Neiman Marcus 2008 Annual Report Download - page 80

Table of Contents
(collectively, "WP VIII") and Warburg Pincus Private Equity IX, L.P. ("WP IX") may be deemed, as a result of their
ownership of 43.25% of Newton Holding, LLC's total outstanding shares and certain provisions under the Newton Holding,
LLC operating agreement, to have shared voting or dispositive power. Warburg Pincus Partners, LLC, a direct subsidiary of
Warburg Pincus & Co. ("WP"), is the general partner of WP VIII. Warburg Pincus IX, LLC, an indirect subsidiary of WP, is
the general partner of WP IX. Warburg Pincus LLC ("WP LLC") is the manager of each of WP VIII and WP IX. WP and WP
LLC may be deemed to beneficially own all of the shares of common stock owned by WP VIII and WP IX. Messrs. Barr,
Lapidus, and Lee disclaim beneficial ownership of all of the shares of common stock owned by the Warburg Pincus entities.
(4) Messrs. Barr and Lee, as partners of WP and managing directors and members of WP LLC, may be deemed to beneficially
own all of the shares of common stock beneficially owned by the Warburg Pincus entities. Messrs. Barr and Lee disclaim any
beneficial ownership of these shares of common stock.
(5) Includes 1,506 shares held for the benefit of a family trust of which Mr. Tansky disclaims beneficial ownership.
(6) Includes 944 shares held for the benefit of a family trust of which Ms. Katz disclaims beneficial ownership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Our board of directors has adopted a written related-person transactions policy that sets forth our policies and procedures
regarding the identification, review, consideration and approval or ratification of "related-person transactions." For purposes of our
policy only, a "related-person transaction " is any transaction, including any financial transaction, arrangement or relationship (or any
series of similar transactions, arrangements or relationships), in which we and any "related person" are, were or will be participants
involving an amount that exceeds $120,000. Certain transactions, including transactions involving compensation for services
provided to us as an employee, director or consultant by a related person and transactions in which rates or charges are determined by
competitive bid, are not covered by this policy. A related person is any executive officer, director or nominee for director, or more
than 5% stockholder of our company, including any of their immediate family members, and any entity owned or controlled by such
persons.
The Board has determined that the Company's Audit Committee is best suited to review and approve any related-person
transaction and any material amendments thereto, although the Board may instead determine that a particular transaction (or
amendment thereto) should be reviewed and approved by a majority of directors disinterested from the transaction. In the event a
member of the Audit Committee has an interest in the proposed transaction, the relevant member must recuse himself or herself from
the deliberations and approval. The policy requires that, in determining whether to approve, ratify or reject a related-person
transaction, the Audit Committee satisfy itself that it has been fully informed as to the related person's relationship and interest in the
transaction (or amendment thereto) and the material facts thereof, and must determine must look at, in light of known circumstances,
whether the transaction is, or is not, consistent with the best interests of our company and our Sponsors, as the Audit Committee
determines in the good faith exercise of its discretion.
Typically, in considering related-person transactions, the Audit Committee takes into account the relevant available facts and
circumstances including, but not limited to (a) the risks, costs and benefits to us, (b) the terms of the transaction, (c) the availability of
other sources for comparable services or products and (d) the terms available to or from, as the case may be, unrelated third parties or
to or from employees generally.
Related Person Transactions
Newton Holding, LLC Limited Liability Company Operating Agreement
The investment funds associated with or designated by a Sponsor (Sponsor Funds) and certain investors who agreed to co-
invest with the Sponsor Funds or through a vehicle jointly controlled by the Sponsors to provide equity financing for the Acquisition
(Co-Investors), entered into a limited liability company operating agreement in respect of our parent company, Newton Holding, LLC
(the "LLC Agreement"). The LLC Agreement contains agreements among the parties with respect to the election of our directors and
the directors of our parent companies, restrictions on the issuance or transfer of interests in us, including tag-along rights and drag-
along rights, and other corporate governance provisions (including the right to approve various corporate actions).
Pursuant to the LLC Agreement, each of TPG Capital, L.P. and Warburg Pincus has the right, which is freely assignable to
other members or indirect members, to nominate four directors, and TPG Capital, L.P. and Warburg Pincus are
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