made available on same basis to all holders of Class B Common Stock.

(vii) Transfers of shares of Restricted Stock in with the redemption by the Company of all or portion of the Company's Class B Common Stock, that if, at the time of such redemption, the holds Class B Common Stock which is not Stock, the number of shares of Restricted which may be transferred in connection with such shall not exceed that number of shares by multiplying the total number of shares to transferred by the Stockholder in connection with redemption by a fraction, the numerator of which the total number of shares of Restricted Stock owned the Stockholder and the denominator of which is the number of shares of Class B Common Stock owned by Stockholder.

All Permitted Transferees (other than Permitted who acquire Restricted Stock pursuant to 3(i)(C), 3(vi) or 3(vii) herein) shall be to be Stockholders for purposes of this Agreement.

4. In the event that all Restricted Stock shall cease be outstanding, this Agreement shall automatically terminate be of no further force and effect. In any event, this shall terminate 181 days after the Distribution Date.

5. Whenever by the terms of this Agreement notice or demand shall or may be given to the Company or to any Stockholder, the same shall be in writing and shall be sent, prepaid, Express Mail or registered or certified mail receipt requested, or by reputable expedited commercial service such as Federal Express, or by hand, addressed the party for whom it is intended at the addresses set forth the Schedule.

Whenever by the terms hereof notice is, or is required be, given to a party hereto, a copy shall also be sent, prepaid, Express Mail or registered or certified mail receipt requested, or by expedited

commercial delivery to Goulston & Storrs, Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esquire, Atlantic Avenue, Boston, Massachusetts 02110-3333.

Any address for the giving of notice may be changed time to time by written notice given to all parties to this.

Whenever by the terms hereof, notice may, or is required to be, given on or before a specified date, notice shall properly given only if deposited in the United States mail (or such commercial delivery service) in conformity with the of this Paragraph 5 on or before such date. All sent via Express Mail or expedited commercial delivery shall be deemed to hove been received on the date on delivery is guaranteed by such Express Mail or commercial service. All notices sent by registered or certified shall be deemed to have been received three (3) days from date on which such notices are mailed.

6. All of the parties hereto acknowledge that the relationship to and with the Company is of a unique special character, and that in the event of a breach or breach of the covenants of this Agreement by any party (other than the payments of monetary obligations), any at law would be inadequate. It is, therefore, agreed that the event of such a breach or threatened breach by any party, party against whom such relief is sought shall not raise the that there exists an adequate remedy at law. Any party have said remedies in addition to any other rights or which may exist at law or in equity or under the of this Agreement.

7. If any term or provision of this Agreement or the thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law, but only to the extent the same continues to reflect fairly the intent and understanding of the parties expressed by this Agreement taken as a whole.

8. Unless the context otherwise requires, the terms "Company", "Stockholder" and "Stockholders", as used herein, shall be construed to refer to such parties, their respective legal representatives, successors and assigns, and all of the terms, provisions and conditions hereunder shall be binding upon and inure to the benefit of each Stockholder, but the foregoing reference to the assigns of a Stockholder shall not be construed as permitting transfers by such Stockholder of such Restricted Stock, except for such transfers as may be permitted pursuant to this Agreement. Without limitations, references to the "Company" shall include any successor to the Company by merger, consolidation, acquisition of assets, recapitalization, reorganization, or otherwise.

As used herein, any reference to Restricted Stock shall include the Restricted Stock described in the Schedule, all stock distributed or transferred by the Company with respect to the Restricted Stock, and all stock issued and from time to time outstanding by reason of transfers of the Restricted Stock described in the Schedule pursuant to Paragraphs 3(i)-(v). Without limiting the generality of the foregoing, references to Restricted Stock shall include all shares issued by reason of a stock split, stock dividend, so-called "reverse stock split, "combination of shares, exchange offer or otherwise, as well as rights issuances, with respect to the Restricted Stock subject to this Agreement.

9. If action is required to be taken by or through a legal representative of a Stockholder, and there is no such legal representative, the time within which any action is required hereunder shall ipso facto be deemed to be extended for such period as may be reasonably required to permit the designation and/or appointment of a legal representative, and the Company or any Stockholder shall have the right to apply to any court having jurisdiction for the appointment of such legal representative.

10. The failure to insist upon strict compliance with any of the terms, covenants and conditions herein shall not be deemed a waiver of such terms, covenants and conditions, nor shall any waiver or

relinquishment of any right at any one or more times be deemed a waiver or relinquishment of such right at any other time or times.

11. Any reference in this instrument to the masculine gender shall be deemed also to include the feminine and the neuter, and references to the singular shall be deemed also to include the plural and vice-versa; unless the context otherwise requires.

12. This Agreement may not be changed orally, but only by an agreement executed by all of the parties to this Agreement at the time of such amendment.

IN WITNESS WHEREOF, the parties have hereto set their hands and seals as of the day and year first above written.

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