<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 1997
REGISTRATION NO. 333-24733
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
POLO RALPH LAUREN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 2337 13-2622036
<S> <C> <C>
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
650 MADISON AVENUE
NEW YORK, NEW YORK 10022
(212) 318-7000
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
VICTOR COHEN, ESQ.
GENERAL COUNSEL
POLO RALPH LAUREN CORPORATION
650 MADISON AVENUE
NEW YORK, NEW YORK 10022
(212) 318-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE OF PROCESS)
------------------------
WITH COPIES TO:
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JAMES M. DUBIN, ESQ. VALERIE FORD JACOB, ESQ.
EDWIN S. MAYNARD, ESQ. FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
PAUL, WEISS, RIFKIND, WHARTON & GARRISON ONE NEW YORK PLAZA
1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10004
NEW YORK, NEW YORK 10019-6064 (212) 859-8000
(212) 373-3000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, CHECK THE FOLLOWING BOX. [ ]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(b) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
- ---------
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [ ]
- ---------
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
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================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
OFFERING AGGREGATE
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE(2) REGISTRATION FEE(3)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value $.01
per share........................... 33,925,000 $25 $848,125,000 $257,008
================================================================================================================
</TABLE>
(1) Includes 4,425,000 shares that may be issued upon exercise of over-allotment
options granted to the Underwriters.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to paragraph (o) of Rule 457 of the Securities Act of 1933.
(3) This amount was previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table shows the expenses, other than underwriting discounts,
which the Company expects to incur in connection with the issuance and
distribution of the securities being registered under this registration
statement. All expenses are estimated except for the Securities and Exchange
Commission registration fee, the New York Stock Exchange Listing Fee and the
NASD filing fee.
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Securities and Exchange Commission registration fee..................... $ 257,008
New York Stock Exchange listing fee..................................... $ 170,797
NASD filing fee......................................................... $ 30,500
Blue Sky fees and expenses*............................................. $ 10,000
Legal fees and expenses*................................................ $1,200,000
Accounting fees and expenses*........................................... $ 700,000
Printing and engraving expenses*........................................ $ 500,000
Registrar and transfer agent's fees*.................................... $ 50,000
Miscellaneous*.......................................................... $2,081,695
-- -------
Total*.................................................................. $5,000,000
==========
</TABLE>
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* Estimated
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
("Section 145") permits a Delaware corporation to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit, or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful.
In the case of an action by or in the right of the corporation, Section 145
permits the corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation. No indemnification may be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and
II-1
<PAGE> 3
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
To the extent that a director, officer, employee, or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit,
or proceeding referred to in the preceding two paragraphs, Section 145 requires
that such person be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
Section 145 provides that expenses (including attorneys' fees) incurred by
an officer or director in defending any civil, criminal, administrative, or
investigative action, suit, or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit, or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to repay
such amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in Section 145.
Article Six of the Company's Amended and Restated Certificate of
Incorporation eliminates the personal liability of the directors of the Company
to the Company or its stockholders for monetary damages for breach of fiduciary
duty as directors, with certain exceptions. Article Seven requires
indemnification of directors and officers of the Company, and for advancement of
litigation expenses to the fullest extent permitted by Section 145.
The Underwriting Agreement filed herewith as Exhibit 1.1 provides for
indemnification of the directors, certain officers, and controlling persons of
the Company by the Underwriters against certain civil liabilities, including
liabilities under the Securities Act. The Company has also entered into an
agreement with a director and executive officer providing for his
indemnification in his capacity as a director and executive officer, including
liabilities under the Federal securities laws.
See Item 17 below.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
See "Reorganization and Related Transactions".
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(i) Exhibits
The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein.
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ ------------------------------------------------------------------------------------
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1.1 Form of Underwriting Agreement
2.1 Subscription Agreement, dated as of April 6, 1997, by and among Mr. Ralph Lauren, RL
Holding, L.P., RL Family, L.P., GS Capital Partners, L.P., GS Capital Partners PRL
Holding I, L.P., GS Capital Partners PRL Holding II, L.P., Stone Street Fund 1994,
L.P., Stone Street 1994 Subsidiary Corp., and Bridge Street Fund 1994, L.P., and
Polo Ralph Lauren Corporation+
2.2 Assignment and Assumption Agreement, dated as of April 6, 1997, by and among Mr.
Ralph Lauren, RL Holding, L.P., RL Family, L.P., GS Capital Partners, L.P., GS
Capital Partners PRL Holding I, L.P., GS Capital Partners PRL Holding II, L.P.,
Stone Street Fund 1994, L.P., Stone Street 1994 Subsidiary Corp., and Bridge Street
Fund 1994, L.P. and Polo Ralph Lauren Corporation+
3.1 Form of Amended and Restated Certificate of Incorporation of the Company
3.2 Form of Bylaws of the Company
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison with respect to the legality of
the Class A Common Stock*
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<PAGE> 4
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ ------------------------------------------------------------------------------------
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10.1 Polo Ralph Lauren Corporation 1997 Long-Term Stock Incentive Plan
10.2 Polo Ralph Lauren Corporation 1997 Stock Option Plan for Non-Employee Directors
10.3 Form of Registration Rights Agreement by and among Ralph Lauren, GS Capital
Partners, L.P., GS Capital Partners PRL Holding I, L.P., GS Capital Partners PRL
Holding II, L.P., Stone Street Fund 1994, L.P., Stone Street 1994 Subsidiary Corp.,
Bridge Street Fund 1994, L.P., and Polo Ralph Lauren Corporation
10.4 U.S.A. Design and Consulting Agreement, dated January 1, 1985, between Ralph Lauren,
individually and d/b/a Ralph Lauren Design Studio, and Cosmair, Inc., and letter
agreement related thereto dated January 1, 1985+
10.5 Restated U.S.A. License Agreement, dated January 1, 1985, between Ricky Lauren and
Mark N. Kaplan, as Licensor, and Cosmair, Inc., as Licensee, and letter agreement
related thereto dated January 1, 1985+
10.6 Foreign Design and Consulting Agreement, dated January 1, 1985, between Ralph
Lauren, individually and d/b/a Ralph Lauren Design Studio, as Licensor, and L'Oreal
S.A., as Licensee, and letter agreements related thereto dated January 1, 1985,
September 16, 1994 and October 25, 1994+
10.7 Restated Foreign License Agreement, dated January 1, 1985, between The Polo/Lauren
Company, as Licensor, and L'Oreal S.A., as Licensee, letter agreement related
thereto dated January 1, 1985, and Supplementary Agreement thereto, dated October 1,
1991+
10.8 Amendment, dated November 27, 1992, to Foreign Design And Consulting Agreement and
Restated Foreign License Agreement+
10.9 Sublicense Agreement, dated February 1, 1992, between The Ralph Lauren Home Collec-
tion and WestPoint Stevens Inc., as successor in interest to J.P. Stevens & Co.,
Inc., and letter agreements related thereto dated July 6, 1992, January 4, 1994 and
July 5, 1994+
10.10 License Agreement, dated March 1, 1998, between The Polo/Lauren Company, L.P. and
Polo Ralph Lauren Japan Co., Ltd., and undated letter agreement related thereto+
10.11 Design Services Agreement, dated March 1, 1998, between Polo Ralph Lauren
Enterprises, L.P. and Polo Ralph Lauren Japan Co., Ltd.+
10.12 Deferred Compensation Agreement dated April 1, 1993, between Michael J. Newman and
Polo Ralph Lauren Corporation, assigned October 31, 1994 to Polo Ralph Lauren, L.P.+
10.13 Deferred Compensation Agreement dated April 3, 1994 between John D. Idol and Polo
Ralph Lauren Corporation, assigned October 31, 1994 to Polo Ralph Lauren, L.P.+
10.14 Deferred Compensation Agreement dated April 2, 1995 between F. Lance Isham and Polo
Ralph Lauren, L.P.+
10.15 Deferred Compensation Agreement dated April 1, 1993 between Cheryl L. Sterling Udell
and Polo Ralph Lauren Corporation, assigned October 31, 1994 to Polo Ralph Lauren,
L.P.+
10.16 Deferred Compensation Agreement dated April 1, 1996 between Donna A. Barbieri and
Polo Ralph Lauren, L.P.
10.17 Amended and Restated Employment Agreement dated October 26, 1993 between Michael J.
Newman and Polo Ralph Lauren Corporation, as amended and assigned October 31, 1994
to Polo Ralph Lauren, L.P. and as further amended as of May , 1997*
10.18 Employment Agreement dated March 31, 1994 between John D. Idol and Polo Ralph Lauren
Corporation, assigned October 31, 1994 to Polo Ralph Lauren, L.P.+
10.19 Employment Agreement dated April 2, 1995 between F. Lance Isham and Polo Ralph
Lauren, L.P.+
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<TABLE>
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ ------------------------------------------------------------------------------------
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10.20 Employment Agreement dated October 26, 1993 between Cheryl L. Sterling Udell and
Polo Ralph Lauren Corporation, assigned October 31, 1994 to Polo Ralph Lauren, L.P.+
10.21 Employment Agreement dated as of April 1, 1997 between David J. Hare and Polo Ralph
Lauren, L.P.+
10.22 Form of Stockholders Agreement among Polo Ralph Lauren Corporation, GS Capital
Partners, L.P., GS Capital Partners PRL Holding I, L.P., GS Capital Partners PRL
Holding II, L.P., Stone Street Fund 1994, L.P., Stone Street 1994 Subsidiary Corp.,
Bridge Street Fund 1994, L.P., Mr. Ralph Lauren, RL Holding, L.P. and RL Family,
L.P.
10.23 Form of Reorganization Note*
10.24 Credit Facility dated , 1997 between Polo Ralph Lauren Corporation
and The Chase Manhattan Bank*
21.1 List of Subsidiaries
23.1 Consent of Mahoney, Cohen, Rashba & Pokart, CPA, PC+
23.2 Consent of Deloitte & Touche LLP and Report on Schedule+
23.3 Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in its opinion filed
as Exhibit 5.1 to the Registration Statement)
23.4 Consent of Richard A. Friedman+
</TABLE>
- ---------------
+ Previously filed.
* To be filed by amendment.
(ii) Financial Statement Schedule
Schedule II Valuation and Qualifying Accounts
ITEM 17. UNDERTAKINGS.
The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The Registrant hereby undertakes to provide to the Underwriters at the
closing specified in the Underwriting Agreement (filed herewith as Exhibit 1.1)
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described above in Item 14 or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
II-4
<PAGE> 6
suit, or proceeding) is asserted against the Registrant by such director,
officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-5
<PAGE> 7
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW
YORK, ON JUNE 4, 1997.
Polo Ralph Lauren Corporation
By: /s/ VICTOR COHEN
------------------------------------
VICTOR COHEN
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
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SIGNATURE TITLE DATE
--------- ----- ----
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* Chairman, Chief Executive Officer June 4, 1997
- ------------------------------------- (principal executive officer) and
RALPH LAUREN Director
* Vice-Chairman, Chief Operating June 4, 1997
- ------------------------------------- Officer and Director
MICHAEL J. NEWMAN
* Vice-President and Chief Financial June 4, 1997
- ------------------------------------- Officer (principal accounting and
NANCY A. PLATONI POLI financial officer)
*By: /s/ VICTOR COHEN
- -------------------------------------
VICTOR COHEN
ATTORNEY-IN-FACT
</TABLE>
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------ ------------------------------------------------------------------------ ------------
<S> <C> <C>
1.1 Form of Underwriting Agreement..........................................
2.1 Subscription Agreement, dated as of April 6, 1997, by and among Mr.
Ralph Lauren, RL Holding, L.P., RL Family, L.P., GS Capital Partners,
L.P., GS Capital Partners PRL Holding I, L.P., GS Capital Partners PRL
Holding II, L.P., Stone Street Fund 1994, L.P., Stone Street 1994
Subsidiary Corp., and Bridge Street Fund 1994, L.P., and Polo Ralph
Lauren Corporation+.....................................................
2.2 Assignment and Assumption Agreement, dated as of April 6, 1997, by and
among Mr. Ralph Lauren, RL Holding, L.P., RL Family, L.P., GS Capital
Partners, L.P., GS Capital Partners PRL Holding I, L.P., GS Capital
Partners PRL Holding II, L.P., Stone Street Fund 1994, L.P., Stone
Street 1994 Subsidiary Corp., and Bridge Street Fund 1994, L.P. and Polo
Ralph Lauren Corporation+...............................................
3.1 Form of Amended and Restated Certificate of Incorporation of the
Company.................................................................
3.2 Form of Bylaws of the Company...........................................
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison with respect to the
legality of the Class A Common Stock*...................................
10.1 Polo Ralph Lauren Corporation 1997 Long-Term Stock Incentive Plan.......
10.2 Polo Ralph Lauren Corporation 1997 Stock Option Plan for Non-Employee
Directors...............................................................
10.3 Form of Registration Rights Agreement by and among Ralph Lauren, GS
Capital Partners, L.P., GS Capital Partners PRL Holding I, L.P., GS
Capital Partners PRL Holding II, L.P., Stone Street Fund 1994, L.P.,
Stone Street 1994 Subsidiary Corp., Bridge Street Fund 1994, L.P., and
Polo Ralph Lauren Corporation...........................................
10.4 U.S.A. Design and Consulting Agreement, dated January 1, 1985, between
Ralph Lauren, individually and d/b/a Ralph Lauren Design Studio, and
Cosmair, Inc., and letter agreement related thereto dated January 1,
1985+...................................................................
10.5 Restated U.S.A. License Agreement, dated January 1, 1985, between Ricky
Lauren and Mark N. Kaplan, as Licensor, and Cosmair, Inc., as Licensee,
and letter agreement related thereto dated January 1, 1985+.............
10.6 Foreign Design and Consulting Agreement, dated January 1, 1985, between
Ralph Lauren, individually and d/b/a Ralph Lauren Design Studio, as
Licensor, and L'Oreal S.A., as Licensee, and letter agreements related
thereto dated January 1, 1985, September 16, 1994 and October 25,
1994+...................................................................
10.7 Restated Foreign License Agreement, dated January 1, 1985, between The
Polo/Lauren Company, as Licensor, and L'Oreal S.A., as Licensee, letter
agreement related thereto dated January 1, 1985, and Supplementary
Agreement thereto, dated October 1, 1991+...............................
10.8 Amendment, dated November 27, 1992, to Foreign Design And Consulting
Agreement and Restated Foreign License Agreement+.......................
10.9 Sublicense Agreement, dated February 1, 1992, between The Ralph Lauren
Home Collection and WestPoint Stevens Inc., as successor in interest to
J.P. Stevens & Co., Inc., and letter agreements related thereto dated
July 6, 1992, January 4, 1994 and July 5, 1994+.........................
10.10 License Agreement, dated March 1, 1998, between The Polo/Lauren Com-
pany, L.P. and Polo Ralph Lauren Japan Co., Ltd., and undated letter
agreement related thereto+..............................................
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------ ------------------------------------------------------------------------ ------------
<S> <C> <C>
10.11 Design Services Agreement, dated March 1, 1998, between Polo Ralph
Lauren Enterprises, L.P. and Polo Ralph Lauren Japan Co., Ltd.+.........
10.12 Deferred Compensation Agreement dated April 1, 1993, between Michael J.
Newman and Polo Ralph Lauren Corporation, assigned October 31, 1994 to
Polo Ralph Lauren, L.P.+................................................
10.13 Deferred Compensation Agreement dated April 3, 1994 between John D. Idol
and Polo Ralph Lauren Corporation, assigned October 31, 1994 to Polo
Ralph Lauren, L.P.+.....................................................
10.14 Deferred Compensation Agreement dated April 2, 1995 between F. Lance
Isham and Polo Ralph Lauren, L.P.+......................................
10.15 Deferred Compensation Agreement dated April 1, 1993 between Cheryl L.
Sterling Udell and Polo Ralph Lauren Corporation, assigned October 31,
1994 to Polo Ralph Lauren, L.P.+........................................
10.16 Deferred Compensation Agreement dated April 1, 1996 between Donna A.
Barbieri and Polo Ralph Lauren, L.P.....................................
10.17 Amended and Restated Employment Agreement dated October 26, 1993 between
Michael J. Newman and Polo Ralph Lauren Corporation, as amended and
assigned October 31, 1994 to Polo Ralph Lauren, L.P. and as further
amended as of May , 1997*.............................................
10.18 Employment Agreement dated March 31, 1994 between John D. Idol and Polo
Ralph Lauren Corporation, assigned October 31, 1994 to Polo Ralph
Lauren, L.P.+...........................................................
10.19 Employment Agreement dated April 2, 1995 between F. Lance Isham and Polo
Ralph Lauren, L.P.+.....................................................
10.20 Employment Agreement dated October 26, 1993 between Cheryl L. Sterling
Udell and Polo Ralph Lauren Corporation, assigned October 31, 1994 to
Polo Ralph Lauren, L.P.+................................................
10.21 Employment Agreement dated as of April 1, 1997 between David J. Hare and
Polo Ralph Lauren, L.P.+................................................
10.22 Form of Stockholders Agreement among Polo Ralph Lauren Corporation, GS
Capital Partners, L.P., GS Capital Partners PRL Holding I, L.P., GS
Capital Partners PRL Holding II, L.P., Stone Street Fund 1994, L.P.,
Stone Street 1994 Subsidiary Corp., Bridge Street Fund 1994, L.P., Mr.
Ralph Lauren, RL Holding, L.P. and RL Family, L.P.......................
10.23 Form of Reorganization Note*............................................
10.24 Credit Facility dated , 1997 between Polo Ralph Lauren
Corporation and The Chase Manhattan Bank*...............................
21.1 List of Subsidiaries....................................................
23.1 Consent of Mahoney, Cohen, Rashba & Pokart, CPA, PC+....................
23.2 Consent of Deloitte & Touche LLP and Report on Schedule+................
23.3 Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in its
opinion filed as Exhibit 5.1 to the Registration Statement).............
23.4 Consent of Richard A. Friedman+.........................................
</TABLE>
- ---------------
+ Previously filed.
* To be filed by amendment.
<PAGE> 1
Exhibit 1.1
POLO RALPH LAUREN CORPORATION
Class A Common Stock
(par value $.01 per share)
Underwriting Agreement
(U.S. Version)
_________, 1997
Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Morgan Stanley & Co. Incorporated,
As representatives of the several
Underwriters named in Schedule 1 hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
Polo Ralph Lauren Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of ___________ shares and, at the election of the Underwriters, up to _________
additional shares of Class A Common Stock, par value $.01 per share (the
"Stock"), of the Company, and the stockholders of the Company named in Schedule
II hereto (the "Selling Stockholders") propose, subject to the terms and
conditions stated herein, to sell to the Underwriters an aggregate of
____________ shares and, at the election of the Underwriters, up to _________
additional shares of Stock. The aggregate of _________ shares to be sold by the
Company and the Selling Stockholders is herein called the "Firm Shares" and the
aggregate of _________ additional shares to be sold by the Company and certain
of the Selling Stockholders is herein called the "Optional Shares." The Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 2 hereof are herein collectively called the "Shares."
It is understood and agreed to by all parties that the Company and the
Selling Stockholders are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Company
and the Selling Stockholders of up to a total of ___________ shares of Stock
(the "International Shares"), including the overallotment option thereunder,
through arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Goldman Sachs International, Merrill
Lynch International and Morgan Stanley & Co. International Limited are acting as
lead managers. Anything herein or therein to the contrary notwithstanding, the
respective closings under this Agreement and the International Underwriting
Agreement are hereby expressly made conditional on one another. The Underwriters
hereunder and the International Underwriters are simultaneously entering into an
Agreement between U.S. and
<PAGE> 2
International Underwriting Syndicates (the "Agreement between Syndicates") which
provides, among other things, for the transfer of shares of Stock between the
two syndicates. Two forms of prospectus are to be used in connection with the
offering and sale of shares of Stock contemplated by the foregoing, one relating
to the Shares hereunder and the other relating to the International Shares. The
latter form of prospectus will be identical to the former except for certain
substitute pages. Except as used in Sections 2, 3, 4, 5, 11 and 13 herein, and
except as the context may otherwise require, references hereinafter to the
Shares shall include all the shares of Stock which may be sold pursuant to
either this Agreement or the International Underwriting Agreement, and
references herein to any prospectus whether in preliminary or final form, and
whether as amended or supplemented, shall include both the U.S. and the
international versions thereof.
Prior to the Reorganization (as defined below), the Company conducted
its operations through three primary operating partnerships, Polo Ralph Lauren
Enterprises, L.P. ("Enterprises"), Polo Ralph Lauren, L.P. ("Polo LP") and The
Ralph Lauren Womenswear Company L.P. ("Womenswear LP" and, together with
Enterprises and Polo LP, the "Operating Partnerships") and certain other
entities. In anticipation of the sale of the Shares, (i) in May 1997, a
corporation wholly owned by Ralph Lauren through which he held certain interests
in Enterprises and Polo LP merged into the Company in exchange for shares of
Class B Common Stock, $.01 par value per share (the "Class B Common Stock") of
the Company and (ii) the Company and the other partners of the Operating
Partnerships entered into a Subscription Agreement, dated as of April 6, 1997
(the "Reorganization Agreement"), pursuant to which prior to the date hereof the
partners of the Operating Partnerships other than the Company contributed their
interests in the Operating Partnerships to the Company in exchange for shares of
Class B Common Stock or Class C Common Stock, $.01 par value per share, of the
Company, as the case may be, and promissory notes (the "Reorganization"). In
connection with the Reorganization, the parties to the Reorganization Agreement
entered into a Stockholders Agreement, dated as of June __, 1997 (the
"Stockholders Agreement") and the Registration Rights Agreement, dated as of
June __, 1997 (the "Registration Rights Agreement").
Effective April 3, 1997, the Company entered into purchase agreements
with certain third parties (collectively, the "Retail Acquisition Agreement") to
acquire the 50% interest in Polo Retail Corporation and minority interests in
related entities that the Company did not previously own, which acquisition (the
"PRC Acquisition") will be consummated at the First Time of Delivery (as defined
herein).
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-24733)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the
size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document
with respect to the Initial Registration Statement has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement,
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if any, has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 6(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective or such
part of the Rule 462(b) Registration Statement, if any, which became or
hereafter becomes effective, each as amended at the time such part of
the registration statement became effective, are hereinafter
collectively called the "Registration Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein or
by a Selling Stockholder expressly for use in the preparation of the
answers therein to Items 7 and 11(l) of Form S-1;
(iii) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Goldman, Sachs & Co. expressly for use therein or by a Selling
Stockholder expressly for use in the preparation of the answers therein
to Items 7 and 11(l) of Form S-1;
(iv) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries, except for
draws or paydowns under the Company's New Credit Facility (as defined
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in the Prospectus) and required payments under the Subordinated Notes
(as defined in the Prospectus) and payments required in connection with
the Reorganization Notes (as defined in the Prospectus) or any material
adverse change, or any development related to the Company involving a
prospective material adverse change, in or affecting the business
affairs, financial condition, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated by the Prospectus;
(v) The Company and its subsidiaries listed on Schedule IV hereto
(the "Principal Subsidiaries") have good and marketable title in fee
simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries or such as do not
and would not, individually or in the aggregate, have a material
adverse effect on the business, prospects, operations, financial
condition, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole (a "Material Adverse Effect");
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries or such as do not and
would not, individually or in the aggregate, have a Material Adverse
Effect; and other than the Principal Subsidiaries, there are no
subsidiaries of the Company which would constitute significant
subsidiaries as defined in Rule 1-02(w) of Regulation S-X;
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, except where the
failure to be in such good standing would not have a Material Adverse
Effect;
(vii) The Company has [or will have as of the First Time of
Delivery] an authorized capitalization as set forth in the Prospectus,
and all of the issued and outstanding shares of capital stock of the
Company have been duly authorized and issued, are fully paid and
non-assessable and conform in all material respects to the description
of the capital stock contained in the Prospectus; the Reorganization
has been duly authorized and consummated in accordance with applicable
law; and all of the issued and outstanding shares of capital stock of
each subsidiary of the Company have been duly authorized and issued,
are fully paid and non-assessable and (except for directors' qualifying
shares and except as set forth in the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances or
claims or as may have been pledged to the lenders under certain of the
Company's credit agreements;
(viii) The unissued Shares to be issued and sold by the Company
to the Underwriters hereunder and to the International Underwriters
under the International Underwriting
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Agreement have been duly authorized and, when issued and delivered
against payment therefor as provided herein, will be validly issued and
fully paid and non-assessable and will conform in all material respects
to the description of the Stock contained in the Prospectus;
(ix) The issue and sale of the Shares to be sold by the Company
hereunder and under the International Underwriting Agreement, the
authorization, execution and delivery of the Reorganization Agreement,
the Retail Acquisition Agreement, the Registration Rights Agreement and
the Stockholders Agreement and the compliance by the Company with all
of the provisions of this Agreement, the International Underwriting
Agreement, the Reorganization Agreement, the Retail Acquisition
Agreement, the Registration Rights Agreement and the Stockholders
Agreement and the consummation of the transactions herein and therein
contemplated including the Reorganization (i) will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject except any such
conflict, breach, violation or default which has been consented to or
waived by the appropriate counterparty thereto, prior to the execution
and delivery of this Agreement, (ii) will not result in any violation
of the provisions of the Certificate of Incorporation or By-laws of the
Company, and (iii) will not result in any violation of any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties, except for conflicts, breaches, violations or
defaults (other than any relating to the Certificate of Incorporation
or By-laws of the Company) that would not, individually or in the
aggregate, have a Material Adverse Effect or, individually or in the
aggregate, impair the Company's ability to consummate the transactions
herein or therein contemplated; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, the International Underwriting
Agreement, the Reorganization Agreement, the Retail Acquisition
Agreement, the Registration Rights Agreement and the Stockholders
Agreement and by the Reorganization, except the registration under the
Act of the Shares and of any shares as contemplated by the Registration
Rights Agreement, the registration under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters and the
International Underwriters and as contemplated by the Registration
Rights Agreement;
(x) Neither the Company nor any of its Principal Subsidiaries is
in violation of its respective Certificate of Incorporation or By-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound which default would have a Material Adverse Effect;
(xi) The Company has all requisite corporate power and authority
to enter into this Agreement, the International Underwriting Agreement,
the Reorganization Agreement, the
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Retail Acquisition Agreement, the Registration Rights Agreement and the
Stockholders Agreement; and each of this Agreement, the International
Underwriting Agreement, the Reorganization Agreement, the Retail
Acquisition Agreement, the Registration Rights Agreement and the
Stockholders Agreement have been duly authorized by the Company and
have been validly executed and delivered by the Company and each of the
Reorganization Agreement, Retail Acquisition Agreement, the
Registration Rights Agreement and the Stockholders Agreement
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms;
(xii) The statements set forth in the Prospectus under the
caption "Description of Capital Stock," insofar as they purport to
constitute a summary of the terms of the Stock, and under the captions
"Underwriting," "Reorganization and Related Transactions" and "Certain
Relationships and Related Transactions," insofar as they purport to
describe the provisions of the laws, documents and transactions
referred to therein for purposes of complying with the requirements of
the Act and the rules and regulations thereunder are accurate and fair
in all material respects;
(xiii) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a material adverse effect on the current or
future consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(xiv) The financial statements included in the Registration
Statement and the Prospectus, together with the related schedules and
notes, present fairly the financial position of the Company and its
subsidiaries on a consolidated basis as of the dates indicated and the
results of operations, stockholders' equity and cash flows of the
Company and its subsidiaries on a combined basis for the periods
indicated. Such financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The financial
statement schedules, if any, included in the Registration Statement
present fairly the information required to be stated therein. The
selected financial data included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
in all material respects with that of the audited financial statements
included in the Registration Statement;
(xv) The pro forma balance sheet and pro forma statement of
income and the related notes thereto set forth in the Registration
Statement and the Prospectus with respect to the Company have been
prepared in accordance with the applicable requirements of Rule 11-02
of Regulation S-X promulgated by the Commission, have been compiled on
the pro forma basis described therein, and in the opinion of the
Company, the assumptions used in the preparation thereof were
reasonable at the time made and the adjustments used therein are based
on good faith estimates and assumptions believed by the Company to be
reasonable at the time made;
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(xvi) There are no contracts or documents of a character required
to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not so
described or filed;
(xvii) Except as disclosed in the Prospectus, the Company and
its subsidiaries own or possess all foreign and domestic governmental
licenses, permits, certificates, consents, orders, approvals and other
authorizations (collectively, "Governmental Licenses") necessary to own
or lease, as the case may be, and to operate their properties and to
carry on their business as presently conducted, except to the extent
that the failure to own or possess such Governmental Licenses would
not, individually or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except to the extent that the failure to have such Governmental
Licenses would not, individually or in the aggregate, have a Material
Adverse Effect; and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to revocation or
modification of any such Governmental Licenses, except to the extent
that individually or in the aggregate, if subject to an unfavorable
decision, ruling or finding, such proceedings would not have a Material
Adverse Effect;
(xviii) Each of the Company and its subsidiaries owns or has
rights to adequate foreign and domestic trademarks, service marks,
trade names, inventions, copyrights and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) (collectively, the
"Intellectual Property") necessary to carry on their respective
businesses as of the date hereof, and neither the Company nor any of
its subsidiaries is aware that it would interfere with, infringe upon
or otherwise come into conflict with any Intellectual Property rights
of third parties as a result of the operation of the business of the
Company or any subsidiary as of the date hereof that, individually or
in the aggregate, if subject to an unfavorable decision, ruling or
finding would have a Material Adverse Effect;
(xix) Except as disclosed in the Prospectus, there are no holders
of securities (debt or equity) of the Company or any of its
subsidiaries, or holders of rights (including, without limitation,
preemptive rights), warrants or options to obtain securities of the
Company or any of its subsidiaries, who have the right to request the
Company or any of its subsidiaries to register securities held by them
under the Act;
(xx) Except as disclosed in the Prospectus, there are no labor
disputes between the Company or any of its subsidiaries, on the one
hand, and the employees of the Company or any of its subsidiaries, on
the other hand that could reasonably be expected to have a material
adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries;
(xxi) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xxii) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes; and
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(xxiii) Deloitte & Touche LLP and Mahoney, Cohen, Rashba &
Pokart, CPA, PC, each who have certified certain financial statements
of the Company and its subsidiaries, are each independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder.
(b) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, each of the Underwriters and the Company that:
(i) With respect to the Ralph Lauren 1997 Charitable Remainder
Unitrust, such Selling Stockholder has been duly created, is validly
existing as a trust under the laws of the jurisdiction of its
organization and has the power and authority to own and sell its
property and to conduct its activities;
(ii) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this
Agreement, the International Underwriting Agreement, the Stockholders
Agreement and the Registration Rights Agreement and, in the case of GS
Capital Partners, L.P., GS Capital Partners PRL Holding I, L.P., GS
Capital Partners PRL Holding II, L.P., Stone Street Fund 1994, L.P.,
Stone Street 1994 Subsidiary Corp. and Bridge Street Fund 1994, L.P.
(collectively, the "GS Selling Stockholders"), the Put Agreement to be
entered into among the GS Selling Stockholders and the representatives
of the Underwriters (the "Put Agreement"), and for the sale and
delivery of the Shares to be sold by such Selling Stockholder hereunder
and under the International Underwriting Agreement, have been obtained;
such Selling Stockholder has full right, power and authority to enter
into this Agreement, the International Underwriting Agreement, the
Stockholders Agreement and the Registration Rights Agreement and, in
the case of the GS Selling Stockholders, the Put Agreement, and to
sell, assign, transfer and deliver the Shares to be sold by such
Selling Stockholder hereunder and thereunder; and such Selling
Stockholder has executed and delivered this Agreement, the
International Underwriting Agreement, the Stockholders Agreement and
the Registration Rights Agreement and, in the case of the GS Selling
Stockholders, the Put Agreement;
(iii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and under the International Underwriting
Agreement and the compliance by such Selling Stockholder with all of
the provisions of this Agreement, the International Underwriting
Agreement, the Stockholders Agreement and the Registration Rights
Agreement and, in the case of the GS Selling Stockholders, the Put
Agreement and the consummation of the transactions herein and therein
contemplated (i) will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any statute, indenture, mortgage, deed of trust, loan agreement
or other material agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or
to which any of the property or assets of such Selling Stockholder is
subject, except any such conflict, breach, violation or default which
has been consented to or waived, by the appropriate counterparty
thereto, prior to the execution and delivery hereof, (ii) will not
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of such Selling Stockholder if such Selling
Stockholder is a corporation or the Partnership Agreement of such
Selling Stockholder if such Selling Stockholder is a partnership and
(iii) will not result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
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(iv) Such Selling Stockholder has, or immediately prior to each
Time of Delivery (as defined in Section 5 hereof) that such Selling
Stockholder is required to sell Shares pursuant to this Agreement and
the International Underwriting Agreement such Selling Stockholder will
have, good and valid title to the Shares to be sold by such Selling
Stockholder hereunder and under the International Underwriting
Agreement, free and clear of all liens, encumbrances or claims; and,
upon delivery of such Shares hereunder and thereunder and payment
therefor pursuant hereto and thereto, good and valid title to such
Shares, free and clear of all liens, encumbrances or claims, will pass
to the several Underwriters or the International Underwriters, as the
case may be;
(v) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, such Selling Stockholder will not offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder or under the
International Underwriting Agreement, Stock or any securities of the
Company that are substantially similar to the Stock, including but not
limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, Stock or any substantially
similar securities (other than pursuant to employee or director stock
option plans existing on the date of this Agreement), without the prior
written consent of Goldman, Sachs & Co., as representative of the
Underwriters;
(vi) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(vii) To the extent that any statements or omissions made in the
Registration Statement, and Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading;
(viii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof); and
(ix) The Shares represented by the certificates held by each
Selling Stockholder are subject to the interests of the Underwriters
hereunder; the obligations of the Selling Stockholder hereunder shall
not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Stockholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee
or the termination of such estate or trust, or in the case of a
partnership or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event; if any individual
Selling Stockholder or any such
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executor or trustee should die or become incapacitated, or if any such
estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should
occur, before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of the
Selling Stockholder in accordance with the terms and conditions of this
Agreement and of the International Underwriting Agreement.
2. Subject to the terms and conditions herein set forth, (a) the
Company and each of the Selling Stockholders agree, severally and not jointly,
to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company and each of the Selling
Stockholders, at a purchase price per share of $__________, the number of Firm
Shares (to be adjusted by you so as to eliminate fractional shares) determined
by multiplying the aggregate number of Firm Shares to be sold by the Company and
each of the Selling Stockholders as set forth opposite their respective names in
Schedule II hereto by a fraction, the numerator of which is the aggregate number
of Firm Shares to be purchased by such Underwriter as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the aggregate number of Firm Shares to be purchased by all of the Underwriters
from the Company and all of the Selling Stockholders hereunder and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company and certain of the
Selling Stockholders agree, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company and such Selling Stockholders, at the purchase price
per share set forth in clause (a) of this Section 2, that portion of the number
of Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder. For purposes of facilitating
the sale of Shares by the GS Selling Stockholders pursuant to clause (a) of this
Section 2 and subject to the terms and conditions herein set forth, each of you
agrees, severally and not jointly, to purchase from each of the GS Selling
Stockholders, at the purchase price per share set forth in clause (a) of this
Section 2, the number of Firm Shares of each of the GS Selling Stockholders as
set forth opposite your respective names in Schedule III hereto and in Schedule
III to the International Underwriting Agreement (the "Note Shares") at the Note
Time of Delivery (as defined in Section 5 hereof) against payment by each of you
of the purchase price therefor by delivery of a promissory note (each, a "Note"
and collectively, the "Notes") in the form previously agreed by the GS Selling
Stockholders and each of you. The number of shares each respective Underwriter
is severally obligated to purchase, as set forth in Schedule I hereto, shall not
be affected by the foregoing arrangements.
The Company and certain of the Selling Stockholders, as and to the
extent indicated in Schedule II hereto, hereby grant, severally and not jointly,
to the Underwriters the right to purchase at their election up to _________
Optional Shares, at the purchase price per share set forth in the paragraph
above, for the sole purpose of covering over-allotments in the sale of the Firm
Shares. [Any such election to purchase Optional Shares shall be made in
proportion to the maximum number of Optional Shares to be sold by the Company
and such Selling Stockholders as set forth in Schedule II hereto.] Any such
election to purchase Optional Shares may be exercised only by written notice
from you to the Company and such Selling Stockholders, given within a period of
30 calendar days
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after the date of this Agreement and setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by you but in no event earlier than the First
Time of Delivery (as defined in Section 5 hereof) or, unless you and the Company
and such Selling Stockholders otherwise agree in writing, earlier than two or
later than ten business days after the date of such notice.
3. The Company hereby confirms its engagement of Morgan Stanley & Co.
Incorporated as, and Morgan Stanley & Co. Incorporated hereby confirms its
agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Section 2(o) of Rule 2720 of the National
Association of Securities Dealers, Inc. (the "NASD") with respect to the
offering and sale of the Shares. Morgan Stanley & Co. Incorporated, in its
capacity as qualified independent underwriter and not otherwise, is referred to
herein as the "QIU".
4. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
5. (a) The Shares to be purchased by each of you hereunder in exchange
for the Notes, in definitive form, and in such authorized denominations and
registered in such names as Goldman, Sachs & Co. has requested by notice to the
Company and the GS Selling Stockholders, shall be delivered by or on behalf of
the GS Selling Stockholders to Goldman, Sachs & Co. for your accounts against
delivery by or on your behalf of the Notes. The Shares to be purchased by each
Underwriter hereunder (other than Shares purchased in exchange for the Notes) in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company and the Selling Stockholders, shall be delivered by or on
behalf of the Company and the Selling Stockholders to Goldman, Sachs & Co.
through the facilities of the Depository Trust Company ("DTC") for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer or certified or official bank check or
checks, payable to the order of the Company or such Selling Stockholder, as the
case may be, in immediately available (same-day) funds. The Company will cause
the certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004 or DTC or its designated custodian (the
"Designated Office"). The time and date of such delivery and payment shall be
(i) with respect to the Firm Shares to be purchased in exchange for the Notes,
immediately following the execution of this Agreement and the satisfaction of
the conditions set forth in Section 8 hereof, (ii) with respect to all other
Firm Shares, 9:30 a.m., New York City time, on June __, 1997 or such other time
and date as Goldman, Sachs & Co. and the Company may agree upon in writing, and
(iii) with respect to the Optional Shares, 9:30 a.m., New York City time, on the
date specified by Goldman, Sachs & Co. in the written notice given by Goldman,
Sachs & Co. of the Underwriters' election to purchase such Optional Shares, or
such other time and date as Goldman, Sachs & Co., the Company and the Selling
Stockholders may agree upon in writing. Such time and date for delivery of the
Firm Shares to be purchased in exchange for the Notes is herein called the "Note
Time of Delivery," such time and date for delivery of all other Firm Shares is
herein called the "First Time of Delivery," such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery," and each such time and date for delivery is herein
called a "Time of Delivery."
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(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 8 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 8(k) hereof, will be delivered at the offices
of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, NY
10004 (the "Closing Location"), and the Shares will be delivered at the
Designated Office, all at each Time of Delivery. A meeting will be held at the
Closing Location at __ p.m., New York City time, on the New York Business Day
next preceding each Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 5, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
6. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to the last date on which
the Underwriters may be required to deliver a Prospectus which shall be
disapproved by you promptly after reasonable notice thereof, except for
any such amendment or supplement that in the reasonable written opinion
of counsel to the Company is required by applicable law; to advise you,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish you with copies thereof; to advise you,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or prospectus, of the suspension
of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction or to take any other action which would subject it to
taxation, other than as to matters and transactions relating to the
offer and sale of the Shares in each jurisdiction in which the Shares
have been qualified as provided above;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with copies of the Prospectus in
New York City in such quantities as you may reasonably request,
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and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of the Shares and if at such time
any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such period to
amend or supplement the Prospectus in order to comply with the Act, to
notify you and upon your request to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as
you may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many copies as you may
request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder and under the International
Underwriting Agreement, any Stock or any securities of the Company that
are substantially similar to the Stock, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee or director stock option
plans existing on the date of this Agreement), or to file any
registration statement with the Commission under the Act relating to
any such securities, without the prior written consent of Goldman,
Sachs & Co., as representative of the Underwriters;
(f) During a period of five years from the effective date of the
Registration Statement, to furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary
financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to stockholders,
and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional
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<PAGE> 14
information that is available without undue expense concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement and the International Underwriting
Agreement in the manner specified in the Prospectus under the caption
"Use of Proceeds";
(i) To use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange (the "Exchange");
(j) To file with the Commission such reports on Form SR as may
be required by Rule 463 under the Act; and
(k) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
7. The Company and each of the Selling Stockholders covenant and agree
with one another and with the several Underwriters that (a) the Company will pay
or cause to be paid the following: (i) the fees, disbursements and expenses of
the Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the
International Underwriting Agreement, the Agreement between Syndicates, the Blue
Sky Memorandum, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
6(b) hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey and all reasonable fees and expenses of counsel in connection
with the sale of Shares to the Company's officers, employees, customers and
suppliers and other persons associated with the Company or affiliated with any
director, officer or employee of the Company; (iv) all fees and expenses in
connection with listing the Shares on the Exchange; (v) the filing fees incident
to, and the reasonable fees and disbursements of counsel for the Underwriters in
connection with, securing any required review by the NASD of the terms of the
sale of the Shares on behalf of or disbursements by Morgan Stanley & Co.
Incorporated in its capacity as "qualified independent underwriter"; (vi) the
cost of preparing stock certificates; (vii) the cost and charges of any transfer
agent or registrar; (viii) all reasonable fees, disbursements and expenses of
counsel for the Selling Stockholders; and (ix) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section; and (b) each Selling Stockholder will
pay or cause to be paid all costs and expenses incident to the performance of
each Selling Stockholder's obligations hereunder which are not otherwise
specifically provided for in this Section, including (i) all
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<PAGE> 15
expenses and taxes incident to the sale and delivery of the Shares to be sold by
such Selling Stockholder to the Underwriters hereunder including, but not
limited to, all such expenses and taxes relating to the delivery to the
Underwriters of Shares purchased in exchange for the Notes, except as provided
below; and (ii) all other costs and expenses incident to the performance of its
obligations or the Selling Stockholder obligations hereunder which are not
otherwise specifically provided for in this Section 7. In connection with clause
(b) of the preceding sentence, Goldman, Sachs & Co. agrees to pay New York State
stock transfer tax, and each Selling Stockholder agrees to reimburse Goldman,
Sachs & Co. for associated carrying costs if such tax payment is not rebated on
the day of payment and for any portion of such tax payment not rebated. It is
understood, however, that the Company shall bear, and the Selling Stockholder
shall not be required to pay or to reimburse the Company for, the cost of any
other matters not directly relating to the sale and purchase of the Shares
pursuant to this Agreement, and that, except as provided in this Section, and
Sections 9, 10 and 13 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees and disbursements of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
8. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and, in the case of the Note Time of Delivery and each Time of
Delivery, of the Selling Stockholders herein are, at and as of such Time of
Delivery, true and correct, the condition that the Company and, in the case of
the Note Time of Delivery and each Time of Delivery, the Selling Stockholders
shall have performed all of its and their obligations hereunder theretofore to
be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 6(a) hereof, except in the case of the Note
Time of Delivery; if the Company has elected to rely upon Rule 462(b),
the Rule 462(b) Registration Statement shall have become effective by
10:00 P.M., Washington, D.C. time, on the date of this Agreement; no
stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission
shall have been complied with to your reasonable satisfaction;
(b) Fried, Frank, Harris, Shriver & Jacobson, counsel for the
Underwriters, shall have furnished to you such opinion or opinions,
dated such Time of Delivery, with respect to the matters covered in
paragraphs (i), (ii), (vi), (ix) and (xii) of subsection (c) below as
well as such other related matters as you may reasonably request, and
such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Paul, Weiss, Rifkind, Wharton & Garrison, counsel for the
Company, shall have furnished to you their written opinion (a draft of
such opinion is attached as Annex II(a) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
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(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued and outstanding
shares of capital stock of the Company (including the Shares
being delivered by the Company at such Time of Delivery) have
been duly authorized and, upon payment for the Shares in
accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable; and the Shares conform in
all material respects as to legal matters to the description of
the Stock contained in the Prospectus;
(iii) Based solely on such counsel's review of
certificates from public officials, the Company has been duly
qualified as a foreign corporation for the transaction of
business in, and is in good standing under the laws of, the
states of California, Georgia, Illinois, Kentucky, New Jersey,
New York, North Carolina, Pennsylvania and Texas.
(iv) Based solely on such counsel's review of certificates
from public officials, each of the Principal Subsidiaries has
been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation; and all of the issued and outstanding shares of
capital stock of each such Principal Subsidiary have been duly
authorized and validly issued, and are fully paid and
non-assessable, and (except for directors' qualifying shares) are
owned of record directly or indirectly by the Company, and, to
such counsel's knowledge are owned free and clear of all liens,
encumbrances or claims other than those as may have been created
by pledges to lenders under certain of the Company's credit
agreements (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the
Company or its subsidiaries);
(v) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate reasonably be expected to have a
material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations
of the Company and its subsidiaries; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) This Agreement, the International Underwriting
Agreement, the Reorganization Agreement, the Retail Acquisition
Agreement, the Stockholders Agreement and the Registration Rights
Agreement have each been duly authorized, executed and delivered
by the Company and each of the Reorganization Agreement, Retail
Acquisition Agreement, the Stockholders Agreement and
Registration Rights Agreement constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and subject, as to enforceability, to
general principles of equity, good faith and fair dealing
(regardless of whether such enforceabililty is considered in a
proceeding in equity or at law);
(vii) The issue and sale of the Shares being delivered at
such Time of Delivery to be sold by the Company and the
compliance by the Company with all of the provisions of
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<PAGE> 17
this Agreement, the International Underwriting Agreement, the
Reorganization Agreement, the Retail Acquisition Agreement, the
Stockholders Agreement and the Registration Rights Agreement and
of the Reorganization and the consummation of the transactions
herein and therein contemplated including the Reorganization (i)
will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument and which is either filed as an Exhibit
to the Registration Statement or listed on Schedule V hereto,
(ii) nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or any Applicable Law, or (iii) to the knowledge of such
counsel, based solely on an officer's certificate from an officer
of the Company and without independent inquiry, any order
applicable to the Company or any of its Principal Subsidiaries.
As used herein, "Applicable Law" shall mean the federal laws of
the United States, the laws of the State of New York and the
General Corporation Law of the State of Delaware, in each case
which, in such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement, the
International Underwriting Agreement, the Reorganization
Agreement, the Retail Acquisition Agreement, the Stockholders
Agreement and the Registration Rights Agreement;
(viii) Based on such counsel's review of Applicable Law,
but without any investigation concerning any other laws, rules or
regulations, no consent, approval, authorization, order,
registration or qualification of or with any United States
federal, New York or Delaware court or governmental agency or
body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by
this Agreement, the International Underwriting Agreement, the
Reorganization Agreement, the Retail Acquisition Agreement, the
Stockholders Agreement and the Registration Rights Agreement and
of the Reorganization, except the registration under the Act of
the Shares and of any shares as contemplated by the Registration
Rights Agreement;
(ix) The statements set forth in the Prospectus under the
caption "Description of Capital Stock," insofar as they purport
to constitute a summary of the terms of the Stock, and under the
captions "Underwriting," "Reorganization and Related
Transactions," "Certain Relationships and Related Transactions"
and "Certain United States Federal Tax Consequences to Non-United
States Holders of Class A Common Stock," insofar as they purport
to describe the provisions of the laws and documents referred to
therein, are accurate and fair in all material respects;
(x) The Company is not an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act;
(xi) The Reorganization has been duly authorized and
consummated in accordance with Federal and New York law, the
General Corporation Law of the State of Delaware and the Delaware
Revised Uniform Limited Partnership Act; and
(xii) Each of the Registration Statement and the
Prospectus as of their respective effective or issue dates and
any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial
statements, financial statement schedules and other financial
data included in or omitted therefrom and related
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<PAGE> 18
schedules therein, as to which such counsel need express no
opinion) appears on its face to be appropriately responsive in
all material respects to the requirements of the Act and the
rules and regulations thereunder; although they do not assume any
responsibility for the accuracy or fairness of the statements
contained in the Registration Statement or the Prospectus, except
for those referred to in the opinion in subsection (ix) of this
Section 8(c); in addition, such counsel shall state that it has
participated in conferences with directors, officers and other
representatives of the Company, various of the Selling
Stockholders, representatives of the independent public
accountants for the Company, representatives of the Underwriters
and representatives of counsel for the Underwriters, at which
conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and, on the basis
of such participation, (relying as to various questions of fact
relevant to the opinion expressed therein upon the
representations and statements of officers and other
representatives of the Company) but without independent
verification of the accuracy, completeness, or fairness of the
statements contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, nothing has
come to such counsel's attention which has caused such counsel to
believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial
statements, financial statement schedules and other financial
data included in or omitted therefrom, as to which such counsel
need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements, financial
statement schedules and other financial data included in or
omitted therefrom, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading or that, as of such Time of Delivery, either
the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements, financial
statement schedules and other financial data included in or
omitted therefrom, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and they do not know of any amendment to
the Registration Statement required to be filed or of any
contracts or other documents of a character required to be filed
as an exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus which
are not filed or described as required;
(d) Amster, Rothstein & Ebenstein ("AR&E"), counsel for the
Company, shall have furnished to you their written opinion (a draft of
such opinion is attached as Annex II(c) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that
except as disclosed in the Prospectus, the Company and its subsidiaries
together own or have rights to use the trademarks Polo, Ralph Lauren
and Chaps/Ralph Lauren (the "Principal Trademarks") in their businesses
as described in the Prospectus, without any conflict known
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to such counsel with any intellectual property rights of third parties
that would, individually or in the aggregate, have a material adverse
effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries and, to such counsel's knowledge, there is no infringement
by others of the Principal Trademarks that would, individually or in
the aggregate, have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, except that no opinion
need be given as to any jurisdiction outside the United States;
(e) The respective counsel for each of the Selling Stockholders
each shall have furnished to you their written opinion with respect to
each of the Selling Stockholders for whom they are acting as counsel
(drafts of such opinions are attached as Annex II(d) hereto), dated the
Note Time of Delivery with respect to the GS Selling Stockholders and
such Time of Delivery with respect to each other Selling Stockholder,
in form and substance satisfactory to you, to the effect that:
(i) Based on such counsel's review of Applicable Law, but
without any investigation concerning any other laws, rules or
regulations, this Agreement, the International Underwriting
Agreement, the Registration Rights Agreement and the Stockholders
Agreement and, in the case of the GS Selling Stockholders, the
Put Agreement, have been duly authorized (with respect to Selling
Stocking who are not natural persons), executed and delivered by
or on behalf of such Selling Stockholder; and the sale of the
Shares to be sold by such Selling Stockholder hereunder and
thereunder and compliance by such Selling Stockholder with all of
the provisions of this Agreement, the International Underwriting
Agreement, the Registration Rights Agreement and the Stockholders
Agreement and, in the case of the GS Selling Stockholders, the
Put Agreement, and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a
breach or violation of any terms or provisions of, or constitute
a default under, any statute, indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such
counsel to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound or to which any of the property
or assets of such Selling Stockholder is subject based on such
counsel's review of Applicable Law, but without any investigation
concerning any other laws, rules or regulations; nor will such
action result in any violation of (i) the provisions of the
Certificate of Incorporation or By-Laws of such Selling
Stockholder if such Selling Stockholder is a corporation the
Partnership Agreement of such Selling Stockholder if such Selling
Stockholder is a partnership or the Trust Agreement of such
Selling Stockholder if such Selling Stockholder is a Trust, (ii)
any Applicable Law, or (iii) to the knowledge of such counsel,
any order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over such
Selling Stockholder or the property of such Selling Stockholder;
(ii) Based on such counsel's review of Applicable Law, but
without any investigation concerning any other laws, rules or
regulations, no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement,
the International Underwriting Agreement, or the Registration
Rights Agreement or, in the case of the GS Selling Stockholders,
the Put Agreement, in connection with the Shares to be sold by
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such Selling Stockholder hereunder or thereunder, except such as
have been obtained under the Act and such as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of such shares by the Underwriters and
the International Underwriters and as contemplated by the
Registration Rights Agreement; and
(iii) Good and valid title to such Shares, free and clear
of all liens, encumbrances or claims, has been transferred to
each of the several Underwriters and International Underwriters
who have purchased such Shares in good faith and without notice
of any such lien, encumbrance or claim or any other adverse claim
within the meaning of the New York Uniform Commercial Code.
(f) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, each of Deloitte & Touche LLP and Mahoney Cohen
Rashbit & Pohart, CPA, PC shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex I
hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex 1(a) hereto and a
draft of the form of letter to be delivered on the effective date of
any post-effective amendment to the Registration Statement and as of
each Time of Delivery is attached as Annex 1(b) hereto);
(g)(i) Neither the Company nor any of its Principal Subsidiaries
shall have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries, except for draws or paydowns under the
Company's New Credit Facility and required payments under the
Subordinated Notes and payments required in connection with the
Reorganization Notes or any change, or any development related to the
Company involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus,
the effect of which, in any such case described in clause (i) or (ii),
is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
(h) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the Exchange;
(iii) a general moratorium on commercial banking activities declared by
either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this clause (iv) in the judgment
of the Representatives makes it
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impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(i) The Shares at such Time of Delivery shall have been duly
listed, subject to notice of issuance, on the Exchange, except in the
case of the Note Time of Delivery;
(j) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each of the non-selling
stockholders of the Company (the "Non-Selling Stockholders"),
substantially to the effect set forth in Subsection 1(b)(iv) hereof in
form and substance satisfactory to you;
(k) The Company and the Selling Stockholders shall have furnished
or caused to be furnished to you at such Time of Delivery certificates
of officers of the Company and of the Selling Stockholders,
respectively, reasonably satisfactory to you as to the accuracy of the
representations and warranties of the Company and the Selling
Stockholders, respectively, herein at and as of such Time of Delivery,
as to the performance by each of the Company and the Selling
Stockholders of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery, and as to such other
matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and (g) of this Section;
(l) The Reorganization and the transactions contemplated by the
Retail Acquisition Agreement shall have been duly and validly
consummated in accordance with applicable law and in accordance with
the agreements governing the Reorganization as in effect on the date
hereof and the Retail Acquisition Agreement, respectively, and the
Reorganization Agreement, Stockholders Agreement and Registration
Rights Agreements shall have been authorized, executed and delivered in
the forms previously delivered to the Underwriters or counsel for the
Underwriters;
(m) The Put Agreement shall have been validly executed and
delivered by the GS Selling Stockholders at or prior to the Note Time
of Delivery;
(n) The Company shall have complied with the provisions of
Section 6(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
(o) Each of the Selling Stockholders shall have delivered to the
Underwriters certificates required by Treasury Regulation section
1.1445-2(b)(2) in order to avoid withholding of tax under Section 1445
of the Internal Revenue Code of 1986, as amended; and
(p) The Shares shall have been registered pursuant to the
Exchange Act and the rules and regulations thereof.
For purposes of this Section 8 references to the Prospectus shall mean
the most current Preliminary Prospectus if the Prospectus has not been filed
pursuant to Rule 424(b) under the Act at the Note Time of Delivery.
9. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject,
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under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements in the Registration Statement or any
amendment or supplement thereto not misleading or to make the statements in any
Preliminary Prospectus or the Prospectus not misleading in light of the
circumstances under which they were made, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Goldman, Sachs & Co. expressly for use
therein.
(b) Each of the Selling Stockholders will indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements in the Registration Statement or any amendment or supplement
thereto not misleading or to make the statements in any Preliminary Prospectus
or the Prospectus not misleading in light of the circumstances under which they
were made, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Registration Statement or the Prospectus or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder expressly for
use therein; and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that such Selling Stockholder shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use therein; provided, further, that
the liability of such Selling Stockholder pursuant to this subsection (b) shall
not exceed the product of the number of Shares sold by such Selling Stockholder
(including any Optional Shares) and the initial public offering price as set
forth in the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the
22
<PAGE> 23
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through Goldman, Sachs & Co. expressly for use therein; and will
reimburse the Company and each Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or such Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection, except to the extent
that such indemnifying party is prejudiced by the failure to give such notice.
In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with a single counsel (in addition to
any local counsel) satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party. Notwithstanding anything to the contrary
contained herein, an indemnifying party will not be liable for the settlement of
any claim or action effected without its prior written consent, which consent
shall not be unreasonably withheld.
(e) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
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<PAGE> 24
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholders on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, each of the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (e) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section 9 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 9 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as someone
who will become a director of the Company and who becomes such a director) and
to each person, if any, who controls the Company or any Selling Stockholder
within the meaning of the Act.
10. (a) The Company will indemnify and hold harmless Morgan Stanley &
Co. Incorporated, in its capacity as QIU, against any losses, claims, damages or
liabilities, joint or several, to which the QIU may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of
24
<PAGE> 25
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or defending any
such action or claim as such expenses are incurred.
(b) The Company also agrees to indemnify and hold harmless Morgan
Stanley & Co. Incorporated and each person, if any, who controls Morgan Stanley
& Co. Incorporated within the meaning of either Section 15 of the Act, or
Section 20 of the Exchange Act, from and against any all losses, claims,
damages, liabilities and judgments incurred as a result of Morgan Stanley & Co.
Incorporated's participation as a "qualified independent underwriter" within the
meaning of Rule 2720 of the National Association of Securities Dealers' Conduct
Rules in connection with the offering of the Shares except for any losses,
claims, damages, liabilities and judgments found in a final judgment by a court
to have resulted from Morgan Stanley & Co. Incorporated's, or such controlling
person's willful misconduct or gross negligence.
(c) Promptly after receipt by the QIU under subsection (a) and (b)
above of notice of the commencement of any action, the QIU shall, if a claim in
respect thereof is to be made against the Company under such subsection, notify
the Company in writing of the commencement thereof; but the omission so to
notify the Company shall not relieve it from any liability which it may have to
the QIU otherwise than under such subsection, except to the extent that the
Company is prejudiced by the failure to give such notice. In case any such
action shall be brought against the QIU and it shall notify the Company of the
commencement thereof, the Company shall be entitled to participate therein and,
to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with a single counsel (in
addition to any local counsel) satisfactory to the QIU (who shall not, except
with the consent of the QIU, be counsel to the Company), and, after notice from
the indemnifying party to the QIU of its election so to assume the defense
thereof, the indemnifying party shall not be liable to the QIU under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by the QIU, in connection with the defense
thereof other than reasonable costs of investigation. The Company shall not,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the QIU is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the QIU from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
the QIU. Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Sections 9(a) and 9(b) hereof in respect of such
action or proceeding, then in addition to a separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local counsel)
for Morgan Stanley & Co. Incorporated in its capacity as a "qualified
independent underwriter" and all persons, if any, who control Morgan Stanley &
Co. Incorporated within the meaning of either Section 15 of the Act or Section
20 of the Exchange Act.
(d) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless Morgan Stanley & Co.
Incorporated, in its capacity as QIU, under subsection (a) and (b) above in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by the QIU as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such
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<PAGE> 26
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the QIU on the other from the offering of the
Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the QIU failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by the QIU in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the QIU on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. .The relative benefits received by the Company on the
one hand and the QIU on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company, as set forth in the table on the cover page of the Prospectus,
bear to the fee payable to the QIU. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the QIU on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the QIU agree that it would not be just and equitable if contributions pursuant
to this subsection (d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by the QIU
as a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) The obligations of the Company under this section 10 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the QIU
within the meaning of the Act.
11. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company and the Selling Stockholders shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Stockholders that you have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
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<PAGE> 27
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company and certain of the Selling
Stockholders to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Stockholders, except for the expenses to be borne by the Company and the
Selling Stockholders and the Underwriters as provided in Section 7 hereof and
the indemnity and contribution agreements in Sections 9 and 10 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
12. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
Anything herein to the contrary notwithstanding, the indemnity
agreement of the Company in subsection (a) of Section 9 hereof, the
representations and warranties in subsections (a)(ii) and (a)(iii) of Section 1
hereof and any representation or warranty as to the accuracy of the Registration
Statement or the Prospectus contained in any certificate furnished by the
Company pursuant to Section 8 hereof, insofar as they may constitute a basis for
indemnification for liabilities (other than payment by the Company of expenses
incurred or paid in the successful defense of any action, suit or proceeding)
arising under the Act, shall not extend to the extent of any interest therein of
a controlling person or partner of an Underwriter who is a director, officer or
controlling person of the Company when the Registration Statement has become
effective, in each case to the extent that an interest of such character shall
have been determined by a court of appropriate jurisdiction as not against
public policy as expressed in the Act. Unless in the opinion of counsel for the
Company the matter has been settled by controlling precedent, the Company will,
if a claim for such indemnification is asserted, submit to a court of
appropriate jurisdiction the question of whether such interest is
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against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
13. If this Agreement shall be terminated pursuant to Section 11
hereof, neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 7, 9 and 10 hereof;
but, if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company, will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company and the Selling
Stockholders shall then be under no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Sections 7, 9 and
10 hereof.
14. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives; and in all dealings with any of the GS Selling Stockholders
hereunder, you and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of such GS Selling
Stockholders made or given by either of the Attorneys-in-Fact for such GS
Selling Stockholders.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; if to any Selling Stockholders shall be delivered or sent by mail,
telex or facsimile transmission to counsel for such Selling Stockholders at its
address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 9(d) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you on request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
15. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and, to
the extent provided in Sections 9, 10 and 12 hereof, the officers and directors
of the Company and each person who controls the Company, any Selling
Stockholders or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
16. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
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18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
each of the Selling Stockholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholders for examination, upon
request, but without warranty on your part as to the authority of the signers
thereof.
29
<PAGE> 30
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholders represents by so doing that he has been duly
appointed as Attorney-in-Fact by such Selling Stockholders pursuant to a validly
existing and binding Power-of-Attorney which authorizes such Attorney-in-Fact to
take such action.
<TABLE>
<S> <C>
Very truly yours,
POLO RALPH LAUREN CORPORATION
By: ______________________________________________________
Name:
Title:
The GS Selling Stockholders Named in Schedule II to this
Agreement
By: ______________________________________________________
Name:
Title:
As Attorney-in-Fact acting on
behalf of each of the GS Selling
Stockholders named in Schedule II
Accepted as of the date hereof: to this Agreement.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith __________________________________________________________
Incorporated RALPH LAUREN
Morgan Stanley & Co. Incorporated
By:__________________________________________________
(Goldman, Sachs & Co.) RALPH LAUREN 1997 CHARITABLE
REMAINDER TRUST
On behalf of each of the Underwriters By: ______________________________________________________
Name:
</TABLE>
<PAGE> 31
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
--------------- ------------------
<S> <C> <C>
Goldman, Sachs & Co.................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................
Morgan Stanley & Co. Incorporated...................................
---------- ---------
Total...................................................... 23,500,000 3,525,000
========== =========
</TABLE>
30
<PAGE> 32
SCHEDULE II
<TABLE>
<CAPTION>
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
--------------- ------------------
<S> <C> <C>
The Company.........................................................
The Selling Stockholder(s):.........................................
Ralph Lauren (a)............................................
Ralph Lauren 1997 Charitable Remainder Unitrust (b).........
GS Capital Partners, L.P. (c)...............................
GS Capital Partners PRL Holding I, L.P. (c).................
GS Capital Partners PRL Holding II, L.P. (c)................
Stone Street Fund 1994, L.P. (c)............................
Stone Street 1994 Subsidiary Corp. (c)......................
Bridge Street Fund 1994, L.P. (c)...........................
---------- ---------
Total.....................................................
========== =========
</TABLE>
- -------------
(a) This Selling Stockholder is represented by Paul, Weiss, Rifkind, Wharton
& Garrison.
(b) This Selling Stockholder is represented by Sherman & Sterling.
(c) This Selling Stockholder is represented by David J. Greenwald.
31
<PAGE> 33
SCHEDULE III
<TABLE>
<CAPTION>
FIRM SHARES
-----------
<S> <C> <C>
Goldman, Sachs & Co......................
GS Capital Partners, L.P.
GS Capital Partners PRL Holding I, L.P.
GS Capital Partners PRL Holding II, L.P.
Stone Street Fund 1994, L.P.
Stone Street 1994 Subsidiary Corp.
Bridge Street Fund 1994, L.P.
Merrill Lynch Pierce Fenner & Smith
Incorporated................
GS Capital Partners, L.P.
GS Capital Partners PRL Holding I, L.P.
GS Capital Partners PRL Holding II, L.P.
Stone Street Fund 1994, L.P.
Stone Street 1994 Subsidiary Corp.
Bridge Street Fund 1994, L.P.
Morgan Stanley & Co. Incorporated........
GS Capital Partners, L.P.
GS Capital Partners PRL Holding I, L.P.
GS Capital Partners PRL Holding II, L.P.
Stone Street Fund 1994, L.P.
Stone Street 1994 Subsidiary Corp.
Bridge Street Fund 1994, L.P.
-----------------------
Total.............................
=======================
</TABLE>
32
<PAGE> 34
ANNEX I
FORM OF COMFORT LETTER
Pursuant to Section 8(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus as indicated in their reports thereon copies
of which have been separately furnished to the Representatives; and on
the basis of specified procedures including inquiries of officials of
the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(A)(i) below comply
as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform
I-1
<PAGE> 35
in all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the related published rules and regulations, or (ii)
any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements
included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in Clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with the
basis for the audited consolidated financial statements included
in the Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Prospectus) or any increase in the consolidated long-term debt
of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared
with amounts shown in the latest
. I-2
<PAGE> 36
balance sheet included in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
the comparable period of the preceding year and with any other
period of corresponding length specified by the Representatives,
except in each case for decreases or increases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectus, or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
I-3
<PAGE> 37
SCHEDULE IV
PRINCIPAL SUBSIDIARIES
Fashions Outlet of America, Inc.
The Ralph Lauren Womenswear Company, L.P.
The Polo/Lauren Company, L.P.
RL Fragrances, LLC
I-4
<PAGE> 1
EXHIBIT 3.1
FORM OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
of
POLO RALPH LAUREN CORPORATION
(Originally Incorporated March 20, 1997)
POLO RALPH LAUREN CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies pursuant to Sections 242 and 245 of the General
Corporation Law of the State of Delaware (the "General Corporation Law") as
follows:
FIRST: The Corporation's name is Polo Ralph Lauren Corporation
and it was originally incorporated under such name.
SECOND: The Certificate of Incorporation of the Corporation
was filed with the Secretary of State on March 20, 1997. An Amended and Restated
Certificate of Incorporation was filed with the Secretary of State on April 1,
1997.
THIRD: This Amended and Restated Certificate of Incorporation
amends and restates the Certificate of Incorporation of the Corporation, as
previously amended and now in effect. This Amended and Restated Certificate of
Incorporation was adopted by the Board of Directors and stockholders of the
Corporation entitled to vote in respect thereof in the manner and by the vote
prescribed by Section 242 of the General Corporation Law to read as follows:
<PAGE> 2
1. Name. The name of the corporation is Polo Ralph Lauren
Corporation (the "Corporation").
2. Address; Registered Office and Agent. The address of the
Corporation's registered office is 1013 Centre Road, County of New Castle, State
of Delaware; and its registered agent at such address is Corporation Service
Company.
3. Purposes. The purpose of the Corporation is to engage in,
carry on and conduct any lawful act or activity for which corporations may be
organized under the General Corporation Law.
4. Capital Stock.
4.1 Authorized Capital Stock. The total number of shares of
stock that the Corporation shall have the authority to issue is seven-hundred
million (700,000,000) shares, consisting of (a) five-hundred million
(500,000,000) shares of Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"); (b)one-hundred million (100,000,000) shares of Class B
Common Stock, par value $.01 per share (the "Class B Common Stock"); (c)
seventy-million (70,000 million ) shares of Class C Common Stock, par value $.01
per share (the "Class C Common Stock"); and (d) thirty million (30,000,000)
shares of Preferred Stock, par value $.01 per share (the "Preferred Stock"),
issuable in one or more series as hereinafter provided. The Class A Common
Stock, the Class B Common Stock and the Class C Common Stock shall hereinafter
collectively be called the "Common Stock." The number of authorized shares of
any class or classes of capital stock of the Corporation may be increased or
decreased (but not below the number of shares thereof then
2
<PAGE> 3
outstanding) by the affirmative vote of the holders of a majority of the voting
power of the stock of the Corporation entitled to vote generally in the election
of directors irrespective of the provisions of Section 242(b)(2) of the General
Corporation Law or any corresponding provision hereinafter enacted.
4.2 Terms of Common Stock. All shares of Common Stock will be
identical in all respects and will entitle the holders thereof to the same
rights and privileges, except as otherwise provided herein.
(a) Voting Rights. The holders of shares of Common Stock
shall have the following voting rights:
(i) Each share of Class A Common Stock and Class
C Common Stock shall entitle the holder thereof to one vote in person or by
proxy on all matters submitted to a vote of the stockholders of the Corporation.
(ii) Each share of Class B Common Stock shall
entitle the holder thereof to ten votes in person or by proxy on all matters
submitted to a vote of the stockholders of the Corporation.
(iii) Except for the election and the removal of
directors described below, and as otherwise required by applicable law, the
holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation (or, except for
the election or the removal of directors entitled to be elected by the holders
of Common Stock described below, if any holders of shares of Preferred Stock
3
<PAGE> 4
are entitled to vote together with the holders of Common Stock, as a single
class with such holders of shares of Preferred Stock).
(iv) With respect to the annual election of
directors, the holders of Common Stock shall be entitled to elect directors as
follows (exclusive of those directors permitted to be elected by holders of any
series of Preferred Stock ("Preferred Directors")):
(1) When there are shares of Class A Common
Stock, shares of Class B Common Stock and shares of Class C Common Stock
outstanding, and if on the record date for any meeting of stockholders of the
Corporation the number of shares of Class B Common Stock and Class C Common
Stock are each equal to or greater than 10% of the greater of the aggregate
number of outstanding shares of all classes of Common Stock immediately upon the
consummation of the (i) Transfer Closing Date (as defined in the Assignment and
Assumption Agreement made as of April 6, 1997 by and between Ralph Lauren, RL
Holding, L.P., RL Family, L.P., GS Capital Partners, L.P., GS Capital Partners
PRL Holding I, L.P., GS Capital Partners PRL Holding II, L.P., Stone Street Fund
1994, L.P., Stone Street 1994 Subsidiary Corp., Bridge Street Fund 1994, L.P.,
and the Corporation) and (ii) the offering contemplated by Registration
Statement No. 333-24733 (the "IPO") (adjusted for stock splits, stock dividends,
reclassifications, recapitalizations and reverse stock splits
4
<PAGE> 5
and similar transactions), (a) the holders of the Class A Common Stock, voting
as a separate class, are entitled to elect one (1) director if the Board
(exclusive of Preferred Directors) consists of less then ten directors, two (2)
directors if the Board (exclusive of Preferred Directors) consists of at least
10 but less than 19 members and three (3) directors if the Board (exclusive of
Preferred Directors) consists of 19 or more directors, (b) the holders of the
Class C Common Stock, voting as a separate class, are entitled to elect one (1)
director if the Board (exclusive of Preferred Directors) consists of less than
13 directors and two (2) directors if the Board (exclusive of Preferred
Directors) consists of 13 or more directors and (c) the holders of the Class B
Common Stock, voting as a separate class, are entitled to elect all other
directors.
(2) When there are shares of Class A Common Stock and
Class B Common Stock outstanding, but no shares of Class C Common Stock are
outstanding, and, if on the record date for any meeting of stockholders of the
Corporation the number of outstanding shares of Class B Common Stock is at least
10% of the greater of the aggregate number of outstanding shares of all classes
of Common Stock immediately upon the consummation of the (i) Transfer Closing
Date and (ii) the IPO (adjusted for stock splits, stock dividends,
reclassifications, recapitalizations and reverse stock splits
5
<PAGE> 6
and similar transactions), (a) the holders of the Class A Common Stock, voting
as a separate class, shall be entitled to elect two (2) directors if the Board
(exclusive of Preferred Directors) consists of less than ten directors, three
(3) directors if the Board (exclusive of Preferred Directors) consists of at
least 10 but less than 13 directors, four (4) directors if the Board (exclusive
of Preferred Directors) consists of at least 13 but less than 19 members and
five (5) directors if the Board (exclusive of Preferred Directors) consists of
19 or more directors and (b) the holders of Class B Common Stock, voting as a
separate class, shall be entitled to elect all other directors.
(3) Under all circumstances, if on the record date
for any meeting of stockholders of the Corporation the number of outstanding
shares of Class B Common Stock has fallen below 10% of the greater of the
aggregate number of outstanding shares of all classes of Common Stock
immediately upon the consummation of (i) the Transfer Closing Date and (ii) the
IPO (adjusted for stock splits, stock dividends, reclassifications,
recapitalizations and reverse stock splits and similar transactions), directors
that would have been elected by a separate vote of the holders of the Class A
Common Stock and Class B Common Stock (if any), respectively, will instead be
elected by the holders of the Class A Common Stock and the holders of the Class
B Common Stock (if any),
6
<PAGE> 7
voting together, with holders of Class A Common Stock having one vote per share
and holders of Class B Common Stock (if any) having ten votes per share.
(4) Under all circumstances, so long as on the record
date of any meeting of stockholders of the Corporation the number of outstanding
shares of Class C Common Stock is not less than 10% of the greater of the
aggregate number of outstanding shares of Common Stock immediately upon the
consummation of (i) the Transfer Closing Date and (ii) the IPO (adjusted for
stock splits, stock dividends, reclassifications, recapitalizations and reverse
stock splits and similar transactions), then the holders of the Class C Common
Stock, voting as a separate class, shall be entitled to elect one (1) director
if the Board (exclusive of Preferred Directors) consists of less than 13
directors and two (2) directors if the Board (exclusive of Preferred Directors)
consists of 13 or more directors.
(5) Whenever there is only one class of Common Stock
outstanding, the holders of such class of Common Stock shall be entitled to
elect all of the directors.
(v) Directors may be removed, with or without cause,
only by the holders of the class or classes of Common Stock or series of
Preferred Stock that, as of the date such removal is effected, would be entitled
to elect such directorship at the next annual meeting of
7
<PAGE> 8
stockholders. Vacancies in a directorship may be filled only by (a) the
remaining directors elected by holders of each class of Common Stock or series
of Preferred Stock that (x) elected such directorship and (y) as of the date
such vacancy is filled, would be entitled to elect such directorship at the next
annual meeting of stockholders or, (b) if there are no such remaining directors,
then by the vote of the holders of the class or classes of Common Stock or
series of Preferred Stock that, as of the date such vacancy is filled, would be
entitled to elect such directorship at the next annual meeting of stockholders,
voting as a separate class at a meeting, special or otherwise, of the holders of
Common Stock of such class or classes or series of Preferred Stock.
Notwithstanding the above sentence, any vacancy or vacancies in existence
immediately following the adoption of this Amended and Restated Certificate of
Incorporation in a directorship of a class for which there are no directors
elected by such class may be filled by the affirmative votes of a majority of
the remaining Board members, although less than a quorum, until such time as
there is a meeting, special or otherwise, of the holders of Common Stock of such
class at which time such vote to elect such director or directors shall take
place.
(b) Dividends and Distributions.
(i) Subject to the preferences applicable to
Preferred Stock outstanding at any time, the holders of shares of Common Stock
shall be entitled to receive such dividends and other distributions in
8
<PAGE> 9
cash, property or shares of stock of the Corporation as may be declared thereon
by the Board of Directors from time to time out of assets or funds of the
Corporation legally available therefor; provided, that, subject to the
provisions of this Section 4.2(b), and except with respect to the Second
Dividend (as defined below), the Corporation shall not pay dividends or make
distributions to any holders of any class of Common Stock unless simultaneously
with such dividend or distribution, as the case may be, the Company makes the
same dividend or distribution with respect to each outstanding share of Common
Stock regardless of class. In the case of dividends or other distributions
payable in Class A Common Stock, Class B Common Stock or Class C Common Stock,
including distributions pursuant to stock splits or divisions of Class A Common
Stock, Class B Common Stock or Class C Common Stock which occur after the first
date upon which the Corporation has issued shares of either Class A Common
Stock, Class B Common Stock or Class C Common Stock, only shares of Class A
Common Stock shall be distributed with respect to Class A Common Stock, only
shares of Class B Common Stock shall be distributed with respect to Class B
Common Stock, and only shares of Class C Common Stock shall be distributed with
respect to Class C Common Stock. Whenever a dividend or distribution, including
distributions pursuant to stock splits or divisions of the Common Stock, is
payable in shares of Class A Common Stock, Class B Common Stock or Class C
Common Stock, the number of shares of each class
9
<PAGE> 10
of Common Stock payable per share of such class of Common Stock shall be equal
in number. In the case of dividends or other distributions consisting of other
voting securities of the Corporation or of voting securities of any corporation
which is a wholly-owned subsidiary of the Corporation, the Corporation shall
declare and pay such dividends in three separate classes of such voting
securities, identical in all respects, except that (i) the voting rights of each
such security paid to the holders of Class A Common Stock and Class C Common
Stock shall be one-tenth of the voting rights of each such security paid to the
holders of Class B Common Stock, (ii) such security paid to the holders of Class
B Common Stock shall convert into the security paid to the holders of Class A
Common Stock upon the same terms and conditions applicable to the conversion of
Class B Common Stock into Class A Common Stocks and shall have the same
restrictions on transfer and ownership applicable to the transfer and ownership
of the Class B Common Stock, (iii) such security paid to the holders of Class C
Common Stock shall convert into the security paid to the holders of Class A
Common Stock upon the same terms and conditions applicable to the conversion of
Class C Common Stock into Class A Common Stock and shall have the same
restrictions on transfer and ownership applicable to the transfer and ownership
of the Class C Common Stock and (iv) with respect only to dividends or other
distributions of voting securities of any corporation which is a wholly-owned
subsidiary of the Company, the respective voting rights of each such security
paid to holders of
10
<PAGE> 11
Class A Common Stock, Class B Common Stock and Class C Common Stock with respect
to the election of directors shall otherwise be as comparable as is practicable
to those of the Class A Common Stock, Class B Common Stock and Class C Common
Stock, respectively. In the case of dividends or other distributions consisting
of securities convertible into, or exchangeable for, voting securities of the
Corporation or voting securities of another corporation which is a wholly-owned
subsidiary of the corporation, the Corporation shall provide that such
convertible or exchangeable securities and the underlying securities be
identical in all respects (including, without limitation, the conversion or
exchange rate), except that (i) the voting rights of each security underlying
the convertible or exchangeable security paid to the holders of Class A Common
Stock and Class C Common Stock shall be one-tenth of the voting rights of each
security underlying the convertible or exchangeable security paid to the holders
of the Class B Common Stock, (ii) such underlying securities paid to the holders
of Class B Common Stock shall convert into the underlying securities paid to the
holders of Class A Common Stock upon the same terms and conditions applicable to
the conversion of Class B Common Stock into Class A Common Stock and shall have
the same restrictions on transfer and ownership applicable to the transfer and
ownership of the Class B Common Stock and (iii) such underlying securities paid
to the holders of Class C Common Stock shall convert into the underlying
securities paid to holders of Class A Common Stock upon the same terms and
conditions
11
<PAGE> 12
applicable to the conversion of Class C Common Stock into Class A Common Stock
and shall have the same restrictions on transfer and ownership applicable to the
transfer and ownership of the Class C Common Stock.
(ii) Notwithstanding anything contained in Section
4.2(b)(i) above, the holders of shares of Class B Common Stock and Class C
Common Stock may be entitled, if so determined by the Board of Directors of the
Corporation, to receive a one-time dividend (the "Second Dividend") in an amount
equal to the aggregate previously undistributed taxable income, if any, of Polo
Ralph Lauren Enterprises, L.P., Polo Ralph Lauren, L.P. and The Ralph Lauren
Womenswear Company, L.P. (the "Operating Partnerships") through the date on
which the Operating Partnerships became directly or indirectly wholly owned by
the Corporation, with the holders of shares of Class B Common Stock and the
holders of shares of Class C Common Stock entitled to receive in the aggregate
71.5% and 28.5%, respectively of such Second Dividend.
(c) Conversion of Class B
Common Stock and Class C Common Stock.
(i) Each holder of Class B Common Stock or Class C
Common Stock shall be entitled to convert, at any time and from time to time,
any or all of the shares of such holder's Class B Common Stock or Class C Common
Stock, as the case may be, on a one-for-one basis, into the same number of fully
paid and non-assessable shares of Class A Common
12
<PAGE> 13
Stock. Such right shall be exercised by the surrender of the certificate or
certificates representing the shares of Class B Common Stock or Class C Common
Stock to be converted to the Corporation at any time during normal business
hours at the principal executive offices of the Corporation or at the office of
the Transfer Agent, accompanied by a written notice of the holder of such shares
stating that such holder desires to convert such shares, or a stated number of
the shares represented by such certificate or certificates, into an equal number
of shares of the Class A Common Stock, and (if so required by the Corporation or
the Transfer Agent) by instruments of transfer, in form satisfactory to the
corporation and to the Transfer Agent, duly executed by such holder or such
holder's duly authorized attorney, and transfer tax stamps or funds therefor, if
required pursuant to Section 4.2(c)(vi).
(ii) If, on the record date for any meeting of
stockholders of the Corporation, the number of shares of Class C Common Stock
outstanding constitutes less than 10% of the greater of the aggregate number of
shares of Common Stock outstanding immediately upon the consummation of (i) the
Transfer Closing Date and (ii) the IPO (adjusted for stock splits, stock
dividends, reclassifications, recapitalizations and reverse stock splits and
similar transactions), each share of Class C Common Stock then issued or
outstanding shall thereupon be converted automatically as of such date into one
(1) fully paid and non-assessable share of Class A Common Stock. Upon the making
of such determination, notice of such automatic
13
<PAGE> 14
conversion shall be given by the Corporation by means of a press release and
written notice to all holders of Class C Common Stock, and shall be given as
soon as practicable, and the Secretary of the Corporation shall be instructed
to, and shall promptly request from each holder of Class C Common Stock that
each such holder promptly deliver, and each such holder shall promptly deliver,
the certificate representing each such share of Class C Common Stock to the
Corporation for exchange hereunder, together with instruments of transfer, in
form satisfactory to the Corporation and Transfer agent, duly executed by such
holder or such holder's duly authorized attorney, and together with transfer tax
stamps or funds therefore, if required pursuant to Section 4.2(c)(vi).
(iii) As promptly as practicable following the
surrender for conversion of a certificate representing shares of Class B Common
Stock or Class C Common Stock in the manner provided in Section 4.2(c)(i) or
Section 4.2(c)(ii), as applicable, and the payment in cash of any amount
required by the provisions of Section 4.2(c)(vi), the Corporation will deliver
or cause to be delivered at the office of the Transfer Agent, a certificate or
certificates representing the number of full shares of Class A Common Stock
issuable upon such conversion, issued in such name or names as such holder may
direct. Such conversion shall be deemed to have been effected immediately prior
to the close of business on the date of the surrender of the certificate or
certificates representing shares of Class B
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Common Stock or Class C Common Stock. Upon the date any such conversion is made
or effected, all rights of the holder of such shares as such holder shall cease,
and the person or persons in whose name or names the certificates or
certificates representing the shares of Class A Common Stock are to be issued
shall be treated for all purposes as having become the record holder or holders
of such shares of Class A Common Stock; provided, however, that if any such
surrender and payment occurs on any date when the stock transfer books of the
Corporation shall be closed, the person or persons in whose name or names the
certificate or certificates representing shares of Class A Common Stock are to
be issued shall be deemed the record holder or holders thereof for all purposes
immediately prior to the close of business on the next succeeding day on which
the stock transfer books are open.
(iv) In the event of a reclassification or other
similar transaction as a result of which the shares of Class A Common Stock are
converted into another security, then a holder of Class B Common Stock or Class
C Common Stock shall be entitled to receive upon conversion the amount of such
security that such holder would have received if such conversion had occurred
immediately prior to the record date of such reclassification or other similar
transaction. No adjustments in respect of dividends shall be made upon the
conversion of any share of Class B Common Stock or Class C Common Stock;
provided, however, that if a share shall be converted subsequent to the record
date for the payment of a dividend or other
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<PAGE> 16
distribution on shares of Class B Common Stock or Class C Common Stock but prior
to such payment, then the registered holder of such share at the close of
business on such record date shall be entitled to receive the dividend or other
distribution payable on such share on such date notwithstanding the conversion
thereof or the Corporation's default in payment of the dividend due on such
date.
(v) The Corporation covenants that it will at all
times reserve and keep available out of its authorized but unissued shares of
Class A Common Stock, solely for the purpose of issuance upon conversion of the
outstanding shares of Class B Common Stock or Class C Common Stock, such number
of shares of Class A Common Stock that shall be issuable upon the conversion of
all such outstanding shares of Class B Common Stock or Class C Common Stock;
provided that, nothing contained herein shall be construed to preclude the
Corporation from satisfying its obligations in respect of the conversion of the
outstanding shares of Class B Common Stock or Class C Common Stock by delivery
of purchased shares of Class A Common Stock which are held in the treasury of
the Corporation. The Corporation covenants that if any shares of Class A Common
Stock require registration with or approval of any governmental authority under
any federal or state law before such shares of Class A Common stock may be
issued upon conversion, the Corporation will cause such shares to be duly
registered or approved, as the case may be. The Corporation will use its best
efforts to list the shares of
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<PAGE> 17
Class A Common Stock required to be delivered upon conversion prior to such
delivery upon each national securities exchange upon which the outstanding Class
A Common Stock is listed at the time of such delivery. The Corporation covenants
that all shares of Class A Common Stock that shall be issued upon conversion of
the shares of Class B Common Stock or Class C Common Stock will, upon issue, be
validly issued, fully paid and non-assessable.
(vi) The issuance of certificates for shares of Class
A Common Stock upon conversion of shares of Class B Common Stock or Class C
Common Stock shall be made without charge to the holders of such shares for any
stamp or other similar tax in respect of such issuance; provided, however, that,
if any such certificate is to be issued in a name other than that of the holder
of the share or shares of Class B Common Stock or Class C Common Stock
converted, then the person or persons requesting the issuance thereof shall pay
to the Corporation the amount of any tax that may be payable in respect of any
transfer involved in such issuance or shall establish to the satisfaction of the
Corporation that such tax has been paid.
(vii) Shares of Class B Common Stock or Class C
Common Stock that are converted into shares of Class A Common Stock as provided
herein shall continue to be authorized shares of Class B Common Stock or Class C
Common Stock and available for reissue by the Corporation; provided, however,
that no shares of Class B Common Stock or
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<PAGE> 18
Class C Common Stock shall be reissued except as expressly permitted by Sections
4.2(b) and 4.2(d) of this Amended and Restated Certificate of Incorporation.
(d) Stock Splits. The Corporation shall not in any
manner subdivide (by any stock split, stock dividend, reclassification,
recapitalization or otherwise) or combine (by reverse stock split,
reclassification, recapitalization or otherwise) the outstanding shares of one
class of Common Stock unless the outstanding shares of all classes of Common
Stock shall be proportionately subdivided or combined.
(e) Options, Rights or Warrants.
(i) The Corporation shall not make any offering
of options, rights or warrants to subscribe for shares of Class B Common Stock
or Class C Common Stock. If the Corporation makes an offering of options, rights
or warrants to subscribe for shares of any other class or classes of capital
stock (other than Class B Common Stock or Class C Common Stock) to all holders
of a class of Common Stock then the Corporation shall simultaneously make an
identical offering to all holders of the other classes of Common Stock other
than to any class of Common Stock the holders of which, voting as a separate
class, determine that such offering need not be made to such class. All such
options, rights or warrants offerings shall offer the respective holders of
Class A Common Stock, Class B Common Stock and Class C Common Stock the right to
subscribe at the same rate per share.
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(ii) Subject to Section 4.2(c)(iv) and
4.2(e)(i), the Corporation shall have the power to create and issue, whether or
not in connection with the issue and sale of any shares of stock or other
securities of the Corporation, rights or options entitling the holders thereof
to purchase from the Corporation any shares of its capital stock of any class or
classes at the time authorized (other than Class B Common Stock or Class C
Common Stock), such rights or options to have such terms and conditions, and to
be evidenced by or in such instrument or instruments, as shall be approved by
the Board of Directors.
(f) Mergers, Consolidation, Etc. In the event that
the Corporation shall enter into any consolidation, merger, combination or other
transaction in which shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then, and in such
event, the shares of each class of Common Stock shall be exchanged for or
changed into either (1) the same amount of stock, securities, cash and/or any
other property, as the case may be, into which or for which each share of any
other class of Common Stock is exchanged or changed; provided, however, that if
shares of Common Stock are exchanged for or changed into shares of capital
stock, such shares so exchanged for or changed into may differ to the extent and
only to the extent that the Class A Common Stock, the Class B Common Stock and
the Class C Common Stock differ as provided herein or (2) if holders of each
class of Common Stock are to receive different distributions of stock,
securities, cash and/or any other property, an amount of stock, securities, cash
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<PAGE> 20
and/or property per share having a value, as determined by an independent
investment banking firm of national reputation selected by the Board of
Directors, equal to the value per share into which or for which each share of
any other class of Common Stock is exchanged or changed.
(g) Liquidation Rights. In the event of any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary, after payment or provision for payment of the
debts and other liabilities of the Corporation and after making provision for
the holders of each series of Preferred Stock, if any, the remaining assets and
funds of the Corporation, if any, shall be divided among and paid ratably to the
holders of the shares of the Class A Common Stock, the Class B Common Stock and
the Class C Common Stock treated as a single class.
(h) No Preemptive Rights. Except as provided in
Section 4.2(e), the holders of shares of Common Stock are not entitled to any
preemptive right to subscribe for, purchase or receive any part of any new or
additional issue of stock of any class, whether now or hereafter authorized, or
of bonds, debentures or other securities convertible into or exchangeable for
stock.
(i) Transfer of Class B Common Stock.
(i) No person may, directly or indirectly, sell
(whether by involuntary or judicial sale or otherwise), assign, transfer, grant
a security interest in, pledge, encumber, hypothecate, give (by bequest, gift or
appointment) or otherwise (voluntarily or by operation of law) dispose of
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<PAGE> 21
(collectively, "Transfer") any interest in his, her or its shares of Class B
Common Stock (or in any shares of Class B Common Stock held by such person for
the benefit of or on the behalf of another person) (including, without
limitation, the power to vote or provide a consent with respect to his, her or
its shares of Class B Common Stock by proxy or otherwise, except for proxies
given to any Class B Permitted Holder (as defined below) or to a person
designated by the Board of Directors of the Corporation who is soliciting
proxies on behalf of the Corporation), and the Corporation and the transfer
agent for the Class B Common Stock, if any (the "Class B Transfer Agent"), shall
not register the Transfer of such shares of Class B Common Stock, except to the
Corporation or a Class B Permitted Holder; provided, however, such restrictions
on transfer shall not apply to a merger, consolidation or business combination
of the Corporation with or into another corporation pursuant to which all of the
outstanding shares of each class of Common Stock and Preferred Stock of the
Company is being acquired. Any transfer of Class B Common Stock in violation of
this Section 4.2(i) shall be null and void ab initio, and the Corporation shall
not register such Transfer. For the purposes of this Article Four, a "Class B
Permitted Holder" shall include only the following persons: (i) Ralph Lauren and
his estate, guardian, conservator or committee; (ii) the spouse of Ralph Lauren
and her estate, guardian, conservator or committee; (iii) each descendant of
Ralph Lauren (a "Lauren Descendant") and their respective estates, guardians,
conservators or
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committees; (iv) each Family Controlled Entity (as defined below); and (v) the
trustees, in their respective capacities as such, of each Lauren Family Trust
(as defined below). The term "Family Controlled Entity" means (i) any
not-for-profit corporation if at least a majority of its board of directors is
composed of Ralph Lauren, the spouse of Ralph Lauren and/or Lauren Descendants;
(ii) any other corporation if at least a majority of the value of its
outstanding equity is owned by Class B Permitted Holders; (iii) any partnership
if at least a majority of the economic interest of its partnership interests are
owned by Class B Permitted Holders; and (iv) any limited liability or similar
company if at least a majority of the economic interest of the Company is owned
by Class B Permitted Holders. The term "Lauren Family Trust" includes trusts the
primary beneficiaries of which are Mr. Lauren, the spouse of Ralph Lauren,
Lauren Descendants, Mr. Lauren's siblings, spouses of Lauren Descendants and
their respective estates, guardians, conservators or committees and/or
charitable organizations (collectively, "Lauren Beneficiaries"), provided that
if the trust is a wholly charitable trust, at least a majority of the trustees
of such trust consist of Mr. Lauren, the spouse of Mr. Lauren and/or Class B
Permitted Holder. For purposes of this provision, the primary beneficiaries of a
trust will be deemed to be Lauren Beneficiaries if, under the maximum exercise
of discretion by the trustee in favor of persons who are not Lauren
Beneficiaries, the value of the interests of such persons in such trust,
computed actuarially, is 50% or less. The factors and methods prescribed in
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section 7520 of the Internal Revenue Code of 1986, as amended, for use in
ascertaining the value of certain interests shall be used in determining a
beneficiary's actuarial interest in a trust for purposes of applying this
provision. For purposes of this provision, the actuarial value of the interest
in a trust of any person in whose favor a testamentary power of appointment may
be exercised shall be deemed to be zero. For purposes of this provision, in the
case of a trust created by a Lauren Descendant, the actuarial value of the
interest in such trust of any person who may receive trust property only at the
termination of the trust and then only in the event that, at the termination of
the trust, there are no living issue of such Lauren Descendant shall be deemed
to be zero.
(ii) Notwithstanding anything to the contrary set
forth herein, any Class B Permitted Holder may pledge his, her or its shares of
Class B Common Stock to a financial institution pursuant to a bona fide pledge
of such shares as collateral security for indebtedness due to the pledgee;
provided, that, such shares shall remain subject to the provisions of this
Section 4.2(i). In the event of foreclosure or other similar action by the
pledgee, such pledged shares of Class B Common Stock may only be transferred to
a Class B Permitted Holder or converted into shares of Class A Common Stock, as
the pledgee may elect.
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(iii) For purposes of this Section 4.2(i) and 4.2(j):
(1) the relationship of any person that is
derived by or through legal adoption shall be considered a natural relationship;
(2) a minor who is a descendant of Ralph Lauren
and for whom shares of Class B Common Stock are held pursuant to a Uniform Gifts
to Minors Act or similar law shall be considered a Class B Permitted Holder and
the custodian who is the record holder of such shares shall not be considered
the Class B Permitted Holder of such shares;
(3) an incompetent stockholder who is a Class B
Permitted Holder but whose shares are owned or held by a guardian or conservator
shall be considered a Class B Permitted Holder of such shares and such guardian
or conservator who is the holder of such shares shall not be considered the
Class B Permitted Holder of such shares;
(4) unless otherwise specified, the term
"person" means and includes natural persons, corporations, partnerships,
unincorporated associations, firms, joint ventures, trusts and all other
entities; and
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(5) except as provided in clauses (2) and (3)
above, for purposes of determining whether the holder of shares of Class B
Common Stock is a Class B Permitted Holder, the record holder of such share
shall be considered the holder; provided, however, that if such record holder is
a nominee, the holder for purposes of determining whether the holder of shares
of Class B Common Stock is a Class B Permitted Holder shall be the first person
in the chain of ownership of such share of Class B Common Stock who is not
holding such share solely as a nominee.
(iv) Each certificate representing shares of Class B
Common Stock shall be endorsed with a legend that states that shares of Class B
Common Stock are not transferable other than to certain transferees and are
subject to certain restrictions as set forth in this Amended and Restated
Certificate of Incorporation filed by the Corporation with the Secretary of
State of the State of Delaware.
(j) Transfer of Class C Common Stock.
(i) No person may Transfer any interest in his, her
or its shares of Class C Common Stock (or in any shares of Class C Common Stock
held for the benefit of or on the behalf of another person) (including, without
limitation, the power to vote or provide a consent with respect to his, her or
its shares of Class C Common Stock by proxy or otherwise, except for proxies
given to any Class C Permitted Holder (as
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<PAGE> 26
defined below) or to a person designated by the Board of Directors of the
Corporation who is soliciting proxies on behalf of the Corporation), and the
Corporation and the transfer agent for the Class C Common Stock, if any (the
"Class C Transfer Agent"), shall not register the Transfer of such shares of
Class C Common Stock, except to the Corporation or a Class C Permitted Holder;
provided, however, such restrictions on transfer shall not apply to a merger,
consolidation or business combination of the Corporation with or into another
corporation pursuant to which all of the outstanding shares of each class of
Common Stock and Preferred Stock of the Company is being acquired. Any transfer
of Class C Common Stock in violation of this Section 4.2(j) shall be null and
void ab initio, and the Corporation shall not register such Transfer. For the
purposes of this Article Four, a "Class C Permitted Holder" shall include only
the following persons: GS Capital Partners, L.P., a Delaware limited
partnership, GS Capital Partners PRL Holding I, L.P., a Delaware limited
partnership, GS Capital Partners PRL Holding II, L.P., a Delaware limited
partnership, Stone Street Fund 1994, L.P., a Delaware limited partnership, Stone
Street 1994 Subsidiary Corp., a Delaware corporation and Bridge Street Fund
1994, L.P., a Delaware limited partnership (collectively, the "GS Group") and,
until January 1, 2001, any Successor of any of the foregoing persons. For
purposes of the immediately preceding sentence, "Successor" means, with respect
to any member of the GS Group, an investment entity, similar in form and purpose
to that of such GS Group
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member, that is controlled by the same entity that controlled such member of the
GS Group immediately prior to the transfer of Class C Common Stock. For purposes
of the previous sentence, "controls" when used with respect to any GS Group
member means the power to direct the management and policies of such GS Group
member directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the term "controlled" has the meaning correlative
to the foregoing.
(ii) For purposes of this Section 4.2(j), for
purposes of determining whether the holder of shares of Class C Common Stock is
a Class C Permitted Holder, the record holder of such share shall be considered
the holder; provided, however, that if such record holder is a nominee, the
holder for purposes of determining whether the holder of shares of Class C
Common Stock is a Class C Permitted Holder shall be the first person in the
chain of ownership of such share of Class C Common Stock who is not holding such
share solely as a nominee.
(iii) Notwithstanding anything to the contrary set
forth, any holder of Class C Common Stock may Transfer shares of Class C Common
Stock to the underwriters of the IPO pursuant to the terms of the underwriting
agreements entered into by such holder of Class C Common Stock with respect to
the IPO and the ownership of shares of Class C Common Stock by such underwriters
as a result of such Transfer will not result in the conversion of the
transferred shares of Class C Common Stock into shares of
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Class A Common Stock until the closing of the IPO at which time such shares of
Class C Common Stock shall automatically convert into shares of Class A Common
Stock.
(iv) Each certificate representing shares of Class C
Common Stock shall be endorsed with a legend that states that shares of Class C
Common Stock are not transferable other than to certain transferees and are
subject to certain restrictions as set forth in this Amended and Restated
Certificate of Incorporation filed by the Corporation with the Secretary of
State of the State of Delaware.
(k) Certain Automatic Conversions of Class B Common Stock and
Class C Common Stock. Subject to Section 4.2(i), at such time as a person ceases
to be a Class B Permitted Holder, any and all shares of Class B Common Stock
held by such person at such time shall automatically convert into shares of
Class A Common Stock, provided that, no conversion shall occur upon the pledge
of a Class B Permitted Holder's share of Class B Common Stock to a financial
institution as contemplated by and pursuant to Section 4.2(i)(ii). Subject to
Section 4.2(j), at such time as a person ceases to be a Class C Permitted
Holder, any and all shares of Class C Common Stock held by such person at such
time shall automatically convert into shares of Class A Common Stock, provided
that no conversion shall occur upon the Transfer of shares of Class C Common
Stock to the underwriters of the IPO as contemplated by and pursuant to Section
4.2(j)(iii).
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(l) Restrictions on Issuance. The Corporation shall
not issue or sell (x) any shares of Class B Common Stock or any securities
(including, without limitation, any rights, options, warrants or other
securities) convertible, exchangeable or exercisable into shares of Class B
Common Stock to any person that is not a Class B Permitted Holder and (y) any
shares of Class C Common Stock or any securities (including, without limitation,
any rights, options, warrants or other securities) convertible, exchangeable or
exercisable into shares of Class C Common Stock to any person that is not a
Class C Permitted Holder. Any issuance or sale of shares of Class B Common Stock
or Class C Common Stock (or securities convertible into, or exchangeable or
exercisable for, shares of Class B Common Stock or Class C Common Stock) in
violation of this Section 4.2(i) shall be null and void ab initio.
4.3 Preferred Stock. Shares of Preferred Stock may be issued
from time to time in one or more series of any number of shares provided that
the aggregate number of shares issued and not canceled of any and all series
shall not exceed the total number of shares of Preferred Stock hereinabove
authorized. The Board of Directors is authorized, by resolution adopted and
filed in accordance with law, to provide for the issue of such series of shares
of Preferred Stock. Each series of shares of Preferred Stock: (a) may have such
voting powers, full or limited, or may be without voting powers; provided,
however, that, unless holders of at least seventy-five percent (75%) of the
outstanding shares of Class B Common Stock have approved the issuance of such
shares of Preferred Stock, the Board of Directors may not issue any shares of
Preferred Stock that have the right (i) to vote for the election
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of directors under ordinary circumstances, or (ii) under any circumstances to
elect fifty percent (50%) or more of the directors of the Corporation; (b) may
be subject to redemption at such time or times and at such prices; (c) may be
entitled to receive dividends (which may be cumulative or non-cumulative) at
such rate or rates, on such conditions and at such times, and payable in
preference to, or in such relation to, the dividends payable on any other class
or classes or series of stock; (d) may have such rights upon the dissolution of,
or upon any distribution of the assets of, the Corporation; (e) may be made
convertible into, or exchangeable for, shares of any other class or classes or
of any other series of the same or any other class or classes of stock of the
Corporation or such other corporation or other entity at such price or prices or
at such rates of exchange and with such adjustments; (f) may be entitled to the
benefit of a sinking fund to be applied to the purchase or redemption of shares
of such series in such amount or amounts; (g) may be entitled to the benefit of
conditions and restrictions upon the creation of indebtedness of the Corporation
or any subsidiary, upon the issue of any additional shares (including additional
shares of such series or of any other series) and upon the payment of dividends
or the making of other distributions on, and the purchase, redemption or other
acquisition by the Corporation or any subsidiary of, any outstanding shares of
the Corporation; and (h) may have such other relative, participating, optional
or other special rights, qualifications, limitations or restrictions thereof,
all as shall be stated in said resolution or resolutions providing for the issue
of such shares of Preferred Stock. Any of the voting powers, designations,
preferences, rights and qualifications,
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limitations or restrictions of any such series of Preferred Stock may be made
depended upon facts ascertainable outside of the resolution or resolutions
provided for the issue of such Preferred Stock adopted by the Board of Directors
pursuant to the authority vested in it by this Section 4.3, provided that the
manner in which such facts shall operate upon the voting powers, designations,
preferences, rights and qualifications, limitations or restrictions of such
series of Preferred Stock is clearly and expressly set forth in the resolution
or resolutions provided for the issue of such Preferred Stock. The term "facts"
as used in the next preceding sentence shall have the meaning given to it in
Section 151(a) of the General Corporation Law. Shares of Preferred Stock of any
series that have been redeemed or repurchased by the Corporation (whether
through the operation of a sinking fund or otherwise) or that, if convertible or
exchangeable, have been converted or exchanged in accordance with their terms
shall be retired and have the status of authorized and unissued shares of
Preferred Stock of the same series and may be reissued as a part of the series
of which they were originally a part or may, upon the filing of an appropriate
certificate with the Delaware Secretary of State, be reissued as part of a new
series of shares of Preferred Stock to be created by resolution or resolutions
of the Board of Directors or as part of any other series of shares of Preferred
Stock, all subject to the conditions or restrictions on issuance set forth in
the resolution or resolutions adopted by the Board of Directors providing for
the issue of any series of shares of Preferred Stock. Notwithstanding anything
herein to the contrary, in no event shall any series of shares of Preferred
Stock be entitled to vote together with any class of Common Stock with
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respect to the election of any directors entitled to be elected by such class of
Common Stock pursuant to Section 4.2(a)(iv).
5. Board of Directors.
5.1 Number of Directors. The number of Directors
shall be between six and twenty (plus any directors which are entitled to be
elected by any series of Preferred Stock pursuant to the terms thereof).
Initially, the number of Directors shall be set at six. The use of the phrase
"Entire Board" refers to the total number of directors in office, whether or not
present at a meeting of the Board, but disregarding vacancies.
5.2 Powers of the Board of Directors. The business
and affairs of the Corporation shall be managed by or under the direction of the
Board of Directors selected as provided by law and this Amended and Restated
Certificate of Incorporation and the By-laws of the Corporation (the "By-laws").
In furtherance, and not in limitation, of the powers conferred by the laws of
the State of Delaware, the Board of Directors is expressly authorized to:
(a) adopt, amend, alter, change or repeal
By-laws of the Corporation; provided, however, that no By-law hereafter adopted
shall invalidate any prior act of the Corporation that would have been valid if
such new By-laws had not been adopted;
(b) subject to the By-laws as from time to
time in effect, determine the rules and procedures for the conduct of the
business of the Board of Directors and the management and direction by the Board
of Directors of
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the business and affairs of the Corporation, including the power to designate
and empower committees of the Board of Directors, to elect, or authorize the
appointment of, and empower officers and other agents of the Corporation, and to
determine the time and place of, the notice requirements for, and the manner of
conducting, Board meetings, as well as other notice requirements for, and the
manner of taking, Board action; and
(c) exercise all such powers and do all such
acts as may be exercised or done by the Corporation, subject to the provisions
of the General Corporation Law and this Amended and Restated Certificate of
Incorporation and Bylaws of the Corporation.
6. Liability of Directors.
6.1 Limitation of Liability. No director of the
Corporation shall be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, provided that
this provision shall not eliminate or limit the liability of a director (a) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) under section 174 of
the General Corporation Law or (d) for any transaction from which the director
derived any improper personal benefits. If the General Corporation Law is
amended after approval by the stockholders of this article to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the
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liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the General Corporation Law, as so amended.
6.2 Amendments. Any repeal or modification of Section
6.1 hereof by the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification.
7. Indemnification.
7.1 To the extent not prohibited by law, the
Corporation shall indemnify any person who is or was made, or threatened to be
made, a party to any threatened, pending or completed action, suit or proceeding
(a "Proceeding"), whether civil, criminal, administrative or investigative,
including, without limitation, an action by or in the right of the Corporation
to procure a judgment in its favor, by reason of the fact that such person, or a
person of whom such person is the legal representative, is or was a director or
officer of the Corporation, or, at the request of the Corporation, is or was
serving as a director or officer of any other corporation or in a capacity with
comparable authority or responsibilities for any partnership, joint venture,
trust, employee benefit plan or other enterprise (an "Other Entity"), against
judgments, fines, penalties, excise taxes, amounts paid in settlement and costs,
charges and expenses (including attorneys' fees, disbursements and other
charges). Persons who are not directors or officers of the Corporation (or
otherwise entitled to indemnification pursuant to the preceding sentence) may be
similarly indemnified in respect of service to the Corporation or to an Other
Entity at the request of the
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Corporation to the extent the Board at any time specifies that such persons are
entitled to the benefits of this Section 7.
7.2 The Corporation shall, from time to time,
reimburse or advance to any director or officer or other person entitled to
indemnification hereunder the funds necessary for payment of expenses, including
attorneys' fees and disbursements, incurred in connection with any Proceeding,
in advance of the final disposition of such Proceeding; provided, however, that,
if required by the General Corporation Law, such expenses incurred by or on
behalf of any director or officer or other person may be paid in advance of the
final disposition of a Proceeding only upon receipt by the Corporation of an
undertaking, by or on behalf of such director or officer (or other person
indemnified hereunder), to repay any such amount so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right of appeal that such director, officer or other person is not
entitled to be indemnified for such expenses.
7.3 The rights to indemnification and reimbursement
or advancement of expenses provided by, or granted pursuant to, this Section 7
shall not be deemed exclusive of any other rights to which a person seeking
indemnification or reimbursement or advancement of expenses may have or
hereafter be entitled under any statute, this Certificate of Incorporation, the
By-laws, any agreement, any vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office.
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7.4 The rights to indemnification and reimbursement
or advancement of expenses provided by, or granted pursuant to, this Section 7
shall continue as to a person who has ceased to be a director or officer (or
other person indemnified hereunder) and shall inure to the benefit of the
executors, administrators, legatees and distributees of such person.
7.5 The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of an Other Entity,
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the Corporation would have the power to indemnify such person against such
liability under the provisions of this Section 7, the By-laws or under section
145 of the General Corporation Law or any other provision of law.
7.6 The provisions of this Section 7 shall be a
contract between the Corporation, on the one hand, and each director and officer
who serves in such capacity at any time while this Section 7 is in effect and
any other person entitled to indemnification hereunder, on the other hand,
pursuant to which the Corporation and each such director, officer, or other
person intend to be, and shall be, legally bound. No repeal or modification of
this Section 7 shall affect any rights or obligations with respect to any state
of facts then or theretofore existing or there-
36
<PAGE> 37
after arising or any proceeding theretofore or thereafter brought or threatened
based in whole or in part upon any such state of facts.
7.7 The rights to indemnification and reimbursement
or advancement of expenses provided by, or granted pursuant to, this Section 7
shall be enforceable by any person entitled to such indemnification or
reimbursement or advancement of expenses in any court of competent jurisdiction.
The burden of proving that such indemnification or reimbursement or advancement
of expenses is not appropriate shall be on the Corporation. Neither the failure
of the Corporation (including its Board, its independent legal counsel and its
stockholders) to have made a determination prior to the commencement of such
action that such indemnification or reimbursement or advancement of expenses is
proper in the circumstances nor an actual determination by the Corporation
(including its Board, its independent legal counsel and its stockholders) that
such person is not entitled to such indemnification or reimbursement or
advancement of expenses shall constitute a defense to the action or create a
presumption that such person is not so entitled. Such a person shall also be
indemnified for any expenses incurred in connection with successfully
establishing his or her right to such indemnification or reimbursement or
advancement of expenses, in whole or in part, in any such proceeding.
7.8 Any director or officer of the Corporation
serving in any capacity of (a) another corporation of which a majority of the
shares entitled to vote in the election of its directors is held, directly or
indirectly, by the Corporation or
37
<PAGE> 38
(b) any employee benefit plan of the Corporation or any corporation referred to
in clause (a) shall be deemed to be doing so at the request of the Corporation.
7.9 Any person entitled to be indemnified or to
reimbursement or advancement of expenses as a matter of right pursuant to this
Section 7 may elect to have the right to indemnification or reimbursement or
advancement of expenses interpreted on the basis of the applicable law in effect
at the time of the occurrence of the event or events giving rise to the
applicable Proceeding, to the extent permitted by law, or on the basis of the
applicable law in effect at the time such indemnification or reimbursement or
advancement of expenses is sought. Such election shall be made, by a notice in
writing to the Corporation, at the time indemnification or reimbursement or
advancement of expenses is sought; provided, however, that if no such notice is
given, the right to indemnification or reimbursement or advancement of expenses
shall be determined by the law in effect at the time indemnification or
reimbursement or advancement of expenses is sought.
8. Adoption, Amendment and/or Repeal of By-laws. The Board may
from time to time adopt, amend or repeal the By-laws; provided, however, that
any By-laws adopted or amended by the Board may be amended or repealed, and any
By-laws may be adopted, by the stockholders of the Corporation by vote of a
majority of the holders of shares of stock of the Corporation entitled to vote
in the election of directors of the Corporation.
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<PAGE> 39
9. Action by Stockholders.
9.1 No Action by Written Consent. Except with respect
to any matter with respect to which the holders of a class of Common Stock are
entitled to vote as a separate class, the stockholders of the Corporation
entitled to take action on any matter may not consent in writing to the taking
of any such action without a meeting of stockholders duly called and held in
accordance with law and this Amended and Restated Certificate of Incorporation
and the By-laws.
9.2 Meetings of Stockholders. The annual meeting of
stockholders for the election of directors and the transaction of such other
business as may be brought before such meeting in accordance with this Amended
and Restated Certificate of Incorporation shall be held at such hour and on such
business day in each year as may be determined by resolution adopted by the
affirmative vote of a majority of the Entire Board. Except as otherwise required
by law, or by the sentence immediately following this sentence, special meetings
of stockholders may be called only at the direction of the Board of Directors by
resolution adopted by the affirmative vote of a majority of the Entire Board or
by the Chairman or by the Chief Executive Officer. Notwithstanding the
immediately preceding sentence, meetings, special or otherwise, of holders of
any class of Common Stock may be called by the holders of a majority of the
shares of such class of Common Stock with respect to any matter as to which the
holders of such class of Common Stock are entitled to vote as
39
<PAGE> 40
a separate class. Except as otherwise required by law or the immediately
preceding sentence, stockholders of the Corporation shall not have the right to
request or call a special meeting of the stockholders. Annual and special
meetings of stockholders shall not be called or held otherwise than as herein
provided.
10. Amendment of Certain Articles.
10.1 (a) Except as provided in Section 10.1(b), the
provisions set forth in Article Ten, Article Nine and Section 4.3 may not be
amended, altered, changed or repealed in any respect unless such amendment,
alteration, change or repeal is approved by the affirmative vote of holders of
not less than seventy-five percent (75%) of the voting power of the outstanding
shares of the Corporation entitled to vote thereon, voting together as a single
class.
(b) The provisions of Section 4.2 and the last
sentence of Section 4.3 may not be amended, altered, changed or repealed in any
respect with respect to a class of Common Stock unless such amendment,
alteration, change or repeal is approved by such class of Common Stock voting as
a separate class. In addition, the first sentence of Section 5.1 and this
Section 10.1(b) may not be amended, altered, changed or repealed in any respect
unless such amendment, alteration, change or repeal is approved by each class of
Common Stock voting as a separate class.
10.2 Subject to the provisions of Section 10.1 of
this Article Ten, the Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the
40
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manner now or hereafter prescribed by statute, and all rights conferred on
shareholders herein are granted subject to this reservation.
41
<PAGE> 1
EXHIBIT 3.2
FORM OF
AMENDED AND RESTATED BY-LAWS
of
POLO RALPH LAUREN CORPORATION
(A Delaware Corporation)
------------------------
ARTICLE 1
DEFINITIONS
As used in these By-laws, unless the context otherwise requires, the
term:
1.1 "Assistant Secretary" means an Assistant Secretary of the
Corporation.
1.2 "Assistant Treasurer" means an Assistant Treasurer of the
Corporation.
1.3 "Board" means the Board of Directors of the Corporation.
1.4 "By-laws" means the initial by-laws of the Corporation, as
amended from time to time.
1.5 "Certificate of Incorporation" means the initial certificate of
incorporation of the Corporation, as amended, supplemented or restated from time
to time.
1.6 "Chairman" means the Chairman of the Board of Directors of the
Corporation.
1.7 "Chief Executive Officer" means the Chief Executive Officer of
the Corporation.
1.8 "Corporation" means POLO RALPH LAUREN CORPORATION.
1.9 "Directors" means directors of the Corporation.
1.10 "Entire Board" means all directors of the Corporation in
office, whether or not present at a meeting of the Board, but disregarding
vacancies.
1.11 "General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended from time to time.
1.12 "Office of the Corporation" means the executive office of the
Corporation, anything in Section 131 of the General Corporation Law to the
contrary notwithstanding.
1.13 "President" means the President of the Corporation.
1.14 "Secretary" means the Secretary of the Corporation.
1.15 "Stockholders" means stockholders of the Corporation.
1.16 "Treasurer" means the Treasurer of the Corporation.
1.17 "Vice Chairman" means the Vice Chairman of the Board of
Directors of the Corporation.
1.18 "Vice President" means a Vice President of the Corporation.
ARTICLE 2
STOCKHOLDERS
2.1 Place of Meetings. Every meeting of Stockholders shall be held
at the office of the Corporation or at such other place within or without the
State of Delaware as shall be specified or fixed in the notice of such meeting
or in the waiver of notice thereof.
<PAGE> 2
2
2.2 Annual Meeting. A meeting of Stockholders shall be held annually
for the election of Directors and the transaction of other business as may
properly come before the meeting at such date and time as may be determined by
the Board and designated in the notice of meeting.
2.2.1 At any such annual meeting of stockholders, only such
business shall be conducted, and only such proposals shall be acted upon, as
shall have been properly brought before the annual meeting of stockholders (A)
by, or at the direction of, the Board of Directors or (B) by a stockholder of
the Corporation who complies with the procedures set forth in this Section
2.2.1. For business or a proposal to be properly brought before an annual
meeting of stockholders by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 60 days nor more
than 90 days prior to the scheduled date of the annual meeting, regardless of
any postponement, deferral or adjournment of that meeting to a later date;
provided, however, that if less than 70 days' notice or prior public disclosure
of the date of the annual meeting is given or made to stockholders, notice by
the stockholder to be timely must be so delivered or received not later than the
close of business on the 10th day following the earlier (i) the day on which
such notice of the date of the meeting was mailed or (ii) the day on which such
public disclosure was made.
A stockholder's notice to the Secretary shall set forth as to
each matter the stockholder proposes to bring before an annual meeting of
stockholders (i) a description, in 500 words or less, of the business desired to
be brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business and any other
stockholders known by such stockholder to be supporting such proposal, (iii) the
class and number of shares of the Corporation which are beneficially owned by
such stockholder on the date of such stockholder's notice and by any other
stockholders known by such stockholder to be supporting such proposal on the
date of such stockholder's notice, (iv) a description, in 500 words or less, of
any interest of the stockholder in such proposal and (v) a representation that
the stockholder is a holder of record of stock of the Corporation and intends to
appear in person or by proxy at the meeting to present the proposal specified in
the notice. Notwithstanding anything these Amended and Restated By-Laws or in
the Amended and Restated Certificate of Incorporation to the contrary, no
business shall be conducted at a meeting of stockholders except in accordance
with the procedures set forth in this Section 2.2.1.
The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that the business was not properly brought
before the meeting in accordance with the procedures prescribed by this Section
2.2.1, and if he should so determine, he shall so declare to the meeting and any
such business not properly brought before the meeting shall not be transacted.
Notwithstanding the foregoing, nothing in this Section 2.2.1 shall be
interpreted or construed to require the inclusion of information about any such
proposal in any proxy statement distributed by, at the direction of, or on
behalf of, the Board of Directors.
<PAGE> 3
3
2.2.2 Subject to the rights, if any, of the holders of any
series of Preferred Stock then outstanding, only persons nominated in accordance
with the procedures set forth in this Section 2.2.2 shall be eligible for
election as directors. Nominations of persons for election to the Board may be
made at an annual meeting of stockholders or special meeting of stockholders
called by the Board of Directors for the purpose of electing directors (A) by or
at the direction of the Board or (B) by any stockholder of the Corporation
entitled to vote for the election of directors at such meeting who complies with
the notice procedures set forth in this Section 2.2.2. Such nominations, other
than those made by or at the direction of the Board, shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 60 days nor more
than 90 days prior to the scheduled date of the meeting, regardless of any
postponement, deferral or adjournment of that meeting to a later date; provided,
however, that if less than 70 days' notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by the stockholder
to be timely must be so delivered or received not later than the close of
business on the 10th day following the earlier of (i) the day on which such
notice of the date of the meeting was mailed or (ii) the day on which such
public disclosure was made.
A stockholder's notice to the Secretary shall set forth (i) as
to each person whom the stockholder proposes to nominate for election or
reelection as a director (a) the name, age, business address and residence
address of such person, (b) the principal occupation or employment of such
person, (c) the class and number of shares of the Corporation which are
beneficially owned by such person on the date of such stockholder's notice and
(d) any other information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended, or any successor statute thereto (the "Exchange Act")
(including, without limitation, such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); (ii)
as to the stockholder giving the notice (a) the name and address, as they appear
on the Corporation's books, of such stockholder and any other stockholders known
by such stockholder to be supporting such nominee(s), (b) the class and number
of shares of the Corporation which are beneficially owned by such stockholder on
the date of such stockholder's notice and by any other stockholders known by
such stockholder to be supporting such nominee(s) on the date of such
stockholder's notice, (c) a representation that the stockholder is a holder of
record of stock of the Corporation entitled to vote at such meeting and intends
to appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; and (iii) a description of all arrangements or
understandings between the stockholder and each nominee and other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder.
No person (other than persons nominated by or at the directors
of the Board) shall be eligible for election as director of the Corporation
unless nominated in accordance with the procedures set forth in this Section
2.2.2. The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by this Section 2.2.2, and, if he should so
<PAGE> 4
4
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded.
2.3 Deferred Meeting for Election of Directors, Etc. If the annual
meeting of Stockholders for the election of Directors and the transaction of
other business is not held within the months specified in Section 2.2 hereof,
the Board shall call a meeting of Stockholders for the election of Directors and
the transaction of other business as soon thereafter as convenient.
2.4 Other Special Meetings. A special meeting of Stockholders (other
than a special meeting for the election of Directors), unless otherwise
prescribed by statute or by the Certificate of Incorporation, may be called at
any time by the Board, by the Chairman or by the Chief Executive Officer. At any
special meeting of Stockholders only such business may be transacted as is
related to the purpose or purposes of such meeting set forth in the notice
thereof given pursuant to Section 2.6 hereof or in any waiver of notice thereof
given pursuant to Section 2.7 hereof.
2.5 Fixing Record Date. For the purpose of (a) determining the
Stockholders entitled (i) to notice of or to vote at any meeting of Stockholders
or any adjournment thereof, (ii) unless otherwise provided in the Certificate of
Incorporation to ex press consent to corporate action in writing without a
meeting or (iii) to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock; or (b) any other lawful action, the
Board may fix a record date, which record date shall not precede the date upon
which the resolution fixing the record date was adopted by the Board and which
record date shall not be (x) in the case of clause (a)(i) above, more than sixty
nor less than ten days before the date of such meeting, (y) in the case of
clause (a)(ii) above, more than 10 days after the date upon which the resolution
fixing the record date was adopted by the Board and (z) in the case of clause
(a)(iii) or (b) above, more than sixty days prior to such action. If no such
record date is fixed:
2.5.1 the record date for determining Stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at
the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held;
2.5.2 the record date for determining stockholders
entitled to express consent to corporate action in writing without a
meeting (unless otherwise provided in the Certificate of Incorporation),
when no prior action by the Board is required under the General
Corporation Law, shall be the first day on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in the State of Delaware,
its principal place of business, or an officer or agent of the Corporation
having custody of the book in which proceedings of meetings of
stockholders are recorded; and when prior action by the Board is required
under the General Corporation Law, the record date for determining
stockholders entitled to consent to corporate action in writing
<PAGE> 5
5
without a meeting shall be at the close of business on the date on which
the Board adopts the resolution taking such prior action; and
2.5.3 the record date for determining stockholders for
any purpose other than those specified in Sections 2.5.1 and 2.5.2 shall
be at the close of business on the day on which the Board adopts the
resolution relating thereto.
When a determination of Stockholders entitled to notice of or to vote at any
meeting of Stockholders has been made as provided in this Section 2.5, such
determination shall apply to any adjournment thereof unless the Board fixes a
new record date for the adjourned meeting. Delivery made to the Corporation's
registered office in accordance with Section 2.5.2 shall be by hand or by
certified or registered mail, return receipt requested.
2.6 Notice of Meetings of Stockholders. Except as otherwise provided
in Sections 2.5 and 2.7 hereof, whenever under the provisions of any statute,
the Certificate of Incorporation or these By-laws, Stockholders are required or
permitted to take any action at a meeting, written notice shall be given stating
the place, date and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called. Unless otherwise
provided by any statute, the Certificate of Incorporation or these By-laws, a
copy of the notice of any meeting shall be given, personally or by mail, not
less than ten nor more than sixty days before the date of the meeting, to each
Stockholder entitled to notice of or to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
with postage prepaid, directed to the Stockholder at his or her address as it
appears on the records of the Corporation. An affidavit of the Secretary or an
Assistant Secretary or of the transfer agent of the Corporation that the notice
required by this Section 2.6 has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. When a meeting is adjourned to
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken, and at the adjourned meeting any business may be transacted that might
have been transacted at the meeting as originally called. If, however, the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each Stockholder of record entitled to vote at the
meeting.
2.7 Waivers of Notice. Whenever the giving of any notice is required
by statute, the Certificate of Incorporation or these By-laws, a waiver thereof,
in writing, signed by the Stockholder or Stockholders entitled to said notice,
whether before or after the event as to which such notice is required, shall be
deemed equivalent to notice. Attendance by a Stockholder at a meeting shall
constitute a waiver of notice of such meeting except when the Stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the ground that the meeting has
not been lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the Stockholders need be
specified in any written waiver of notice unless so required by statute, the
Certificate of Incorporation or these By-laws.
2.8 List of Stockholders. The Secretary shall prepare and make, or
cause to be prepared and made, at least ten days before every meeting of
Stockholders, a complete
<PAGE> 6
6
list of the Stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each Stockholder and the number
of shares registered in the name of each Stockholder. Such list shall be open to
the examination of any Stockholder, the Stockholder's agent, or attorney, at the
Stockholder's expense, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any Stockholder who is present. The Corporation shall maintain the
Stockholder list in written form or in another form capable of conversion into
written form within a reasonable time. Upon the willful neglect or refusal of
the Directors to produce such a list at any meeting for the election of
Directors, they shall be ineligible for election to any office at such meeting.
The stock ledger shall be the only evidence as to who are the Stockholders
entitled to examine the stock ledger, the list of Stockholders or the books of
the Corporation, or to vote in person or by proxy at any meeting of
Stockholders.
2.9 Quorum of Stockholders; Adjournment. Except as otherwise
provided by any statute, the Certificate of Incorporation or these By-laws, the
holders of one-third of all outstanding shares of stock entitled to vote at any
meeting of Stockholders, present in person or represented by proxy, shall
constitute a quorum for the transaction of any business at such meeting. When a
quorum is once present to organize a meeting of Stockholders, it is not broken
by the subsequent withdrawal of any Stockholders. The holders of a majority of
the shares of stock present in person or represented by proxy at any meeting of
Stockholders, including an adjourned meeting, whether or not a quorum is
present, may adjourn such meeting to another time and place. Shares of its own
stock belonging to the Corporation or to another corporation, if a majority of
the shares entitled to vote in the election of directors of such other
corporation is held, directly or indirectly, by the Corporation, shall neither
be entitled to vote nor be counted for quorum purposes; provided, however, that
the foregoing shall not limit the right of the Corporation to vote stock,
including but not limited to its own stock, held by it in a fiduciary capacity.
2.10 Voting; Proxies. Unless otherwise provided in the Certificate
of Incorporation, every Stockholder of record shall be entitled at every meeting
of Stockholders to one vote for each share of capital stock standing in his or
her name on the record of Stockholders determined in accordance with Section 2.5
hereof. If the Certificate of Incorporation provides for more or less than one
vote for any share on any matter, each reference in the By-laws or the General
Corporation Law to a majority or other proportion of stock shall refer to such
majority or other proportion of the votes of such stock. The provisions of
Sections 212 and 217 of the General Corporation Law shall apply in determining
whether any shares of capital stock may be voted and the persons, if any,
entitled to vote such shares; but the Corporation shall be protected in assuming
that the persons in whose names shares of capital stock stand on the stock
ledger of the Corporation are entitled to vote such shares. Holders of
redeemable shares of stock are not entitled to vote after the notice of
redemption is mailed to such holders and a sum sufficient to redeem the stocks
has been deposited with a bank, trust company, or other financial institution
under an irrevocable obligation to pay the holders the redemption price on
surrender of the shares of stock. At any
<PAGE> 7
7
meeting of Stockholders (at which a quorum was present to organize the meeting),
all matters, except as otherwise provided by statute or by the Certificate of
Incorporation or by these Bylaws, shall be decided by a majority of the votes
cast at such meeting by the holders of shares present in person or represented
by proxy and entitled to vote thereon, whether or not a quorum is present when
the vote is taken. All elections of Directors shall be by written ballot unless
otherwise provided in the Certificate of Incorporation. In voting on any other
question on which a vote by ballot is required by law or is demanded by any
Stockholder entitled to vote, the voting shall be by ballot. Each ballot shall
be signed by the Stockholder voting or the Stockholder's proxy and shall state
the number of shares voted. On all other questions, the voting may be viva voce.
Each Stockholder entitled to vote at a meeting of Stockholders or to express
consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such Stockholder by proxy. The
validity and enforceability of any proxy shall be determined in accordance with
Section 212 of the General Corporation Law. A Stockholder may revoke any proxy
that is not irrevocable by attending the meeting and voting in person or by
filing an instrument in writing revoking the proxy or by delivering a proxy in
accordance with applicable law bearing a later date to the Secretary.
2.11 Voting Procedures and Inspectors of Election at Meetings of
Stockholders. The Board, in advance of any meeting of Stockholders, may appoint
one or more inspectors to act at the meeting and make a written report thereof.
The Board may designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate has been appointed
or is able to act at a meeting, the person presiding at the meeting may appoint,
and on the request of any Stockholder entitled to vote thereat shall appoint,
one or more inspectors to act at the meeting. Each inspector, before entering
upon the discharge of his or her duties, shall take and sign an oath faithfully
to execute the duties of inspector with strict impartiality and according to the
best of his or her ability. The inspectors shall (a) ascertain the number of
shares outstanding and the voting power of each, (b) determine the shares
represented at the meeting and the validity of proxies and ballots, (c) count
all votes and ballots, (d) determine and retain for a reasonable period a record
of the disposition of any challenges made to any determination by the
inspectors, and (e) certify their determination of the number of shares
represented at the meeting and their count of all votes and ballots. The
inspectors may appoint or retain other persons or entities to assist the
inspectors in the performance of their duties. Unless otherwise provided by the
Board, the date and time of the opening and the closing of the polls for each
matter upon which the Stockholders will vote at a meeting shall be determined by
the person presiding at the meeting and shall be announced at the meeting. No
ballot, proxies or votes, or any revocation thereof or change thereto, shall be
accepted by the inspectors after the closing of the polls unless the Court of
Chancery of the State of Delaware upon application by a Stockholder shall
determine otherwise.
2.12 Organization. At each meeting of Stockholders, the Chief
Executive Officer, or in the absence of the Chief Executive Officer, the
Chairman, or in the absence of the Chairman, the Vice Chairman, or in the
absence of the Vice Chairman, the President, or in the absence of the President,
a Vice President, and in case more than one Vice President shall be present,
that Vice President designated by the Board (or in the absence of any such
designation, the most senior Vice President, based on age, present), shall act
as chairman of the meeting. The Secretary, or in his or her absence, one of the
Assistant Secretaries, shall
<PAGE> 8
8
act as secretary of the meeting. In case none of the officers above designated
to act as chairman or secretary of the meeting, respectively, shall be present,
a chairman or a secretary of the meeting, as the case may be, shall be chosen by
a majority of the votes cast at such meeting by the holders of shares of capital
stock present in person or represented by proxy and entitled to vote at the
meeting.
2.13 Order of Business. The order of business at all meetings of
Stockholders shall be as determined by the chairman of the meeting, but the
order of business to be followed at any meeting at which a quorum is present may
be changed by a majority of the votes cast at such meeting by the holders of
shares of capital stock present in person or represented by proxy and entitled
to vote at the meeting.
2.14 Written Consent of Stockholders Without a Meeting. Unless
otherwise provided in the Certificate of Incorporation, any action required by
the General Corporation Law to be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered (by hand or by certified or registered mail, return
receipt requested) to the Corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the Corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Every written consent shall bear the date of
signature of each stockholder who signs the consent and no written consent shall
be effective to take the corporate action referred to therein unless, within 60
days of the earliest dated consent delivered in the manner required by this
Section 2.14, written consents signed by a sufficient number of holders to take
action are delivered to the Corporation as aforesaid. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those Stockholders who have not consented in writing.
ARTICLE 3
Directors
3.1 General Powers. Except as otherwise provided in the Certificate
of Incorporation, the business and affairs of the Corporation shall be managed
by or under the direction of the Board. The Board may adopt such rules and
regulations, not inconsistent with the Certificate of Incorporation or these
By-laws or applicable laws, as it may deem proper for the conduct of its
meetings and the management of the Corporation. In addition to the powers
expressly conferred by these By-laws, the Board may exercise all powers and
perform all acts that are not required, by these By-laws or the Certificate of
Incorporation or by statute, to be exercised and performed by the Stockholders.
3.2 Number; Qualification; Term of Office. The Board shall consist
of six to twenty members (plus any directors which are entitled to be elected by
any series of Preferred Stock pursuant to the terms thereof). The number of
Directors shall be fixed initially by the incorporator and may thereafter be
changed from time to time by action of the
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stockholders or by action of the Board. Directors need not be stockholders. Each
Director shall hold office until a successor is elected and qualified or until
the Director's death, resignation or removal.
3.3 Election. Directors shall, except as otherwise required by
statute or by the Certificate of Incorporation, be elected by a plurality of the
votes cast at a meeting of stockholders by the holders of shares entitled to
vote in the election.
3.4 Newly Created Directorships and Vacancies. Unless otherwise
provided in the Certificate of Incorporation, newly created Directorships
resulting from an increase in the number of Directors and vacancies occurring in
the Board for any other reason, including the removal of Directors without
cause, may be filled only by (a) the affirmative votes of a majority of the
remaining directors elected by holders of each class of Common Stock that (x)
elected such directorship and (y) as of the date such vacancy is filled, would
be entitled to elect such directorship at the next annual meeting of
stockholders or, (b) if there are no such remaining directors, then by a
plurality of the votes cast by the holders of the class or classes of Common
Stock that, as of the date such vacancy is filled, would be entitled to elect
such directorship at the next annual meeting of stockholders, voting as a
separate class at a meeting, special or otherwise, of the holders of Common
Stock of such class or classes. A Director elected to fill a vacancy shall be
elected to hold office until a successor is elected and qualified, or until the
Director's earlier death, resignation or removal.
3.5 Resignation. Any Director may resign at any time by written
notice to the Corporation. Such resignation shall take effect at the time
therein specified, and, unless otherwise specified in such resignation, the
acceptance of such resignation shall not be necessary to make it effective.
3.6 Removal. Unless otherwise provided in the Certificate of
Incorporation, and subject to the provisions of Section 141(k) of the General
Corporation Law, directors may be removed with or without cause only by a
majority of the holders of the class or classes of Common Stock that, as of the
date such removal is effected, would be entitled to elect such directorship at
the next annual meeting of stockholders.
3.7 Compensation. Each Director, in consideration of his or her
service as such, shall be entitled to receive from the Corporation such amount
per annum or such fees for attendance at Directors' meetings, or both, as the
Board may from time to time determine, together with reimbursement for the
reasonable out-of-pocket expenses, if any, incurred by such Director in
connection with the performance of his or her duties. Each Director who shall
serve as a member of any committee of Directors in consideration of serving as
such shall be entitled to such additional amount per annum or such fees for
attendance at committee meetings, or both, as the Board may from time to time
determine, together with reimbursement for the reasonable out-of-pocket
expenses, if any, incurred by such Director in the performance of his or her
duties. Nothing contained in this Section 3.7 shall preclude any Director from
serving the Corporation or its subsidiaries in any other capacity and receiving
proper compensation therefor.
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3.8 Times and Places of Meetings. The Board may hold meetings, both
regular and special, either within or without the State of Delaware. The times
and places for holding meetings of the Board may be fixed from time to time by
resolution of the Board or (unless contrary to a resolution of the Board) in the
notice of the meeting.
3.9 Annual Meetings. On the day when and at the place where the
annual meeting of stockholders for the election of Directors is held, and as
soon as practicable there after, the Board may hold its annual meeting, without
notice of such meeting, for the purposes of organization, the election of
officers and the transaction of other business. The annual meeting of the Board
may be held at any other time and place specified in a notice given as provided
in Section 3.11 hereof for special meetings of the Board or in a waiver of
notice thereof.
3.10 Regular Meetings. Regular meetings of the Board may be held
without notice at such times and at such places as shall from time to time be
determined by the Board.
3.11 Special Meetings. Special meetings of the Board may be called
by the Chairman, the Vice Chairman, the Chief Executive Officer or the Secretary
or by any two or more Directors then serving on at least one day's notice to
each Director given by one of the means specified in Section 3.14 hereof other
than by mail, or on at least three days' notice if given by mail. Special
meetings shall be called by the Chairman, the Vice Chairman, the Chief Executive
Officer or Secretary in like manner and on like notice on the written request of
any two or more of the Directors then serving.
3.12 Telephone Meetings. Directors or members of any committee
designated by the Board may participate in a meeting of the Board or of such
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Section 3.12 shall constitute
presence in person at such meeting.
3.13 Adjourned Meetings. A majority of the Directors present at any
meeting of the Board, including an adjourned meeting, whether or not a quorum is
present, may adjourn such meeting to another time and place. At least one day's
notice of any adjourned meeting of the Board shall be given to each Director
whether or not present at the time of the adjournment, if such notice shall be
given by one of the means specified in Section 3.14 hereof other than by mail,
or at least three days' notice if by mail. Any business may be transacted at an
adjourned meeting that might have been transacted at the meeting as originally
called.
3.14 Notice Procedure. Subject to Sections 3.11 and 3.17 hereof,
whenever, under the provisions of any statute, the Certificate of Incorporation
or these By-laws, notice is required to be given to any Director, such notice
shall be deemed given effectively if given in person or by telephone, by mail
addressed to such Director at such Director's address as it appears on the
records of the Corporation, with postage thereon prepaid, or by telegram, telex,
telecopy or similar means addressed as aforesaid.
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3.15 Waiver of Notice. Whenever the giving of any notice is required
by statute, the Certificate of Incorporation or these By-laws, a waiver thereof,
in writing, signed by the person or persons entitled to said notice, whether
before or after the event as to which such notice is required, shall be deemed
equivalent to notice. Attendance by a person at a meeting shall constitute a
waiver of notice of such meeting except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business on the ground that the meeting has not been lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Directors or a committee of Directors
need be specified in any written waiver of notice unless so required by statute,
the Certificate of Incorporation or these By-laws.
3.16 Organization. At each meeting of the Board, the Chairman, or in
the absence of the Chairman, the Vice Chairman, or in the absence of the Vice
Chairman, the Chief Executive Officer, or in the absence of the Chief Executive
Officer, a chairman chosen by a majority of the Directors present, shall
preside. The Secretary shall act as secretary at each meeting of the Board. In
case the Secretary shall be absent from any meeting of the Board, an Assistant
Secretary shall perform the duties of secretary at such meeting; and in the
absence from any such meeting of the Secretary and all Assistant Secretaries,
the person presiding at the meeting may appoint any person to act as secretary
of the meeting.
3.17 Quorum of Directors. The presence in person of a majority of
the Entire Board shall be necessary and sufficient to constitute a quorum for
the transaction of business at any meeting of the Board, but a majority of a
smaller number may adjourn any such meeting to a later date.
3.18 Action by Majority Vote. Except as otherwise expressly required
by statute, the Certificate of Incorporation or these By-laws, the act of a
majority of the Directors present at a meeting at which a quorum is present
shall be the act of the Board.
3.19 Action Without Meeting. Unless otherwise restricted by the
Certificate of Incorporation or these By-laws, any action required or permitted
to be taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if all Directors or members of such committee, as the case may
be, consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.
ARTICLE 4
COMMITTEES OF THE BOARD
The Board may, by resolution passed by a vote of a majority of the
entire Board, designate one or more committees, each committee to consist of one
or more of the Directors of the Corporation. The Board may designate one or more
Directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of such committee. If a member of a committee
shall be absent from any meeting, or disqualified from voting thereat, the
remaining member or members present and not disqualified from voting, whether or
not such member or members constitute a quorum, may, by a unanimous vote,
appoint another member of the Board to act at the meeting in the place
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of any such absent or disqualified member. Any such committee, to the extent
provided in the resolution of the Board passed as aforesaid, shall have and may
exercise all the powers and authority of the Board in the management of the
business and affairs of the Corporation, and may authorize the seal of the
Corporation to be impressed on all papers that may require it, but no such
committee shall have the power or authority of the Board in reference to
amending the Certificate of Incorporation, adopting an agreement of merger or
consolidation under section 251 or section 252 of the General Corporation Law,
recommending to the stockholders (a) the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, or (b) a dissolution
of the Corporation or a revocation of a dissolution, or amending the By-laws of
the Corporation; and, unless the resolution designating it expressly so
provides, no such committee shall have the power and authority to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the General Corporation Law.
Unless otherwise specified in the resolution of the Board designating a
committee, at all meetings of such committee a majority of the total number of
members of the committee shall constitute a quorum for the transaction of
business, and the vote of a majority of the members of the committee present at
any meeting at which there is a quorum shall be the act of the committee. Each
committee shall keep regular minutes of its meetings. Unless the Board otherwise
provides, each committee designated by the Board may make, alter and repeal
rules for the conduct of its business. In the absence of such rules each
committee shall conduct its business in the same manner as the Board conducts
its business pursuant to Article 3 of these By-laws.
ARTICLE 5
OFFICERS
5.1 Positions. The officers of the Corporation shall be a Chief
Executive Officer, a Secretary, a Treasurer and such other officers as the Board
may appoint, including a Chairman, a Vice Chairman, a President, one or more
Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers,
who shall exercise such powers and perform such duties as shall be determined
from time to time by the Board. The Board may designate one or more Vice
Presidents as Executive Vice Presidents and may use descriptive words or phrases
to designate the standing, seniority or areas of special competence of the Vice
Presidents elected or appointed by it. Any number of offices may be held by the
same person unless the Certificate of Incorporation or these By-laws otherwise
provide.
5.2 Appointment. The officers of the Corporation shall be chosen by
the Board at its annual meeting or at such other time or times as the Board
shall determine.
5.3 Compensation. The compensation of all officers of the
Corporation shall be fixed by the Board. No officer shall be prevented from
receiving a salary or other compensation by reason of the fact that the officer
is also a Director.
5.4 Term of Office. Each officer of the Corporation shall hold
office for the term for which he or she is elected and until such officer's
successor is chosen and qualifies or until such officer's earlier death,
resignation or removal. Any officer may resign at any time upon written notice
to the Corporation. Such resignation shall take effect at the
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date of receipt of such notice or at such later time as is therein specified,
and, unless otherwise specified, the acceptance of such resignation shall not be
necessary to make it effective. The resignation of an officer shall be without
prejudice to the contract rights of the Corporation, if any. Any officer elected
or appointed by the Board may be removed at any time, with or without cause, by
vote of a majority of the entire Board. Any vacancy occurring in any office of
the Corporation shall be filled by the Board. The removal of an officer without
cause shall be without prejudice to the officer's contract rights, if any. The
election or appointment of an officer shall not of itself create contract
rights.
5.5 Fidelity Bonds. The Corporation may secure the fidelity of any
or all of its officers or agents by bond or otherwise.
5.6 Chairman. The Chairman, if one shall have been appointed, shall
preside at all meetings of the Board and shall exercise such powers and perform
such other duties as shall be determined from time to time by the Board.
5.7 Vice Chairman. The Vice Chairman, if one shall have been
appointed, shall exercise such powers and perform such other duties as shall be
determined from time to time by the Board.
5.8 Chief Executive Officer. The Chief Executive Officer of the
Corporation shall have general supervision over the business of the Corporation,
subject, however, to the control of the Board and of any duly authorized
committee of Directors. The Chief Executive Officer shall preside at all
meetings of the Stockholders and at all meetings of the Board at which the
Chairman (if there be one) or the Vice Chairman (if there be one) is not
present. The Chief Executive Officer may sign and execute in the name of the
Corporation deeds, mortgages, bonds, contracts and other instruments except in
cases in which the signing and execution thereof shall be expressly delegated by
the Board or by these By-laws to some other officer or agent of the Corporation
or shall be required by statute otherwise to be signed or executed and, in
general, the Chief Executive Officer shall perform all duties incident to the
office of Chief Executive Officer of a corporation and such other duties as may
from time to time be assigned to the Chief Executive Officer by the Board.
5.9 President. At the request of the Chief Executive Officer, or, in
the Chief Executive Officer's absence, at the request of the Board, the
President, if one shall have been appointed, shall perform all of the duties of
the Chief Executive Officer and, in so performing, shall have all the powers of,
and be subject to all restrictions upon, the Chief Executive Officer. The
President may sign and execute in the name of the Corporation deeds, mortgages,
bonds, contracts or other instruments, except in cases in which the signing and
execution thereof shall be expressly delegated by the Board or by these By-laws
to some other officer or agent of the Corporation, or shall be required by
statute otherwise to be signed or executed, and the President shall perform such
other duties as from time to time may be assigned to the President by the Board
or by the Chief Executive Officer.
5.10 Vice Presidents. At the request of the Chief Executive Officer,
or, in the Chief Executive Officer's absence, at the request of the Board, the
Vice Presidents shall (in such order as may be designated by the Board, or, in
the absence of any such designation,
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in order of seniority based on age) perform all of the duties of the Chief
Executive Officer and, in so performing, shall have all the powers of, and be
subject to all restrictions upon, the Chief Executive Officer. Any Vice
President may sign and execute in the name of the Corporation deeds, mortgages,
bonds, contracts or other instruments, except in cases in which the signing and
execution thereof shall be expressly delegated by the Board or by these Bylaws
to some other officer or agent of the Corporation, or shall be required by
statute otherwise to be signed or executed, and each Vice President shall
perform such other duties as from time to time may be assigned to such Vice
President by the Board or by the Chief Executive Officer.
5.11 Secretary. The Secretary shall attend all meetings of the Board
and of the Stockholders and shall record all the proceedings of the meetings of
the Board and of the stockholders in a book to be kept for that purpose, and
shall perform like duties for committees of the Board, when required. The
Secretary shall give, or cause to be given, notice of all special meetings of
the Board and of the stockholders and shall perform such other duties as may be
prescribed by the Board or by the Chief Executive Officer, under whose
supervision the Secretary shall be. The Secretary shall have custody of the
corporate seal of the Corporation, and the Secretary, or an Assistant Secretary,
shall have authority to impress the same on any instrument requiring it, and
when so impressed the seal may be attested by the signature of the Secretary or
by the signature of such Assistant Secretary. The Board may give general
authority to any other officer to impress the seal of the Corporation and to
attest the same by such officer's signature. The Secretary or an Assistant
Secretary may also attest all instruments signed by the Chief Executive Officer,
the President or any Vice President. The Secretary shall have charge of all the
books, records and papers of the Corporation relating to its organization and
management, shall see that the reports, statements and other documents required
by statute are properly kept and filed and, in general, shall perform all duties
incident to the office of Secretary of a corporation and such other duties as
may from time to time be assigned to the Secretary by the Board or by the Chief
Executive Officer.
5.12 Treasurer. The Treasurer shall have charge and custody of, and
be responsible for, all funds, securities and notes of the Corporation; receive
and give receipts for moneys due and payable to the Corporation from any sources
whatsoever; deposit all such moneys and valuable effects in the name and to the
credit of the Corporation in such depositaries as may be designated by the
Board; against proper vouchers, cause such funds to be disbursed by checks or
drafts on the authorized depositaries of the Corporation signed in such manner
as shall be determined by the Board and be responsible for the accuracy of the
amounts of all moneys so disbursed; regularly enter or cause to be entered in
books or other records maintained for the purpose full and adequate account of
all moneys received or paid for the account of the Corporation; have the right
to require from time to time reports or statements giving such information as
the Treasurer may desire with respect to any and all financial transactions of
the Corporation from the officers or agents transacting the same; render to the
Chief Executive Officer or the Board, whenever the Chief Executive Officer or
the Board shall require the Treasurer so to do, an account of the financial
condition of the Corporation and of all financial transactions of the
Corporation; exhibit at all reasonable times the records and books of account to
any of the Directors upon application at the office of the Corporation where
such records and books are kept; disburse the funds of the Corporation as
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ordered by the Board; and, in general, perform all duties incident to the office
of Treasurer of a corporation and such other duties as may from time to time be
assigned to the Treasurer by the Board or the Chief Executive Officer.
5.13 Assistant Secretaries and Assistant Treasurers. Assistant
Secretaries and Assistant Treasurers shall perform such duties as shall be
assigned to them by the Secretary or by the Treasurer, respectively, or by the
Board or by the Chief Executive Officer.
ARTICLE 6
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
6.1 Execution of Contracts. The Board, except as otherwise provided
in these By-laws, may prospectively or retroactively authorize any officer or
officers, employee or employees or agent or agents, in the name and on behalf of
the Corporation, to enter into any contract or execute and deliver any
instrument, and any such authority may be general or confined to specific
instances, or otherwise limited.
6.2 Loans. The Board may prospectively or retroactively authorize
the Chief Executive Officer or any other officer, employee or agent of the
Corporation to effect loans and advances at any time for the Corporation from
any bank, trust company or other institution, or from any firm, corporation or
individual, and for such loans and advances the person so authorized may make,
execute and deliver promissory notes, bonds or other certificates or evidences
of indebtedness of the Corporation, and, when authorized by the Board so to do,
may pledge and hypothecate or transfer any securities or other property of the
Corporation as security for any such loans or advances. Such authority conferred
by the Board may be general or confined to specific instances, or otherwise
limited.
6.3 Checks, Drafts, Etc. All checks, drafts and other orders for the
payment of money out of the funds of the Corporation and all evidences of
indebtedness of the Corporation shall be signed on behalf of the Corporation in
such manner as shall from time to time be determined by resolution of the Board.
6.4 Deposits. The funds of the Corporation not otherwise employed
shall be deposited from time to time to the order of the Corporation with such
banks, trust companies, investment banking firms, financial institutions or
other depositaries as the Board may select or as may be selected by an officer,
employee or agent of the Corporation to whom such power to select may from time
to time be delegated by the Board.
ARTICLE 7
STOCK AND DIVIDENDS
7.1 Certificates Representing Shares. The shares of capital stock of
the Corporation shall be represented by certificates in such form (consistent
with the provisions of Section 158 of the General Corporation Law) as shall be
approved by the Board. Such certificates shall be signed by the Chairman, the
Chief Executive Officer or a Vice President
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and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer, and may be impressed with the seal of the Corporation or a facsimile
thereof. The signatures of the officers upon a certificate may be facsimiles, if
the certificate is countersigned by a transfer agent or registrar other than the
Corporation itself or its employee. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon any
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, such certificate may, unless otherwise
ordered by the Board, be issued by the Corporation with the same effect as if
such person were such officer, transfer agent or registrar at the date of issue.
7.2 Transfer of Shares. Transfers of shares of capital stock of the
Corporation shall be made only on the books of the Corporation by the holder
thereof or by the holder's duly authorized attorney appointed by a power of
attorney duly executed and filed with the Secretary or a transfer agent of the
Corporation, and on surrender of the certificate or certificates representing
such shares of capital stock properly endorsed for transfer and upon payment of
all necessary transfer taxes. Except for shares of Class B Common Stock and
Class C Common Stock, which shall be retained by the Corporation as treasury
shares, every certificate exchanged, returned or surrendered to the Corporation
shall be marked "Cancelled," with the date of cancellation, by the Secretary or
an Assistant Secretary or the transfer agent of the Corporation. A person in
whose name shares of capital stock shall stand on the books of the Corporation
shall be deemed the owner thereof to receive dividends, to vote as such owner
and for all other purposes as respects the Corporation. No transfer of shares of
capital stock shall be valid as against the Corporation, its stockholders and
creditors for any purpose, except to render the transferee liable for the debts
of the Corporation to the extent provided by law, until such transfer shall have
been entered on the books of the Corporation by an entry showing from and to
whom transferred.
7.3 Transfer and Registry Agents. The Corporation may from time to
time maintain one or more transfer offices or agents and registry offices or
agents at such place or places as may be determined from time to time by the
Board.
7.4 Lost, Destroyed, Stolen and Mutilated Certificates. The holder
of any shares of capital stock of the Corporation shall immediately notify the
Corporation of any loss, destruction, theft or mutilation of the certificate
representing such shares, and the Corporation may issue a new certificate to
replace the certificate alleged to have been lost, destroyed, stolen or
mutilated. The Board may, in its discretion, as a condition to the issue of any
such new certificate, require the owner of the lost, destroyed, stolen or
mutilated certificate, or his or her legal representatives, to make proof
satisfactory to the Board of such loss, destruction, theft or mutilation and to
advertise such fact in such manner as the Board may require, and to give the
Corporation and its transfer agents and registrars, or such of them as the Board
may require, a bond in such form, in such sums and with such surety or sureties
as the Board may direct, to indemnify the Corporation and its transfer agents
and registrars against any claim that may be made against any of them on account
of the continued existence of any such certificate so alleged to have been lost,
destroyed, stolen or mutilated and against any expense in connection with such
claim.
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7.5 Rules and Regulations. The Board may make such rules and
regulations as it may deem expedient, not inconsistent with these By-laws or
with the Certificate of Incorporation, concerning the issue, transfer and
registration of certificates representing shares of its capital stock.
7.6 Restriction on Transfer of Stock. A written restriction on the
transfer or registration of transfer of capital stock of the Corporation, if
permitted by Section 202 of the General Corporation Law and noted conspicuously
on the certificate representing such capital stock, may be enforced against the
holder of the restricted capital stock or any successor or transferee of the
holder, including an executor, administrator, trustee, guardian or other
fiduciary entrusted with like responsibility for the person or estate of the
holder. Unless noted conspicuously on the certificate representing such capital
stock, a restriction, even though permitted by Section 202 of the General
Corporation Law, shall be ineffective except against a person with actual
knowledge of the restriction. A restriction on the transfer or registration of
transfer of capital stock of the Corporation may be imposed either by the
Certificate of Incorporation or by an agreement among any number of stockholders
or among such stockholders and the Corporation. No restriction so imposed shall
be binding with respect to capital stock issued prior to the adoption of the
restriction unless the holders of such capital stock are parties to an agreement
or voted in favor of the restriction.
7.7 Dividends, Surplus, Etc. Subject to the provisions of the
Certificate of Incorporation and of law, the Board:
7.7.1 may declare and pay dividends or make other
distributions on the outstanding shares of capital stock in such amounts
and at such time or times as it, in its discretion, shall deem advisable
giving due consideration to the condition of the affairs of the
Corporation;
7.7.2 may use and apply, in its discretion, any of the
surplus of the Corporation in purchasing or acquiring any shares of
capital stock of the Corporation, or purchase warrants therefor, in
accordance with law, or any of its bonds, debentures, notes, scrip or
other securities or evidences of indebtedness; and
7.7.3 may set aside from time to time out of such
surplus or net profits such sum or sums as, in its discretion, it may
think proper, as a reserve fund to meet contingencies, or for equalizing
dividends or for the purpose of maintaining or increasing the property or
business of the Corporation, or for any purpose it may think conducive to
the best interests of the Corporation.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnity Undertaking. To the extent not prohibited by law, the
Corporation shall indemnify any person who is or was made, or threatened to be
made, a party to any threatened, pending or completed action, suit or proceeding
(a "Proceeding"), whether civil, criminal, administrative or investigative,
including, without limitation, an action
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by or in the right of the Corporation to procure a judgment in its favor, by
reason of the fact that such person, or a person of whom such person is the
legal representative, is or was a Director or officer of the Corporation, or, at
the request of the Corporation, is or was serving as a director or officer of
any other corporation or in a capacity with comparable authority or
responsibilities for any partnership, joint venture, trust, employee benefit
plan or other enterprise (an "Other Entity"), against judgments, fines,
penalties, excise taxes, amounts paid in settlement and costs, charges and
expenses (including attorneys' fees, disbursements and other charges). Persons
who are not directors or officers of the Corporation (or otherwise entitled to
indemnification pursuant to the preceding sentence) may be similarly indemnified
in respect of service to the Corporation or to an Other Entity at the request of
the Corporation to the extent the Board at any time specifies that such persons
are entitled to the benefits of this Article 8.
8.2 Advancement of Expenses. The Corporation shall, from time to
time, reimburse or advance to any Director or officer or other person entitled
to indemnification hereunder the funds necessary for payment of expenses,
including attorneys' fees and disbursements, incurred in connection with any
Proceeding, in advance of the final disposition of such Proceeding; provided,
however, that, if required by the General Corporation Law, such expenses
incurred by or on behalf of any Director or officer or other person may be paid
in advance of the final disposition of a Proceeding only upon receipt by the
Corporation of an undertaking, by or on behalf of such Director or officer (or
other person indemnified hereunder), to repay any such amount so advanced if it
shall ultimately be determined by final judicial decision from which there is no
further right of appeal that such Director, officer or other person is not
entitled to be indemnified for such expenses.
8.3 Rights Not Exclusive. The rights to indemnification and
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article 8 shall not be deemed exclusive of any other rights to which a
person seeking indemnification or reimbursement or advancement of expenses may
have or hereafter be entitled under any statute, the Certificate of
Incorporation, these By-laws, any agreement, any vote of stockholders or
disinterested Directors or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such office.
8.4 Continuation of Benefits. The rights to indemnification and
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article 8 shall continue as to a person who has ceased to be a Director or
officer (or other person indemnified hereunder) and shall inure to the benefit
of the executors, administrators, legatees and distributees of such person.
8.5 Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of an Other Entity,
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the Corporation would have the power to indemnify such person against such
liability under the provisions of this Article 8, the Certificate of
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Incorporation or under section 145 of the General Corporation Law or any other
provision of law.
8.6 Binding Effect. The provisions of this Article 8 shall be a
contract between the Corporation, on the one hand, and each Director and officer
who serves in such capacity at any time while this Article 8 is in effect and
any other person entitled to indemnification hereunder, on the other hand,
pursuant to which the Corporation and each such Director, officer or other
person intend to be, and shall be legally bound. No repeal or modification of
this Article 8 shall affect any rights or obligations with respect to any state
of facts then or theretofore existing or thereafter arising or any proceeding
theretofore or thereafter brought or threatened based in whole or in part upon
any such state of facts.
8.7 Procedural Rights. The rights to indemnification and
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article 8 shall be enforceable by any person entitled to such
indemnification or reimbursement or advancement of expenses in any court of
competent jurisdiction. The burden of proving that such indemnification or
reimbursement or advancement of expenses is not appropriate shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, its independent legal counsel and its stockholders) to have made a
determination prior to the commencement of such action that such indemnification
or reimbursement or advancement of expenses is proper in the circumstances nor
an actual determination by the Corporation (including its Board of Directors,
its independent legal counsel and its stockholders) that such person is not
entitled to such indemnification or reimbursement or advancement of expenses
shall constitute a defense to the action or create a presumption that such
person is not so entitled. Such a person shall also be indemnified for any
expenses incurred in connection with successfully establishing his or her right
to such indemnification or reimbursement or advancement of expenses, in whole or
in part, in any such proceeding.
8.8 Service Deemed at Corporation's Request. Any Director or officer
of the Corporation serving in any capacity (a) another corporation of which a
majority of the shares entitled to vote in the election of its directors is
held, directly or indirectly, by the Corporation or (b) any employee benefit
plan of the Corporation or any corporation referred to in clause (a) shall be
deemed to be doing so at the request of the Corporation.
8.9 Election of Applicable Law. Any person entitled to be
indemnified or to reimbursement or advancement of expenses as a matter of right
pursuant to this Article 8 may elect to have the right to indemnification or
reimbursement or advancement of expenses interpreted on the basis of the
applicable law in effect at the time of the occurrence of the event or events
giving rise to the applicable Proceeding, to the extent permitted by law, or on
the basis of the applicable law in effect at the time such indemnification or
reimbursement or advancement of expenses is sought. Such election shall be made,
by a notice in writing to the Corporation, at the time indemnification or
reimbursement or advancement of expenses is sought; provided, however, that if
no such notice is given, the right to indemnification or reimbursement or
advancement of expenses shall be determined by the law in effect at the time
indemnification or reimbursement or advancement of expenses is sought.
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ARTICLE 9
BOOKS AND RECORDS
9.1 Books and Records. There shall be kept at the principal office
of the Corporation correct and complete records and books of account recording
the financial transactions of the Corporation and minutes of the proceedings of
the stockholders, the Board and any committee of the Board. The Corporation
shall keep at its principal office, or at the office of the transfer agent or
registrar of the Corporation, a record containing the names and addresses of all
stockholders, the number and class of shares held by each and the dates when
they respectively became the owners of record thereof.
9.2 Form of Records. Any records maintained by the Corporation in
the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible
written form within a reasonable time. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.
9.3 Inspection of Books and Records. Except as otherwise provided by
law, the Board shall determine from time to time whether, and, if allowed, when
and under what conditions and regulations, the accounts, books, minutes and
other records of the Corporation, or any of them, shall be open to the
stockholders for inspection.
ARTICLE 10
SEAL
The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization and the words "Corporate Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced.
ARTICLE 11
FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and may be
changed, by resolution of the Board.
ARTICLE 12
PROXIES AND CONSENTS
Unless otherwise directed by the Board, the Chairman, the Vice
Chairman, the Chief Executive Officer, the President, any Vice President, the
Secretary or the Treasurer, or any one of them, may execute and deliver on
behalf of the Corporation proxies respecting any and all shares or other
ownership interests of any Other Entity owned by the Corporation
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appointing such person or persons as the officer executing the same shall deem
proper to represent and vote the shares or other ownership interests so owned at
any and all meetings of holders of shares or other ownership interests, whether
general or special, and/or to execute and deliver consents respecting such
shares or other ownership interests; or any of the aforesaid officers may attend
any meeting of the holders of shares or other ownership interests of such Other
Entity and thereat vote or exercise any or all other powers of the Corporation
as the holder of such shares or other ownership interests.
ARTICLE 13
EMERGENCY BY-LAWS
Unless the Certificate of Incorporation provides otherwise, the
following provisions of this Article 13 shall be effective during an emergency,
which is defined as when a quorum of the Corporation's Directors cannot be
readily assembled because of some catastrophic event. During such emergency:
13.1 Notice to Board Members. Any one member of the Board or any one
of the following officers: Chairman, Vice Chairman, Chief Executive Officer,
President, any Vice President, Secretary, or Treasurer, may call a meeting of
the Board. Notice of such meeting need be given only to those Directors whom it
is practicable to reach, and may be given in any practical manner, including by
publication and radio. Such notice shall be given at least six hours prior to
commencement of the meeting.
13.2 Temporary Directors and Quorum. One or more officers of the
Corporation present at the emergency Board meeting, as is necessary to achieve a
quorum, shall be considered to be Directors for the meeting, and shall so serve
in order of rank, and within the same rank, in order of seniority. In the event
that less than a quorum of the Directors are present (including any officers who
are to serve as Directors for the meeting), those Directors present (including
the officers serving as Directors) shall constitute a quorum.
13.3 Actions Permitted To Be Taken. The Board as constituted in
Section 13.2, and after notice as set forth in Section 13.1 may:
13.3.1 prescribe emergency powers to any officer of the
Corporation;
13.3.2 delegate to any officer or Director, any of the powers
of the Board;
13.3.3 designate lines of succession of officers and agents,
in the event that any of them are unable to discharge their duties;
13.3.4 relocate the principal place of business, or designate
successive or simultaneous principal places of business; and
13.3.5 take any other convenient, helpful or necessary action
to carry on the business of the Corporation.
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ARTICLE 14
AMENDMENTS
These By-laws may be amended or repealed and new By-laws may be
adopted by a vote of the holders of shares entitled to vote in the election of
Directors or by the Board. Any By-laws adopted or amended by the Board may be
amended or repealed by the Stockholders entitled to vote thereon.
<PAGE> 1
EXHIBIT 10.1
POLO RALPH LAUREN CORPORATION
1997 LONG-TERM STOCK INCENTIVE PLAN
SECTION 1. Purpose. The purposes of this Polo Ralph Lauren
Corporation 1997 Long-Term Stock Incentive Plan are to promote the interests of
Polo Ralph Lauren Corporation and its stockholders by (i) attracting and
retaining exceptional officers and other employees, directors and consultants of
the Company and its Subsidiaries, as defined below; (ii) motivating such
individuals by means of performance-related incentives to achieve longer-range
performance goals; and (iii) enabling such individuals to participate in the
long-term growth and financial success of the Company.
SECTION 2. Definitions. As used in the Plan, the following
terms shall have the meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or
indirectly, is controlled by, or controls or is under common control with, the
Company and (ii) any entity in which the Company has a significant equity
interest, in either case as determined by the Committee.
"Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock Award, Restricted Stock Unit Award, Performance Award, Other
Stock-Based Award or Performance Compensation Award.
"Award Agreement" shall mean any written agreement, contract,
or other instrument or document evidencing any Award, which may, but need not,
be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Change of Control" shall mean the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition, in
one or a series of related transactions, of all or substantially all of the
assets of the Company to any "person" or "group" (as such terms are used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Permitted
Holders, (ii) any person or group, other than the Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total voting power of the voting
stock of the Company, including by way of merger, consolidation or otherwise or
(iii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board (together with any new directors
whose election by such Board or whose nomination for election by the
shareholders of the Company was
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approved by a vote of a majority of the directors of the Company, then still in
office, who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board, then in office.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Committee" shall mean either (i) the Board or (ii) a
committee of the Board designated by the Board to administer the Plan and
composed of not less two directors, each of whom is expected, but not required,
to be a "Non-Employee Director" (within the meaning of Rule 16b-3) and an
"outside director" (within the meaning of Code section 162(m)) to the extent
Rule 16b-3 and Code section 162(m), respectively, are applicable to the Company
and the Plan. If at any time such a committee has not been so designated, the
Board shall constitute the Committee.
"Company" shall mean Polo Ralph Lauren Corporation, together
with any successor thereto.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Fair Market Value" shall mean, (A) with respect to any
property other than Shares, the fair market value of such property determined by
such methods or procedures as shall be established from time to time by the
Committee and (B) with respect to the Shares, as of any date, (i) the mean
between the high and low sales prices of the Shares as reported on the composite
tape for securities traded on the New York Stock Exchange for such date (or if
not then trading on the New York Stock Exchange, the mean between the high and
low sales price of the Shares on the stock exchange or over-the-counter market
on which the Shares are principally trading on such date), or if, there were no
sales on such date, on the closest preceding date on which there were sales of
Shares or (ii) in the event there shall be no public market for the Shares on
such date, the fair market value of the Shares as determined in good faith by
the Committee.
"Incentive Stock Option" shall mean a right to purchase Shares
from the Company that is granted under Section 6 of the Plan and that is
intended to meet the requirements of Section 422 of the Code or any successor
provision thereto.
"Negative Discretion" shall mean the discretion authorized by
the Plan to be applied by the Committee to eliminate or reduce the size of a
Performance Compensation Award; provided that the exercise of such discretion
would not cause the Performance Compensation Award to fail to qualify as
"performance-based compensation" under section 162(m) of the Code. By way of
example and not by way of limitation, in no event shall any discretionary
authority granted to the Committee by the Plan including, but not limited to,
Negative Discretion, be used to
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(a) grant or provide payment in respect of Performance Compensation Awards for a
Performance Period if the Performance Goals for such Performance Period have not
been attained; or (b) increase a Performance Compensation Award above the
maximum amount payable under Sections 4(a) or 11(d)(vi) of the Plan.
Notwithstanding anything herein to the contrary, in no event shall Negative
Discretion be exercised by the Committee with respect to any Option or Stock
Appreciation Right (other than an Option or Stock Appreciation Right that is
intended to be a Performance Compensation Award under Section 11 of the Plan).
"Non-Qualified Stock Option" shall mean a right to purchase
Shares from the Company that is granted under Section 6 of the Plan and that is
not intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.
"Other Stock-Based Award" shall mean any right granted under
Section 10 of the Plan.
"Participant" shall mean any officer or other employee,
director or consultant of the Company or its Subsidiaries eligible for an Award
under Section 5 and selected by the Committee to receive an Award under the
Plan.
"Performance Award" shall mean any right granted under Section
9 of the Plan.
"Performance Compensation Award" shall mean any Award
designated by the Committee as a Performance Compensation Award pursuant to
Section 11 of the Plan.
"Performance Criteria" shall mean the criterion or criteria
that the Committee shall select for purposes of establishing the Performance
Goal(s) for a Performance Period with respect to any Performance Compensation
Award under the Plan. The Performance Criteria that will be used to establish
the Performance Goal(s) shall be based on the attainment of specific levels of
performance of the Company (or Subsidiary, Affiliate, division or operational
unit of the Company) and shall be limited to the following: Return on net
assets, return on stockholders' equity, return on assets, return on capital,
stockholder returns, profit margin, earnings per Share, net earnings, operating
earnings, price per Share, earnings before interest and taxes and sales or
market share. To the extent required under section 162(m) of the Code, the
Committee shall, within the first 90 days of a Performance Period (or, if
longer, within the maximum period allowed under section 162(m) of the Code),
define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period.
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"Performance Formula" shall mean, for a Performance Period,
the one or more objective formulas applied against the relevant Performance Goal
to determine, with regard to the Performance Compensation Award of a particular
Participant, whether all, some portion but less than all, or none of the
Performance Compensation Award has been earned for the Performance Period.
"Performance Goals" shall mean, for a Performance Period, the
one or more goals established by the Committee for the Performance Period based
upon the Performance Criteria. The Committee is authorized at any time during
the first 90 days of a Performance Period, or at any time thereafter (but only
to the extent the exercise of such authority after the first 90 days of a
Performance Period would not cause the Performance Compensation Awards granted
to any Participant for the Performance Period to fail to qualify as
"performance-based compensation" under section 162(m) of the Code), in its sole
and absolute discretion, to adjust or modify the calculation of a Performance
Goal for such Performance Period to the extent permitted under section 162(m) of
the Code in order to prevent the dilution or enlargement of the rights of
Participants, (a) in the event of, or in anticipation of, any unusual or
extraordinary corporate item, transaction, event or development affecting the
Company; or (b) in recognition of, or in anticipation of, any other unusual or
nonrecurring events affecting the Company, or the financial statements of the
Company, or in response to, or in anticipation of, changes in applicable laws,
regulations, accounting principles, or business conditions.
"Performance Period" shall mean the one or more periods of
time of at least one year in duration, as the Committee may select, over which
the attainment of one or more Performance Goals will be measured for the purpose
of determining a Participant's right to and the payment of a Performance
Compensation Award.
"Permitted Holders" shall mean, as of the date of
determination, (i) any and all of Ralph Lauren, his spouse, his siblings and
their spouses, and descendants of any of them (whether natural or adopted)
(collectively, the "Lauren Group") and (ii) any trust established and maintained
primarily for the benefit of any member of the Lauren Group and any entity
controlled by any member of the Lauren Group.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, government
or political subdivision thereof or other entity.
"Plan" shall mean this Polo Ralph Lauren Corporation 1997
Long-Term Stock Incentive Plan.
"Restricted Stock" shall mean any Share granted under Section
8 of the Plan.
"Restricted Stock Unit" shall mean any unit granted under
Section 8 of the Plan.
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"Rule 16b-3" shall mean Rule 16b-3 as promulgated and
interpreted by the SEC under the Exchange Act, or any successor rule or
regulation thereto as in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the Staff thereof.
"Shares" shall mean the shares of Class A Common Stock of the
Company, $.01 par value, or such other securities of the Company (i) into which
such common shares shall be changed by reason of a recapitalization, merger,
consolidation, split-up, combination, exchange of shares or other similar
transaction or (ii) as may be determined by the Committee pursuant to Section
4(b).
"Stock Appreciation Right" shall mean any right granted under
Section 7 of the Plan.
"Subsidiary" shall mean (i) any entity that, directly or
indirectly, is controlled by the Company and (ii) any entity in which the
Company has a significant equity interest, in either case as determined by the
Committee
"Substitute Awards" shall have the meaning specified in
Section 4(c).
SECTION 3. Administration. (a) The Plan shall be administered
by the Committee. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee
by the Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant and designate those Awards which shall constitute Performance
Compensation Awards; (iii) determine the number of Shares to be covered by, or
with respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited, or suspended and the method or methods by
which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi)
determine whether, to what extent, and under what circumstances cash, Shares,
other securities, other Awards, other property, and other amounts payable with
respect to an Award (subject to section 162(m) of the Code with respect to
Performance Compensation Awards) shall be deferred either automatically or at
the election of the holder thereof or of the Committee; (vii) interpret,
administer reconcile any inconsistency, correct any default and/or supply any
omission in the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (viii) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; (ix) establish and administer Performance Goals and
certify whether, and to what extent, they have been attained; and (x) make any
other determination and take
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any other action that the Committee deems necessary or desirable for the
administration of the Plan.
(b) Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participant, any
holder or beneficiary of any Award, and any shareholder.
(c) The mere fact that a Committee member shall fail to
qualify as a "Non-Employee Director" or "outside director" within the meaning of
Rule 16b-3 and Code section 162(m), respectively, shall not invalidate any award
made by the Committee which award is otherwise validly made under the Plan.
(d) No member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Award
hereunder.
(e) With respect to any Performance Compensation Award granted
under the Plan, the Plan shall be interpreted and construed in accordance with
section 162(m) of the Code.
(f) Notwithstanding the foregoing, the Committee may delegate
to one or more officers of the Company the authority to grant awards to
Participants who are not officers or directors of the Company subject to Section
16 of the Exchange Act or "covered employees" within the meaning of Code section
162(m).
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in
Section 4(b), the aggregate number of Shares with respect to which Awards may be
granted under the Plan shall be 10,000,000; the maximum number of Shares with
respect to which Options and Stock Appreciation Rights may be granted to any
Participant in any fiscal year shall be 600,000 and the maximum number of Shares
which may be paid to a Participant in the Plan in connection with the settlement
of any Award(s) designated as "Performance Compensation Awards" in respect of a
single Performance Period shall be 600,000 or, in the event such Performance
Compensation Award is paid in cash, the equivalent cash value thereof. If, after
the effective date of the Plan, any Shares covered by an Award granted under the
Plan, or to which such an Award relates, are forfeited, or if an Award has
expired, terminated or been canceled for any reason whatsoever (other than by
reason of exercise or vesting), then the Shares covered by such Award shall
again be, or shall become, Shares with respect to which Awards may be granted
hereunder.
(b) Adjustments. Notwithstanding any provisions of the Plan to
the contrary, in the event that the Committee determines that any dividend or
other
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distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
determined by the Committee in its discretion to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
with respect to which Awards may be granted, (ii) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
subject to outstanding Awards, and (iii) the grant or exercise price with
respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award in consideration for the
cancellation of such Award which, in the case of Options and Stock Appreciation
Rights shall equal the excess if any, of the Fair Market Value of the Shares
subject to such Options or Stock Appreciation Rights over the aggregate exercise
price or grant price of such Options or Stock Appreciation Rights.
(c) Substitute Awards. Awards may, in the discretion of the
Committee, be made under the Plan in assumption of, or in substitution for,
outstanding awards previously granted by the Company or its Affiliates or a
company acquired by the Company or with which the Company combines ("Substitute
Awards"). The number of Shares underlying any Substitute Awards shall be counted
against the aggregate number of Shares available for Awards under the Plan.
(d) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of authorized
and unissued Shares or of treasury Shares.
SECTION 5. Eligibility. Any officer or other employee,
director or consultant to the Company or any of its Subsidiaries (including any
prospective officer, employee, director or consultant) shall be eligible to be
designated a Participant.
SECTION 6. Stock Options.
(a) Grant. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Participants
to whom Options shall be granted, the number of Shares to be covered by each
Option, the exercise price therefor and the conditions and limitations
applicable to the exercise of the Option. The Committee shall have the authority
to grant Incentive Stock Options, or to grant Non-Qualified Stock Options, or to
grant both types of Options. In the case of Incentive Stock Options, the terms
and conditions of such grants shall be subject to and comply with such rules as
may be prescribed by Section 422 of the Code, as from
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time to time amended, and any regulations implementing such statute. All Options
when granted under the Plan are intended to be Non-Qualified Stock Options,
unless the applicable Award Agreement expressly states that the Option is
intended to be an Incentive Stock Option. If an Option is intended to be an
Incentive Stock Option, and if for any reason such Option (or any portion
thereof) shall not qualify as an Incentive Stock Option, then, to the extent of
such nonqualification, such Option (or portion thereof) shall be regarded as a
Non-Qualified Stock Option appropriately granted under the Plan; provided that
such Option (or portion thereof) otherwise complies with the Plan's requirements
relating to Non-Qualified Stock Options.
(b) Exercise Price. The Committee shall establish the exercise
price at the time each Option is granted, which exercise price shall be set
forth in the applicable Award Agreement.
(c) Exercise. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter. The
Committee may impose such conditions with respect to the exercise of Options,
including without limitation, any relating to the application of federal or
state securities laws, as it may deem necessary or advisable. Options with an
exercise price equal to or greater than the Fair Market Value per Share as of
the date of grant are intended to qualify as "performance-based compensation"
under section 162(m) of the Code. In the sole discretion of the Committee,
Options may be granted with an exercise price that is less than the Fair Market
Value per Share and such Options may, but need not, be intended to qualify as
performance-based compensation in accordance with Section 11 hereof.
(d) Payment.
(i) No Shares shall be delivered pursuant to any
exercise of an Option until payment in full of the aggregate exercise price
therefor is received by the Company. Such payment may be made in cash, or its
equivalent or (x) by exchanging Shares owned by the optionee (which are not the
subject of any pledge or other security interest and which have been owned by
such optionee for at least 6 months), (y) subject to such rules as may be
established by the Committee, through delivery of irrevocable instructions to a
broker to sell the Shares otherwise deliverable upon the exercise of the Option
and to deliver promptly to the Company an amount equal to the aggregate exercise
price, or (z) with the consent of the Committee in its sole discretion, by the
promissory note and agreement of a Participant providing for the payment with
interest of the unpaid balance accruing at a rate not less than needed to avoid
the imputation of income under Code section 7872 and upon such terms and
conditions (including the security, if any therefor) as the Committee may
determine, or by a combination of the foregoing, provided that the combined
value of all cash and cash equivalents and the Fair Market Value of any such
Shares so tendered to the Company as of the date of such tender is at least
equal to such aggregate exercise price.
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(ii) Wherever in this Plan or any Award Agreement a
Participant is permitted to pay the exercise price of an Option or taxes
relating to the exercise of an Option by delivering Shares, the Participant may,
subject to procedures satisfactory to the Committee, satisfy such delivery
requirement by presenting proof of beneficial ownership of such Shares, in which
case the Company shall treat the Option as exercised without further payment and
shall withhold such number of Shares from the Shares acquired by the exercise of
the Option.
SECTION 7. Stock Appreciation Rights.
(a) Grant. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Participants
to whom Stock Appreciation Rights shall be granted, the number of Shares to be
covered by each Stock Appreciation Right Award, the grant price thereof and the
conditions and limitations applicable to the exercise thereof. Stock
Appreciation Rights with a grant price equal to or greater than the Fair Market
Value per Share as of the date of grant are intended to qualify as
"performance-based compensation" under section 162(m) of the Code. In the sole
discretion of the Committee, Stock Appreciation Rights may be granted with an
exercise price that is less than the Fair Market Value per Share and such Stock
Appreciation Rights may, but need not, be intended to qualify as
performance-based compensation in accordance with Section 11 hereof. Stock
Appreciation Rights may be granted in tandem with another Award, in addition to
another Award, or freestanding and unrelated to another Award. Stock
Appreciation Rights granted in tandem with or in addition to an Award may be
granted either at the same time as the Award or at a later time.
(b) Exercise and Payment. A Stock Appreciation Right shall
entitle the Participant to receive an amount equal to the excess of the Fair
Market Value of a Share on the date of exercise of the Stock Appreciation Right
over the grant price thereof. The Committee shall determine whether a Stock
Appreciation Right shall be settled in cash, Shares or a combination of cash and
Shares.
(c) Other Terms and Conditions. Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine, at or
after the grant of a Stock Appreciation Right, the term, methods of exercise,
methods and form of settlement, and any other terms and conditions of any Stock
Appreciation Right. Any such determination by the Committee may be changed by
the Committee from time to time and may govern the exercise of Stock
Appreciation Rights granted or exercised prior to such determination as well as
Stock Appreciation Rights granted or exercised thereafter. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it shall deem appropriate.
SECTION 8. Restricted Stock and Restricted Stock Units.
(a) Grant. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Participants
to whom Shares of
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Restricted Stock and Restricted Stock Units shall be granted, the number of
Shares of Restricted Stock and/or the number of Restricted Stock Units to be
granted to each Participant, the duration of the period during which, and the
conditions, if any, under which, the Restricted Stock and Restricted Stock Units
may be forfeited to the Company, and the other terms and conditions of such
Awards.
(b) Transfer Restrictions. Shares of Restricted Stock and
Restricted Stock Units may not be sold, assigned, transferred, pledged or
otherwise encumbered, except, in the case of Restricted Stock, as provided in
the Plan or the applicable Award Agreements. Certificates issued in respect of
Shares of Restricted Stock shall be registered in the name of the Participant
and deposited by such Participant, together with a stock power endorsed in
blank, with the Company. Upon the lapse of the restrictions applicable to such
Shares of Restricted Stock, the Company shall deliver such certificates to the
Participant or the Participant's legal representative.
(c) Payment. Each Restricted Stock Unit shall have a value
equal to the Fair Market Value of a Share. Restricted Stock Units shall be paid
in cash, Shares, other securities or other property, as determined in the sole
discretion of the Committee, upon the lapse of the restrictions applicable
thereto, or otherwise in accordance with the applicable Award Agreement.
Dividends paid on any Shares of Restricted Stock may be paid directly to the
Participant, withheld by the Company subject to vesting of the Restricted Shares
pursuant to the terms of the applicable Award Agreement, or may be reinvested in
additional Shares of Restricted Stock or in additional Restricted Stock Units,
as determined by the Committee in its sole discretion.
SECTION 9. Performance Awards.
(a) Grant. The Committee shall have sole and complete
authority to determine the Participants who shall receive a "Performance Award",
which shall consist of a right which is (i) denominated in cash or Shares, (ii)
valued, as determined by the Committee, in accordance with the achievement of
such performance goals during such performance periods as the Committee shall
establish, and (iii) payable at such time and in such form as the Committee
shall determine.
(b) Terms and Conditions. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award and the amount and kind
of any payment or transfer to be made pursuant to any Performance Award.
(c) Payment of Performance Awards. Performance Awards may be
paid in a lump sum or in installments following the close of the performance
period or, in accordance with procedures established by the Committee, on a
deferred basis.
SECTION 10. Other Stock-Based Awards.
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(a) General. The Committee shall have authority to grant to
Participants an "Other Stock-Based Award", which shall consist of any right
which is (i) not an Award described in Sections 6 through 9 above and (ii) an
Award of Shares or an Award denominated or payable in, valued in whole or in
part by reference to, or otherwise based on or related to, Shares (including,
without limitation, securities convertible into Shares), as deemed by the
Committee to be consistent with the purposes of the Plan; provided that any such
rights must comply, to the extent deemed desirable by the Committee, with Rule
16b-3 and applicable law. Subject to the terms of the Plan and any applicable
Award Agreement, the Committee shall determine the terms and conditions of any
such Other Stock-Based Award, including the price, if any, at which securities
may be purchased pursuant to any Other Stock-Based Award granted under this
Plan.
(b) Dividend Equivalents. In the sole and complete discretion
of the Committee, an Award, whether made as an Other Stock-Based Award under
this Section 10 or as an Award granted pursuant to Sections 6 through 9 hereof,
may provide the Participant with dividends or dividend equivalents, payable in
cash, Shares, other securities or other property on a current or deferred basis.
SECTION 11. Performance Compensation Awards.
(a) General. The Committee shall have the authority, at the
time of grant of any Award described in Sections 6 through 10 (other than
Options and Stock Appreciation Rights granted with an exercise price or grant
price, as the case may be, equal to or greater than the Fair Market Value per
Share on the date of grant), to designate such Award as a Performance
Compensation Award in order to qualify such Award as "performance-based
compensation" under section 162(m) of the Code.
(b) Eligibility. The Committee will, in its sole discretion,
designate within the first 90 days of a Performance Period (or, if longer,
within the maximum period allowed under section 162(m) of the Code) which
Participants will be eligible to receive Performance Compensation Awards in
respect of such Performance Period. However, designation of a Participant
eligible to receive an Award hereunder for a Performance Period shall not in any
manner entitle the Participant to receive payment in respect of any Performance
Compensation Award for such Performance Period. The determination as to whether
or not such Participant becomes entitled to payment in respect of any
Performance Compensation Award shall be decided solely in accordance with the
provisions of this Section 11. Moreover, designation of a Participant eligible
to receive an Award hereunder for a particular Performance Period shall not
require designation of such Participant eligible to receive an Award hereunder
in any subsequent Performance Period and designation of one person as a
Participant eligible to receive an Award hereunder shall not require designation
of any other person as a Participant eligible to receive an Award hereunder in
such period or in any other period.
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(c) Discretion of Committee with Respect to Performance
Compensation Awards. With regard to a particular Performance Period, the
Committee shall have full discretion to select the length of such Performance
Period, the type(s) of Performance Compensation Awards to be issued, the
Performance Criteria that will be used to establish the Performance Goal(s), the
kind(s) and/or level(s) of the Performance Goals(s) is(are) to apply to the
Company and the Performance Formula. Within the first 90 days of a Performance
Period (or, if longer, within the maximum period allowed under section 162(m) of
the Code), the Committee shall, with regard to the Performance Compensation
Awards to be issued for such Performance Period, exercise its discretion with
respect to each of the matters enumerated in the immediately preceding sentence
of this Section 11(c) and record the same in writing.
(d) Payment of Performance Compensation Awards
(i) Condition to Receipt of Payment. Unless otherwise
provided in the applicable Award Agreement, a Participant must be employed by
the Company on the last day of a Performance Period to be eligible for payment
in respect of a Performance Compensation Award for such Performance Period.
(ii) Limitation. A Participant shall be eligible to receive
payment in respect of a Performance Compensation Award only to the extent that:
(1) the Performance Goals for such period are achieved; and (2) the Performance
Formula as applied against such Performance Goals determines that all or some
portion of such Participant's Performance Award has been earned for the
Performance Period.
(iii) Certification. Following the completion of a Performance
Period, the Committee shall meet to review and certify in writing whether, and
to what extent, the Performance Goals for the Performance Period have been
achieved and, if so, to calculate and certify in writing that amount of the
Performance Compensation Awards earned for the period based upon the Performance
Formula. The Committee shall then determine the actual size of each
Participant's Performance Compensation Award for the Performance Period and, in
so doing, may apply Negative Discretion, if and when it deems appropriate.
(iv) Negative Discretion In determining the actual size of an
individual Performance Award for a Performance Period, the Committee may reduce
or eliminate the amount of the Performance Compensation Award earned under the
Performance Formula in the Performance Period through the use of Negative
Discretion if, in its sole judgement, such reduction or elimination is
appropriate.
(v) Timing of Award Payments. The Awards granted for a
Performance Period shall be paid to Participants as soon as administratively
possible following completion of the certifications required by this Section 11.
<PAGE> 13
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(vi) Maximum Award Payable. Notwithstanding any provision
contained in this Plan to the contrary, the maximum Performance Compensation
Award payable to any one Participant under the Plan for a Performance Period is
600,000 Shares or, in the event the Performance Compensation Award is paid in
cash, the equivalent cash value thereof on the last day of the Performance
Period to which such Award relates. Furthermore, any Performance Compensation
Award that has been deferred shall not (between the date as of which the Award
is deferred and the payment date) increase (i) with respect to Performance
Compensation Award that is payable in cash, by a measuring factor for each
fiscal year greater than a reasonable rate of interest set by the Committee or
(ii) with respect to a Performance Compensation Award that is payable in Shares,
by an amount greater than the appreciation of a Share from the date such Award
is deferred to the payment date.
SECTION 12. Amendment and Termination.
(a) Amendments to the Plan. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without shareholder approval if such approval is
necessary to comply with any tax or regulatory requirement applicable to the
Plan and provided further that any such amendment, alteration, suspension,
discontinuance or termination that would impair the rights of any Participant or
any holder or beneficiary of any Award theretofore granted shall not to that
extent be effective without the consent of the affected Participant, holder or
beneficiary.
(b) Amendments to Awards. The Committee may waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate, any Award theretofore granted, prospectively or
retroactively; provided that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would impair the rights of any
Participant or any holder or beneficiary of any Award theretofore granted shall
not to that extent be effective without the consent of the affected Participant,
holder or beneficiary.
(c) Adjustment of Awards Upon the Occurrence of Certain
Unusual or Nonrecurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4(b) hereof) affecting the Company, any
Affiliate, or the financial statements of the Company or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan; provided that no such adjustment shall be
authorized to the extent that such authority or adjustment would cause an Award
designated by the Committee as a Performance Compensation Award under Section 11
of the Plan to fail to qualify as "performance-based compensation" under section
162(m) of the Code.
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SECTION 13. Change of Control. In the event of a Change of
Control after the date of the adoption of this Plan, any outstanding Awards then
held by Participants which are unexercisable or otherwise unvested shall
automatically be deemed exercisable or otherwise vested, as the case may be, as
of immediately prior to such Change of Control.
SECTION 14. General Provisions.
(a) Nontransferability.
(i) Each Award, and each right under any Award, shall be
exercisable only by the Participant during the Participant's lifetime,
or, if permissible under applicable law, by the Participant's legal
guardian or representative.
(ii) No Award may be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by a Participant otherwise
than by will or by the laws of descent and distribution, and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Affiliate; provided that the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale,
transfer or encumbrance.
(iii) Notwithstanding the foregoing, the Committee may in the
applicable Award Agreement evidencing an option granted under the Plan
or at any time thereafter in an amendment to an Award Agreement provide
that Options granted hereunder which are not intended to qualify as
Incentive Options may be transferred by the Participant to whom such
Option was granted (the "Grantee") without consideration, subject to
such rules as the Committee may adopt to preserve the purposes of the
Plan, to:
(A) the Grantee's spouse, children or
grandchildren (including adopted and
stepchildren and grandchildren)
(collectively, the "Immediate Family");
(B) a trust solely for the benefit of the
Grantee and his or her Immediate Family; or
(C) a partnership or limited liability company
whose only partners or shareholders are the
Grantee and his or her Immediate Family
members;
(each transferee described in clauses (A), (B) and (C) above
is hereinafter referred to as a "Permitted Transferee");
provided that the grantee gives the Committee advance written
notice describing the terms and conditions of the proposed
transfer and the Committee notifies the Grantee in writing
that such a transfer would comply with
<PAGE> 15
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the requirements of the Plan and any applicable Award
Agreement evidencing the option.
The terms of any option transferred in accordance with the
immediately preceding sentence shall apply to the Permitted
Transferee and any reference in the Plan or in an Award
Agreement to an optionee, Grantee or Participant shall be
deemed to refer to the Permitted Transferee, except that (a)
Permitted Transferees shall not be entitled to transfer any
Options, other than by will or the laws of descent and
distribution; (b) Permitted Transferees shall not be entitled
to exercise any transferred Options unless there shall be in
effect a registration statement on an appropriate form
covering the shares to be acquired pursuant to the exercise of
such Option if the Committee determines that such a
registration statement is necessary or appropriate, (c) the
Committee or the Company shall not be required to provide any
notice to a Permitted Transferee, whether or not such notice
is or would otherwise have been required to be given to the
Grantee under the Plan or otherwise and (d) the consequences
of termination of the Grantee's employment by, or services to,
the Company under the terms of the Plan and applicable Award
Agreement shall continue to be applied with respect to the
Grantee, following which the Options shall be exercisable by
the Permitted Transferee only to the extent, and for the
periods, specified in the Plan and the applicable Award
Agreement.
(b) No Rights to Awards. No Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Participants, or holders or beneficiaries of Awards.
The terms and conditions of Awards and the Committee's determinations and
interpretations with respect thereto need not be the same with respect to each
Participant (whether or not such Participants are similarly situated).
(c) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares or other securities are
then listed, and any applicable Federal or state laws, and the Committee may
cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(d) Withholding.
(i) A Participant may be required to pay to the Company or any
Affiliate and the Company or any Affiliate shall have the right and is hereby
authorized to withhold from any Award, from any payment due or transfer made
under any Award or under the Plan or from any compensation or other amount owing
<PAGE> 16
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to a Participant the amount (in cash, Shares, other securities, other Awards or
other property) of any applicable withholding taxes in respect of an Award, its
exercise, or any payment or transfer under an Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes. The Committee may provide
for additional cash payments to holders of Awards to defray or offset any tax
arising from the grant, vesting, exercise or payments of any Award.
(ii) Without limiting the generality of clause (i) above, a
Participant may satisfy, in whole or in part, the foregoing withholding
liability by delivery of Shares owned by the Participant (which are not subject
to any pledge or other security interest and which have been owned by the
Participant for at least 6 months) with a Fair Market Value equal to such
withholding liability or by having the Company withhold from the number of
Shares otherwise issuable pursuant to the exercise of the option a number of
Shares with a Fair Market Value equal to such withholding liability.
(iii) Notwithstanding any provision of this Plan to the
contrary, in connection with the transfer of an Option to a Permitted Transferee
pursuant to Section 14(a) of the Plan, the Grantee shall remain liable for any
withholding taxes required to be withheld upon the exercise of such Option by
the Permitted Transferee.
(e) Award Agreements. Each Award hereunder shall be
evidenced by an Award Agreement which shall be delivered to the Participant and
shall specify the terms and conditions of the Award and any rules applicable
thereto, including but not limited to the effect on such Award of the death,
disability or termination of employment or service of a Participant and the
effect, if any, of such other events as may be determined by the Committee.
(f) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other compensation arrangements, which may, but need
not, provide for the grant of options, restricted stock, Shares and other types
of Awards provided for hereunder (subject to shareholder approval if such
approval is required), and such arrangements may be either generally applicable
or applicable only in specific cases.
(g) No Right to Employment. The grant of an Award shall not
be construed as giving a Participant the right to be retained in the employ of,
or in any consulting relationship to, the Company or any Affiliate. Further, the
Company or an Affiliate may at any time dismiss a Participant from employment or
discontinue any consulting relationship, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(h) No Rights as Stockholder. Subject to the provisions of
the applicable Award, no Participant or holder or beneficiary of any Award shall
have
<PAGE> 17
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any rights as a stockholder with respect to any Shares to be distributed under
the Plan until he or she has become the holder of such Shares. Notwithstanding
the foregoing, in connection with each grant of Restricted Stock hereunder, the
applicable Award shall specify if and to what extent the Participant shall not
be entitled to the rights of a stockholder in respect of such Restricted Stock.
(i) Governing Law. The validity, construction, and effect of
the Plan and any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of New
York.
(j) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.
(k) Other Laws. The Committee may refuse to issue or transfer
any Shares or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or such
other consideration might violate any applicable law or regulation or entitle
the Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would be in compliance with all applicable requirements of the U.S.
federal securities laws.
(l) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(m) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities, or other property shall be paid or
transferred in lieu of any fractional Shares or whether such fractional Shares
or any rights thereto shall be canceled, terminated, or otherwise eliminated.
<PAGE> 18
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(n) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.
SECTION 16. Term of the Plan.
(a) Effective Date. The Plan shall be effective as of the date
of its approval by the Board.
(b) Expiration Date. No Award shall be granted under the Plan
after December 31, 2006. Unless otherwise expressly provided in the Plan or in
an applicable Award Agreement, any Award granted hereunder may, and the
authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Award shall, continue after December 31, 2006.
<PAGE> 1
EXHIBIT 10.2
POLO RALPH LAUREN CORPORATION
1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Polo Ralph Lauren Corporation., a Delaware corporation (the
"Company"), hereby formulates and adopts the following Stock Option Plan (the
"Plan") for non-employee directors of the Company.
1. Purpose. The purpose of the Plan is to secure for the Company
the benefits of the additional incentive inherent in the ownership of Class A
Common Stock, par value $.01 per share, of the Company ("Common Stock") by
non-employee directors of the Company and to help the Company secure and retain
the services of such non-employee directors.
2. Administration.
(a) The Plan is intended to be self-governing formula plan. To
this end, the Plan requires minimal discretionary action by any administrative
body with regard to any transaction under the Plan. To the extent, if any, that
questions of administration arise, these shall be resolved by the Board of
Directors of the Company (the "Board of Directors").
(b) Subject to the express provisions of the Plan, the Board
of Directors shall have plenary authority to interpret the Plan, to prescribe,
amend and rescind the rules and regulations relating to it and to make all other
determinations deemed necessary and advisable for the administration of the
Plan. The determination of the Board of Directors shall be conclusive.
3. Common Stock Subject to Options.
(a) Subject to the adjustment provisions of Paragraph 23
below, a maximum of 500,000 shares of Common Stock may be made subject to
options granted under the Plan (each an "Option"). If, and to the extent that,
Options granted under the Plan shall terminate, expire or be canceled for any
reason without having been exercised, new Options may be granted in respect of
the shares covered by such terminated, expired or canceled Options. The granting
and terms of such new Options shall comply in all respects with the provisions
of the Plan.
(b) Shares issued upon the exercise of any Option granted
under the Plan may be shares of authorized and unissued Common Stock, shares of
issued Common Stock held in the Company's treasury or both. There shall be
reserved at all times for sale under the Plan a number of shares, of either
authorized and unissued shares of Common Stock, shares of Common Stock held in
the
<PAGE> 2
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Company's treasury, or both, equal to the maximum number of shares which may be
purchased pursuant to Options granted or that may be granted under the Plan.
4. Individuals Eligible. Only directors of the Company who are
not employees of the Company or any affiliate of the Company ("Outside
Directors") shall participate in the Plan.
5. Grant of Options. A director receiving an Option pursuant to
the Plan is hereinafter referred to as an "Optionee."
(a) Each person who first becomes elected an Outside Director
after the commencement date of the initial public offering of the shares of
Common Stock pursuant to an effective registration statement under the
Securities Act of 1933 (the "IPO Effective Date") will receive an Option to
purchase 7,500 shares of Common Stock on the date of their initial election as
an Outside Director.
(b) Each person who is an Outside Director on April 1 of each
year occurring after the IPO Effective Date and during the term of the Plan and
who first became an Outside Director prior to October 1 of the preceding year
will receive, on such April 1, an Option to purchase 3,000 shares of Common
stock.
6. Type of Options. All Options granted under the Plan shall be
"nonqualified" stock options subject to the provisions of section 83 of the
Internal Revenue Code of 1986, as amended (the "Code").
7. Form of Agreements with Optionees. Each Option granted
pursuant to the Plan shall be evidenced by a written option agreement (an
"Option Agreement") and shall have such form, terms and provisions, not
inconsistent with the provisions of the Plan, as the Board of Directors shall
provide for in such Option Agreement.
8. Price.
(a) The exercise price per share of Common Stock purchasable
under all other Options granted pursuant to the Plan shall be the Fair Market
Value (as defined below) of a share of Common Stock on the date the Option is
granted. For purposes of the Plan, "Fair Market Value" of a share of Common
Stock as of any grant date shall mean:
(i) the mean between the high and low sales prices of the
shares of Common Stock as reported on the composite tape for securities traded
on the New York Stock Exchange for such date (or if not then trading on the New
York Stock Exchange, the mean between the high and low sales price of the shares
of Common Stock on the stock exchange or over-the-counter market on which the
shares
<PAGE> 3
3
of Common Stock are principally trading on such date), or if, there were no
sales on such date, on the closest preceding date on which there were sales of
shares of Common Stock; or
(ii) in the event there shall be no public market for
the shares of Common Stock on such date, the fair market value of the shares of
Common Stock as determined in good faith by Board of Directors.
9. Vesting of Options. Each Option granted to an Optionee
hereunder shall vest and become exercisable with respect to fifty percent (50%)
of the shares of Common Stock initially subject to the Option on each of the
first and second anniversaries of the date of grant; provided that the Optionee
continues in the service of the Company as a director until such date.
10. Duration of Options. Notwithstanding any provision of the Plan
to the contrary, the unexercised portion of any Option granted under the Plan
shall automatically and without notice terminate and become null and void at the
time of the earliest to occur of the following:
(a) The expiration of ten years from the date on which such
Option was granted;
(b) The expiration of two years from the date the Optionee's
service as an Outside Director shall terminate for any reason.
11. Exercise of Options.
(a) No shares shall be delivered pursuant to any exercise of
an Option until payment in full of the aggregate exercise price therefor is
received by the Company. Such payment may be made in cash, or its equivalent or
(i) by exchanging shares of Common Stock owned by the Optionee (which are not
the subject of any pledge or other security interest and which have been owned
by such Optionee for at least 6 months), (ii) subject to such rules as may be
established by the Board of Directors, through delivery of irrevocable
instructions to a broker to sell the shares deliverable upon the exercise of the
Option and to deliver promptly to the Company an amount equal to the aggregate
exercise price, (iii) with the consent of the Board of Directors in its sole
discretion, by the promissory note and agreement of an Optionee providing for
the payment with interest of the unpaid balance accruing at a rate not less than
needed to avoid the imputation of income under Code section 7872 and upon such
terms and conditions (including the security, if any therefor) as the Board of
Directors may determine, or by a combination of the foregoing, provided that the
combined value of all cash and cash equivalents and the Fair Market Value of any
such shares of Common Stock so tendered to the Company as of the date of such
tender is at least equal to such aggregate exercise price.
<PAGE> 4
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(b) Wherever in this Plan or any Award Agreement a Optionee is
permitted to pay the exercise price of an Option or taxes relating to the
exercise of an Option by delivering shares of Common Stock, the Optionee may,
subject to procedures satisfactory to the Board of Directors, satisfy such
delivery requirement by presenting proof of beneficial ownership of such shares
of Common Stock, in which case the Company shall treat the Option as exercised
without further payment and shall withhold such number of shares of Common Stock
from the shares of Common Stock acquired by the exercise of the Option.
12. Nontransferability of Options.
(a) Each Option, and each right under any Option, shall be
exercisable only by the Optionee during the Optionee's lifetime, or, if
permissible under applicable law, by the Optionee's legal guardian or
representative.
(b) No Option may be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by a Optionee otherwise than by will
or by the laws of descent and distribution, and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any of its affiliates; provided that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.
13. Share Certificates. All certificates for shares of Common
Stock or other securities of the Company or any of its affiliates delivered
under the Plan pursuant to any Option or the exercise thereof shall be subject
to such stop transfer orders and other restrictions as the Board of Directors
may deem advisable under the Plan or the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which such shares of Common Stock or other securities are then listed, and any
applicable Federal or state laws, and the Board of Directors may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.
14. No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any of its affiliates from adopting or
continuing in effect other compensation arrangements, which may, but need not,
provide for the grant of options, restricted stock, shares of Common Stock and
other types of compensatory awards (subject to shareholder approval if such
approval is required), and such arrangements may be either generally applicable
or applicable only in specific cases.
15. No Right to Continued Director Status. The grant of an Option
shall not be construed as giving an Optionee the right to continue to serve as
an Outside Director or otherwise be retained in the employ of, or in any
consulting relationship to, the Company or any of its affiliates. Further, the
Company or its
<PAGE> 5
5
affiliates may at any time dismiss an Optionee from such director status or
employment or discontinue any consulting relationship, free from any liability
or any claim under the Plan, unless otherwise expressly provided in the Plan or
in any Option Agreement.
16. No Rights as Stockholder. Subject to the provisions of the
applicable Option Agreement, no Optionee or holder or beneficiary of any Option
shall have any rights as a stockholder with respect to any shares of Common
Stock or other securities to be distributed under the Plan until he or she has
become the holder of such shares or other securities.
17. Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan and any Option Agreement
shall be determined in accordance with the laws of the State of New York.
18. Severability. If any provision of the Plan or any Option is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any person, entity or Option, or would disqualify the Plan
or any Option under any law deemed applicable by the Board of Directors, such
provision shall be construed or deemed amended to conform the applicable laws,
or if it cannot be construed or deemed amended without, in the determination of
the Board of Directors, materially altering the intent of the Plan or the
Option, such provision shall be stricken as to such jurisdiction, person, entity
or Option and the remainder of the Plan and any such Option shall remain in full
force and effect.
19. Other Laws. The Board of Directors may refuse to issue or
transfer any shares of Common Stock or other consideration under an Option if,
acting in its sole discretion, it determines that the issuance or transfer of
such shares of Common Stock or such other consideration might violate any
applicable law or regulation or entitle the Company to recover the same under
Section 16(b) of the Securities Exchange Act of 1934, and any payment tendered
to the Company by an Optionee, other holder or beneficiary in connection with
the exercise of such Option shall be promptly refunded to the relevant Optionee,
holder or beneficiary. Without limiting the generality of the foregoing, no
Option granted hereunder shall be construed as an offer to sell securities of
the Company, and no such offer shall be outstanding, unless and until the Board
of Directors in its sole discretion has determined that any such offer, if made,
would be in compliance with all applicable requirements of the U.S. federal
securities laws.
20. No Trust or Fund Created. Neither the Plan nor any Option
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any of its affiliates and an
Optionee or any other person or entity. To the extent that any person acquires a
right to receive payments from the Company or any of its affiliates pursuant to
an Option, such right
<PAGE> 6
6
shall be no greater than the right of any unsecured general creditor of the
Company or any of its affiliates.
21. No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Option, and the Board of Directors
shall determine whether cash, other securities, or other property shall be paid
or transferred in lieu of any fractional shares of Common Stock or whether such
fractional shares of Common Stock or any rights thereto shall be canceled,
terminated, or otherwise eliminated.
22. Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.
23. Adjustment Upon Changes in Capitalization, etc. In the
event that the Board of Directors determines that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of shares of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase shares of Common Stock or other securities
of the Company, or other similar corporate transaction or event affects the
shares of Common Stock such that an adjustment is determined by the Board of
Directors in its discretion to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Board of Directors shall, in such manner as it may deem
equitable, adjust any or all of (i) the number of shares of Common Stock or
other securities of the Company (or number and kind of other securities or
property) with respect to which Options may be granted, (ii) the number of
shares of Common Stock or other securities of the Company (or number and kind of
other securities or property) subject to outstanding Options, and (iii) the
grant or exercise price with respect to any Option or, if deemed appropriate,
make provision for a cash payment to the holder of an outstanding Option in
consideration for the cancellation of such Option which shall equal the excess,
if any, of the Fair Market Value of the shares of Common Stock subject to the
Option over the aggregate exercise price of the Option.
24. Purchase for Investment. Whether or not the Options and
shares covered by the Plan have been registered under the Securities Act of
1933, as amended, each person exercising an Option under the Plan may be
required by the Company to give a representation in writing that such person is
acquiring such shares for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof. The Company will endorse
any necessary legend referring to the foregoing restriction upon the certificate
or certificates representing any shares issued or transferred to the Optionee
upon the exercise of any option granted under the Plan.
<PAGE> 7
7
25. Amendment/Termination. The Plan may be terminated or amended
at any time by the Board of Directors; provided, however, that (i) any such
amendment shall comply with all applicable laws and applicable stock exchange
listing requirements and (ii) no such termination or amendment shall be made
without shareholder approval if such approval is necessary to comply with any
tax or regulatory requirement applicable to the Plan and provided that no
termination or amendment of the Plan, without the consent of the Optionee, may
adversely affect the rights of such person with respect to any Option previously
granted under the Plan.
26. Withholding. An Optionee may be required to pay to the Company
and the Company shall have the right and is hereby authorized to withhold from
the settlement of any Option granted hereunder or from any compensation or other
amount owing to an Optionee the amount (in cash, shares of Common Stock, other
securities, or other property) of any applicable withholding taxes in respect of
an Option or its exercise and to take such other action as may be necessary in
the opinion of the Company to satisfy all obligations for the payment of such
taxes.
27. Term of the Plan.
(a) Effective Date. The Plan shall be effective as of the date
of its approval by the Board.
(b) Expiration Date. No Option shall be granted under the Plan
after December 31, 2006. Unless otherwise expressly provided in the Plan or in
an applicable Option Agreement, any Option granted hereunder may, and the
authority of the Board of Directors to amend, alter, adjust, suspend,
discontinue, or terminate any such Option or to waive any conditions or rights
under any such Option shall, continue after December 31, 2006.
<PAGE> 1
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
among
POLO RALPH LAUREN CORPORATION
a Delaware corporation
GS CAPITAL PARTNERS, L.P.
a Delaware limited partnership
GS CAPITAL PARTNERS PRL HOLDING I, L.P.
a Delaware limited partnership
GS CAPITAL PARTNERS PRL HOLDING II, L.P.
a Delaware limited partnership
STONE STREET FUND 1994, L.P.
a Delaware limited partnership
STONE STREET 1994 SUBSIDIARY CORP.
a Delaware corporation
BRIDGE STREET FUND 1994, L.P.
a Delaware limited partnership
RALPH LAUREN
RL Family, L.P.,
a Delaware limited partnership
and
RL Holding, L.P.
a Delaware limited partnership
Dated as of June __, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Certain Definitions...................................................................2
1.1. "Amended RL Note"....................................................2
1.2. "Class A Common Stock"...............................................2
1.3. "Class B Common Stock"...............................................2
1.4. "Class B Permitted Transferee".......................................2
1.5. "Class C Common Stock"...............................................3
1.6. "Commission".........................................................4
1.7. "Common Stock".......................................................4
1.8. "Fair Market Value"..................................................4
1.9. "Formation Agreement"................................................4
1.10. "Holder" or "Holders"...............................................5
1.11. "IPO"...............................................................5
1.12. "Person"............................................................5
1.13. "Registrable Securities"............................................5
1.14. "Securities Act"....................................................5
1.15. "Stockholders Agreement"............................................5
2. Registration Rights...................................................................6
2.1. Demand Registrations.................................................6
2.2. Piggyback Registrations..............................................11
2.3. Allocation of Securities Included in Registration Statement..........12
2.4. Registration Procedures..............................................14
2.5. Registration Expenses................................................22
2.6. Certain Limitations on Registration Rights...........................23
2.7. Limitations on Sale or Distribution of Other Securities..............23
2.8. No Required Sale.....................................................24
2.9. Indemnification......................................................24
3. Underwritten Offerings................................................................30
3.1. Requested Underwritten Offerings.....................................30
3.2. Piggyback Underwritten Offerings.....................................30
4. General...............................................................................31
4.1. Adjustments Affecting Registrable Securities.........................31
4.2. Rule 144.............................................................31
4.3. Preparation; Reasonable Investigation................................31
4.4. Nominees for Beneficial Owners.......................................32
4.5. Amendments and Waivers...............................................32
4.6. Notices..............................................................33
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
4.7. Miscellaneous........................................................33
4.8. No Inconsistent Agreements...........................................35
Schedules
I - Addresses for Notices
</TABLE>
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<PAGE> 4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of June , 1997 (this
"Agreement") among Polo Ralph Lauren Corporation, a Delaware corporation (the
"Company"), GS Capital Partners, L.P., a Delaware limited partnership ("GSCP"),
GS Capital Partners PRL Holding I, L.P., a Delaware limited partnership and
wholly owned subsidiary of GSCP ("Holding I"), GS Capital Partners PRL Holding
II, L.P., a Delaware limited partnership and wholly owned subsidiary of GSCP
("Holding II"), Stone Street Fund 1994, L.P., a Delaware limited partnership
("Stone Street"), Stone Street 1994 Subsidiary Corp., a Delaware corporation and
wholly owned subsidiary of Stone Street ("Stone Street Sub"), Bridge Street Fund
1994, L.P., a Delaware limited partnership ("Bridge Street"), Ralph Lauren
("Lauren"), RL Holding L.P., a Delaware limited partnership ("RL Holding"), and
RL Family, L.P., a Delaware limited partnership ("RL Family"). GSCP, Holding I,
Holding II, Stone Street, Stone Street Sub, Bridge Street and their permitted
assignees are sometimes collectively referred to herein as the "GS Parties," and
Lauren, RL Holding, RL Family and their permitted assignees are sometimes
collectively referred to herein as the "Polo Parties."
WHEREAS, on the date hereof, the GS Parties and the Polo Parties have
executed and delivered the Stockholders Agreement which establishes and set
forth their agreement with respect to certain rights and obligations associated
with ownership of shares of common stock of the Company;
WHEREAS, Section 9.8 of the Stockholders Agreement requires the parties
to amend the registration rights agreement dated October 31, 1994 among Polo
Ralph Lauren Enterprises, L.P., Polo Ralph Lauren, L.P., Polo Ralph Lauren
Corporation, a New York corporation, the GS Parties, Lauren and Peter Strom
Goldstein (the "Original Registration Rights Agreement");
<PAGE> 5
WHEREAS, the parties hereto desire to enter into an agreement which
establishes and sets forth their agreement with respect to certain registration
rights relating to shares of common stock of the Company;
Accordingly, the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the meanings
ascribed to them below:
1.1. "Amended RL Note": as defined in the Formation Agreement.
1.2. "Class A Common Stock": Class A Common Stock of the Company, par
value $.01 per share, and any and all securities of any kind whatsoever of the
Company which may be issued after the date hereof in respect of, or in exchange
for, shares of Class A Common Stock of the Company pursuant to a merger,
consolidation, stock split, stock dividend or recapitalization of the Company or
otherwise.
1.3. "Class B Common Stock": Class B Common Stock of the Company, par
value $.01 per share, and any and all securities of any kind whatsoever of the
Company which may be issued after the date hereof in respect of, or in exchange
for, shares of Class B Common Stock of the Company pursuant to a merger,
consolidation, stock split, stock dividend or recapitalization of the Company or
otherwise.
1.4. "Class B Permitted Transferee": only the following persons: (i)
Ralph Lauren and his estate, guardian, conservator or committee; (ii) the spouse
of Ralph Lauren and her estate, guardian, conservator or committee; (iii) each
descendant of Ralph Lauren (a "Lauren Descendant") and their respective estates,
guardians, conservators or committees; (iv) each Family Controlled Entity (as
defined below); and (v) the trustees, in their respective capacities as such, of
each Lauren Family Trust (as defined below). The term "Family Controlled Entity"
means (i) any not-for-profit corporation if at least a majority of its board of
directors is composed of Ralph Lauren, the spouse of Ralph Lauren and/or Lauren
Descendants; (ii) any other corporation if at least a majority of the value of
its outstanding
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<PAGE> 6
equity is owned by Class B Permitted Transferees; (iii) any partnership if at
least a majority of the economic interest of its partnership interests are owned
by Class B Permitted Transferees; and (vi) any limited liability or similar
company if at least a majority of the economic interest of the Company is owned
by Class B Permitted Transferees. The term "Lauren Family Trust" includes trusts
the primary beneficiaries of which are Mr. Lauren, the spouse of Ralph Lauren,
Lauren Descendants, Mr. Lauren's siblings, spouses of Lauren Descendants and
their respective estates, guardians, conservators or committees and/or
charitable organizations (collectively, "Lauren Beneficiaries"), provided that
if the trust is a wholly charitable trust, at least a majority of the trustees
of such trust consist of Mr. Lauren, the spouse of Mr. Lauren and/or Class B
Permitted Transferees. For purposes of this Agreement, the primary beneficiaries
of a trust will be deemed to be Lauren Beneficiaries if, under the maximum
exercise of discretion by the trustee in favor of persons who are not Lauren
Beneficiaries, the value of the interests of such persons in such trust,
computed actuarially, is 50% or less. The factors and methods prescribed in
section 7520 of the Internal Revenue Code of 1986, as amended, for use in
ascertaining the value of certain interests shall be used in determining a
beneficiary's actuarial interest in a trust for purposes of applying this
provision. For purposes of this Agreement, the actuarial value of the interest
in a trust of any person in whose favor a testamentary power of appointment may
be exercised shall be deemed to be zero. For purposes of this Agreement, in the
case of a trust created by a Lauren Descendant, the actuarial value of the
interest in such trust of any person who may receive trust property only at the
termination of the trust and then only in the event that, at the termination of
the trust, there are no living issue of such Lauren Descendant shall be deemed
to be zero.
1.5. "Class C Common Stock": Class C Common Stock of the Company, par
value $.01 per share, and any and all securities of any kind whatsoever of the
Company which may be issued after the date hereof in respect of, or in exchange
for, shares of Class C Common Stock of the Company pursuant to a merger,
consolidation, stock split, stock dividend or recapitalization of the Company or
otherwise.
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<PAGE> 7
1.6. "Commission": the Securities and Exchange Commission.
1.7. "Common Stock": common stock of the Company, par value $.01 per
share (including, without limitation, shares of Class A Common Stock, Class B
Common Stock and Class C Common Stock), and any and all securities of any kind
whatsoever of the Company which may be issued after the date hereof in respect
of, or in exchange for, shares of common stock of the Company pursuant to a
merger, consolidation, stock split, stock dividend or recapitalization of the
Company or otherwise.
1.8. "Fair Market Value": after the IPO, (a) if the Class A Common
Stock is listed on a national securities exchange, the average of the last
reported sales price of a share of Class A Common Stock for the thirty (30)
consecutive business days immediately preceding the date on which any such
determination is to be made, or (b) the average of the last reported bid price
of a share of Class A Common Stock for the thirty (30) consecutive business days
immediately preceding the date on which such determination is to be made, as
reported by the NASDAQ National Market or, if the Class A Common Stock is not
listed on the NASDAQ National Market, as determined in good faith by the
Company's board of directors.
1.9. "Formation Agreement": the agreement dated as of August 22, 1994,
relating to the formation of Polo Ralph Lauren Enterprises, L.P. and Polo Ralph
Lauren, L.P. by and among the GS Parties, Lauren and Mr. Peter Strom Goldstein.
1.10. "Holder" or "Holders": any party who is a signatory to this
Agreement and any party who shall hereafter acquire and hold Registrable
Securities and to whom rights have been assigned under this Agreement pursuant
to Section 4.7(a) hereof.
1.11. "IPO": the initial underwritten offering pursuant to which
shares of Class A Common Stock becomes registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
1.12. "Person": any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or other entity, whether
acting in an individual, fiduciary or other capacity.
-4-
<PAGE> 8
1.13. "Registrable Securities": any shares of Class A Common Stock
held by any Holder and any shares of Class A Common Stock issued or issuable in
respect of any shares of Common Stock or other securities held by any Holder. As
to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have been declared effective under the Securities
Act and such securities shall have been disposed of in accordance with such
registration statement, or (ii) such securities shall have been sold (other than
in a privately negotiated sale) pursuant to Rule 144 (or any successor
provision) under the Securities Act and in compliance with the requirements of
paragraphs (c), (e), (f) and (g) of Rule 144 (notwithstanding the provisions of
paragraph (k) of such Rule).
1.14. "Securities Act": the Securities Act of 1933, as amended.
1.15. "Stockholders Agreement": the stockholders agreement dated the
date hereof among the Company, the GS Parties and the Polo Parties.
2. Registration Rights.
2.1. Demand Registrations.
(a) (i) (A) At any time on or after the date hereof the Polo
Parties, acting together through Lauren or his designee, shall have the right,
and (B) at any time on or after December 31, 1998 the GS Parties, acting
together through GSCP or its designee, shall have the right, to require the
Company to file a registration statement under the Securities Act with respect
to an IPO (the "IPO Demand"), by delivering a written request therefor to the
Company specifying the number of Registrable Securities to be included in such
registration by the GS Parties (if they made such request) or the Polo Parties
(if Lauren made such request). Within three days of the receipt of a written
request for an IPO Demand, the Company shall notify the GS Parties, on the one
hand, or Lauren, on the other (whichever did not make the IPO Demand), of such
request. In connection with an IPO Demand, the parties hereto shall consult on a
good faith basis to determine whether the Company should issue and sell shares
of Class A Common Stock in the IPO.
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<PAGE> 9
(ii) Subject to Section 2.1(b) below, at any time and from
time to time after the IPO, the GS Parties, acting together through GSCP or its
designee, on the one hand, and the Polo Parties, acting together through Lauren
or his designee, on the other hand, shall have the right to require the Company
to file a registration statement under the Securities Act covering all or part
of their respective Registrable Securities, by delivering a written request
therefor to the Company specifying the number of Registrable Securities to be
included in such registration by the GS Parties (if they made such request) or
by the Polo Parties (if Lauren made such request) and the intended method of
distribution thereof. All requests pursuant to this Section 2.1(a)(ii) are
referred to herein as "Demand Registration Requests," and the registrations
requested are referred to herein as "Demand Registrations." As promptly as
practicable, but no later than ten days after receipt of a Demand Registration
Request, the Company shall give written notice of such Demand Registration
Request to all Holders of record of Registrable Securities.
(iii) The Company, subject to Sections 2.3 and 2.6, shall
include in the IPO Demand or a Demand Registration (x) the Registrable
Securities of the Holder(s) which requested such registration and (y) the
Registrable Securities of any Holder which shall have made a written request to
the Company for registration thereof (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by such Holder)
within 30 days after the receipt of written notice pursuant to clause (i) or
(ii) (or, in the case of a Demand Registration only, 15 days if, at the request
of the Holder(s) which requested such registration, the Company states in such
written notice or gives telephonic notice to all Holders, with written
confirmation to follow promptly thereafter, that such registration will be on
Form S-3).
(iv) The Company shall, as expeditiously as possible following
the IPO Demand or a Demand Registration Request, use its best efforts to (x)
effect such registration under the Securities Act (including, without
limitation, by means of a shelf registration pursuant to Rule 415 under the
Securities Act if so requested and if the Company is
-6-
<PAGE> 10
then eligible to use such a registration) of the Registrable Securities which
the Company has been so requested to register, for distribution in accordance
with such intended method of distribution, and (y) if requested by the Holder(s)
which requested such registration, obtain acceleration of the effective date of
the registration statement relating to such registration.
(b) The demand registration rights granted to the Holders in
Section 2.1(a) are subject to the following limitations: (i) each IPO Demand and
Demand Registration must include Registrable Securities having an aggregate
market value of at least $20,000,000, which market value shall be determined by
multiplying the number of Registrable Securities to be included in such IPO
Demand or Demand Registration by the fair market value determined, in the case
of an IPO Demand, by the Board of Directors of the Company based on the
anticipated mid-point of the filing range for the registration prepared with
respect to the IPO or, in the case of a Demand Registration, by the Fair Market
Value determined as of the date the Demand Registration Request in respect of
such Demand Registration is made (provided that the limitations set forth in
this clause (i) shall not be in effect at any time the Holders' Registrable
Securities may not be sold pursuant to Rule 144 under the Securities Act because
of the Company's failure to comply with the information requirements
thereunder), unless at such time, the Company's outside counsel (which shall be
reasonably acceptable to GSCP if such Holder is a GS Party or Lauren if such
Holder is a Polo Party) delivers a written opinion of counsel to such Holder
proposing to register Registrable Securities to the effect that such Holder's
Registrable Securities may be publicly offered and sold without registration
under the Securities Act), (ii) each of Lauren and GSCP may only make a demand
for registration pursuant to Section 2.1(a)(ii) once within any nine month
period, (iii) the Company shall not be required to cause a registration pursuant
to Section 2.1(a)(ii) to be declared effective within a period of 180 days after
the effective date of any other registration statement of the Company effected
in connection with an underwritten offering by the Company; (iv) if the Board of
Directors of the Company, in its good faith judgment, determines that any
registration of Registrable Securities should not be made or continued because
it would materially interfere
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<PAGE> 11
with any material financing, acquisition, corporate reorganization or merger or
other transaction involving the Company or any of its subsidiaries (a "Valid
Business Reason"), (x) the Company may postpone filing a registration statement
relating to an IPO Demand or a Demand Registration Request until such Valid
Business Reason no longer exists, but in no event for more than three months,
and, (y) in case a registration statement has been filed relating to an IPO
Demand or a Demand Registration Request, if the Valid Business Reason has not
resulted from actions taken by the Company, the Company may cause such
registration statement to be withdrawn and its effectiveness terminated or may
postpone amending or supplementing such registration statement; and the Company
shall give written notice of its determination to postpone or withdraw a
registration statement and of the fact that the Valid Business Reason for such
postponement or withdrawal no longer exists, in each case, promptly after the
occurrence thereof; (v) the offering of Registrable Securities requested to be
registered pursuant to this Section 2.1 shall be pursuant to a firm commitment
underwritten offering unless the Company has previously sold Registrable
Securities pursuant to a registration statement under the Securities Act; and
(vi) from and after such time as the GS Parties beneficially own, in the
aggregate, less than 10% of the Company's outstanding Common Stock, the Company
shall only be required to effect one Demand Registration at the request of the
GS Parties provided that any Demand Registration requested by the GS Parties at
such time as the GS parties beneficially own, in the aggregate, less than 10% of
the Company's outstanding Common Stock shall not count as the one Demand
Registration permitted by this subclause (vi) if, immediately after giving
effect to such registration, and due to the allocation provisions of Section
2.3(a), the GS Parties beneficially own, in the aggregate, 5% or more of the
Company's outstanding Common Stock. If the Company shall give any notice of
postponement or withdrawal of any registration statement, the Company shall not,
during the period of postponement or withdrawal, register any Common Stock,
other than pursuant to a registration statement on Form S-4 or S-8 (or an
equivalent registration form then in effect). Each Holder of Registrable
Securities agrees that, upon receipt of any notice from the Company that the
Company has
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<PAGE> 12
determined to withdraw any registration statement pursuant to clause (iv) above,
such Holder will discontinue its disposition of Registrable Securities pursuant
to such registration statement and, if so directed by the Company, will deliver
to the Company (at the Company's expense) all copies, other than permanent file
copies, then in such Holder's possession of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such notice.
If the Company shall have withdrawn or prematurely terminated a registration
statement filed under Section 2.1(a) (whether pursuant to clause (iv) above or
as a result of any stop order, injunction or other order or requirement of the
Commission or any other governmental agency or court), the Company shall not be
considered to have effected an effective registration for the purposes of this
Section 2.1(b) until the Company shall have filed a new registration statement
covering the Registrable Securities covered by the withdrawn registration
statement and such registration statement shall have been declared effective and
shall not have been withdrawn. If the Company shall give any notice of
withdrawal or postponement of a registration statement, the Company shall, at
such time as the Valid Business Reason that caused such withdrawal or
postponement no longer exists (but in no event later than three months after the
date of the postponement), use its best efforts to effect the registration under
the Securities Act of the Registrable Securities covered by the withdrawn or
postponed registration statement in accordance with this Section 2.1 (unless the
Holder(s) delivering the Demand Registration Request shall have withdrawn such
request, in which case the Company shall not be considered to have effected an
effective registration for the purposes of this Section 2.1(b)), and such
registration shall not be withdrawn or postponed pursuant to clause (iv) above.
(c) The Company, subject to Sections 2.3 and 2.6, may elect to
include in any registration statement and offering made pursuant to Section
2.1(a), authorized but unissued shares of Common Stock or shares of Common Stock
held by the Company as treasury shares; provided that such inclusion shall be
permitted only to the extent that it is pursuant to and subject to the terms of
the underwriting agreement or arrangements, if any,
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<PAGE> 13
entered into by the Holders exercising the demand registration rights granted to
the Holders under Section 2.1(a).
(d) The lead managing underwriter for the IPO effected
pursuant to an IPO Demand or any Demand Registration shall be selected by the
party or parties making the demand for such registration, provided that such
underwriter shall be reasonably satisfactory to the Company. It is the current
intention of the parties that Goldman, Sachs & Co. ("GS&Co.") will act as
managing underwriter in any registration of the Registrable Securities pursuant
to an IPO Demand. If GS&Co. acts as managing underwriter in any such registered
offering pursuant to an IPO Demand or any Demand Registration, to the extent
required by applicable law, a Qualified Independent Underwriter (as defined in
Conduct Rule 2720 of the National Association of Securities Dealers, Inc.'s
By-Laws) shall be retained, and the Company shall pay all reasonable fees and
expenses (other than underwriting discounts and commissions) of such Qualified
Independent Underwriter.
2.2. Piggyback Registrations.
(a) If, at any time, the Company proposes or is required to
register any of its equity securities (including pursuant to any registration
statement which generally registers equity and debt securities without
specifying the type of security or the amount) under the Securities Act (other
than pursuant to (i) the IPO, unless the GS Parties (acting together as a group)
and Lauren otherwise consent in writing to the inclusion of Registrable
Securities pursuant to this Section 2.2 (it being acknowledged that the GS
Parties and Lauren have consented to the inclusion of Registrable Securities by
the GS Parties and Lauren in the offering contemplated by Registration Statement
333-24733), (ii) registrations on such form or similar form(s) solely for
registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger or consolidation, or (iii) a Demand
Registration under Section 2.1) on a registration statement on Form S-1, Form
S-2 or Form S-3 (or an equivalent general registration form then in effect),
whether or not for its own account, the Company shall give prompt written notice
of its intention to do so to each of the Holders of
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record of Registrable Securities. Upon the written request of any Holder, made
within 15 days following the receipt of any such written notice (which request
shall specify the maximum number of Registrable Securities intended to be
disposed of by such Holder and the intended method of distribution thereof), the
Company shall, subject to Sections 2.2(b), 2.3 and 2.6 hereof, use its best
efforts to cause all such Registrable Securities, the Holders of which have so
requested the registration thereof, to be registered under the Securities Act
(with the securities which the Company at the time proposes to register) to
permit the sale or other disposition by the Holders (in accordance with the
intended method of distribution thereof) of the Registrable Securities to be so
registered. No registration effected under this Section 2.2(a) shall relieve the
Company of its obligations to effect registrations upon request under Section
2.1.
(b) If, at any time after giving written notice of its
intention to register any equity securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay registration
of such equity securities, the Company may, at its election, give written notice
of such determination to all Holders of record of Registrable Securities and (i)
in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
abandoned registration, and (ii) in case of a determination to delay such
registration of its equity securities, shall be permitted to delay the
registration of such Registrable Securities for the same period as the delay in
registering such other equity securities, in each case, without prejudice,
however, to the rights of Holders under Section 2.1.
(c) Any Holder shall have the right to withdraw its request
for inclusion of its Registrable Securities in any registration statement
pursuant to this Section 2.2 by giving written notice to the Company of its
request to withdraw; provided, however, that (i) such request must be made in
writing prior to the earlier of the execution of the underwriting agreement or
the execution of the custody agreement with respect to such registration and
(ii) such withdrawal shall be irrevocable and, after making such withdrawal, a
Holder shall no
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longer have any right to include Registrable Securities in the registration as
to which such withdrawal was made.
2.3. Allocation of Securities Included in Registration
Statement.
(a) If any requested registration pursuant to Section 2.1
involves an underwritten offering and a co-manager of such offering, which shall
be a prominent investment banking firm which is unaffiliated with the Holders
(the "Co-Manager"), shall advise the Company that, in its view, the number of
securities requested to be included in such registration (including those
securities requested by the Company to be included in such registration) exceeds
the largest number (the "Section 2.1 Sale Number") that can be sold in an
orderly manner in such offering within a price range acceptable to the Holders
of Registrable Securities proposed to be registered, the Company shall include
in such registration:
(i) all Registrable Securities requested to be included in
such registration by Holders of Registrable Securities, provided, however, that
if the number of such Registrable Securities exceeds the Section 2.1 Sale
Number, the number of such Registrable Securities (not to exceed the Section 2.1
Sale Number) to be included in such registration shall be allocated: (x) first
to the GS Parties up to that number (not to exceed the number of shares
requested to be included by the GS Parties in such requested registration) of
Registrable Securities (the "GS Securities") which, based upon the midpoint of
the filing range for the registration (in the case of an IPO) or the then market
price of the Common Stock (in all other cases) and the estimated underwriting
discount for the registration, is expected to yield an amount of net proceeds to
the GS Parties (the "Priority Amount") that, when added to the net proceeds of
any Registrable Securities sold for the account of the GS Parties in any
preceding registration (if any) pursuant to this clause (x) or clause (x) of
Section 2.3(b)(ii) will aggregate an amount equal to $20,000,000, and (y)
thereafter on a pro rata basis among all Holders requesting that Registrable
Securities be included in such registration, based on the number of Registrable
Securities then owned by each Holder requesting inclusion in relation to the
number of Registrable Securities owned by all Holders requesting inclusion,
provided,
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however, that such ratio will be calculated after giving effect to the sale of
the GS Securities to the extent that the GS Parties have a first priority right
in such offering; and
(ii) to the extent that the number of Registrable Securities
to be included by all Holders is less than the Section 2.1 Sale Number,
securities that the Company proposes to register.
If, as a result of the proration provisions of this Section 2.3(a), any
Holder shall not be entitled to include all Registrable Securities in a
registration that such Holder has requested to be included, such Holder may
elect to withdraw his request to include Registrable Securities in such
registration or may reduce the number requested to be included; provided,
however, that (x) such request must be made in writing prior to the earlier of
the execution of the underwriting agreement or the execution of the custody
agreement with respect to such registration and (y) such withdrawal shall be
irrevocable and, after making such withdrawal, a Holder shall no longer have any
right to include Registrable Securities in the registration as to which such
withdrawal was made.
(b) If any registration pursuant to Section 2.2 involves an
underwritten offering and the Co-Manager shall advise the Company that, in its
view, the number of securities requested to be included in such registration
exceeds the number (the "Section 2.2 Sale Number") that can be sold in an
orderly manner in such registration within a price range acceptable to the
Company, the Company shall include in such registration:
(i) all Common Stock or securities convertible into, or
exchangeable or exercisable for, Common Stock that the Company proposes to
register for its own account (the "Company Securities"), and
(ii) (x) to the extent that the number of Company
Securities is less than the Section 2.2 Sale Number, if the GS Parties have not
previously registered Registrable Securities yielding the Priority Amount, the
Registrable Securities that the GS Parties propose to register up to that number
(the "Priority Number") of Registrable Securities (such Priority Number,
together with the Company Securities, not to exceed the Section 2.2
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Sale Number) which is expected to yield an amount of net proceeds to the GS
Parties equal to the Priority Amount (calculated in the same manner as set forth
in Section 2.3(a)(i)) and (y) to the extent the number of Company Securities
plus the Priority Number (if any) is less than the Section 2.2 Sale Number, all
Registrable Securities requested to be included by all Holders; provided,
however, that, if the number of such Registrable Securities exceeds the Section
2.2 Sale Number less the number of Company Securities and the Priority Number
(if any), then the number of such Registrable Securities included in such
registration shall be allocated on a pro rata basis, based on the number of
Registrable Securities owned by each Holder requesting inclusion in relation to
the number of Registrable Securities owned by all Holders requesting inclusion.
2.4. Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to use its best efforts to effect or cause
the registration of any Registrable Securities under the Securities Act as
provided in this Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the Commission a registration
statement on an appropriate registration form of the Commission for the
disposition of such Registrable Securities in accordance with the intended
method of disposition thereof, which form (i) shall be selected by the Company
and (ii) shall, in the case of a shelf registration, be available for the sale
of the Registrable Securities by the selling Holders thereof and such
registration statement shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the Commission to be filed therewith, and the Company shall use its
best efforts to cause such registration statement to become and remain effective
(provided, however, that before filing a registration statement or prospectus or
any amendments or supplements thereto, or comparable statements under securities
or blue sky laws of any jurisdiction, the Company will furnish to the counsel of
any Holder participating in the planned offering and the underwriters, if any,
copies of all such documents proposed to be filed (including all exhibits
thereto), which documents will be subject to the reasonable review
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<PAGE> 18
and reasonable comment of such counsel, and the Company shall not file any
registration statement or amendment thereto or any prospectus or supplement
thereto to which the holders of a majority of the Registrable Securities covered
by such registration statement or the underwriters, if any, shall reasonably
object in writing);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the earlier of (a) such time as all of such Registrable Securities and other
securities have been disposed of in accordance with the intended methods of
disposition by the sellers thereof as set forth in such registration statement
and (b) such period (which shall not be required to exceed 150 days in the case
of a registration pursuant to Section 2.1 or 120 days in the case of a
registration pursuant to Section 2.2, unless reasonably requested by any
underwriter pursuant to an underwritten offering) as any seller of Registrable
Securities pursuant to such registration statement shall reasonably request and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Registrable Securities covered by such registration
statement in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement;
(c) as soon as reasonably possible furnish, without charge, to
each seller of such Registrable Securities and each underwriter, if any, of the
securities covered by such registration statement such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits), and the prospectus included in such registration
statement (including each preliminary prospectus) in conformity with the
requirements of the Securities Act, and other documents, as such seller and
underwriter may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities owned by such seller (the
Company hereby consenting to the use in accordance with all applicable law of
each such registration statement (or amendment or post-effective amendment
thereto) and each such prospectus (or preliminary prospectus or
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supplement thereto) by each such seller of Registrable Securities and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such registration statement or prospectus);
(d) use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under such other
securities or "blue sky" laws of such jurisdictions as any sellers of
Registrable Securities or any managing underwriter, if any, shall reasonably
request, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such sellers or underwriter, if any, to
consummate the disposition of the Registrable Securities in such jurisdictions,
except that in no event shall the Company be required to qualify to do business
as a foreign corporation in any jurisdiction where it would not, but for the
requirements of this paragraph (d), be required to be so qualified, to subject
itself to taxation in any such jurisdiction or to consent to general service of
process in any such jurisdiction;
(e) promptly notify each Holder selling Registrable Securities
covered by such registration statement and each managing underwriter, if any:
(i) when the registration statement, any pre-effective amendment, the prospectus
or any prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or state securities authority for
amendments or supplements to the registration statement or the prospectus
related thereto or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the securities or
blue sky laws of any jurisdiction or the initiation of any proceeding for such
purpose; (v) of the existence of any fact of which the Company becomes aware
which results in the registration statement, the prospectus related thereto or
any document incorporated therein by reference
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<PAGE> 20
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make any statement
therein not misleading; and (vi) if at any time the representations and
warranties contemplated by Section 3 below cease to be true and correct in all
material respects; and, if the notification relates to an event described in
clause (v), the Company shall promptly prepare and furnish to each such seller
and each underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein in the light of the
circumstances under which they were made not misleading;
(f) comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders, as soon as
reasonably practicable after the effective date of the registration statement
(and in any event within 16 months thereafter), an earnings statement (which
need not be audited) covering the period of at least twelve consecutive months
beginning with the first day of the Company's first calendar quarter after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(g) (i) cause all such Registrable Securities covered by such
registration statement to be listed on the principal securities exchange on
which similar securities issued by the Company are then listed (if any), if the
listing of such Registrable Securities is then permitted under the rules of such
exchange, or (ii) if no similar securities are then so listed, cause all such
Registrable Securities to be listed on a national securities exchange or,
failing that, secure inclusion of all such Registrable Securities on the NASDAQ
National Market or, failing that, secure NASDAQ authorization for such shares
and, without limiting the generality of the foregoing, take all actions that may
be required by the Company as the issuer of such Registrable Securities in order
to facilitate the managing underwriter's arranging for the
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registration of at least two market makers as such with respect to such shares
with the National Association of Securities Dealers, Inc. (the "NASD");
(h) provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;
(i) enter into such customary agreements (including, if
applicable, an underwriting agreement) and take such other actions as the GS
Parties or the Polo Parties shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities, provided that the
underwriting agreement, if any, shall be reasonably satisfactory in form and
substance to the Company. The Holders of the Registrable Securities which are to
be distributed by such underwriters shall be parties to such underwriting
agreement and may, at their option, require that the Company make to and for the
benefit of such Holders the representations, warranties and covenants of the
Company which are being made to and for the benefit of such underwriters and
which are of the type customarily provided to institutional investors in
secondary offerings;
(j) obtain an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountants in customary
form and covering such matters as are customarily covered by such opinions and
"cold comfort" letters delivered to underwriters in underwritten public
offerings, which opinion and letter shall be reasonably satisfactory to the
underwriter, if any, the GS Parties and the Polo Parties, and furnish to each
Holder participating in the offering and to each underwriter, if any, a copy of
such opinion and letter addressed to such Holder or underwriter;
(k) deliver promptly to each Holder participating in the
offering and each underwriter, if any, copies of all correspondence between the
Commission and the Company, its counsel or auditors and all memoranda relating
to discussions with the Commission or its staff with respect to the registration
statement, other than those portions of any such correspondence and memoranda
which contain information subject to attorney-client
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<PAGE> 22
privilege with respect to the Company, and, upon receipt of such confidentiality
agreements as the Company may reasonably request, make reasonably available for
inspection by any seller of such Registrable Securities covered by such
registration statement, by any underwriter, if any, participating in any
disposition to be effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such seller or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company's
officers, directors and employees to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in connection
with such registration statement;
(l) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement;
(m) provide a CUSIP number for all Registrable Securities, not
later than the effective date of the registration statement;
(n) make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the underwriters (taking into account
the needs of the Company's businesses and the requirements of the marketing
process) in the marketing of Registrable Securities in any underwritten
offering;
(o) promptly prior to the filing of any document which is to
be incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement) provide copies of such
document to counsel to the selling holders of Registrable Securities and to the
managing underwriter, if any, and make the Company's representatives reasonably
available for discussion of such document and make such changes in such document
prior to the filing thereof as counsel for such selling holders or underwriters
may reasonably request;
(p) furnish to each Holder participating in the offering and
the managing underwriter, without charge, at least one signed copy of the
registration statement and any post-effective amendments thereto, including
financial statements and schedules, all
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documents incorporated therein by reference and all exhibits (including those
incorporated by reference);
(q) cooperate with the selling holders of Registrable
Securities and the managing underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause such Registrable
Securities to be issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of Registrable
Securities to the underwriters or, if not an underwritten offering, in
accordance with the instructions of the selling holders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities; and
(r) take all such other commercially reasonable actions as are
necessary or advisable in order to expedite or facilitate the disposition of
such Registrable Securities.
The Company may require as a condition precedent to the Company's
obligations under this Section 2.4 that each seller of Registrable Securities as
to which any registration is being effected furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request provided that such information shall be
used only in connection with such registration.
Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (v) of paragraph (e) of this Section 2.4, such Holder will discontinue
such Holder's disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by paragraph
(e) of this Section 2.4 and, if so directed by the Company, will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession of the prospectus covering such Registrable
Securities that was in effect at the time of receipt of such notice. In the
event the Company shall give any such notice, the applicable
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period mentioned in paragraph (b) of this Section 2.4 shall be extended by the
number of days during such period from and including the date of the giving of
such notice to and including the date when each seller of any Registrable
Securities covered by such registration statement shall have received the copies
of the supplemented or amended prospectus contemplated by paragraph (e) of this
Section 2.4.
If any such registration statement or comparable statement under "blue
sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require (i)
the insertion therein of language, in form and substance satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion of
the reference to such Holder.
2.5. Registration Expenses. The Company shall, whether or not any
registration pursuant to this Agreement becomes effective, pay all expenses
incident to the Company's performance of or compliance with this Article 2,
including (i) Commission, stock exchange or NASD registration and filing fees
and all listing fees and fees with respect to the inclusion of securities in
NASDAQ, (ii) fees and expenses of compliance with state securities or "blue sky"
laws and in connection with the preparation of a "blue sky" survey, including
without limitation, reasonable fees and expenses of blue sky counsel, (iii)
printing expenses, (iv) messenger and delivery expenses, (v) internal expenses
(including, without limitation, all salaries and expenses of the Company's
officers and employees performing legal and accounting duties), (vi) fees and
disbursements of counsel for the Company, (vii) with respect to each
registration, the fees and disbursements of one counsel for the selling Holders
(selected
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by the Holders making the IPO Demand or Demand Registration Request, in the case
of a registration pursuant to Section 2.1, and selected by the Holders of a
majority of the Registrable Securities included in such registration, in the
case of a registration pursuant to Section 2.2 as well as of one local counsel
(as applicable), (viii) fees and disbursements of all independent public
accountants (including the expenses of any audit and/or "cold comfort" letter)
and fees and expenses of other persons, including special experts, retained by
the Company, (ix) fees and expenses payable to a Qualified Independent
Underwriter and (x) any other fees and disbursements of underwriters, if any,
customarily paid by issuers or sellers of securities. Notwithstanding the
foregoing, (x) the provisions of this Section 2.5 shall be deemed amended to the
extent necessary to cause these expense provisions to comply with "blue sky"
laws of each state in which the offering is made and (y) in connection with any
registration hereunder, each Holder of Registrable Securities being registered
shall pay all underwriting discounts and commissions and any capital gains,
income or transfer taxes, if any, attributable to such Holder's Registrable
Securities.
2.6. Certain Limitations on Registration Rights. In the case of any
registration under Section 2.1 pursuant to an underwritten offering, or in the
case of a registration under Section 2.2 if the Company has determined to enter
into an underwriting agreement in connection therewith, all Registrable
Securities to be included in such registration shall be subject to an
underwriting agreement and no person may participate in such registration unless
such person agrees to sell such person's securities on the basis provided
therein and completes and/or executes all questionnaires, indemnities, lock-ups,
underwriting agreements and other documents (other than powers of attorney), in
each case in customary form and substance, which must be executed in connection
therewith.
2.7. Limitations on Sale or Distribution of Other Securities.
(a) If requested in writing by the Company or the managing
underwriter, if any, of any registration effected pursuant to Section 2.1 or
2.2, each Holder of Registrable Securities agrees not to effect any public sale
or distribution, including any sale
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pursuant to Rule 144 under the Securities Act, of any Registrable Securities, or
of any other equity security of the Company or of any security convertible into
or exchangeable or exercisable for any equity security of the Company (other
than as part of such underwritten public offering) during the time period
reasonably requested by the managing underwriter, not to exceed 180 days (and
the Company hereby also so agrees (except that the Company may effect any sale
or distribution of any such securities pursuant to a registration on Form S-4
(if reasonably acceptable to the managing underwriter) or Form S-8, or any
successor or similar form which is then in effect) and agrees to use its
reasonable efforts to cause each holder of any equity security or of any
security convertible into or exchangeable or exercisable for any equity security
of the Company purchased from the Company at any time other than in a public
offering so to agree).
(b) The Company hereby agrees that if it shall previously have
received a request for registration pursuant to Section 2.1 or 2.2, and if such
previous registration shall not have been withdrawn or abandoned, the Company
shall not, without the prior written consent of the managing underwriter of such
previous registration, effect any registration of any of its securities under
the Securities Act (other than a registration on Form S-4 or Form S-8 or any
successor or similar form which is then in effect), whether or not for sale for
its own account, until a period 180 days shall have elapsed from the effective
date of such previous registration; and the Company shall so provide in any
registration rights agreements hereafter entered into with respect to any of its
securities.
2.8. No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any Holder to sell any
Registrable Securities pursuant to any effective registration statement.
2.9. Indemnification.
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Article 2, the Company will,
and hereby does, indemnify and hold harmless, to the fullest extent permitted by
law, the seller of any
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Registrable Securities covered by such registration statement, its directors,
officers, fiduciaries, employees and stockholders or general and limited
partners (and the directors, officers, employees and stockholders thereof), each
other individual, partnership, joint venture, corporation, trust, unincorporated
organization or other entity (each, a "Person") who participates as an
underwriter or a Qualified Independent Underwriter, if any, in the offering or
sale of such securities, each officer, director, employee, stockholder or
partner of such underwriter or Qualified Independent Underwriter, and each other
Person, if any, who controls such seller or any such underwriter within the
meaning of the Securities Act, against any and all losses, claims, damages or
liabilities, joint or several, actions or proceedings (whether commenced or
threatened) in respect thereof ("Claims") and expenses (including reasonable
fees of counsel and any amounts paid in any settlement effected with the
Company's consent, which consent shall not be unreasonably withheld or delayed)
to which each such indemnified party may become subject under the Securities Act
or otherwise, insofar as such Claims or expenses arise out of or are based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such securities were
registered under the Securities Act or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary, final or summary
prospectus or any amendment or supplement thereto, together with the documents
incorporated by reference therein, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or (iii) any violation by the Company of any federal,
state or common law rule or regulation applicable to the Company and relating to
action required of or inaction by the Company in connection with any such
registration, and the Company will reimburse any such indemnified party for any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim as such expenses are
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incurred; provided, that the Company shall not be liable to any such indemnified
party in any such case to the extent such Claim or expense arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission of a material fact made in such registration
statement or amendment thereof or supplement thereto or in any such prospectus
or any preliminary, final or summary prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such indemnified party specifically for use therein. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such seller.
(b) Each Holder of Registrable Securities that are included in
the securities as to which any registration under Section 2.1 or 2.2 is being
effected (and, if the Company requires as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 2.1 or 2.2, any underwriter and Qualified Independent Underwriter, if
any) shall, severally and not jointly, indemnify and hold harmless (in the same
manner and to the same extent as set forth in paragraph (a) of this Section 2.9)
to the extent permitted by law the Company, its officers and directors, each
Person controlling the Company within the meaning of the Securities Act and all
other prospective sellers and their directors, officers, general and limited
partners and respective controlling Persons with respect to any untrue statement
or alleged untrue statement of any material fact in, or omission or alleged
omission of any material fact from, such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or its representatives by or on behalf of
such Holder or underwriter or Qualified Independent Underwriter, if any,
specifically stating that it is for use in such registration statement,
preliminary, final or summary prospectus or amendment or supplement or document
incorporated by reference into any of the foregoing; provided, however, that the
aggregate amount which any such Holder shall be required to pay
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pursuant to this Section 2.9(b) and Sections 2.9(c) and (e) shall be limited to
the amount of the net proceeds received by such person upon the sale of the
Registrable Securities pursuant to the registration statement giving rise to
such claim. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such Holder.
(c) Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 2.9 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any state securities and "blue sky" laws.
(d) Any person entitled to indemnification under this
Agreement shall notify promptly the indemnifying party in writing of the
commencement of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 2.9, but the failure of any
indemnified party to provide such notice shall not relieve the indemnifying
party of its obligations under the preceding paragraphs of this Section 2.9,
except to the extent the indemnifying party is materially prejudiced thereby and
shall not relieve the indemnifying party from any liability which it may have to
any indemnified party otherwise than under this Article 2. In case any action or
proceeding is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, unless in the reasonable opinion of outside
counsel to the indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, to assume the
defense thereof jointly with any other indemnifying party similarly notified, to
the extent that it chooses, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party that it so chooses, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of
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investigation; provided, however, that (i) if the indemnifying party fails to
take reasonable steps necessary to defend diligently the action or proceeding
within 20 days after receiving notice from such indemnified party that the
indemnified party believes it has failed to do so; or (ii) if such indemnified
party who is a defendant in any action or proceeding which is also brought
against the indemnifying party reasonably shall have concluded that there may be
one or more legal defenses available to such indemnified party which are not
available to the indemnifying party; or (iii) if representation of both parties
by the same counsel is otherwise inappropriate under applicable standards of
professional conduct, then, in any such case, the indemnified party shall have
the right to assume or continue its own defense as set forth above (but with no
more than one firm of counsel for all indemnified parties in each jurisdiction,
except to the extent any indemnified party or parties reasonably shall have
concluded that there may be legal defenses available to such party or parties
which are not available to the other indemnified parties or to the extent
representation of all indemnified parties by the same counsel is otherwise
inappropriate under applicable standards of professional conduct) and the
indemnifying party shall be liable for any expenses therefor. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is unavailable
or is insufficient to hold harmless an indemnified party under Sections 2.9(a),
(b) or (c), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any Claim in such proportion as
is appropriate to reflect the relative benefits received
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by the indemnifying party on the one hand and the indemnified party on the other
from such offering of securities. If, however, the allocation provided in the
immediately preceding sentence is not permitted by applicable law, or if the
indemnified party failed to give the notice required by subsection (d) above and
the indemnifying party is materially prejudiced thereby, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the indemnifying party, on the one hand, and the
indemnified party, on the other hand, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The parties hereto agree
that it would not be just and equitable if contributions pursuant to this
Section 2.9(e) were to be determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the preceding sentences of this Section 2.9(e). The amount paid
or payable in respect of any Claim shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding anything in this Section 2.9(e) to
the contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 2.9(e) to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims, damages or liabilities
of the indemnified parties relate, less the amount of any indemnification
payment made pursuant to Sections 2.9(b) and (c).
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(f) The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party and shall survive the transfer
of the Registrable Securities by any such party.
(g) The indemnification and contribution required by this
Section 2.9 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
3. Underwritten Offerings.
3.1. Requested Underwritten Offerings. If requested by the underwriters
for any underwritten offering by the Holders pursuant to a registration
requested under Section 2.1, the Company shall enter into a customary
underwriting agreement with the underwriters. Such underwriting agreement shall
be satisfactory in form and substance to the Holders which requested such
registration and shall contain such representations and warranties by, and such
other agreements on the part of, the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities and contribution agreements. Any Holder participating in the
offering shall be a party to such underwriting agreement and may, at its option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Holder and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
such Holder. Such underwriting agreement shall also contain such
representations, warranties and indemnities by the participating Holders as are
customary in agreements of that type.
3.2. Piggyback Underwritten Offerings. In the case of a registration
pursuant to Section 2.2 hereof, if the Company shall have determined to enter
into any underwriting agreements in connection therewith, all of the Holders'
Registrable Securities to be included in
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<PAGE> 33
such registration shall be subject to such underwriting agreements. Any Holder
participating in such registration may, at its option, require that any or all
of the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of such Holder and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such Holder. Such
underwriting agreement shall also contain such representations, warranties and
indemnities by the participating Holders as are customary in agreements of that
type.
4. General.
4.1. Adjustments Affecting Registrable Securities. The Company agrees
that it shall not effect or permit to occur any combination or subdivision of
shares which would adversely affect the ability of the Holder of any Registrable
Securities to include such Registrable Securities in any registration
contemplated by this Agreement or the marketability of such Registrable
Securities in any such registration. The Company agrees that it will take all
reasonable steps necessary to effect a subdivision of shares if in the
reasonable judgment of (a) the Holder of Registrable Securities that makes a
Demand Registration Request and (b) the managing underwriter for the offering in
respect of such Demand Registration Request, such subdivision would enhance the
marketability of the Registrable Securities.
4.2. Rule 144. If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act in respect of the
Common Stock or securities of the Company convertible into or exchangeable or
exercisable for Common Stock, the Company covenants that it will timely file the
reports required to be filed by it under the Securities Act or the Exchange Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 under the Securities
Act), and will take such further action as any Holder of Registrable Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell
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<PAGE> 34
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder
of Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
4.3. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Holders participating in
the offering, their underwriters, if any, and their respective counsel,
accountants and other representatives and agents the opportunity to participate
in the preparation of such registration statement, each prospectus included
therein or filed with the Commission, and, to the extent practicable, each
amendment thereof or supplement thereto, and give each of them reasonable access
to its books and records and properties and such opportunities to discuss the
business of the Company and such other matters with the Company's directors,
officers and employees and the independent public accountants who have certified
its financial statements, and the Company will supply, or cause its directors,
officers, employees and independent accountants to supply, all other information
reasonably requested by each of them, as shall be reasonably necessary or
appropriate, in the opinion of the Holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
4.4. Nominees for Beneficial Owners. If Registrable Securities are held
by a nominee for the beneficial owner thereof, the beneficial owner thereof may,
at its option, be treated as the Holder of such Registrable Securities for
purposes of any request or other action by any Holder or Holders of Registrable
Securities pursuant to this Agreement (or any determination of any number or
percentage of shares constituting Registrable Securities held by any Holder or
Holders of Registrable Securities contemplated by this Agreement); provided that
the Company shall have received assurances reasonably satisfactory to it of such
beneficial ownership.
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<PAGE> 35
4.5. Amendments and Waivers. This Agreement may be amended, modified,
supplemented or waived only upon the written agreement of the party against whom
enforcement of such amendment, modification, supplement or waiver is sought
provided that (a) the written agreement of the holders of a majority of the
Registrable Securities held by the GS Parties shall be considered to be signed
by all of the GS Parties and (b) the written agreement of the holders of a
majority of the Registrable Securities held by the Polo Parties shall be
considered to be signed by the Polo Parties.
4.6. Notices. Except as otherwise provided in this Agreement, notices
and other communications under this Agreement shall be in writing and delivered
personally, by telecopy (with confirmation sent within three business days by
overnight courier) or by overnight courier, addressed to the Company and each of
the Polo Parties at 650 Madison Avenue, New York, New York 10022 (telecopier
212-318-7183) (Attention: General Counsel), with a copy to Paul, Weiss, Rifkind,
Wharton & Garrison at 1285 Avenue of the Americas, New York, NY 10019
(Attention: James M. Dubin) and to the other parties at the "Address for
Notices" specified below its name on Schedule I hereto. Each Holder, by written
notice given to the Company in accordance with this Section 4.6, may change the
address to which such notice or other communications are to be sent to such
Holder. All such notices and communications shall be deemed to have been
received on the date of delivery thereof, if delivered by hand, on the fifth day
after the mailing thereof, if mailed, on the next day after the sending thereof,
if by overnight courier, when answered back if telexed and when receipt is
acknowledged, if telecopied.
4.7. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and the respective
successors and assigns of the parties hereto, whether so expressed or not. No
Person other than a Holder shall be entitled to any benefits under this
Agreement, except as otherwise expressly provided herein. This Agreement and the
rights of the parties hereunder may be assigned by any of the parties hereto to
any
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<PAGE> 36
transferee of Registrable Securities (i) who acquires such securities in
accordance with the provisions of the Stockholders Agreement, and (ii) from and
after an IPO, who is a successor of such party or in the case of the Polo
Parties, a Class B Permitted Transferee; provided that (A) the rights of the
Polo Parties under Section 2.1(a)(i) shall not be assignable without the consent
of the GS Parties and (B) the rights of the GS Parties under Section 2.1(a)(i)
shall not be assignable without the consent of Lauren. Notwithstanding anything
herein to the contrary, upon the death of Lauren or the entry by a court of
competent jurisdiction of an order adjudicating him incompetent, (i) in the
event of Lauren's death, the legal representative of Lauren's estate, or another
representative of Lauren's estate if selected by beneficiaries holding a
majority-in-interest of Lauren's estate's rights in the Company (it being agreed
that, in the case of any trusts that are beneficiaries of Lauren's estate's
rights in the Company, such trusts shall act through the trustees thereof) will
be entitled to exercise the rights under this Agreement that Lauren would have
been entitled to exercise if he had not died, or (ii) in the event that Lauren
is so adjudicated an incompetent, the legal representative of Lauren will be
entitled to exercise the rights under this Agreement that Lauren would have been
entitled to exercise if he had not been so adjudicated an incompetent.
(b) This Agreement (with the documents referred to herein or
delivered pursuant hereto) embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof (including the terms of the
Original Registration Rights Agreement). The Original Registration Rights
Agreement is hereby terminated.
(c) This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York without giving
effect to the conflicts of law principles thereof.
(d) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. All
section references are to this Agreement unless otherwise expressly provided.
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(e) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
(f) Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
(g) It is hereby agreed and acknowledged that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with any of the obligations herein imposed on them and that in
the event of any such failure, an aggrieved person will be irreparably damaged
and will not have an adequate remedy at law. Any such person shall, therefore,
be entitled to injunctive relief, including specific performance, to enforce
such obligations, without the posting of any bond and if any action should be
brought in equity to enforce any of the provisions of this Agreement, none of
the parties hereto shall raise the defense that there is an adequate remedy at
law.
(h) Each party hereto shall do and perform or cause to be done
and performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
4.8. No Inconsistent Agreements. Without the prior written consent of
(i) Lauren and (ii) GSCP, neither the Company nor any Holder will, on or after
the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted in this Agreement or
otherwise conflicts with the provisions hereof, other than any lock-up agreement
with the underwriters in connection with any registered offering effected
hereunder, pursuant to which the Company shall agree not to register for sale,
and the Company shall agree not to sell or otherwise dispose of, Common Stock or
any securities convertible into
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<PAGE> 38
or exercisable or exchangeable for Common Stock, for a specified period
following the registered offering. The Company shall not grant any other Person
registration rights without the written consent of the Holders holding at least
a majority of the Registrable Securities held by all of the Holders. If the
Company shall at any time hereafter provide to any holder of any securities of
the Company rights with respect to the registration of such securities and such
rights are provided on terms or conditions more favorable to such holder than
the terms or conditions applicable to the Holders herein, the Company shall
provide (by way of amendment to this Agreement or otherwise) such more favorable
terms or conditions to the Holders under this Agreement.
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<PAGE> 39
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
GS CAPITAL PARTNERS, L.P.
By: GS Advisors L.P., its general partner
By: GS Advisors, Inc., its general partner
By: __________________________________________
GS CAPITAL PARTNERS PRL HOLDING I, L.P.
By: GS Capital Partners, L.P., its general partner
By: GS Advisors, L.P., its general partner
By: GS Advisors, Inc., its general partner
By: __________________________________________
Name:
Title:
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<PAGE> 40
GS CAPITAL PARTNERS PRL HOLDING II, L.P.
By: GS Capital Partners, L.P., its general partner
By: GS Advisors, L.P., its general partner
By: GS Advisors, Inc., its general partner
By: __________________________________________
Name:
Title:
STONE STREET FUND 1994, L.P.
By: Stone Street Funding Corp., its general partner
By: ________________________
Name:
Title:
STONE STREET 1994 SUBSIDIARY CORP.
By: __________________________________________
Name:
Title:
BRIDGE STREET FUND 1994, L.P.
By: Stone Street Funding Corp., its general partner
By: ________________________
Name:
Title:
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<PAGE> 41
POLO RALPH LAUREN CORPORATION
By: _____________________________________________
Name:
Title:
RALPH LAUREN
RL HOLDING, L.P.
By: ____________________________________
Name:
Title:
RL FAMILY, L.P.
By: ____________________________________
Name:
Title:
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<PAGE> 42
SCHEDULE I
Addresses for Notices
GS Capital Partners, L.P.
GS Capital Partners PRL Holding I, Inc.
GS Capital Partners PRL Holding II, Inc.
Stone Street Fund 1994, L.P.
Stone Street 1994 Subsidiary Corp.
Bridge Street Fund 1994, L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Attention: David J. Greenwald
Telephone: (212) 902-1000
Telecopy: (212) 902-3000
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004-1980
Attention: ______________
Telephone: (212) 859-8000
Telecopy: (212) 859-4000
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<PAGE> 1
Exhibit 10.16
DEFERRED COMPENSATION AGREEMENT
AGREEMENT made as of the lst day of April, 1996, by and between Polo
Ralph Lauren, L.P., a limited partnership organized under the laws of the State
of Delaware (the "Company"), and Donna A. Barbieri (the "Executive").
The Company recognizes that the Executive's contribution to the
growth and success of the Company has been substantial. The Company desires to
assure itself of the continued employment of the Executive by providing an
incentive for her to continue her employment with the Company.
In order to effect the foregoing, the Company and the Executive wish
to enter into a Deferred Compensation Agreement on the terms and conditions set
forth below.
Accordingly, in consideration of the premises and covenants
hereinafter contained, the parties hereto agree as follows:
Section 1. Deferred Compensation Account; Contributions to Trust.
(a) The Company shall credit to a book reserve (the "Deferred
Compensation Account") established for this purpose, commencing as of April,
1996, and for each month thereafter through and including March, 2006, an amount
equal to 20% of the Executive's base salary for such month; provided that the
Executive is employed with the Company on the last business day of such month.
The Deferred Compensation Account shall be debited or credited with amounts
<PAGE> 2
representing all losses or earnings debited or credited to an account (the
"Account") established in respect of the Executive under the Trust (as
hereinafter defined).
(b) Any amounts represented by credits made to the Deferred
Compensation Account in accordance with the first sentence of paragraph (a)
above shall be contributed by the Company on the last business day of each month
to the trust (the "Trust") established under the Trust Agreement annexed as
Exhibit A hereto (such agreement as amended or supplemented and any successor
agreement hereinafter referred to as the "Trust Agreement"). Amounts contributed
to the Trust and credited to the Executive's Account thereunder shall be
invested and reinvested, at the direction of the Executive, in accordance with
the provisions of the Trust Agreement.
(c) The Executive agrees on behalf of herself and her
designated beneficiary to assume all risk in connection with any debits or
credits made to her Account under the Trust by reason of losses or earnings on
investments made in accordance with the provisions of the Trust Agreement.
Section 2. Benefit Payments.
(a) On the earlier of (i) April 1, 2006 and (ii) the earliest
date reasonably practicable following the Executive's termination of employment
with the Company for any reason, the Company shall pay (or cause to be paid from
the Trust) to the Executive or to the Executive's beneficiary or estate (in the
event of her death) in cash a lump sum amount equal to the vested amount
(determined pursuant to
2
<PAGE> 3
Section 3 hereof) reflected in the Deferred Compensation Account as of the date
of such termination.
(b) The beneficiary referred to in paragraph (a) above may be
designated or changed by the Executive (without the consent of any prior
beneficiary) on a form provided by the Company and delivered to the Company
before her death. If no such beneficiary shall have been designated, or if no
designated beneficiary shall survive the Executive, the lump sum payment payable
under paragraph (a) above shall be payable to the Executive's estate.
Section 3. Vesting.
(a) Except as provided in paragraph (b) below, the Executive's
interest in the Deferred Compensation Account shall vest at the rate of 20% per
year, commencing on the first anniversary of April 1, 1996, and on each of the
following four anniversaries thereof, thereby becoming 100% vested on April 1,
2001, but only if the Executive is actively employed by the Company and has
remained continuously so employed from the date hereof to and including the
applicable anniversary date. The Executive shall not be deemed to be actively
employed for a period during which the Executive remains on the payroll for the
purpose of collecting salary pursuant to a severance or similar termination
arrangement.
(b) In the event that (i) the Executive dies, (ii) the
Executive's employment is terminated by reason of Disability (as hereinafter
defined), (iii) the Executive's employment is terminated by the Company for
other than Cause
3
<PAGE> 4
(as hereinafter defined) or (iv) the Executive terminates employment for Good
Reason (as hereinafter defined), then the Executive's Deferred Compensation
Account shall be 100% vested.
For purposes of this Agreement:
Termination of employment by reason of "Disability" shall mean, if,
as a result of the Executive's incapacity due to physical or mental illness, the
Executive shall have been absent from her duties hereunder on a full-time basis
for the entire period of six consecutive months.
"Cause" shall mean (i) the willful and continued failure by the
Executive to substantially perform her duties hereunder after demand for
substantial performance is delivered by the Company that specifically identifies
the manner in which the Company believes the Executive has not substantially
performed her duties, or (ii) the Executive's conviction of any crime (whether
or not involving the Company) constituting a felony or (iii) the willful
engaging by the Executive in misconduct that is materially injurious to the
Company, monetarily or otherwise (including, but not limited to, conduct that
constitutes competitive activity) or that subjects, or if generally known, would
subject the Company to public ridicule or embarrassment. For purposes of this
paragraph, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by her not in good
faith and without reasonable belief that her action or omission was in the best
interest of the Company. Notwithstanding the foregoing, the Executive shall not
be deemed to have been terminated for Cause without (x) reasonable written
notice to the Executive setting forth the reasons for the Company's intention to
4
<PAGE> 5
terminate for Cause, (y) an opportunity for the Executive, together with her
counsel, to be heard before the Board (as hereinafter defined) and (z) delivery
to the Executive of a notice of termination from the Board finding that in the
good faith opinion of the Board the Executive was guilty of the conduct set
forth above in clauses (i) - (iii) hereof, and specifying the particulars
thereof in detail.
"Good Reason" shall mean (i) the assignment to the Executive of a
title or duties inconsistent with those of a senior executive of the Company or
(ii) a reduction by the Board of the Executive's salary. "Board" shall mean the
board of directors of the Company's general partner or such other managing board
or committee as is vested with authority to hire and/or discharge executive
officers of the Company.
Section 4. Unfunded Arrangement.
It is the intention of the parties hereto that the arrangement
described in this Agreement be unfunded for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974, as amended.
Nothing contained in this Agreement or the Trust Agreement and no action taken
pursuant to the provisions of this Agreement or the Trust Agreement shall create
or be construed to create a fiduciary relationship between the Company and the
Executive, her designated beneficiary or any other person. Any funds that may be
invested under the provisions of the Trust Agreement shall continue for all
purposes to be a part of the general funds of the Company and no person other
than the Company shall by virtue of the provisions of this Agreement have any
interest in such funds. To the extent
5
<PAGE> 6
that any person acquires a right to receive payments from the Company under this
Agreement, such right shall be no greater than the right of any unsecured
general creditor of the Company. This Agreement constitutes a mere promise by
the Company to make a benefit payment in the future.
Section 5. Nonalienation of Benefits.
The right of the Executive or any other person to the payment of
deferred compensation or other benefits under this Agreement shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment by creditors of the Executive or
the Executive's beneficiary or estate.
Section 6. No Right to Employment.
Nothing contained herein shall be construed as conferring upon the
Executive the right to continue in the employ of the Company as an executive or
in any other capacity.
Section 7. Effect on Other Benefits.
Any deferred compensation payable under this Agreement shall not be
deemed salary or other compensation to the Executive for the purpose of
computing benefits to which she may be entitled under any pension plan or other
arrangement of the Company for the benefit of its employees.
6
<PAGE> 7
Section 8. Binding Agreement.
This Agreement shall be binding upon and inure to the benefit of the
Company, its successors and assigns and the Executive and her heirs, executors,
administrators and legal representatives.
Section 9. Governing Law.
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York without regard to its conflict of laws
principles.
Section 10. Validity.
The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
Section 11. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
Section 12. Arbitration.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in the City of New York in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
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<PAGE> 8
Fees and expenses payable to the American Arbitration Association and the
arbitrator shall be shared equally by the Company and by the Executive, but the
parties shall otherwise bear their own costs in connection with the arbitration;
provided that the arbitrator shall be entitled to include as part of the award
to the prevailing party the reasonable legal fees and expenses incurred by such
party in an amount not to exceed $25,000.
Section 13. Amendment.
The Agreement may be amended in whole or in part by a written
instrument executed by both parties hereto.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officers and the Executive has hereunto set her
hand and seal as of the date first above written.
POLO RALPH LAUREN, L.P.
By: /s/ Michael J. Newman
----------------------------------
Michael J. Newman, Vice Chairman
EXECUTIVE:
/s/ Donna A. Barbieri
----------------------------------
Donna A. Barbieri
8
<PAGE> 9
EXHIBIT A
TRUST UNDER
POLO RALPH LAUREN CORPORATION
DEFERRED COMPENSATION AGREEMENTS
(a) This Trust Agreement made this _____ day of ___________, 1993,
by and between Polo Ralph Lauren Corporation (the "Company") and
______________________ (the "Trustee");
(b) WHEREAS, the Company has entered into deferred compensation
agreements (the "Deferred Compensation Agreements") effective as of April 4,
1993, with certain executives of the Company listed on Appendix 1 hereto (the
"Executives") and may enter into similar agreements with other executives in the
future;
(c) WHEREAS, the Company may incur liability under the terms of
such Deferred Compensation Agreements with respect to the Executives;
(d) WHEREAS, the Deferred Compensation Agreements contemplate the
establishment of this trust (hereinafter called the "Trust") and the
contribution by the Company to the Trust of amounts that shall be held therein,
in order to assist the Company in meeting its obligations under the Deferred
Compensation Agreements;
(e) WHEREAS, the assets of this Trust shall be subject to the
claims of the Company's creditors in the event of the Company's Insolvency, as
<PAGE> 10
herein defined, until paid to the Executives and their respective beneficiaries
in such manner and at such times as specified in the Deferred Compensation
Agreements;
(f) WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect the status of the
Deferred Compensation Agreements as unfunded plans maintained for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees for purposes of Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") ;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
Section 14. Establishment of Trust.
(a) The Company hereby deposits with the Trustee in trust the sum of
[$__________], which shall become the principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable, but is
subject to termination in accordance with Section 12 hereof.
(c) The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, an amended, and
shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon, shall be
held separate and apart from other funds of the Company and shall be used
exclusively for the purposes herein set forth. The Executives and their
beneficiaries
2
<PAGE> 11
shall have no preferred claim on, or any beneficial ownership interest in, any
assets of the Trust. Any rights created under the Deferred Compensation
Agreements and this Trust Agreement shall be mere unsecured contractual rights
of the Executives and their beneficiaries against the Company. Any assets held
by the Trust will be subject to the claims of the Company's general creditors
under federal and state law in the event that the Company is considered
Insolvent, as defined in Section 3(a) herein.
(e) On the last business day of each month, or otherwise as required
pursuant to the Deferred Compensation Agreements, the Company shall contribute
in cash to the Trustee hereunder an amount equal to the contributions required
to be made pursuant to the terms of the Deferred Compensation Agreements. The
Trustee shall not have any right to compel such contributions.
Section 15. Payments to Executives and their Beneficiaries.
(a) The Company shall deliver to the Trustee a schedule (the
"Payment Schedule") that indicates the name of each Executive for whom
contributions are being made, the amounts contributed in respect of each
Executive, a formula or other instructions acceptable to the Trustee for
determining the amounts payable in respect of each Executive, and the time of
commencement and conditions for payment of such amounts (as provided for under
the Deferred Compensation Agreements). Except as otherwise provided herein, the
Trustee shall make payments to the Executives and their beneficiaries in
accordance with such Payment Schedule. The Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Deferred Compensation Agreements and shall
3
<PAGE> 12
pay amounts withheld to the appropriate taxing authorities or determine that
such amounts have been reported, withheld and paid by the Company.
(b) The entitlement of the Executives or their beneficiaries to
benefits shall be determined in accordance with the provisions of the Deferred
Compensation Agreements.
(c) The Company may make payment of benefits directly to the
Executives or their beneficiaries as they become due under the terms of the
Deferred Compensation Agreements. The Company shall notify the Trustee of its
decision to make payment of benefits directly prior to the time amounts payable
to the Executives or their beneficiaries are due. In the event that the Company
pays the entire amount due to an Executive (or his beneficiary) pursuant to the
terms of the Executive's Deferred Compensation Agreement, then the Trustee, upon
receipt of certification from the Company that such payment has been made, shall
return to the Company all Trust assets that have been credited to such
Executive's Account (as defined in Section 5(a) hereof).
Section 16. Trustee Responsibility Regarding Payments to Trust
Beneficiary When the Company Is Insolvent.
(a) The Trustee shall cease payment of benefits to the Executives
and their beneficiaries if the Company is Insolvent. The Company shall be
considered "Insolvent" for purpose of this Trust Agreement if (i) the Company is
unable to pay its debts as they become due, or (ii) the Company is subject to a
pending procedure as a debtor under the United States Bankruptcy Code.
4
<PAGE> 13
(b) At all times during the continuance of this Trust, as provided
in Section 1(d) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of the Company under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of the
Company's becoming Insolvent. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is Insolvent
and, pending such determination, the Trustee shall discontinue payment of
benefits to the Executives or their beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
becoming Insolvent, or has received notice from the Company or a person
claiming to be a creditor alleging that the Company is Insolvent, the
Trustee shall have no duty to inquire whether the Company is Insolvent.
The Trustee may in all events rely on such evidence concerning the
Company's solvency as may be furnished to the Trustee and that provides
the Trustee with a reasonable basis for making a determination concerning
the Company's solvency.
(3) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall discontinue payments to the Executives or
their beneficiaries and shall hold the assets of the Trust for the benefit
of the Company's general creditors. Nothing in this Trust Agreement shall
in any way diminish any rights of the Executives or their beneficiaries to
5
<PAGE> 14
pursue their rights as general creditors of the Company with respect to
benefits due under the Deferred Compensation Agreements or otherwise.
(4) The Trustee shall resume the payment of benefits to the
Executives or their beneficiaries in accordance with Section 2 of this
Trust Agreement only after the Trustee has determined that the Company is
not Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to the
Executives or their beneficiaries under the terms of the Deferred Compensation
Agreements for the period of such discontinuance, less the aggregate amount of
any payments made to the Executives or their beneficiaries by the Company in
lieu of the payments provided for hereunder during any such period of
discontinuance.
Section 17. Payments to Company.
Except as provided in Sections 2(c) and 3 hereof, the Company shall
have no right or power to direct the Trustee to return to the Company or to
divert to others any of the Trust assets before all payments of benefits have
been made to the Executives and their beneficiaries pursuant to the terms of the
Deferred Compensation Agreements.
Section 18. Accounts and Investment Authority.
(a) Contributions to the Trust on behalf of each Executive and any
interest and earnings thereon shall be separately credited to an account (the
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<PAGE> 15
"Account") established and held by the Trustee for each such Executive. Each
Executive shall timely instruct the Trustee, in writing, as to the manner in
which the assets held in his Account shall be invested. Assets may be invested
in any one or more of the mutual funds managed by the Vanguard Group of
Investment Companies, subject to their rules. In the event that an Executive
fails to timely instruct the Trustee, then the Trustee shall use its good faith
efforts to invest and reinvest the assets credited to such Executive's Account
in any such mutual fund or in cash or marketable securities or other investments
as it deems prudent under the circumstances. Without limitation of and in
addition to the foregoing, the term "investments" as used in this Section shall
include stocks of all kinds and classes (other than stocks of the Company or any
affiliate), bonds, notes, debentures, savings bank accounts and other interest
bearing deposits, mortgages and other obligations, insurance contracts and
annuities, common trust funds, shares or participations in any investment
company, fund or trust, and all other property, tangible and intangible, real,
personal and mixed of every kind and nature.
(b) In no event may the Trustee invest in securities (including
stock or rights to acquire stock) or obligations issued by the Company or
affiliates, other than a de minimis amount held in common investment vehicles in
which the Trustee invests.
Section 19. Disposition of Income.
(a) During the term of this Trust, all income received by the Trust,
net of expenses, shall be accumulated and reinvested.
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<PAGE> 16
Section 20. Accounting by Trustee.
The Trustee shall separately keep accurate and detailed records of
all investments, receipts, disbursements, and all other transactions required to
be made, with respect to the Account of each Executive, including such specific
records as shall be agreed upon in writing between the Company and the Trustee.
Within 60 days following the close of each calendar quarter and within 120 days
after the removal or resignation of the Trustee, the Trustee shall deliver to
the Company a written account of its administration of the Trust during such
quarter or during the period from the close of the last preceding quarter to the
date of such removal or resignation, setting forth separately with respect to
each Account, all investments, receipts, disbursements and other transactions
effected by it for each Executive, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust for each
Executive at the end of such quarter or as of the date of such removal or
resignation, as the case may be.
Section 21. Responsibility of Trustee.
(a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Company or any of the Executives
that is contemplated by, and in
8
<PAGE> 17
conformity with, the terms of the Deferred Compensation Agreements or this
Trust. In the event of a dispute between the Company and a party, the Trustee
may apply to a court of competent jurisdiction to resolve the dispute.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If the Company does not pay such costs, expenses and liabilities
in a reasonably timely manner, the Trustee may obtain payment from the Trust.
(c) The Trustee may consult with legal counsel (who may also be
counsel for the Company generally) with respect to any of its duties or
obligations hereunder.
(d) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred
on the Trustee by applicable law, unless expressly provided otherwise herein.
(f) Notwithstanding any power granted to the Trustee pursuant to
this Trust Agreement or to applicable law, the Trustee shall not have any power
that could give this Trust the objective of carrying on a business and dividing
the gains therefrom, within the meaning of section 301.7701-2 of the Procedure
and Administrative Regulations promulgated pursuant to the Internal Revenue Code
of 1986, as amended.
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<PAGE> 18
Section 22. Compensation and Expenses of Trustee.
The Company shall pay all administrative and Trustee's fees and
expenses.
Section 23. Resignation and Removal of Trustee.
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective 30 days after receipt of such notice unless
the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on 30 days' notice or
upon shorter notice accepted by Trustee.
(c) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within 30 days after receipt of notice
of resignation, removal or transfer, unless the Company extends the time limit.
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraphs (a) or (b) of this section. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.
Section 24. Appointment of Successor.
(a) If the Trustee resigns or is removed in accordance with Section
10(a) or (b) hereof, the Company may appoint any third party, such as a bank
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<PAGE> 19
trust department or other party that may be granted corporate trustee powers
under state law, as a successor to replace the Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by the new
Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall execute
any instrument necessary or reasonably requested by the Company or the successor
Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust assets, subject to
Sections 7 and 8 hereof. The successor Trustee shall not be responsible for and
the Company shall indemnify and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes successor
Trustee.
Section 25. Amendment or Termination.
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company; provided, however, that no amendment
that alters or impairs the rights of any Executive hereunder (including, but not
limited to an amendment that changes or eliminates any of the available
investment options described in Section 5 hereof) may be made without the prior
written consent of the affected Executive.
(b) The Trust shall not terminate until the date on which the
Executives and their beneficiaries are no longer entitled to benefits pursuant
to the
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<PAGE> 20
terms of the Deferred Compensation Agreements. Upon termination of the Trust any
assets remaining in the Trust shall be returned to Company.
(c) Upon written approval of the Executives or their beneficiaries
entitled to payment of benefits pursuant to the terms of the Deferred
Compensation Agreements, the Company may terminate this Trust prior to the time
all benefit payments under the Deferred Compensation Agreements have been made.
All assets in the Trust at termination shall be returned to the Company.
Section 26. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to the Executives and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be construed in accordance with and
governed by the laws of New York without regard to its conflict of laws
principles.
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<PAGE> 21
Section 27. Effective Date.
The effective date of this Trust Agreement shall be as of ________
__, 199_.
IN WITNESS WHEREOF, the parties hereto have executed the Trust as of
the date first above written.
POLO RALPH LAUREN CORPORATION
By:__________________________________
[ ], Trustee
By:__________________________________
13
<PAGE> 22
APPENDIX 1
List of Executives
<PAGE> 1
EXHIBIT 10.22
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of April 6, 1997, among Polo Ralph
Lauren Corporation, a Delaware corporation (the "Company"), GS Capital Partners,
L.P., a Delaware limited partnership ("GSCP"), GS Capital Partners PRL Holding
I, L.P., a Delaware limited partnership ("Holding I"), GS Capital Partners PRL
Holding II, L.P., a Delaware limited partnership ("Holding II"), Stone Street
Fund 1994, L.P., a Delaware limited partnership ("Stone Street"), Stone Street
1994 Subsidiary Corp., a Delaware corporation ("Stone Street Sub"), Bridge
Street Fund 1994, L.P., a Delaware limited partnership ("Bridge Street"), and
Mr. Ralph Lauren ("Lauren"), RL Holding, L.P., a Delaware limited partnership
("RL Holding"), and RL Family, L.P., a Delaware limited partnership ("RL
Family"). GSCP, Holding I, Holding II, Stone Street, Stone Street Sub, Bridge
Street, other Investors that are Affiliates of GSCP and their permitted
assignees are sometimes collectively referred to herein as the "GS Parties," and
Lauren, RL Holding and RL Family and their permitted assignees are sometimes
collectively referred to herein as the "Polo Parties." The parties hereto (other
than the Company) are sometimes collectively referred to herein as the
"Investors."
WHEREAS, (i) pursuant to the Subscription Agreement, dated as of April
6, 1997, by and among the Company, the GS Parties and the Polo Parties (the
"Subscription Agreement"), the GS Parties and the Polo Parties subscribed for
certain promissory notes of the Company and shares of Class B Common Stock or
Class C Common Stock of the Company (as such terms are hereinafter defined) as
set forth on Schedule 1 to that agreement and (ii) as consideration for the
promissory notes and the shares of the Company's common stock purchased pursuant
to the Subscription Agreement, each of the GS Parties and the Polo Parties
assigned to the Company all of their interests in Polo Ralph Lauren Enterprises,
L.P. (the "Design Studio Partnership"), Polo Ralph Lauren, L.P. (the "Polo
Partnership"), The Ralph Lauren Womenswear Company, L.P. (the "Womenswear
Partnership", together with the Design Studio Partnership and the Polo
<PAGE> 2
Partnership, the "RL Partnerships"), The Ralph Lauren Womenswear Company, Inc.
and RL Fragrances, LLC., pursuant to the Assignment and Assumption Agreement
(the "Assignment and Assumption Agreement"), dated April 2, 1997, by and among
the Company, the GS Parties and the Polo Parties.
WHEREAS, Section 12 of the Assignment and Assumption Agreement requires
the parties to enter into, and the parties hereto deem it to be in their best
interests to enter into, an agreement establishing and setting forth their
agreement with respect to certain rights and obligations associated with
ownership of shares of capital stock of the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein set forth, the
parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the meanings
ascribed to them below:
"Advisors" means, any member of the Advisory Board of any RL
Partnership.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) with respect to any
natural Person, any person having a relationship with such Person by blood,
marriage or adoption of grandparent, parent, child, grandchild, aunt, uncle,
niece, nephew, sister, brother or first cousin. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" having meanings
correlative to the foregoing.
"Agreement" means this stockholders agreement, as it may be amended
from time to time in accordance with the terms hereof.
"Amended RL Note" shall have the meaning set forth in the Formation
Agreement.
"Board of Directors" means the board of directors of the Company.
<PAGE> 3
"Business" means the marketing, licensing, manufacturing, designing,
sourcing, developing and selling of products directly and indirectly through
licensees, Subsidiaries, partnerships and joint ventures and any other
activities approved by the Board of Directors in accordance with the terms of
this Agreement.
"Class A Common Stock" means Class A Common Stock, par value $ .01 per
share, of the Company.
"Class B Common Stock" means Class B Common Stock, par value $ .01 per
share, of the Company.
"Class C Common Stock" means Class C Common Stock, par value $ .01 per
share, of the Company.
"Common Stock" means common stock of the Company (including, without
limitation, Class A Common Stock, Class B Common Stock and Class C Common
Stock), and any and all securities of any kind whatsoever of the Company which
may be issued after the date hereof in respect of, or in exchange for, shares of
common stock of the Company pursuant to a merger, consolidation, stock split,
stock dividend, recapitalization of the Company or otherwise.
"Debt" means with respect to any Person, at any date, (i) all
obligations of such Person for borrowed money, including, without limitation,
all obligations, contingent or otherwise, of such Person in connection with any
letters of credit issued under letter of credit facilities, acceptance
facilities or other similar facilities, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under leases which are
capitalized in accordance with generally accepted accounting principles, (v) all
Debt of others secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, (vi) all interest rate protection
agreements (including, without limitation, interest rate swaps, caps, floors,
collars and similar agreements) and/or other types of interest rate hedging
agreements and (vii) all Debt of others guaranteed by such Person.
<PAGE> 4
"Equity Interest" with respect to any Person, means any and all shares,
interests, rights to purchase, warrants, options, participations or other
interests (however designated) in capital stock or other equity participations,
including partnership interests, whether general or limited, in any such Person.
"Existing Airplane" means the Grumman G-1159 aircraft, Serial No. 025.
"Formation Agreement" means the agreement dated as of August 22, 1994,
relating to the formation of the Design Studio Partnership and the Polo
Partnership by and among the GS Parties, Lauren and Mr. Peter Strom Goldstein.
"GS Notes" shall have the meaning set forth in the Formation Agreement.
"GS Ownership Percentage" means the fraction, expressed as a
percentage, equal to the number of shares of Common Stock owned, in the
aggregate, by the GS Parties, divided by the total number of shares of Common
Stock outstanding.
"Incurrence" means the incurrence, creation, assumption, guarantee or,
in any other manner, becoming liable with respect to, responsible for, or a
surety for the payment of, any Debt.
"Initial Public Offering" means the initial sale of equity securities
of the Company (including any equity securities issued in connection with the
exercise of any overallotment option granted in connection with such offering)
pursuant to an effective registration statement under the Securities Act (other
than a registration statement on Form S-8 or otherwise relating to equity
securities issuable under any employee benefit plan of the Company) made (i) in
accordance with the Registration Rights Agreement, (ii) with the prior written
consent of Lauren and GSCP or (iii) as contemplated by the Preliminary
Prospectus.
"Investment" in any Person means the acquisition of any Equity Interest
issued by such Person, any security convertible into an Equity Interest issued
by such Person, or any note, bond or other instrument of indebtedness issued by
such Person, whether from such Person or from another Person or the making of a
loan or advance to such Person; provided, however, that such
<PAGE> 5
term shall not include the acquisition by operation of law or otherwise of an
Equity Interest or any security convertible into an Equity Interest in
satisfaction of a bona fide debt.
"Lien" means any mortgage, pledge, hypothecation, security assignment,
deposit arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any capital lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction), any right of first refusal, right to call, preemptive right or
similar right, or any option, warrant or similar commitment or any other similar
right or interest of others therein.
"New RL Note" shall have the same meaning set forth in the Formation
Agreement.
"Original GS Parties" means GSCP, Holding I, Holding II, Stone Street,
Stone Street Sub and Bridge Street.
"Original Polo Parties" means Lauren, RL Holding and RL Family.
"Own" or any derivation thereof means beneficial ownership as defined
in 17 C.F.R. Section 240.13d-3 promulgated under the Securities Exchange Act of
1934, as amended.
"Person" means any natural person, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, estate, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Permitted Trust" means any trust of which the only beneficiaries are
(i) (x) Lauren and/or his siblings, (y) descendants of any of the foregoing
persons referenced in clause (x), and/or (iii) spouses of any of the foregoing
persons referenced in clauses (x) or (y) (each an "RL Family Member") or (ii)
one or more RL Family Members and one or more persons exempt from federal
taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
"Polo Retail Transactions" means the transactions contemplated by the
agreements entered into by the Company with third parties, effective as of April
3, 1997, to purchase the
<PAGE> 6
remaining interests in Polo Retail Corporation and related entities that the
Company did not previously own.
"Preliminary Prospectus" means the preliminary prospectus of the
Company which forms part of the registration statement on file on the date
hereof with the Securities and Exchange Commission relating to the initial
public offering of Class A Common Stock and filed with the consent of GSCP and
Lauren.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of October 31, 1994, by and among the Design Studio
Partnership, the Polo Partnership, the GS Parties, Lauren and the Company (as
successor to Polo Ralph Lauren Corporation, a New York Corporation) (the
"Original Registration Rights Agreement") as amended pursuant to Section 9.8 of
this Agreement.
"Rule 144" means 17 C.F.R. Section 230.144 (or any similar provision
then in force) promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means any Person of which at least 50% of the Equity
Interests are at the time owned, directly or indirectly, by the Company or by
one or more Subsidiaries, or by the Company and one or more Subsidiaries. The
parties acknowledge that the Womenswear Partnership is a Subsidiary of the
Company.
"Transfer" and any derivation thereof shall have the meaning set forth
in Section 4.1 of this Agreement.
2. Board of Directors.
2.1. Number of Directors. Prior to an Initial Public Offering, the
number of directors of the Company shall be six or seven, at Lauren's election.
2.2. Board of Directors. (a) Prior to an Initial Public Offering the
directors of the Corporation shall be elected in accordance with the provisions
of the Company's Certificate of Incorporation. As of the date hereof, pursuant
to the Company's Certificate of Incorporation:
<PAGE> 7
(i) the holders of the outstanding shares of Class A Common
Stock, shall have the right to elect one director (each director which the
holders of Class A Common Stock have the right to elect pursuant to the
Company's Certificate of Incorporation, an "A Director");
(ii) the holders of the outstanding shares of Class B Common
Stock, shall have the right to elect four directors (if the Board of Directors
of the Company consists of six directors) or five directors (if the Board of
Directors of the Company consists of seven directors); and
(iii) the holders of the outstanding shares of Class C Common
Stock, shall have the right to elect one director.
The parties acknowledge that the Polo Parties currently Own all of the
outstanding shares of Class A Common Stock and Class B Common Stock and will
accordingly be entitled to elect five directors (if the Board of Directors of
the Company consists of six directors) or six directors (if the Board of
Directors of the Company consists of seven directors) as of the date hereof and
that the GS Parties currently Own all of the outstanding shares of Class C
Common Stock and will accordingly be entitled to elect one director. Subject to
Section 2.2(b), the removal of, and filling of any vacancy of, any director
shall be governed by the terms of the Company's By-Laws.
(b) If an Initial Public Offering shall not occur within thirty days
after the date hereof, then (i) upon the written request of GSCP, (A) the Polo
Parties shall immediately cause an A Director to, and such director shall,
resign and (ii) from and after such date and until an Initial Public Offering,
GSCP shall be entitled to designate a person to be elected as an A Director (the
"GS A Director", and together with any director elected by the holders of Class
C Common Stock, the "GS Directors") and the Polo Parties shall take such action
as is necessary or desirable (including calling a special meeting of
stockholders and voting their shares of Class A Common Stock) to cause the GS A
Director to be elected as an A Director within five business days after GSCP
provides Lauren with written notice of such person's identity. Each Polo Party
agrees to
<PAGE> 8
vote, in person or by proxy, all shares of Common Stock over which it may
exercise voting power, at any annual or special meeting of stockholders of the
Company called for the purpose of voting on the election of directors, or, if
necessary, to cause its nominee or nominees on the Board of Directors, if any,
to vote in favor of the election of the GS A Director and to take all other
necessary and appropriate actions to cause the GS A Director to be elected in
accordance with the provisions of this Section 2.2(b). The Polo Parties agree
not to take any action to remove, with or without cause, the GS A Director
unless so directed by GSCP in which case the Polo Parties shall take all
necessary and appropriate action to remove such director. In the event of a
vacancy on the Board of Directors by reason of the death, disability, removal or
resignation of the GS A Director, GSCP shall be entitled to designate a new
director in accordance with the first sentence of this Section 2.2(b) within
twenty business days after such vacancy occurs, and the Polo Parties shall take
such action as is necessary or desirable to cause any person nominated by GSCP
to fill any of such vacancies to be elected as a director of the Company within
five business days after GSCP provides the Company with written notice of the
identity of such person.
2.3. Initial Board of Directors; Election of Directors.
(a) The Board of Directors of the Company as of the date
hereof shall consist of the following individuals:
Names of Directors
[Names and classes to be inserted at time of
execution]
Each such person shall hold his office until his death, resignation or removal
or until his successor shall thereafter have been duly elected and qualified.
Each of the parties by executing and delivering this Agreement hereby consents
to the election of the nominees to the initial Board of Directors as listed
above, effective as of the date hereof.
(b) There shall be no cumulative voting in any election of
directors.
<PAGE> 9
2.4. Meetings of the Board of Directors.
(a) The Board of Directors shall hold regular meetings (at
least semi-annually). Notice of each regular meeting of the Board of Directors
shall be given at least thirty days prior to the scheduled meeting date by the
Secretary of the Company. Special meetings of the Board of Directors may be
called by any Director at any time on at least five business days' prior notice
by the Secretary of the Company to all directors. All special and regular
meetings of the Board of Directors shall be held at the principal office of the
Company.
(b) A quorum for any meeting of the Board of Directors shall
require the presence of a majority of the directors.
2.5. Certain Covenants.
(a) Each Investor shall vote all shares of Common Stock over
which it may exercise voting power, and each Investor and the Company shall take
all other actions necessary and appropriate (including, without limitation,
removing any director), to ensure that the Company's Certificate of
Incorporation and bylaws do not at any time conflict with the provisions of this
Agreement and shall not vote to approve (or consent to the approval of) any
amendment to the Certificate of Incorporation or bylaws which would be
inconsistent with this Agreement.
(b) The Company shall at all times maintain at least $10
million of directors' and officers' liability insurance covering the directors
against any liability asserted against any director in such individual's
capacity as a director or arising out of such individual's status as director,
unless otherwise consented to by the GS Director(s).
(c) The Certificate of Incorporation, By-Laws and other
organizational documents of the Company and each of its Subsidiaries shall at
all times, to the fullest extent permitted by law, provide for indemnification
of, advancement of expenses to, and limitation of the personal liability of, the
members of the Board of Directors and such other persons, if any, who, pursuant
to a provision of such Certificate of Incorporation, By-Laws or other
organizational documents, exercise or perform any of the powers or duties
otherwise conferred or
<PAGE> 10
imposed upon members of the Board of Directors or the boards of directors or
other similar managing bodies of each of the Company's Subsidiaries. Such
provisions may not be amended, repealed or otherwise modified in any manner
adverse to any director until at least six years following the date that there
are no outstanding shares of Class C Common Stock.
(d) The Company shall pay the reasonable out-of-pocket
expenses incurred by each director of the Board of Directors in connection with
his performing his duties as a member of the Board of Directors, including
without limitation the reasonable out-of-pocket expenses incurred by such person
for attending meetings of the Board of Directors or any committee thereof or
meetings of any board of directors or other similar managing body (and any
committee thereof) of any Subsidiary of the Company.
2.6. Termination of Designation Rights. The provisions of this Section
2, other than those contained in Sections 2.5(b) and (c) shall terminate upon an
Initial Public Offering. Sections 2.5(b) and (c) shall survive any termination
of this Agreement.
3. Management of the Company.
3.1. Significant Transactions.
(a) Generally. Prior to an Initial Public Offering and subject
to Section 3.1(b), the Company shall not, and shall cause each Subsidiary not
to, take any action regarding any of the following matters (each a "Significant
Transaction") without the prior written consent of both (1) GSCP and (2) Lauren:
(i) any consolidation, combination or merger of the
Company or any Subsidiary with or into any other Person (other than a
consolidation, combination or merger of any wholly owned Subsidiary with another
wholly owned Subsidiary) or any recapitalization of the Company or any
Subsidiary;
(ii) the sale, assignment, transfer or lease of any
assets of the Company or any Subsidiary with a fair market value in excess of
$15 million in the aggregate in any fiscal year of the Company, other than in
the ordinary course of business;
<PAGE> 11
(iii) the purchase or other acquisition by the
Company or any Subsidiary of another business entity (or entities) or assets
during any fiscal year of the Company with a fair market value in excess of $15
million in the aggregate, other than in the ordinary course of business;
(iv) the making of Investments by the Company or any
Subsidiary in any Person (other than any wholly owned Subsidiary of the Company)
in excess of $5 million in the aggregate through October 31, 2004 excluding the
Polo Retail Transactions;
(v) the Incurrence by the Company or any Subsidiary
of Debt (other than the Incurrence of Debt, in the ordinary course of business
and consistent with past practices, (x) under revolving credit facilities to
which (1) Lauren and (2) GSCP have previously consented and (y) in connection
with the refinancing or modification of the terms of any Debt existing on the
date of this Agreement (or any subsequent refinancing thereof) , in each case,
upon commercially reasonable terms) in excess of $15 million in the aggregate in
any fiscal year of the Company;
(vi) (x) the issuance or sale by the Company or any
Subsidiary of any of its debt or of its equity securities (or securities
exercisable for, exchangeable for or convertible into such securities) or (y)
the granting of registration rights in connection with securities of the Company
or any Subsidiary, except to the extent provided for in the Registration Rights
Agreement;
(vii) capital expenditures by the Company or any
Subsidiary in excess of $15 million in the aggregate in any fiscal year of the
Company and any capital expenditures by the Company or any Subsidiary that are
not in the ordinary course of business;
(viii) the purchase or redemption by the Company or
any Subsidiary of any securities issued by the Company or any Subsidiary (it
being agreed that for purposes of this Section 3.1(a)(viii), Lauren and GSCP
shall be deemed to have consented to the Amended RL Note, the New RL Note and
the GS Notes being prepaid, in whole or in part, in accordance with the terms
thereof);
<PAGE> 12
(ix) the adoption by the Company or any Subsidiary of
any employee stock option, phantom stock, equity or profit participation or
other similar plan;
(x) the involvement by the Company or any Subsidiary
in any line of business other than the lines of business currently comprising
the Business (it being understood that the introduction of a new name or logo to
an existing line or product or the licensing of a new logo shall not constitute
the involvement by any such entity in a new line of business; provided, however,
that such introduction shall be subject to clause (xi));
(xi) the entry by the Company or any Subsidiary into
a new line or product or the introduction of a new name or new logo to an
existing line or product, in each case, with expected start-up costs and total
capital requirements in excess of $15 million in the aggregate;
(xii) any transaction, agreement, understanding or
arrangement (including employment and consulting arrangements) entered into by
the Company or any Subsidiary with any Investor or any Affiliate of any Investor
(other than (A) such transactions, agreements, understandings or arrangements
between the Company and any wholly owned Subsidiary or between wholly owned
Subsidiaries or (B) such transactions, agreements, understandings or
arrangements that do not involve payments in any fiscal year of the Company that
exceed $100,000 in the aggregate to any Investor or any Affiliate of an Investor
or $500,000 in the aggregate to all Investors and their respective Affiliates);
(xiii) any agreement or arrangement which restricts
or prohibits dividends or distributions by any Subsidiary to the Company or by
the Company to its stockholders;
(xiv) the winding up, dissolution or liquidation of
the Company or any Subsidiary;
(xv) the voluntary bankruptcy of the Company or any
Subsidiary;
(xvi) pursuing any business opportunity presented to
the Company pursuant to Section 5.1 or permitting any Polo Party to engage in
any activity prohibited under
<PAGE> 13
Section 5.2 or 5.3 (it being agreed that Lauren shall be deemed to have
consented to any such opportunity so presented);
(xvii) the amendment by the Company or any Subsidiary
of its certificate of incorporation or bylaws (or similar constituent
instruments) or the adoption by the Company or any Subsidiary of any stockholder
rights plan or other antitakeover provisions;
(xviii) the acquisition by the Company or any
Subsidiary of any aircraft (whether fixed wing or otherwise) other than the
Existing Airplane; and
(xix) without limiting Article 5, in the event that
Lauren is no longer the Chief Executive Officer of the Company (by reason of his
death or otherwise), the determination to hire, replace or involuntarily
terminate the Chief Executive Officer of the Company (it being agreed that
GSCP's consent required pursuant to this clause (xix) shall not be unreasonably
withheld).
Any consents provided by Lauren and GSCP with respect to prior
transactions of the RL Partnerships shall be deemed consents under this Section
3.1. For purposes of calculating fiscal year expenditures or other amounts
governed by this Section 3.1 during the fiscal year of the Company in which the
date hereof occurs only (and assuming the Company adopts the same fiscal year as
the RL Partnerships), expenditures or other amounts of the RL Partnerships
during the portion of the fiscal year ending upon the date hereof plus the
expenditures or other amounts of the Company after the date hereof shall be
deemed expenditures or other amounts of the Company during the fiscal year of
the Company in which the date hereof occurs. The dollar amounts in subsections
(ii), (iii), (iv), (v), (vii), (xi) and (xii) shall be adjusted annually as of
January 1 of each year (beginning with the January 1 following the date hereof)
to reflect inflation in the immediately preceding year as measured by the
Consumer Price Index (with the year in which this agreement is executed being
treated as the base year). No later than January 31 of each year, the Company
shall deliver to all of the Investors a statement, certified as to correctness
by the chief financial officer of the Company, that sets forth (A) the amount,
if any, by which the dollar amounts in subsections (ii), (iii), (iv), (v),
(vii), (xi) and (xii) shall be
<PAGE> 14
adjusted pursuant to the preceding sentence, (B) the adjustment factor used to
calculate any such adjustment and (C) the calculation of the adjustment factor
and the amounts set forth in such statement pursuant to clause (A).
Notwithstanding anything herein to the contrary, Lauren and GSCP shall be deemed
to have consented to the transactions expressly contemplated by the Subscription
Agreement, the Assignment and Assumption Agreement and the Preliminary
Prospectus.
Lauren and GSCP hereby provide their good faith commitment, if
the Initial Public Offering has not been consummated by August 31, 1997, to
negotiate with the Company appropriate revisions, if any, to the dollar
thresholds contained in Section 3.1(a).
(b) Annual Budget. Notwithstanding anything to the contrary
contained in this Agreement, no consent to any Significant Transaction shall be
required pursuant to Section 3.1(a) if such action is expressly provided for,
and disclosed in, the annual budget of the Company that has been approved in
writing by both (i) Lauren and (ii) GSCP.
(c) Termination of Right of Consent. Notwithstanding anything
to the contrary contained herein, no consent to any Significant Transaction
shall be required pursuant to Section 3.1: (i) by Lauren, if at any time prior
to an Initial Public Offering, Lauren Owns less than ten percent of the
outstanding Common Stock, (ii) by GSCP, if at any time prior to an Initial
Public Offering, the GSCP Parties (in the aggregate) Own less than ten percent
of the outstanding Common Stock or (iii) from and after consummation of an
Initial Public Offering.
3.2. Conduct of Business. Prior to an Initial Public Offering, the
Company shall not, and shall not permit any of its Subsidiaries to, enter into a
transaction (including, without limitation, the purchase, sale, lease, licensing
or exchange of property or the rendering of any service or the making of any
loan or advance) or series of related transactions with any Person (other than
between the Company and any wholly owned Subsidiary or between wholly owned
Subsidiaries) on terms which are not arm's length. For purposes of this Section
3.2, the affiliated transactions described in the Preliminary Prospectus and the
transactions contemplated by the Registration Rights Agreement shall be deemed
arm's length transactions.
<PAGE> 15
3.3. Officers of the Company. Prior to an Initial Public Offering, the
Board of Directors shall cause the Company to employ qualified and experienced
senior management of the Company. The Company may have employees and agents who
may be designated as officers or authorized representatives of the Company and
who shall (a) serve at the pleasure of the Board of Directors, (b) have such
powers as are vested in them by the Board of Directors and (c) have the power to
bind the Company through the exercise of such powers. Clause (a) of this Section
3.3 shall not be construed as limiting the Company's right to retain employees
for the Company pursuant to employment contracts for a term of years in
accordance with Section 3.1.
4. Restriction on Disposition of Common Stock.
4.1. No Transfer. (a) Prior to an Initial Public Offering, no Investor
shall, directly or indirectly, sell (whether by involuntary or judicial sale or
otherwise), assign, transfer, grant a security interest in, pledge, encumber,
hypothecate, give (by bequest, gift or appointment) or otherwise (voluntarily or
by operation of law) dispose of (any of the foregoing is herein referred to as a
"Transfer") any shares of Common Stock, except in accordance with the provisions
of Sections 4.1(b), 4.2, 4.3 and 4.4. Notwithstanding anything in this Agreement
to the contrary, any holder of Class C Common Stock may Transfer shares of Class
C Common Stock to the underwriters of the Initial Public Offering pursuant to
the terms of the underwriting agreement entered into by such holder of Class C
Common Stock with respect to the Initial Public Offering and in the event the
Initial Public Offering does not occur such underwriters may Transfer such
shares of Class C Common Stock back to their original holders. Any Transfer or
attempted Transfer of shares of Common Stock not in accordance with the
provisions of this Agreement shall be null and void, and the Company shall not
record such Transfer on its books or treat any purported transferee of such
shares as the owner of such shares for any purpose.
(b) In addition to the limitations set forth in Section 4.1(a), until
October 1, 1998, (i) no Polo Party shall (A) Transfer any shares of Class B
Common Stock, or (B) convert any shares of Class B Common Stock into shares of
another class of Common Stock, if, after giving effect to such Transfer or
conversion of Class B Common Stock (whether as a result of such Transfer,
<PAGE> 16
conversion or otherwise), the Original Polo Parties hold (in the aggregate)
Class B Common Stock constituting less than 25% of the outstanding shares of all
Common Stock on the date hereof subject to appropriate adjustment for stock
splits, reverse stock splits, stock dividends and similar transactions (for
purposes of this Section 4.1(b)(i), (w) from and after an Initial Public
Offering, any shares of Common Stock issued and sold by the Company to the
public in the Initial Public Offering shall be treated as having been
outstanding on the date hereof and (x) from and after consummation of the Polo
Retail Transactions, any shares of Common Stock issued in connection therewith
shall be treated as having been outstanding on the date hereof), (ii) Lauren
shall not Transfer or otherwise convert into shares of another class of Common
Stock any of the shares of Class B Common Stock purchased by him pursuant to the
Subscription Agreement and identified on Schedule 1 to that agreement as the
5.0192% acquired by him pursuant to the Reorganization (as defined therein),
(iii) no GS Party shall Transfer any shares of Common Stock if, after giving
effect to such Transfer of Common Stock (whether as a result of such Transfer or
otherwise), the Original GS Parties hold (in the aggregate) Class C Common Stock
constituting less than 11% of the outstanding shares of all Common Stock on the
date hereof subject to appropriate adjustment for stock splits, reverse stock
splits, stock dividends and similar transactions (for purposes of this Section
4.1(b)(iii), (I) from and after an Initial Public Offering, any shares of Common
Stock issued and sold by the Company to the public in the Initial Public
Offering shall be treated as having been outstanding on the date hereof and (II)
from and after consummation of the Polo Retail Transactions, any shares of
Common Stock issued in connection therewith shall be treated as having been
outstanding on the date hereof) and (iv) no Transfer other than by gift, bequest
or appointment of Class B Common Stock or Class C Common Stock in a transaction
in which the transferred shares do not convert into Class A Common Stock shall
be made without delivery to all the parties hereto of an opinion from counsel to
the transferor to the effect that the Transfer should not adversely affect the
qualification of the acquisition of shares of the Common Stock pursuant to
Paragraph 1 of the Subscription Agreement under Section 351 of the Internal
Revenue Code of 1986, as amended.
<PAGE> 17
For purposes of Sections 4.1(b) (i) and (iii), with respect to any shares of any
class of Common Stock transferred by gift, bequest or appointment by an Original
Polo Party or an Original GS Party, as the case may be, to any Permitted
Transferee that has executed and delivered to the Company an instrument or
instruments in form and substance reasonably satisfactory to the Company
confirming that such Permitted Transferee agrees to be bound by the terms of
this Agreement as if it were a Polo Party signatory hereto, the transferring
Original Polo Party or Original GS Party shall be treated as holding (i) all of
such transferred shares held by the Permitted Transferee if the Permitted
Transferee is a natural person and (ii) the portion of each class of transferred
shares held by the Permitted Transferee equal to the percentage of the equity or
economic interests of the Permitted Transferee held by the Original Polo Party
or Original GS Party, as the case may be, as of the date of such transfer or as
subsequently reduced if the Permitted Transferee is not a natural person. For
purposes of this Section 4.1(b), a Transfer shall be deemed to occur if any
transfer of any partnership interest in any partnership results in a termination
of such partnership within the meaning of Section 708 of the Internal Revenue
Code of 1986, as amended, and in all other events any such transfer shall not be
deemed to constitute a Transfer. Notwithstanding anything herein to the
contrary, in no event shall the provisions of this Section 4.1(b) prohibit the
Transfer of shares of Common Stock (i) by Lauren's estate in order to fund
estate taxes or (ii) by any Polo Party or any GS Party in connection with any
business combination transaction or other acquisition of the Company as a result
of which no party to this Agreement or any of its Affiliates holds any
outstanding shares of Common Stock.
4.2. Permitted Transfers. Prior to an Initial Public Offering and
subject to compliance with Section 4.1(b) and 4.3, an Investor may Transfer
shares of Common Stock to an Affiliate (and, in the case of the Polo Parties, to
a Permitted Trust) (such Affiliate or Permitted Trust, a "Permitted
Transferee"), provided that:
(a) such Permitted Transferee agrees that, notwithstanding the
terms of this Section 4.2, such Permitted Transferee shall not thereafter
Transfer such Common Stock to
<PAGE> 18
any Person to whom the transferor Investor would not be permitted to Transfer
such Common Stock pursuant to the terms of this Agreement;
(b) such Permitted Transferee shall have executed and
delivered to the Company, as a condition precedent to the Transfer, an
instrument or instruments in form and substance reasonably satisfactory to the
Company confirming that such Permitted Transferee agrees to be bound by the
terms of this Agreement;
(c) the certificates issued to the Permitted Transferee which
represent the Common Stock so Transferred shall bear the legends provided in
Section 7; and
(d) the transferor Investor shall have delivered to the
Company an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to the Company, to the effect that such Transfer is exempt from
registration under the Securities Act.
4.3. Ownership of Common Stock by Lauren. At all times prior to an
Initial Public Offering, (i) Lauren must Own, directly or indirectly, at least a
majority of the outstanding Common Stock, free and clear of any Liens and (ii)
Lauren, his spouse, his children and his siblings must hold, directly or
indirectly, at least a majority of the outstanding Common Stock, free and clear
of any Liens. For purposes of this Section 4.3(ii), any shares of Common Stock
which are held by a Permitted Trust free and clear of any Liens shall be treated
as held by Lauren.
4.4. Private Sale Rights. Prior to an Initial Public Offering and in
addition to the rights contained in Section 4.2, notwithstanding anything
contained in Section 4.3 to the contrary, but subject to Section 4.1(b), each
Polo Party may, from and after the first anniversary of the date hereof,
Transfer shares of Common Stock to any Person who is not a Permitted Transferee
(any such Transfer, a "Section 4.4 Transfer"), only if such Transfer is made in
accordance with the following procedures:
(a) The transferring Polo Party shall first deliver to GSCP a
written notice (the "Participation Notice"), which shall specifically identify
the identity of the proposed transferee (the "Proposed Transferee"), the amount
of Common Stock being Transferred (the
<PAGE> 19
"Participation Stock"), the purchase price therefor, and a summary of the other
material terms and conditions of the proposed transaction, and shall contain an
offer (the "Participation Offer") by the Proposed Transferee to each GS Party,
which shall be irrevocable for a period of 30 days after the Participation
Notice is received (the "Participation Period"), to purchase from each GS Party
an amount of Common Stock equal to its Pro Rata Portion of the Participation
Stock at a price per share equal to the Per Share Price and upon all such other
terms offered by the Proposed Transferee to Lauren including, without
limitation, those set forth in the Participation Notice. A copy of the
Participation Notice shall promptly be sent to the Company. The Participation
Offer may be accepted in whole or in part at the option of each of the GS
Parties. Notice of a GS Party's intention to accept a Participation Offer, in
whole or in part, shall be evidenced by a writing signed by such GS Party and
delivered to Lauren, the Proposed Transferee and the Company prior to the end of
the Participation Period, setting forth the amount of Common Stock that such GS
Party elects to Transfer. Any failure by a GS Party to respond to a
Participation Offer within the Participation Period shall mean that such GS
Party does not wish to participate in the Section 4.4 Transfer. To the extent
any GS Party does not participate in a Section 4.4 Transfer, the transferring
Polo Party shall be permitted to transfer to the Proposed Transferee such number
of shares that such GS Party otherwise would have been able to transfer to the
Proposed Transferee.
(b) All Transfers of Common Stock to the Proposed Transferee
shall be consummated contemporaneously at the offices of the Company on the
later of (i) a mutually satisfactory business day as soon as practicable, but in
no event more than 15 days after the expiration of the Participation Period and
(ii) the fifth business day following the expiration or termination of all
waiting periods under HSR applicable to such Transfers, or at such other time
and/or place as the parties to such Transfers may agree. The delivery of
certificates or other instruments evidencing such Common Stock duly endorsed for
transfer shall be made on such date against payment of the purchase price for
such Common Stock.
<PAGE> 20
(c) Anything contained herein to the contrary notwithstanding,
simultaneously with, and as a condition to, any Transfer of Common Stock
pursuant to this Section 4.4, the Proposed Transferee must execute and deliver
to the Company and the GS Parties an instrument or instruments in form and
substance reasonably satisfactory to the Company and the GS Parties confirming
that such transferee agrees to be bound by the terms of this Agreement.
"Pro Rata Portion of the Participation Stock" means, as to
each GS Party, the product (rounded up to the nearest whole number) of (i) the
Participation Stock multiplied by (ii) the quotient obtained by dividing (a) the
number of shares of Common Stock owned by such Person on the first day of the
Participation Period (as defined in Section 4.4(a) below) by (b) the aggregate
number of shares of Common Stock owned on the first day of the Participation
Period by the transferring Polo Party and the GS Parties.
"Per Share Price" shall mean, with respect to any Section 4.4
Sale, an amount per share equal to the sum of (a) the consideration per share of
Common Stock proposed to be received by the transferring Polo Party in such
Section 4.4 Sale as set forth in the Participation Notice and (b) the quotient
of (I) any other compensation or benefits to be received by the transferring
Polo Party in such Section 4.4 Sale or in connection with any agreement or
transaction entered into by the transferring Polo Party in connection with such
Section 4.4 Sale (a "Related Transaction") divided by (II) the actual number of
shares of Common Stock to be sold by the transferring Polo Party in such Section
4.4 Sale after giving effect to any participation rights of the GS Parties. It
is the intention of the parties that the Per Share Price shall reflect, and that
the GS Parties shall receive in any Section 4.4 Sale, the same economic value
per share of Common Stock as the transferring Polo Party receives in the Section
4.4 Transfer and in all Related Transactions.
4.5. Termination of Transfer Restrictions. Notwithstanding anything
herein to the contrary, the provisions of Sections 4.1(a), 4.2, 4.3 and 4.4
shall terminate upon consummation of an Initial Public Offering.
<PAGE> 21
5. Business Opportunities.
5.1. First Opportunity. No Polo Party shall, directly or indirectly, in
any capacity, invest, engage, manage, operate, control or otherwise participate
for his own account or for the account of any other Person in any business
opportunity that may exploit, market or otherwise use the names "Ralph",
"Lauren", "Polo" or "Ralph Lauren", the symbol of the polo player astride a
horse or any name or symbol based on, or derivative of, those names or such
symbol, anywhere in the world (including, without limitation, any business
opportunity that markets any product or service by using any such names or
symbols), regardless of how such opportunity arose, was developed or otherwise
came to the attention of such Polo Entity, without first permitting the Company
to exploit such business opportunity on the terms and conditions provided
herein. If a Polo Party intends, directly or indirectly, in any capacity, to
invest, engage, manage, operate, control or otherwise participate for its own
account or for the account of any other Person in any such business opportunity,
such Polo Party shall first offer to the Company the right to exploit such
business opportunity by delivering written notice thereof to the Company and
GSCP (including specifying, in reasonable detail, in such written notice, the
material terms and conditions of such business opportunity). If within 30 days
after receipt of such written notice, GSCP does not consent to the Company
pursuing such business opportunity, the Polo Party may, subject to Sections 5.2
and 5.3, pursue such business opportunity outside the Company, provided that the
Polo Party gives prior notice to GSCP (or a GS Director) of its decision to do
so. Without limiting the foregoing or Sections 5.2 and 5.3, in the event that a
Polo Party decides, directly or indirectly, in any capacity, to invest, engage,
manage, operate, control or otherwise participate in any other business
activities for its own account, the Polo Party shall first notify GSCP (or a GS
Director) of its decision to do so; provided that this sentence shall not apply
to passive investments by the Polo Parties in securities of any publicly traded
corporation which constitute, in the aggregate, less than 5% of the outstanding
shares of such entity entitled to vote generally in the election of directors or
similar persons. Notwithstanding Section 5,
<PAGE> 22
Lauren may use as trademarks "Ralph Lauren", "Double RL" and "RRL" in connection
with beef and other agricultural and food products.
5.2. Protection of Business. Notwithstanding Section 5.1, each Polo
Party hereby agrees that during the term of this Agreement it shall not,
directly or indirectly, as a proprietor, partner, stockholder, director,
officer, employee, consultant, joint venture, investor, lender or in any other
capacity, invest, engage in, or manage, operate or control or participate in the
ownership, management, operation or control of any entity which engages in any
of the businesses or activities that the Company or any of its Subsidiaries
engages in anywhere in the world; provided that this Section 5.2 shall not apply
to passive investments by a Polo Party in securities of any publicly traded
corporation which constitute, in the aggregate, less than 5% of the outstanding
shares of such entity entitled to vote generally in the election of directors or
similar persons. During the term of this Agreement, no Polo Party shall use,
license, or grant to any Person (other than the Company and the Subsidiaries)
any right to use the names "Ralph," "Lauren" or "Ralph Lauren" or any name or
symbol based on, or derivative of, those names or such symbols, in any manner
which would reasonably be expected to be detrimental to the Business.
5.3. Participation in Business. Lauren shall devote substantially all
of his business time, attention, efforts and skill to the Business and the
furtherance of the purposes of the Company and the Subsidiaries, and Lauren
shall use his best efforts to promote the interests of the Company and the
Subsidiaries. Prior to an Initial Public Offering, Lauren shall provide the
foregoing services without any compensation, except for compensation currently
being paid and previously approved by GSCP or for other compensation as
expressly agreed to in writing by GSCP. After an Initial Public Offering, Lauren
shall provide such services and will be compensated as determined by the Board
of Directors. Lauren will not, without the prior written approval of GSCP,
engage in any other activity which would interfere with his devoting
substantially all of his business time, attention, efforts and skill to the
Business and the furtherance of the purposes of the Company and the Subsidiaries
(it being agreed that Lauren
<PAGE> 23
may continue to engage in the beef and ranch business, automobile business and
charitable activities to the same extent that Lauren engages in such businesses
and activities on the date hereof).
The agreements of each of the Polo Parties set forth in this Section 5
are in consideration of the continuing investment of the GS Parties in the
Company.
5.4 Termination. The provisions of this Section 5 shall terminate on
the later of (i) the consummation of an Initial Public Offering and (ii) such
date as Lauren enters into an employment agreement with the Company containing
provisions which are substantially similar to those contained in this Section 5
or which are acceptable to GSCP (which approval will not be unreasonably
withheld).
6. Financial Information.
(a) Prior to an Initial Public Offering, as soon as practicable
following the end of each fiscal year of the Company, but in any event within 90
days after the end of such fiscal year, the Company shall cause to be prepared
and delivered to each Investor consolidated and consolidating statements of
income and cash flows for the Company for such fiscal year, and a balance sheet
of the Company as of the end of such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year, and certified by Mahoney,
Cohen, Rashba & Pokart, CPA, PC, Deloitte & Touche or such other independent
certified public accountants of recognized national standing as shall be
designated by the Company (with the prior consent of GSCP) as to fairness of
presentation, preparation in accordance with generally accepted accounting
principles and consistency of application.
(b) Prior to an Initial Public Offering, as soon as practicable
following the end of each fiscal quarter of the Company but in any event within
45 days after the end of such fiscal quarter, the Company shall cause to be
prepared and delivered to each Investor consolidated and consolidating
statements of income and cash flows for the Company for such fiscal quarter and
for the fiscal year to date and an unaudited balance sheet for the Company as of
the end of such fiscal quarter, in each case setting forth comparative figures
for the preceding periods in the prior
<PAGE> 24
fiscal year and, subject to normal year-end adjustments and the absence of
footnotes, certified by the chief financial officer of the Company as to
fairness of presentation, preparation in accordance with generally accepted
accounting principles and consistency of application.
(c) Prior to an Initial Public Offering, as promptly as practicable and
in any event within 45 days following the end of each fiscal month of the
Company (other than the third, sixth, ninth and twelfth fiscal months of each
fiscal year of the Company), the Company shall prepare and deliver to each
Investor statements of income and cash flows of the Company for such month and
for the year to date and an unaudited balance sheet of the Company as of the end
of such month, in each case setting forth comparative figures for the related
periods in the prior fiscal year of the Company and, subject to normal year-end
adjustments and the absence of footnotes, certified by the chief financial
officer of the Company as to fairness of presentation, preparation in accordance
with generally accepted accounting principles and consistency of application.
7. Legend.
(a) A copy of this Agreement, and any amendments hereto, shall be filed
with the Secretary of the Company and kept on file at the offices of the
Company. So long as this Agreement shall be in effect, this Agreement and any
amendments hereto shall be made available for inspection by any Investor at the
principal offices of the Company.
(b) Prior to an Initial Public Offering, each certificate representing
shares of Common Stock and each certificate issued in exchange for or upon the
transfer of any shares of Common Stock (if after such transfer such shares
remain subject to this Agreement) shall be stamped or otherwise imprinted with a
legend substantially in the following form:
(i) THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED,
ENCUMBERED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE PROVISIONS
OF A STOCKHOLDERS AGREEMENT DATED AS OF
<PAGE> 25
_____, A COPY OF WHICH MAY BE OBTAINED FROM
THE COMPANY. NO TRANSFER OF SUCH
SECURITIES WILL BE MADE ON THE BOOKS OF
THE COMPANY UNLESS ACCOMPANIED BY
EVIDENCE OF COMPLIANCE WITH THE TERMS OF
SUCH AGREEMENT.
(ii) THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS THEY HAVE BEEN REGISTERED
UNDER THAT ACT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT, OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE AND THE
COMPANY HAS RECEIVED THE PRIOR WRITTEN
OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED.
(iii) THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO PROVISIONS
RELATING TO VOTING CONTAINED IN THE
STOCKHOLDERS AGREEMENT REFERRED TO
ABOVE.
After an Initial Public Offering, each certificate
representing shares of Common Stock owned on the date hereof by an Investor and
each certificate issued in exchange for or upon the transfer of any shares of
Common Stock (if after such transfer such shares remain subject to this
Agreement) shall be stamped or otherwise imprinted with a legend substantially
similar to legends (i) and (ii) above.
8. Term.
Except as otherwise expressly provided for herein, this Agreement shall
terminate on the earlier of (a) the tenth anniversary of the date hereof or (b)
the date that the GS Parties (in the aggregate) Own less than five percent of
all outstanding Common Stock. Upon such termination, there shall be no liability
on the part of any party hereto, except that nothing in this Section 8 shall in
any way relieve any party from liability for any breach of the provisions set
<PAGE> 26
forth herein or the period prior to the termination of this Agreement.
Notwithstanding the foregoing, the parties hereto acknowledge that only Sections
2.5(b) and (c), 4.1(b), 5, 7, 8 and 9 (other than 9.5 and 9.7) and related
definitions shall survive the consummation of the Initial Public Offering except
that certain portions of those provisions as specified therein shall terminate
upon the Initial Public Offering.
9. Miscellaneous.
9.1. Representations and Warranties. Each party hereto represents and
warrants to the other parties hereto as follows:
(a) It has full power and authority to execute, deliver and
perform its obligations under this Agreement.
(b) This Agreement has been duly and validly authorized,
executed and delivered by it, and constitutes a valid and binding obligation of
it, enforceable against it in
accordance with its terms except to the extent that enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting creditors'
rights generally.
(c) The execution, delivery and performance of this Agreement
by it does not (x) violate, conflict with, or constitute a breach of or default
under its organizational documents, if any, or any material agreement to which
it is a party or by which it is bound or (y) violate any law, regulation, order,
writ, judgment, injunction or decree applicable to it.
(d) No consent or approval of, or filing with, any
governmental or regulatory body is required to be obtained or made by it in
connection with the transactions contemplated hereby.
(e) It is not a party to any agreement which is inconsistent
with the rights of any party hereunder or otherwise conflicts with the
provisions hereof.
(f) As of the date hereof it has no present plan, intention or
arrangement to sell, exchange, Transfer, distribute, pledge or otherwise dispose
of any Common Stock owned by it including stock purchased under the Subscription
Agreement other than subject to Section 4.1(b), (i) to sell Common Stock in an
Initial Public Offering as contemplated by and described
<PAGE> 27
in the Preliminary Prospectus and (ii) in the case of Lauren, to transfer by
gift, bequest or appointment certain shares of Class A Common Stock (including,
without limitation, transfers by gift, bequest or appointment to one or more
charitable remainder trusts).
9.2. Continuing Partnership Provisions. Notwithstanding the
consummation of the transaction contemplated by the Assignment and Assumption
Agreement and/or the dissolution of any RL Partnership (and any termination of
any partnership agreement relating thereto) which may occur by operation of law
or otherwise on or after the date hereof, the Company agrees to be bound by and
to comply with (and the Investors and the Advisors retain their rights and
obligations under) the following provisions of the partnership agreement
governing each RL Partnership with respect to periods prior to the date hereof
to the same extent as the Company would be bound by (and the Investors would
have rights and obligations under) the terms thereof if (i) such RL Partnership
and its governing partnership agreement were still in existence, (ii) the
Company was such RL Partnership and the general partner of such RL Partnership
and the Investors were limited partners in such RL Partnership holding the
partnership interests set forth on Schedule 1 to the Assignment and Assumption
Agreement: (x) in the case of the Design Studio Partnership and the Polo
Partnership - Section 8.5 (Indemnification of Advisors to the Advisory Board),
Section 15.1 (Books of Account), Section 15.2 (Taxable Year), Section 15.3
(Financial Statement; Tax Matters Partner), Section 15.4 (Tax Elections),
Section 15.5 (Tax Information), Section 16.1 to the extent arising from any
action occurring prior to the date hereof of such RL Partnership
(Indemnification) and Section 16.2 (Exculpation) and (y) in the case of the
Womenswear Partnership - Section 8.5 (Indemnification of Advisors to the
Advisory Board), Section 14.1 (Books of Account), Section 14.2 (Taxable Year),
Section 14.3 (Financial Statement; Tax Matters Partner), Section 14.4 (Tax
Elections), Section 14.5 (Tax Information), Section 15.1 to the extent arising
from any action occurring prior to the date hereof of such RL Partnership
(Indemnification) and Section 15.2 (Exculpation). The parties agree (i) that
appropriate adjustment shall be made in the application of the provisions set
forth in Section 16.1 (or 15.1 in the case of the Womenswear Partnership) of the
partnership agreement governing
<PAGE> 28
each RL Partnership in order to effectuate the intent of such section
recognizing that the Company will satisfy any obligation of an RL Partnership
thereunder and (ii) that the indemnification obligations under such Section 16.1
(or 15.1 in the case of the Womenswear Partnership) shall terminate upon the
consummation of the Initial Public Offering. The Company shall take all
necessary or desirable actions to effectuate the provisions of this Section 9.2.
9.3. Use of Proceeds. The Company shall use the proceeds from an
Initial Public Offering to repay all amounts, if any, outstanding under the
Amended RL Note, the GS Notes and the New RL Note.
9.4. No Inconsistent Agreements.
(a) Without the prior written consent of (i) Lauren and (ii)
GSCP, the Company will not, on or after the date of this Agreement, enter into
any agreement with respect to its securities which is inconsistent with this
Agreement or otherwise conflicts with the provisions hereof. The Company will
not circumvent this Agreement by taking any action through an Affiliate that
would be prohibited under this Agreement.
(b) Each Investor agrees that it will not, on or after the
date of this Agreement, enter into any agreement or take any action with respect
to its Common Stock which is inconsistent with this Agreement or otherwise
conflicts with the provisions hereof. No Investor will grant any proxy or become
a party to any voting trust or other agreement, in each case which is
inconsistent with or conflicts with this Agreement or otherwise conflicts with
the provisions hereof, and no Investor will circumvent this Agreement by taking
any action that would be prohibited under this Agreement through an Affiliate.
9.5. Confidentiality.
(a) Each party hereto agrees not to disclose any non-public,
confidential, proprietary information ("Confidential Information") regarding the
Business or the parties hereto, which has been or is received prior to or after
the date hereof to any Person who is not (i) a partner (including partners of
The Goldman Sachs Group, L.P.), director, officer or employee or
<PAGE> 29
an Affiliate of such party (such persons and Affiliates of each party are
hereinafter collectively referred to as "Related Persons") or (ii) a Person
acting as an advisor to or representative of such party in connection with the
transactions contemplated by this Agreement, except (x) with the consent of the
other parties hereto, (y) pursuant to a subpoena, civil investigative demand (or
similar process), order, statute, rule or other legal requirement promulgated or
imposed by a court or by a judicial, regulatory, self-regulatory or legislative
body, organization, agency or committee or otherwise in connection with any
judicial or administrative proceeding (including, in response to oral questions,
interrogatories or requests for information or documents) in which a party
hereto or any of its Related Persons is involved or (z) in furtherance of the
purposes of the Company. Notwithstanding the foregoing, each of the GS Parties
may disclose to their investors in accordance with past practice summary (x)
nonfinancial information relating to the condition, progress (e.g., business
growth) and prospects of the Business and (y) financial information relating to
the Business. Each party assumes responsibility for any breach by its Related
Persons, advisors or representatives of their obligations concerning
confidentiality obligations hereunder only to the extent such party would be
responsible therefor under principles of agency law.
(b) If any party is to disclose Confidential Information
pursuant to clause (y) of the first sentence of subsection (a) of this Section
9.5, such party will, to the extent practicable, promptly notify the other
parties thereof and cooperate with the other parties to the extent legally
permissible if such other parties should seek to obtain an order or other
reliable assurance that confidential treatment will be accorded to designated
portions of the Confidential Information, and such party shall be entitled to
reimbursement from the Company for expenses incurred by it or any of its Related
Persons, including the fees and expenses of counsel, in connection with any
action taken pursuant to this subsection (b).
(c) Information will not be deemed Confidential Information if
it (i) was already available to, or in the possession of, the recipient prior to
its disclosure by, or at the direction of, the discloser, to the recipient, (ii)
is or becomes available in the public domain
<PAGE> 30
(other than as a result of a disclosure by the recipient or any of its Related
Persons, advisors or representatives), or (iii) is not acquired from a Person
known by the recipient to be in breach of an obligation of confidentiality to a
party to this Agreement.
(d) The provisions of this Section 9.5 shall terminate upon an
Initial Public Offering.
9.6. Expenses. Except as expressly provided herein, the Company shall
bear all reasonable costs and expenses of the Investors, including the fees and
expenses of counsel, in connection with this Agreement.
9.7. Investment Banking Services. Prior to an Initial Public Offering,
Goldman, Sachs & Co. will be the preferred provider of investment banking
services for the Company and its Subsidiaries and will provide those services
for customary compensation and on other terms consistent with an arm's length
transaction. In any instance in which Goldman, Sachs & Co. is unable during such
period to provide a particular type of services or has a conflict, the Company
may use another investment banking firm.
9.8. Registration Rights Agreement. In connection with the execution of
this agreement, the parties shall amend the Original Registration Rights
Agreement to reflect (i) the registration rights described in the Preliminary
Prospectus, (ii) that the parties are entering into the Assignment and
Assumption Agreement, the Subscription Agreement and this Agreement; (iii) (x)
that Lauren shall have the right to require the Company to file a registration
statement with respect to an Initial Public Offering from and after the date
hereof and (y) that GSCP shall have the right to require the Company to file a
registration statement with respect to an Initial Public Offering from and after
December 31, 1998, (iv) that in connection with an IPO Demand under Section
2.1(a) of the Original Registration Rights Agreement, no party shall have the
right to make a Primary Election (as such terms are defined in the Original
Registration Rights Agreement) but rather the parties shall consult on a good
faith basis to determine whether the Company should sell shares in the Initial
Public Offering, and (v) such other changes as the parties in good faith
determine are appropriate.
<PAGE> 31
9.9. Remedies. The parties hereto agree that money damages or other
remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that in addition to
all other remedies available to them, each of them shall be entitled to an
injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including without
limitation specific performance, without bond or other security being required.
9.10. Amendments and Waivers. Except as otherwise provided herein, this
Agreement may be amended, modified, supplemented or waived only by a written
agreement executed by all parties to this Agreement.
9.11. Successors and Affiliates; Assignment.
(a) This Agreement shall inure to the benefit of and shall be
binding upon the parties hereto and their respective heirs, legal
representatives, successors and Affiliates, so long as they hold shares of
Common Stock. If any Investor shall acquire additional shares of Common Stock in
any manner (including pursuant to the exercise of any option granted under a
stock option plan of the Company or pursuant to any benefit plan of the Company)
(or any Affiliate of an Investor shall acquire shares of Common Stock in any
manner), whether by operation of law or otherwise, such shares of Common Stock
shall be held subject to all of the terms of this Agreement, and by taking and
holding such shares of Common Stock such Person shall be conclusively deemed to
have agreed to be bound by and to comply with all of the terms and provisions of
this Agreement.
(b) From and after an Initial Public Offering, shares of
Common Stock which have been distributed in a registered public offering or
pursuant to Rule 144 or otherwise Transferred by any party hereto shall no
longer be subject to this Agreement unless acquired by an Investor or an
Affiliate of an Investor. The transferees of such shares of Common Stock shall
have no rights or obligations under this Agreement as a result of such purchase
of such shares, unless such purchasers are Investors or Affiliates of Investors.
Without limiting the immediately
<PAGE> 32
preceding two sentences, no Person other than the Investors shall be entitled to
any benefits under this Agreement, except as otherwise expressly provided
herein.
(c) Neither this Agreement nor any of the rights hereunder may
be assigned by any of the parties hereto without the consent of the other
parties.
(d) Notwithstanding anything herein to the contrary, upon
Lauren's death, (i) the Person designated by Lauren from time to time in a
written notice to the other parties hereto, or (ii) if no such Person shall have
been designated or be available to serve in such capacity as provided above, the
Person designated to serve in such capacity in Lauren's will, or (iii) if no
such Person shall have been designated in Lauren's will or be available to serve
in such capacity as provided above, the executor of Lauren's estate, or (iv) if
the assets of Lauren's estate shall have been distributed, then, notwithstanding
any designation by Lauren in his will or otherwise, the Person designated in
writing by the holders of a majority-in-interest of the Common Stock owned by
Lauren at the time of his death, shall in each such case be entitled to exercise
the rights under this Agreement that Lauren would have been entitled to exercise
if he had not died. Notwithstanding anything herein to the contrary, but subject
to the preceding sentence of this Section 9.11(d), upon the entry by a court of
competent jurisdiction of an order adjudicating Lauren incompetent, the Person
designated by Lauren from time to time in a written notice to the parties
hereto, or if no such Person shall have been designated and be available to
serve in such capacity, Lauren's judicially appointed representative, shall in
each such case be entitled to exercise the rights under this Agreement that
Lauren would have been entitled to exercise if he had not been adjudicated an
incompetent.
9.12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and which together
shall constitute one and the same instrument.
9.13. Descriptive Headings; Plurals. The headings and captions
contained herein are inserted for convenience only and shall not control or
affect the meaning or construction of any provision hereof. As used herein, the
plural form of any noun shall include the singular and the
<PAGE> 33
singular shall include the plural, unless the context requires otherwise. Each
of the masculine, neuter and feminine forms of any pronoun shall include all
such forms unless the context requires otherwise.
9.14. Notices. All notices and other communications hereunder shall be
in writing and delivered personally, by telecopy (with confirmation sent within
three business days by overnight courier) or sent by overnight courier to the
party to whom such notice or communication is to be given at its address set
forth on Schedule I, or such other address for the party as shall be specified
by notice given pursuant hereto.
9.15. Governing Law. This Agreement and the rights and obligations of
parties hereto shall be governed by, and construed in accordance with, the laws
of the State of New York, without giving effect to any principles of conflicts
of law thereof, except that with respect to internal corporate matters of the
Company, the laws of the State of Delaware shall govern, without giving effect
to the principles of conflicts of law thereof.
9.16. Invalidity of Provision. The invalidity or unenforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction. If any restriction or provision of this
Agreement is held unreasonable, unlawful or unenforceable in any respect, such
restriction or provision shall be interpreted, revised or applied in the manner
that renders it lawful and enforceable to the fullest extent possible under law.
9.17. Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all further acts and things and shall execute and
deliver all other agreements, certificates, instruments and documents as any
other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
<PAGE> 34
9.18. Entire Agreement. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.
<PAGE> 35
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
POLO RALPH LAUREN CORPORATION
By:_________________________________________
Name:
Title:
GS CAPITAL PARTNERS, L.P.
By: GS Advisors, L.P., its general partner
By: GS Advisors, Inc., its general partner
By:_________________________________________
Name:
Title:
GS CAPITAL PARTNERS PRL HOLDING I, L.P.
By: GS Capital Partners, L.P., its general partner
By: GS Advisors, L.P., its general partner
By: GS Advisors, Inc., its general partner
By:_________________________________________
Name:
Title:
GS CAPITAL PARTNERS PRL HOLDING II, L.P.
By: GS Capital Partners, L.P., its general partner
By: GS Advisors, L.P., its general partner
By: GS Advisors, Inc., its general partner
By:_________________________________________
Name:
Title:
<PAGE> 36
STONE STREET FUND 1994, L.P.
By: Stone Street Funding Corp., its general partner
By:_________________________________________
Name:
Title:
STONE STREET 1994 SUBSIDIARY CORP.
By:_________________________________________
Name:
Title:
BRIDGE STREET FUND 1994, L.P.
By: Stone Street Funding Corp., its general partner
By:_________________________________________
Name:
Title:
____________________________________________
Ralph Lauren
RL HOLDING, L.P.
By:_________________________________________
Name:
Title:
RL FAMILY, L.P.
By:_________________________________________
Name:
Title:
<PAGE> 37
SCHEDULE I
Addresses for Notices: With a Copy to:
Polo Ralph Lauren Corporation
650 Madison Avenue
New York, New York 10022
Attention: General Counsel
Telephone: (212) 318-7000
Telecopy: (212) 318-7183
GS Capital Partners, L.P.
GS Capital Partners PRL Holding I, L.P.
GS Capital Partners PRL Holding II, L.P.
Stone Street Funding 1994, L.P.
Stone Street 1994 Subsidiary Corp.
Bridge Street Fund 1994, L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Carla H. Skodinski
Telephone: (212) 902-1000
Telecopy: (212) 902-3000
Mr. Ralph Lauren.
RL Holding, L.P.
RL Family, L.P.
c/o Polo Ralph Lauren Enterprises, L.P.
650 Madison Avenue
New York, New York 10022
Attention: Chairman
Telephone: (212) 318-7000
Telecopy: (212) 318-7183
<PAGE> 1
EXHIBIT 21.1
SIGNIFICANT SUBSIDIARIES
<TABLE>
<CAPTION>
UNNAMED WHOLLY-OWNED
SUBSIDIARIES OF NAMED
SUBSIDIARIES CARRYING ON THE
PERCENTAGE OF SAME LINE OF BUSINESS
JURISDICTION IN VOTING SECURITIES ----------------------------
NAME WHICH ORGANIZED OWNED DOMESTIC FOREIGN
---- --------------- ----------------- -------- -------
<S> <C> <C> <C> <C>
Fashions Outlet of America, Inc. Delaware 100 105 -
The Ralph Lauren Delaware 100 2 -
Womenswear Company, L.P.
The Polo/Lauren Company, L.P. New York 100 - -
RL Fragrances, LLC Delaware 100 - -
</TABLE>
