Neiman Marcus 2005 Annual Report Download - page 154

Permitted Transferee), then the Majority Stockholder or his Permitted Transferee (hereinafter referred to as a "Selling Stockholder")
shall give written notice of such proposed transfer to the Management Stockholder or Transferee (the "Selling Stockholder's Notice")
at least thirty (30) days prior to the consummation of such proposed transfer, and shall provide notice to all other stockholders of the
Company to whom the Majority Stockholder has granted similar "tag-along" rights (such stockholders together with the Management
Stockholder or Transferee, referred to herein as the "Other Stockholders") setting forth the proposed material terms and conditions of
such Transfer (including price per Share).
(ii) The Management Stockholder or Transferee shall have the right to elect, by delivery of written
notice to the Majority Stockholder within twenty (20) days from delivery of the Selling Stockholder's Notice, to sell to the proposed
transferee a number of its Shares of Common Stock, not to exceed (a) the number of shares of Common Stock and Shares underlying
vested options held by such Management Stockholder or Transferee multiplied by (b) a fraction, the numerator of which is the
aggregate number of Shares of Common Stock in which the Majority Stockholder has a pecuniary interest that such Majority
Stockholder has proposed to be transferred, and the denominator of which is the aggregate number of Shares of Common Stock in
which the Majority Stockholder has a pecuniary interest, on the same terms and conditions (including price per share of Common
Stock) as the Majority Stockholder. In the event that the transferee does not wish to acquire all of the Shares offered by the
Management Stockholder or Transferee, the number of Shares of Common Stock to be purchased by such transferee shall be allocated
pro rata among the Majority Stockholders and the Other Stockholders in accordance with the number of shares of Common Stock and
Shares underlying vested Options that each such stockholder elected to transfer to the transferee.
(iii) Any transfer of Shares by the Management Stockholder or Transferee shall be at the same price
per Share of Common Stock and pursuant to the same terms and conditions with respect to payment for the Shares of Common Stock
as agreed to by the Selling Stockholder with respect to the sale of its pecuniary interest in the Shares, provided, that in order to be
entitled to exercise its tag-along rights pursuant to this Section 4(b), the Management Stockholder or Transferee must agree to make to
the proposed Purchaser, representations, warranties, covenants, indemnities and agreements comparable to those made by the Selling
Stockholder in connection with the proposed transfer and agree to the same conditions to the proposed transfer as the Selling
Stockholder agrees, it being understood that all such representation, warranties, covenants, indemnities and agreements shall be made
by the Selling Stockholder, the Management Stockholder or Transferee and any Other Stockholder exercising similar tag-along rights
severally and not jointly. The Selling Stockholder, the Management Stockholder and any Other Stockholder who exercises similar
tag-along rights shall be responsible for their proportionate share of the costs of the proposed Transfer to the extent not paid or
reimbursed by the proposed Purchaser or the Company.
(iv) In connection with the exercise of its tag-along rights under this Section 4(b), if the Management
Stockholder or Transferee desires to exercise vested Options to acquire up to the number of Shares the Management Stockholder or
Transferee is permitted to sell pursuant to the exercise of its tag-along rights pursuant to this Section 4(b), the Company will permit
the Management Stockholder or Transferee to exercise any such vested Options through net-physical settlement (net of the applicable
exercise price and applicable withholding taxes) if the Company's independent auditors determine that net-physical settlement of any
such Options would not produce less-favorable accounting consequences for the Company than if the Management Stockholder or
Transferee paid the exercise price for any such vested Options in cash.
(v) Notwithstanding anything to the contrary contained herein, the provisions of this Section 4(b) shall not
apply during the period from the Effective Date through the first anniversary of the Effective Date to any sale or transfer by a Majority
Stockholder of its pecuniary interest in any shares of Common Stock for a price that is equal to or less than the Fair Market Value of
such share of Common Stock as of the Effective Date unless and until the Majority Stockholder, after giving effect to the proposed
sale or transfer, shall have sold or transferred in the aggregate (other than to Permitted Transferees) its pecuniary interest in shares of
Common Stock representing 15.0% or more of the shares of Common Stock in which the Majority Stockholder collectively had a
pecuniary interest as of the Effective Time.