Neiman Marcus 2004 Annual Report Download - page 124

AMENDED AND RESTATED DISTRIBUTION AGREEMENT
AMENDED AND RESTATED DISTRIBUTION AGREEMENT, dated as of July 1, 1999, amending and restating the DISTRIBUTION
AGREEMENT, dated as of May 14, 1999 (this "Agreement"), between HARCOURT GENERAL, INC., a Delaware corporation ("Harcourt General"), and
THE NEIMAN MARCUS GROUP, INC., a Delaware corporation ("Neiman Marcus").
WHEREAS, Harcourt General will own, immediately prior to the Recapitalization (as defined below), 21,440,960 shares of Common Stock, par value $.
01 per share, of Neiman Marcus ("Common Stock") and HGI Investment Trust, a wholly-owned subsidiary of Harcourt General ("HGI"), will own 4,988,542
shares of Common Stock (the "Retained Shares");
WHEREAS, simultaneously with the execution hereof, Neiman Marcus and Spring Merger Corporation, a Delaware corporation and a wholly-owned
subsidiary of Harcourt General ("Merger Sub"), are entering into an Amended and Restated Agreement and Plan of Merger dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the "Recapitalization Agreement"), pursuant to which, among other things, Merger Sub will
merge with and into Neiman Marcus with the following consequent capital stock changes: (i) 21,440,960 shares of the Common Stock held by Harcourt
General will be contributed to Merger Sub and, as of the Declaration Date (as defined herein), will automatically be canceled and retired with no securities or
other consideration issued in exchange therefor, (ii) all of the common stock of Merger Sub, owned by Harcourt General, will be converted into 21,440,960
shares of a new Class B Common Stock, par value $.01 per share, of Neiman Marcus ("Class B Common Stock" and, together with the Class A Common
Stock, the "Neiman Marcus Common Stock"), which class of stock will be entitled to elect at least 82% of the members of the board of directors of Neiman
Marcus and in all other respects will be substantially identical to the Class A Common Stock and (iii) all other shares of Common Stock will be converted into
Class A Common Stock, par value $.01 per share, of Neiman Marcus ("Class A Common Stock"), including 4,988,542 shares of Common Stock held by HGI,
which class of stock shall be entitled to elect up to 18% of the members of the board of directors of Neiman Marcus (the "Recapitalization");
WHEREAS, the Board of Directors of Harcourt General has determined that it is appropriate, desirable and in the best interests of Harcourt General and
its stockholders to distribute on the Distribution Date all the shares of Class B Common Stock that Harcourt General will receive in the Recapitalization, on
the terms and subject to the conditions set forth in this Agreement, to the holders of record of the Common Stock, par value $1.00 per share, of Harcourt
General and the Class B Stock, par value $1.00 per share, of Harcourt General (collectively, "Harcourt General Common Stock"), as of the Distribution
Record Date (as defined herein), on a pro rata basis (the "Distribution");
WHEREAS, Harcourt General will submit a request for a ruling (as it may be amended from time to time, the "Ruling Request") from the Internal
Revenue Service to the effect that the Distribution will be a tax-free distribution within the meaning of Section 355 of the Code (as defined herein);
WHEREAS, each of Harcourt General and Neiman Marcus has determined that it is necessary and desirable to set forth the principal corporate
transactions required to effect the Distribution and the Recapitalization and to set forth other agreements that will govern certain other matters following the
Distribution.
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