<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 14
TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
The Limited, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.50 Par Value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
532716-107
- --------------------------------------------------------------------------------
(CUSIP Number)
Robert S. Schwartz, Esq.
Schwartz, Warren & Ramirez
A Limited Liability Company
41 South High Street
Columbus, Ohio 43215
(614) 222-3000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 31, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /
(Continued on following pages)
<PAGE> 2
SCHEDULE 13D
CUSIP No. 532716-107 Page 2 of 11 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Leslie H. Wexner ####-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
62,484,900
- --------------------------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 5,327,117
BENEFICIALLY --------------------------------------------------------
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING 62,999,200
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
5,327,117
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
68,326,317
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE> 3
SCHEDULE 13D
CUSIP No. 532716-107 Page 3 of 11 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bella Wexner ###-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
15,697,514
- --------------------------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING 15,697,514
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,697,514
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE> 4
SCHEDULE 13D
CUSIP No. 532716-107 Page 4 of 11 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Wexner Foundation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
2,977,117
- --------------------------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,977,117
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,977,117
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
00
- --------------------------------------------------------------------------------
<PAGE> 5
SCHEDULE 13D
CUSIP No. 532716-107 Page 5 of 11 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Health and Science Interests
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
2,000,000
- --------------------------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,000,000
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
00
- --------------------------------------------------------------------------------
<PAGE> 6
SCHEDULE 13D
CUSIP No. 532716-107 Page 6 of 11 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Health and Science Interests II
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
350,000
- --------------------------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING 350,000
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
350,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
00
- --------------------------------------------------------------------------------
<PAGE> 7
SCHEDULE 13D
CUSIP No. 532716-107 Page 7 of 11 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Wexner Children's Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
18,750,000
- --------------------------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING 18,750,000
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
18,750,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
00
- --------------------------------------------------------------------------------
<PAGE> 8
ITEM 2. Identity and Background. This Amendment No. 14, dated January 31,
1996, to the Schedule 13D dated June 25, 1985 previously filed by
Leslie H. Wexner, Bella Wexner, and The Wexner Foundation is being
filed pursuant to Rule 13d-2 of the Securities Exchange Act of 1934,
as amended. The items for which changes are specified are hereby
amended as indicated below. See Notes 1 and 2 to Item 5.
On January 31, 1996, Leslie H. Wexner transferred 18,750,000 shares of
the Common Stock to The Wexner Children's Trust, u/a/d January 24,
1996 (the "Trust"). The sole trustee of the Trust is Mr. Wexner.
ITEM 3. Source and Amount of Funds or Other Considerations. Not Applicable.
ITEM 4. Purpose of Transaction. The persons named herein may sell securities
from time to time in the open market.
ITEM 5. Interest in Securities of the Issuer.
(A) The number of shares beneficially owned and the corresponding
percentages of all outstanding Shares as of January 31, 1996 are as
follows:
<TABLE>
<S> <C> <C>
1. Leslie H. Wexner 68,326,317(1)(2)(3)(4) 19%
2. Bella Wexner 15,697,514 4.3%
3. The Wexner Foundation 2,977,117 0.8%
4. Health and Science Interests 2,000,000 0.5%
5. Health and Science Interests II 350,000 0.1%
6. The Wexner Children's Trust 18,750,000 5.2%
</TABLE>
(B) Stockholdings of Company Common Stock as of January 31, 1996:
<TABLE>
<CAPTION>
Health and Health and The Wexner
---------- ---------- ----------
Wexner Science Science Children's
------ ------- ------- ----------
Leslie H. Wexner Bella Wexner Foundation Interests Interests II Trust
---------------- ------------ ---------- --------- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
Sole Power to Vote or to 62,484,900(4) 15,697,514 2,977,117(1) 2,000,000(2) 350,000(2) 18,750,000(4)
direct vote
Shared Power to Vote or to 5,327,117(1)(2) N/A N/A N/A N/A
direct vote
Sole Power to dispose of 62,999,200(3)(4) 15,697,514 2,977,117(1) 2,000,000(2) 350,000(2) 18,750,000(4)
or to direct disposition
Shared Power to dispose of 5,327,117(1)(2) N/A N/A N/A N/A
or to direct disposition
</TABLE>
_________________
(1) Power to vote or direct the disposition of the 2,977,117 shares held by The
Wexner Foundation may be deemed to be shared by Leslie H. Wexner, Jeffrey
E. Epstein and Jeffrey J. Smith as the trustees of The Wexner Foundation.
Leslie H. Wexner, Jeffrey E. Epstein and Jeffrey J. Smith disclaim
beneficial ownership of the shares held by the Foundation.
(2) Power to vote or direct the disposition of the 2,350,000 shares held by
Health and Science Interests and Health and Science Interests II may be
deemed to be shared by Leslie H. Wexner as grantor and Jeffrey E. Epstein
as trustees thereof. Leslie H. Wexner and Jeffrey E. Epstein disclaim
beneficial ownership of shares held by Health and Science Interests and
Health and Science Interests II.
The following information required by Item 2 is given with respect to
Messrs. Epstein and Smith:
<TABLE>
<S> <C> <C> <C>
(a) Name: Jeffrey E. Epstein Jeffrey J. Smith
(b) Business Address: 5906 E. Dublin-Granville Road 5906 E. Dublin-Granville Road
New Albany, OH 43054 New Albany, OH 43054
(c) Present Principal
Occupation: Financial Advisor Accountant
(d) and (e) Not applicable
(f) Citizenship: United States United States
</TABLE>
(3) Includes 514,300 shares held in The Limited, Inc. Savings and Retirement
Plan for Mr. Wexner's account.
Page 8 of 11 Pages
<PAGE> 9
(4) Power to vote or direct the disposition of the 18,750,000 shares held by
Leslie H. Wexner as the sole trustee of The Wexner Children's Trust.
(C) The following tables represent the transactions in the Company's
shares by the persons named herein since Amendment No. 13 to the
Schedule 13D was filed on November 22, 1994.
<TABLE>
<CAPTION>
Amount of Price Per
Transactions of Date Securities Share How Transaction Effected
--------------- ---- ---------- ----- ------------------------
<S> <C> <C> <C> <C>
1. Mr. Wexner 12/19/94 300 N/A Gift Disposition
03/01/94 50,000 N/A Grant of Restricted Stock Option
02/01/95 32,500 N/A Grant of Restricted Stock Option
12/18/95 300 N/A Gift Disposition
01/31/96 18,750,000 N/A Transfer to The Wexner Children's Trust
2. Mrs. Bella Wexner None
3. The Wexner Foundation 06/06/95 3,500 $22.00 Open market sale
06/06/95 89,400 $21.875 Open market sale
06/06/95 157,100 $21.75 Open market sale
10/17/95 2,648 N/A Distribution to The Wexner Foundation
Savings and Retirement Plan
11/06/95 113,588 N/A Gift Disposition
4. Health and Science Interests None
5. Health and Science Interests II: None
6. The Wexner Children's Trust 01/31/96 18,750,000 N/A Transfer from Leslie H. Wexner
</TABLE>
(D) No other person is presently known by the persons making this
report to have the right to receive or the power to direct the
receipt of dividends, or the proceeds, from the sale of the
securities mentioned in this report.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
See Note (2) to Item 5.
On January 26, 1996, the Company, Mr. Wexner and the Trust
entered into a Contingent Stock Redemption Agreement (the
"Agreement"), to be effective January 31, 1996.
Pursuant to the terms of the Agreement, the Trust will have the
opportunity (the "Redemption Right"), commencing on January 31, 1998
and for a period of three years thereafter (the "Exercise Period"), to
require the Company to redeem 18,750,000 shares of the Common Stock
(the "Subject Shares"), from time to time, in whole or in part
(subject to specified minimum amounts), at a price per share equal to
$18.75, subject to certain adjustments (the "Redemption Price"). The
Trust will have the right to transfer the Redemption Right, from time,
to time, in whole or in part, to (i) Mr. Wexner, (ii) any member of
his immediate family, (iii) any corporation, partnership, trust or
other entity, all of the owners or beneficiaries of which are Mr.
Wexner or any member of his immediate family or any charitable trust,
(iv) any estate or personal representative of Mr. Wexner or any member
of his immediate family and (v) subject to certain conditions, third
parties, in each case, provided such transferee agrees to be bound by
the terms of the Agreement. The Trust will have the right to pledge
the Redemption Right to a financial institution reasonably
satisfactory to the Company to secure its obligations in respect of
borrowed money under any credit or similar agreement. The Trust will
be permitted to withdraw Subject Shares from the custody account
provided such withdrawn shares are replaced by an amount in cash equal
to 120% of the market value of the withdrawn shares. The Trust will be
permitted to sell the withdrawn shares.
The Company will have the opportunity (the "Company Redemption
Right"), beginning on July 31, 2001 and for six months thereafter, to
redeem the Subject Shares, from time to time, in whole or in part
(subject to specified minimum amounts), at a price per share equal to
$25.07, subject to certain adjustments (also referred to as the
"Redemption Price"). The Company will have the right to transfer the
Company Redemption Right, from time to time, in whole or in part, to
any affiliate. The Company Redemption Right will be reduced on a
share-for-share basis for any Subject Shares redeemed by the Company
pursuant to the Redemption Right.
For purposes of the Agreement, a "Subject Share" will include,
in the event of any spin-off or other distribution by the Company to
its stockholders of any business controlled by the Company, in
addition to a share
Page 9 of 11 Pages
<PAGE> 10
of Common Stock, such security as the Trust may receive in the
spin-off or other distribution in respect of each share. Certain
adjustments will be made to the number of shares subject to the
Redemption Right and the Company Redemption Right, and to the
Redemption Price on the following events: (i) the payment of a
dividend of shares of Common Stock or any subdivision, split or
reclassification of such shares; (ii) the issuance of shares of Common
Stock (or rights, warrants or other securities convertible into or
exchangeable or exercisable for shares) to all holders of shares of
Common Stock at a price less than its market price; (iii) the
repurchase of shares of Common Stock at a price in excess of its
market price subject to certain exceptions, or (iv) any change,
reclassification, conversion or other similar transaction involving
the shares.
Pursuant to the Agreement, the Trust will deposit the Subject
Shares in a Custody Account established with Morgan Guaranty Trust
Company of New York. In addition, Mr. Wexner agreed not to tender any
shares of Common Stock owned by him pursuant to the Company's tender
offer announced on January 28, 1996. A new, wholly-owned subsidiary of
the Company has guaranteed the Company's obligations under the
Agreement.
A copy of the Agreement is filed as an exhibit to this
Amendment to the Schedule 13D, and the foregoing description is
qualified in its entirety by references to such exhibit.
ITEM 7. Material to be Filed as Exhibit
Exhibit A - Contingent Stock Redemption Agreement.
Page 10 of 11 Pages
<PAGE> 11
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: January 31, 1996
/s/ Leslie H. Wexner
--------------------
Leslie H. Wexner
THE WEXNER FOUNDATION
By:/s/ Jeffrey J. Smith
--------------------
Jeffrey J. Smith, Secretary
/s/ Bella Wexner
----------------
Bella Wexner
HEALTH AND SCIENCE INTERESTS
By:/s/ Jeffrey E. Epstein
----------------------
Jeffrey E. Epstein, Trustee
HEALTH AND SCIENCE INTERESTS II
By:/s/ Jeffrey E. Epstein
----------------------
Jeffrey E. Epstein, Trustee
THE WEXNER CHILDREN'S TRUST
By:/s/ Leslie H. Wexner
--------------------
Leslie H. Wexner, Trustee
Page 11 of 11 Pages
<PAGE> 12
EXHIBIT A
CONTINGENT
STOCK REDEMPTION AGREEMENT
dated as of
January 26, 1996
among
THE LIMITED, INC.,
LESLIE H. WEXNER
and
THE WEXNER CHILDREN'S TRUST
<PAGE> 13
CONTINGENT STOCK REDEMPTION AGREEMENT
THIS CONTINGENT STOCK REDEMPTION AGREEMENT (the "AGREEMENT") is made
and entered into as of January 26, 1996 among The Limited, Inc., a Delaware
corporation (the "COMPANY"), Leslie H. Wexner, in his individual capacity, (in
such capacity, the "PRINCIPAL STOCKHOLDER"), and Leslie H. Wexner, as Trustee
(in such capacity, the "TRUSTEE") of The Wexner Children's Trust under a Trust
Agreement dated January 24, 1996 (the "TRUST").
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person. For the purpose of this definition, the term "CONTROL" (including
with correlative meanings, the terms "CONTROLLING", "CONTROLLED BY" and "UNDER
COMMON CONTROL WITH"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"BUSINESS DAY" means each day other than Saturdays, Sundays and days
when commercial banks are authorized or required to be closed for business in
New York City, New York.
"CLOSING" means any closing of a redemption of Subject Shares pursuant
to Section 2.01 or 2.02 hereof, as the case may be.
"COMMON STOCK" means the common stock, par value $.50 per share, of the
Company (or any successor thereto).
"CREDIT AGREEMENT" means any credit or similar agreement providing for
the making of loans or other financial accommodations to a Holder of the Section
2.01 Redemption Right or any portion thereof.
<PAGE> 14
"EFFECTIVE DATE" means the earlier to occur of (i) the day immediately
preceding the date of the commencement of the Tender Offer or (ii) February 2,
1996.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GUARANTY" means any guaranty of the obligations of the Company
hereunder entered into pursuant to Section 3.06.
"HOLDER" means the Trust, any Permitted Transferee and any other Person
to whom rights or obligations under this Agreement have been transferred in
accordance with the terms hereof.
"IMMEDIATE FAMILY" shall be defined as in Rule 16a-1(e) under the
Exchange Act.
"PERMITTED TRANSFEREE" means (i) the Principal Stockholder, (ii) any
member of the Immediate Family of the Principal Stockholder, (iii) any
corporation, partnership, trust or other entity all of the stockholders,
partners, owners or beneficiaries of which are the Principal Stockholder,
members of the Immediate Family of the Principal Stockholder or any Person
qualified as tax-exempt under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, and (iv) the estate or personal representative of (A) the
Principal Stockholder or (B) any member of the Immediate Family of the Principal
Stockholder.
"PERSON" means an individual or a corporation, partnership, trust, or
any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"REDEMPTION PRICE" means the price per share, as adjusted from time to
time in accordance with the terms of Sections 2.07 and 2.08 hereof, at which the
Subject Shares may be redeemed in accordance with the terms and conditions of
this Agreement.
"SUBJECT SHARES" means (i) as of the Effective Date, 18,750,000 shares
of Common Stock, and (ii) as of any subsequent date, the number of shares of
Common Stock (and the number of shares, units or amounts of each such other
security or other property, which, as of such date, is a Subject Share in
accordance with the terms and provisions hereof) which are subject to redemption
hereunder (either pursuant to Section 2.01 or 2.02), as adjusted from time to
time in accordance with the terms hereof.
2
<PAGE> 15
"TENDER OFFER" means the offer by the Company to purchase up to 85
million shares of Common Stock to be commenced on or about February 1, 1996.
"TRANSFEREE" means a Person to whom a Transfer has been made.
"TRUST AGREEMENT" means the Declaration of Trust made as of January 24,
1996 by Leslie H. Wexner, as Settlor and as Trustee.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Aggregate Common Stock Component 2.07(c)
Cash Collateral 3.05(a)
Constituent Person 2.09
Current Market Price
Per Common Share 2.07(d)
Custodian 3.04(a)
Custodian's Notice 3.05(a)
Custody Account 3.04
DGCL 2.03(c)
Daily Price 2.07(d)
Determination Date 2.07(c)
Designated Subject Shares 2.07(a)(ii)
Distributee Company 2.06(a)
Extraordinary Dividend 2.07(b)
Minimum Required Amount 3.05
Pledge Agreement 3.04(a)
Permitted Pledgee 2.04(c)
Pre-Distribution
Subject Shares 2.07(a)(i)(c)
Redemption Notice 2.01 and 2.02
Relevant Distribution 2.06(a)
Replaced Shares 2.04(d)
Repurchased Designated
Common Stock 2.07(c)
Rights 2.07(a)
Section 2.01 Redemption Right 2.01
Section 2.02 Redemption Right 2.02
Specified Number 2.07(a)(i)(A)
Subject Share Shortfall 2.07(a)(iii)
Transfer 2.04(a)
Transferee Agreement 2.04(b)
Withdrawn Shares 3.05(a)
</TABLE>
3
<PAGE> 16
ARTICLE II
REDEMPTION RIGHTS
Section 2.01. Redemption Right of the Holder. Subject to the final
sentence of this Section 2.01, from time to time during the period commencing
upon the second annual anniversary of the Effective Date and ending on the day
prior to the fifth annual anniversary of the Effective Date, a Holder shall be
entitled to require the Company to redeem Subject Shares, in whole or in part,
subject to the terms and conditions hereof, if, and only if, during such period
such Holder gives written notice (a "REDEMPTION NOTICE") to the Company stating
the number of Subject Shares to be redeemed (the "SECTION 2.01 REDEMPTION
RIGHT"). In such event, the Redemption Price shall be a price equal to $18.75
per share in cash, as adjusted from time to time in accordance with Sections
2.07 and 2.08 hereof. The Company shall not be required to redeem a number of
Subject Shares pursuant to this Section 2.01 having an aggregate Redemption
Price of less than $200 million, unless all other Subject Shares shall have been
previously, or shall be simultaneously, redeemed by the Company pursuant to the
terms of this Agreement. The number of Subject Shares from time to time subject
to the Section 2.01 Redemption Right shall be reduced by the number of Subject
Shares theretofore redeemed pursuant to this Section 2.01.
Section 2.02. Redemption Right of the Company. Subject to the final
sentence of this Section 2.02, from time to time during the period commencing
upon the 66th monthly anniversary of the Effective Date and ending on the day
prior to the 72nd monthly anniversary of the Effective Date, the Company shall
have the right to redeem Subject Shares from a Holder that holds such Subject
Shares (or has withdrawn Subject Shares from the Custody Account in accordance
with Section 3.05) subject to the Section 2.02 Redemption Right, in whole or in
part, subject to the terms and conditions hereof, if, and only if, during such
period the Company gives written notice (a "REDEMPTION NOTICE") to such Holder
stating the number of Subject Shares to be redeemed (the "SECTION 2.02
REDEMPTION RIGHT"). In such event, the Redemption Price shall be a price equal
to $25.07 per share in cash, as adjusted from time to time in accordance with
Sections 2.07 and 2.08 hereof. The Company shall not be entitled to redeem a
number of Subject Shares pursuant to this Section 2.02 having an aggregate
Redemption Price of less than $200 million unless all other Subject Shares shall
have been previously, or shall be simultaneously, redeemed by the Company
pursuant to the
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terms of this Agreement. The number of Subject Shares from time to time subject
to the Section 2.02 Redemption Right shall be reduced by the number of Subject
Shares theretofore redeemed pursuant to either the Section 2.01 Redemption Right
or the Section 2.02 Redemption Right.
Section 2.03. Closing. (a) Any Closing shall occur no later than five
Business Days following the receipt by the Company or the Holder, as the case
may be, of a Redemption Notice. A Closing shall be permitted to occur following
the periods specified in Section 2.01 and 2.02 provided that the Redemption
Notice shall have been given prior to the expiration of the applicable period.
(b)(i) At any Closing, the relevant Holder shall deliver, or cause to be
delivered, to the Company a certificate or certificates representing the
securities included in the Subject Shares to be redeemed at such Closing, duly
endorsed for transfer or accompanied by duly executed instruments of transfer,
in each case, with signature guaranteed, against payment therefor pursuant to
paragraph (ii) below. If less than all the securities included in the Subject
Shares represented by any such certificate or certificates are being redeemed,
the Company shall, at any such Closing (or, to the extent that the applicable
Subject Shares are not shares of Common Stock, as soon as practicable
thereafter), deliver to the Custodian, Trust or other Holders, as applicable,
new certificates representing the securities included in the Subject Shares
equal to the difference between the securities included in the Subject Shares
represented by the certificate(s) delivered to the Company and the securities
included in the Subject Shares redeemed. To the extent Subject Shares to be
redeemed at any Closing include property other than securities, title to such
property shall be conveyed, and possession of such property surrendered, to the
Company in a manner appropriate for such property. In the event any Closing
shall occur following a record date for a distribution with respect to any
security constituting a part of the Subject Shares, but prior to such
distribution, the relevant Holder shall not be required to deliver the security
or other property to be distributed in such distribution but, instead, shall be
obligated to deliver an instrument assigning such Holder's right to receive such
security or other property in such distribution with respect to the Subject
Shares so delivered.
(ii) At any Closing, the Company shall deliver to the relevant Holder,
against receipt of the Subject Shares being redeemed at such Closing in
accordance with paragraph (i) above, the aggregate Redemption Price for the
Subject Shares
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<PAGE> 18
to be redeemed from such Holder at such Closing by wire transfer of immediately
available funds to such bank account as such Holder shall have specified in
writing no later than two Business Days prior to the Closing.
(c) Notwithstanding any provision of this Agreement to the contrary, the
Company's obligation to effect any Closing shall be subject to the following
conditions: (i) as of the date of the Closing, the relevant Holder (A) has the
legal capacity to deliver for redemption the Subject Shares and (B) owns the
Subject Shares (or is a Permitted Pledgee), and is delivering such shares to the
Company, free and clear of (x) in the case of any pledgee to whom any Section
2.01 Redemption Right and related Subject Shares shall have been pledged in
accordance with Section 2.04(c) hereof, or any other Holder following a Transfer
contemplated by clause (ii), (iii) or (iv) of such Section 2.04(c), all claims,
charges, encumbrances, or security interests created by or arising or attaching
through such pledgee or Holder and (y) in the case of any other Holder, all
claims, charges, encumbrances or security interests of any nature whatsoever,
except, in each case, a pledge or security interest granted pursuant to Section
3.04 hereof; (ii) as of the date of the Closing, the Company is not prohibited
from redeeming the Subject Shares by reason of clause (a)(1) of Section 160 of
the Delaware General Corporation Law ("DGCL"); (iii) no preliminary or permanent
injunction or other order by any court of competent jurisdiction prohibiting the
consummation of the transaction shall be in effect and (iv) the relevant Holder
shall have confirmed in writing to the Company as of the Closing Date the
accuracy of the matters referred to in clause (i) of this Section 2.03(c).
Section 2.04. Transfer of the Section 2.01 Redemption Right and the
Subject Shares. (a) Any Holder shall have the right to transfer, sell, assign,
bequeath or otherwise dispose of (together, "TRANSFER"), from time to time, in
whole or in part, the Section 2.01 Redemption Right to any Permitted Transferee;
provided the Transferee of the Section 2.01 Redemption Right, at the time of the
Transfer and at all times during which such Transferee holds the Section 2.01
Redemption Right, holds the number of Subject Shares from time to time required
to exercise the Section 2.01 Redemption Right in full (it being understood that
such Subject Shares need not have been owned by the Transferor of the Section
2.01 Redemption Right), and provided further, that as a condition to such
Transfer, such Transferee shall enter into a written agreement reasonably
satisfactory to the Company to the effect that such Transferee shall be bound by
the terms and provisions of this Agreement applicable to Holders of a Section
2.01 Redemption Right,
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including, without limitation, the terms of the immediately foregoing proviso.
(b) Each of the Trust and any Permitted Transferee shall have the right to
Transfer at any time following the third annual anniversary of the Effective
Date, in whole or, subject to the final sentence of this Section 2.04(b), in
part, the Section 2.01 Redemption Right, to any Person other than a Permitted
Transferee, provided that (A) the number of Subject Shares to which the
Transferred Section 2.01 Redemption Right relates shall be Transferred together
with such Section 2.01 Redemption Right and (B) as a condition to such Transfer,
the Transferee shall enter into a written agreement reasonably satisfactory to
the Company to the effect that such Transferee shall (i) be a "Holder"
hereunder, (ii) be bound by the terms and provisions of this Agreement
applicable to Holders, (iii) hold such Section 2.01 Redemption Right (or portion
thereof) (and the related Subject Shares) for investment purposes only, (iv) not
engage (and shall not permit any other Person to engage) in any options,
hedging, derivatives or similar transactions or arrangements with respect to
such Section 2.01 Redemption Right (or portion thereof) or the Subject Shares
related thereto and (v) not Transfer such Section 2.01 Redemption Right (or
portion thereof) or Subject Shares except in accordance with this Section 2.04
(such agreement, a "TRANSFEREE AGREEMENT"). Unless such Transferee shall
continue to hold Subject Shares subject to the Section 2.02 Redemption Right,
upon expiration or termination of the Section 2.01 Redemption Right, any
Transferee Agreement relating thereto shall also expire or terminate. In the
case of a partial Transfer of the Section 2.01 Redemption Right pursuant to this
Section 2.04(b), such Transfer shall be made only with respect to a portion of
such Section 2.01 Redemption Right in respect of Subject Shares having an
aggregate Redemption Price at least equal to $200 million, unless the number of
Subject Shares which have not been previously or simultaneously redeemed
pursuant to this Agreement shall have an aggregate Redemption Price of less than
$200 million (in which case the Section 2.01 Redemption Right may be Transferred
only in its entirety).
(c) The Trust or any Permitted Transferee shall have the right to pledge the
Section 2.01 Redemption Right (and related Subject Shares), from time to time,
in whole or in part, to any financial institution reasonably satisfactory to the
Company to secure such Holder's obligations under a Credit Agreement; provided
that, as a condition to such pledge, the pledgee shall enter into a written
agreement reasonably satisfactory to the Company intended to protect the
Company's rights under this Agreement. Any such pledgee
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<PAGE> 20
is referred to herein as a "PERMITTED PLEDGEE". Notwithstanding any contrary
provision of Section 2.01, the Section 2.01 Redemption Right shall be
exercisable beginning on the first annual anniversary of the Effective Date by a
Permitted Pledgee following the occurrence of a default under the applicable
Credit Agreement or by any Holder of the Section 2.01 Redemption Right and
related Subject Shares following a Transfer thereof pursuant to an exercise of
remedies by a Permitted Pledgee (whether by foreclosure of its pledge or the
exercise of other legal or equitable remedies) or pursuant to a Transfer made in
lieu of foreclosure following a default under the applicable Credit Agreement.
In the event of any default under a Credit Agreement entitling a Permitted
Pledgee to exercise or Transfer the Section 2.01 Redemption Right, then such
Permitted Pledgee shall have the right to:
(i) exercise the Section 2.01 Redemption Right at any time prior to
effecting any Transfer thereof, by foreclosure or otherwise;
(ii) effect a Transfer of the Section 2.01 Redemption Right (and
related Subject Shares), by foreclosure or otherwise, to a Permitted
Transferee, but in such event the Section 2.01 Redemption Right shall not be
exercisable prior to the second annual anniversary of the Effective Date
(except in accordance with this Section 2.04(c) if pledged by such Permitted
Transferee to another Permitted Pledgee);
(iii) effect a Transfer of the Section 2.01 Redemption Right (and
related Subject Shares), by foreclosure or otherwise, to any Person
(including, without limitation, itself); provided that the Transferee
executes and delivers a Transferee Agreement and holds the Section 2.01
Redemption Right (and related Subject Shares) subject to the terms thereof;
or
(iv) effect a Transfer of the Section 2.01 Redemption Right (and
related Subject Shares), by foreclosure or otherwise, to any Person
(including, without limitation, itself) other than in accordance with the
foregoing clauses, but in such event the Section 2.01 Redemption Right so
Transferred shall terminate 15 Business Days after the date of consummation
of such Transfer unless such Person is a Permitted Pledgee (or an affiliate
thereof) and executes an agreement whereby such Person agrees not to
Transfer the Section 2.01 Redemption Right (and related Subject Shares)
other than in accordance with clause
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<PAGE> 21
(ii) or (iii) above, in which case the Section 2.01 Redemption Right so
Transferred shall terminate 15 Business Days after the later to occur of (A)
the date of consummation of such Transfer and (B) the first annual
anniversary of the Effective Date.
A Transfer may be made as contemplated by clause (ii), (iii) or (iv)
above only if the Person to whom such Transfer is made assumes the obligations
of a Holder hereunder with respect to the Section 2.02 Redemption Right to the
extent of the Subject Shares Transferred; provided that such assumption shall
not be required if such Subject Shares constitute Withdrawn Shares, or Replaced
Shares, at the time of such Transfer.
In addition to the foregoing, following the expiration of the
Section 2.01 Redemption Right, the Trust or any Permitted Transferee shall be
permitted to pledge the Subject Shares, subject to the Section 2.02 Redemption
Right, on the same terms as are applicable to a pledge of the Section 2.01
Redemption Right (and the related Subject Shares) under this Section 2.04(c).
(d) No Holder shall be permitted to Transfer any Subject Shares except
(i) in connection with a Transfer of the Section 2.01 Redemption Right in
accordance with Section 2.04(a), (b) or (c) or (ii) Withdrawn Shares or Replaced
Shares. All Subject Shares (other than Withdrawn Shares or Replaced Shares)
Transferred in accordance with Section 2.04(a), (b) or (c) shall at all times
remain subject to the Section 2.02 Redemption Right. Notwithstanding the
foregoing, the Trust shall be entitled from time to time to deposit into the
Custody Account (or to establish a separate Custody Account and deposit therein)
additional Subject Shares which shall immediately become subject to the Section
2.02 Redemption Right (or cash in the Minimum Required Amount) in lieu of an
equivalent number of Subject Shares then held by another Holder (designated by
the Trustee) ("REPLACED SHARES"), and (i) the Company shall thereupon issue or,
to the extent possible, cause to be issued to such Holder new certificates
representing the Replaced Shares without the legend referred to in Section
2.04(f) and (ii) such Replaced Shares shall no longer be subject to the Section
2.02 Redemption Right.
(e) Except as expressly permitted by Section 2.04(a), (b), and (c), a
Section 2.01 Redemption Right may not be Transferred by any Holder; provided
that, notwithstanding any contrary provision in this Section 2.04, it is
understood that any Transfer of Subject Shares and the Section 2.01 Redemption
Right pursuant to enforcement of the
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<PAGE> 22
Guaranty (or any drawing under a letter of credit issued to support obligations
under the Guaranty) shall not be prohibited by any provision of this Agreement.
(f) All Subject Shares from time to time subject to the Section 2.02
Redemption Right shall bear a legend to such effect.
Section 2.05. Transfer of Section 2.02 Redemption Right. The Company
shall have the right to transfer, from time to time, in whole or in part, the
Section 2.02 Redemption Right to any Affiliate, including, without limitation to
a Distributee Company in connection with any Relevant Distribution; provided,
however, that (i) no such transfer shall relieve the Company of its obligation
to pay the aggregate Redemption Price in respect of the Section 2.01 Redemption
Right, unless the Distributee Company shall have assumed such obligation, and
(ii) the Guaranty and all other credit support referred to in Section 3.06
hereof shall remain in effect.
Section 2.06. Certain Adjustments to the Subject Shares. (a) In the
event the Company shall fix a record date for the distribution to holders of
Common Stock of any security representing an interest in any business
theretofore owned or controlled by the Company, immediately following the
effective date of such distribution (a "RELEVANT DISTRIBUTION"), each Subject
Share shall be deemed to consist of the share or shares of Common Stock and
other securities and other assets, if any, which, as of the date immediately
prior to such distribution, constituted a Subject Share, plus such security, or
portion thereof, to be received by the holders of Common Stock in such
distribution in respect of the share or shares of Common Stock included in one
Subject Share immediately prior to such distribution. If, in connection with any
such distribution, the Company's obligations under the Section 2.01 Redemption
Right and the Company's rights under the Section 2.02 Redemption Right are
transferred to the entity the stock of which is being distributed to holders of
Common Stock (the "DISTRIBUTEE COMPANY"), (i) an adjustment in the number and
type of securities included in one Subject Share shall be made in accordance
with the first sentence of this Section 2.06(a), (ii) the Distributee Company
shall be deemed the successor to the Company for all purposes of this Agreement
and (iii) without limiting the generality of the foregoing, for purposes of
determining whether any adjustment is required pursuant to Section 2.06, 2.07,
2.08 or 2.09 as a result of any action taken or event occurring after the date
of such distribution, all references to the Company shall be deemed to be
references to the Distributee Company and all
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<PAGE> 23
references to Common Stock shall be deemed to be references to the common stock
of the Distributee Company received in the Relevant Distribution. The foregoing
adjustments shall be made successively whenever a record date is fixed and, in
the event that such distribution is not so made, the composition of the Subject
Shares shall again be adjusted to be such Subject Shares which would then be in
effect if such record date had not been fixed.
(b) In case the Company shall at any time after the date hereof (i) declare
a dividend, or make a distribution on Common Stock, payable in Common Stock,
(ii) subdivide or split the outstanding Common Stock, (iii) combine or
reclassify the outstanding Common Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), each Subject Share
shall thereafter consist of (x) the number of shares of Common Stock or portions
thereof resulting from such dividend, distribution, subdivision, split,
combination or reclassification in respect of the number of shares of Common
Stock or portions thereof theretofore contained in a Subject Share and (y) all
other assets and property theretofore contained in a Subject Share. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(c) All calculations required by this Section 2.06 shall be made to the
nearest one hundredth of a share.
Section 2.07. Certain Additional Adjustments. (a)(i) In case the
Company shall fix a record date for the issuance to all holders of Common Stock
of rights, options, warrants, convertible securities or other securities
entitling such holders to subscribe for or purchase shares of Common Stock (or
securities convertible into shares of Common Stock) (collectively, "RIGHTS") and
the price per share of Common Stock (or the conversion price per share of Common
Stock, if a security convertible into shares of Common Stock) to be paid upon
exercise or conversion thereof is less than the Current Market Price Per Common
Share on such record date, then:
(A) unless the relevant Holder elects to have the provisions of clause
(iii) of this Section 2.07(a) apply, the Specified Number of shares of
Common Stock theretofore withdrawn from the Custody Account as a result of
the substitution of Cash Collateral shall be replaced in the Custody Account
at least two Business Days prior to the record date for such issuance and
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<PAGE> 24
such replacement shares of Common Stock shall remain in the Custody Account
through such record date (For purposes of this clause (A), the term
"SPECIFIED NUMBER" means a number of shares of Common Stock equal to the
excess, if any, of (1) the number of shares of Common Stock then required
(together with all other assets comprising Subject Shares) to satisfy the
Section 2.02 Redemption Right in full over (2) the sum of the number of
shares of Common Stock then subject to a security interest of Permitted
Pledgees and the number of shares of Common Stock subject to the Section
2.02 Redemption Right but not subject to such security interest.);
(B) all Rights received in respect of Common Stock constituting a part
of the Designated Subject Shares, from and after the distribution thereof,
may not be Transferred (other than in connection with a Transfer of Subject
Shares);
(C) until such time as such Rights included in the Designated Subject
Shares expire or are exercised or converted, each Subject Share shall be
deemed to consist of each share of Common Stock included in a Subject Share
in respect of which such Rights were issued and such other securities and
other assets, if any, which, as of such record date constituted a Subject
Share (together, a "PRE-DISTRIBUTION SUBJECT SHARE") plus the number of
Rights determined by dividing (1) the total number of unexercised or
unconverted Rights included in the Designated Subject Shares, by (2) the
number of Subject Shares;
(D) to the extent such Rights included in the Designated Subject Shares
are exercised or converted, from and after the time of such exercise or
conversion each Subject Share shall be deemed to consist of a
Pre-Distribution Subject Share plus any unexpired, unexercised and
unconverted Rights included therein pursuant to clause (C) above, plus (x) a
number of shares of Common Stock with a Current Market Price Per Common
Share (measured as of the record date) equal to the difference between (1)
the aggregate Current Market Price Per Common Share (determined as
aforesaid) of the shares of Common Stock received upon such exercise or
conversion of Rights included in the Designated Subject Shares minus (2) the
aggregate price paid by the relevant Holder upon such exercise or conversion
divided by (y) the number of Subject Shares.
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(ii) For purposes hereof, "DESIGNATED SUBJECT SHARES" means, at any
time, particular Subject Shares equal to the total number of Subject Shares at
the time, determined by reference to (A) first, to the extent that any Subject
Shares have been pledged, together with related Section 2.01 Redemption Rights,
to a Permitted Pledgee, the number of Subject Shares so pledged and (B) second,
to the extent that the total number of Subject Shares at the time exceeds the
Designated Subject Shares specified in clause (A) of this Section 2.07(a)(ii),
the Subject Shares in the Custody Account.
(iii) For purposes of this Section 2.07(a), if on any record date
referred to in clause (i) of this Section 2.07(a), the aggregate number of
Designated Subject Shares shall be less than the aggregate number of Subject
Shares (such shortfall, the "SUBJECT SHARE SHORTFALL") each Subject Share shall
be adjusted pursuant to clause (i)(D) of this Section 2.07(a) as if, in addition
to the Rights actually exercised in respect of actual Designated Subject Shares,
all Rights in respect of a number of Designated Subject Shares equal to the
Subject Share Shortfall had been exercised on such record date.
(iv) The adjustments set forth above shall be made successively
whenever a record date is fixed or any Right is exercised or converted, as the
case may be; and in the event that such Rights are not so issued or expire
unexercised, each Subject Share shall again be adjusted to be such Subject
Shares which would then be in effect if such record date had not been fixed.
(b) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, assets or other property
(other than (w) distributions payable in Common Stock or Rights referred to in,
and for which an adjustment is made pursuant to, Section 2.07(a) hereof, (x)
distributions referred to in, and for which an adjustment is made pursuant to
Section 2.06, (y) any regular quarterly or semi-annual dividend payable in cash
or (z) any dividend payable in cash other than a regular quarterly or
semi-annual dividend (an "EXTRAORDINARY DIVIDEND") which, individually or
together with all other Extraordinary Dividends paid in such fiscal year, does
not exceed 50% of the aggregate amount of any regular quarterly or semi-annual
dividend or dividends paid in the preceding fiscal year) then (i) in the case of
any distribution of cash, the Redemption Price to be in effect after such record
date
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<PAGE> 26
shall be reduced by the amount of cash distributed in respect of the number of
shares of Common Stock included in one Subject Share and (ii) in the case of a
distribution of evidences of indebtedness, assets or other property (other than
cash), from and after such record date, each Subject Share shall be deemed to
consist of such number of shares of Common Stock included in one Subject Share
as of such record date, and such other securities and other assets, if any,
which, as of such record date, constituted one Subject Share, plus such
evidences of indebtedness, assets or other property received by the Holder in
respect of such number of shares of Common Stock in such distribution. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, each Redemption Price or the
composition of the Subject Shares, as the case may be, shall again be adjusted
to be such Redemption Price or such Subject Shares, as the case may be, which
would then be in effect if such record date had not been fixed.
(c) In case at any time or from time to time the Company or any subsidiary
thereof shall repurchase, by self tender offer (excluding for this purpose, open
market purchases), any shares of Common Stock of the Company included in any
Designated Subject Shares at a weighted average purchase price in excess of the
Current Market Price Per Common Share on the Business Day immediately prior to
the earliest date of such repurchase, the commencement of an offer to repurchase
or the public announcement of either (such date being referred to as the
"DETERMINATION DATE"), (i) each Subject Share shall thereafter consist of (A)
all property and assets other than shares of Common Stock included in one
Subject Share on the Determination Date and (B) a number of shares of Common
Stock equal to the number of shares of Common Stock included in one Subject
Share on the Determination Date multiplied by a fraction the numerator of which
is (I) the aggregate number of shares of Common Stock included in the total
number of Subject Shares on the Determination Date (such aggregate number of
shares of Common Stock, the "AGGREGATE COMMON STOCK COMPONENT") less (II) the
number of shares of Common Stock included in all Designated Subject Shares on
the Determination Date that are purchased pursuant to such repurchase (the
"REPURCHASED DESIGNATED COMMON STOCK") and the denominator of which is the
Aggregate Common Stock Component as of the Determination Date and (ii) each
Redemption Price shall be adjusted to equal the amount determined by dividing
(x) the difference between (A) the product of the number of Subject Shares
outstanding on the Determination Date multiplied by the Redemption Price
theretofore in effect minus (B) the number of shares of Repurchased Designated
Common Stock multiplied
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<PAGE> 27
by the purchase price per share of Repurchased Designated Common Stock paid by
the Company or any subsidiary in such repurchase by (y) the total number of
Subject Shares. For purposes of this Section 2.07(c), if on any Determination
Date in respect of any self tender offer there shall exist a Subject Share
Shortfall, the adjustments set forth in the foregoing sentence shall be made as
if the number of shares of Repurchased Designated Common Stock included, in
addition to any shares of Common Stock included in any Designated Subject Shares
actually purchased pursuant to such repurchase, a number of Shares of Common
Stock equal to the number that would have been purchased had a number of shares
of Common Stock equal to the number of shares included in a number of Subject
Shares equal to the Subject Share Shortfall been tendered and purchased on the
basis of the maximum proration possible in respect of such tender offer. In
addition, for purposes of this Section 2.07(c), neither (A) the Tender Offer,
(B) the exercise of the Section 2.01 Redemption Right or the Section 2.02
Redemption Right nor (C) the repurchase or repurchases by the Company or any
subsidiary thereof within any 12 month period of not more than 15% of the shares
of Common Stock outstanding as of the first date of such period, at a price not
in excess of 115% of the Current Market Price Per Common Share as of the
Determination Date of any such repurchase, shall be deemed to constitute a
repurchase to which this Section 2.07(c) applies. An adjustment made pursuant to
this Section 2.07(c) shall become effective immediately after the effective date
of such repurchase.
(d) For the purpose of any computation under Sections 2.07(a), (b) or (c)
hereof, on any Determination Date the "CURRENT MARKET PRICE PER COMMON SHARE"
shall be deemed to be the average (weighted by daily trading volume) of the
Daily Prices (as defined below) per share of the applicable class of Common
Stock for the 20 consecutive trading days immediately prior to such date. "DAILY
PRICE" means the closing price on such day as reported on the New York Stock
Exchange, Inc. Composite Transactions Tape.
(e) No adjustment in the Redemption Price shall be required unless such
adjustment would require an adjustment of at least one percent in such price;
provided that any adjustments which by reason of this Section 2.07(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 2.07 shall be made to
the nearest one tenth of a cent.
2.08. Other Adjustments. In the event that the Subject Shares shall
include any shares of capital stock of
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<PAGE> 28
the Company other than Common Stock or any shares of capital stock of any other
Person, the number of such other shares and/or the applicable Redemption Price
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained in
Sections 2.06, 2.07 and 2.09 hereof. In addition, if (i) the Company effects any
distribution or similar transaction to or in respect of holders of Common Stock
involving any securities representing an interest in any business theretofore
owned by the Company and (ii) the effect of such distribution or similar
transaction on the composition of the Subject Shares is not addressed in Section
2.06, 2.07 or 2.09 hereof, the composition of the Subject Shares shall
thereafter be adjusted in an equitable manner to reflect both the nature of the
distribution or transaction and the purposes of the provisions of Sections 2.06,
2.07 and 2.08.
2.09. Merger, Consolidation or Sale of Assets. In case of any
consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company (other than a merger which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock) or any sale or transfer of all or
substantially all of the assets of the Company or of the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, the portion of one Subject Share consisting of Common Stock
shall thereafter be the kind and amount of securities receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock equal to the number of shares of Common Stock included in one
Subject Share immediately prior to such consolidation, merger, sale or transfer,
assuming (i) such holder of Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be ("CONSTITUENT
PERSON"), or an Affiliate of a Constituent Person and (ii) in the case of a
consolidation, merger, sale or transfer which includes an election as to the
consideration to be received by the holders, (A) such holder made the election
actually made in respect of the Designated Subject Shares and (B) if there is a
Subject Share Shortfall at the time at which any such election is to be made, no
election was made in respect of a number of Subject Shares equal to such Subject
Share Shortfall, (provided that in the case of this clause (B), if the kind or
amount of securities and other property receivable upon such consolidation,
merger, sale or transfer is not the same for each share of Common Stock held
immediately prior to such consolidation, merger, sale or
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transfer by other than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of clause (B) of this Section 2.09
the kind and amount of securities and other property receivable upon such
consolidation, merger, sale or transfer by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Adjustments for events subsequent to the effective date of
such a consolidation, merger and sale of assets shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Agreement. In the
event the Company is not the surviving entity, this Agreement shall be assumed
by the Person with whom such transaction is effected and any such resulting or
surviving corporation shall expressly assume the obligation to deliver, upon
exercise of the Section 2.01 Redemption Right and the Section 2.02 Redemption
Right, the aggregate Redemption Price. The provisions of this Section 2.09 shall
similarly apply to successive consolidations, mergers, sales, leases or
transfers.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.01. Representations and Warranties of the Company. The
Company represents and warrants to the Principal Stockholder and the Trust that
(a) the Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder, (b) the execution and delivery of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or any of the transactions contemplated
hereby, and (c) this Agreement has been duly executed and delivered by the
Company and, assuming this Agreement constitutes a valid and binding obligation
of the Principal Stockholder and the Trust, constitutes a valid and binding
obligation of the Company and is enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and the availability of equitable
remedies may be limited by equitable principles of general applicability.
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Section 3.02. Representations and Warranties of the Trustee. The
Trustee represents and warrants to the Company that (i) the Trust has been duly
constituted and is validly existing under the laws of the State of Ohio, and has
the requisite power and authority to enter into this Agreement and to carry out
its obligations hereunder, (ii) the execution and delivery of this Agreement by
the Trustee and the consummation by the Trustee and/or its successors in trust
of the transactions contemplated hereby have been duly authorized by all
necessary action under the Trust Agreement and no other proceedings on the part
of the Trustee or any other Person are necessary to authorize this Agreement or
any of the transactions contemplated hereby, and (iii) this Agreement has been
duly executed and delivered by the Trustee and, assuming this Agreement
constitutes a valid and binding obligation of the Company and the Principal
Stockholder, constitutes a valid and binding obligation of the Trustee and/or
its successors in trust, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
the availability of equitable remedies may be limited by equitable principles of
general applicability.
Section 3.03. Covenants of the Principal Stockholder. The Principal
Stockholder agrees that he (a) will not, and will cause all members of his
Immediate Family who reside in his household and all other non-natural Persons
referred to in the definition of Permitted Transferees over which he exercises
control not to, tender any shares of Common Stock in the Tender Offer, and (b)
will cause the Trust to comply with all of its obligations under this Agreement.
Section 3.04. Certain Other Covenants. (a) The Trust agrees that it
will (i) not tender any shares of Common Stock in the Tender Offer, (ii) on the
Effective Date, own not less than 18,750,000 shares of Common Stock and deposit
the certificate or certificates representing such Shares in a custody account
(the "CUSTODY ACCOUNT") with a financial or similar institution (the
"CUSTODIAN") in the manner contemplated in the Pledge Agreement referred to
below; (iii) deposit any certificate or certificates representing any shares of
capital stock or other securities which hereinafter become Subject Shares in the
Custody Account as soon as practicable following the date on which such
securities become Subject Shares, (iv) upon any exercise of the Section 2.02
Redemption Right unless such Section 2.02 Redemption Right shall have been
assumed by another Holder in accordance with the terms hereof, will
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deliver all the Subject Shares being redeemed free and clear of all liens,
charges, encumbrances, or security interests of any nature whatsoever, (v) at
the Effective Date, own the Subject Shares free and clear of any claims,
charges, encumbrances or security interests other than those created under the
Pledge Agreement or those securing a Credit Agreement as permitted under Section
2.04(c) and (vi) on or prior to the Effective Date, (A) execute a pledge or
similar agreement (the "PLEDGE AGREEMENT") in form and substance reasonably
satisfactory to the Trust and the Company pursuant to which the Trust shall
grant to the Company and its permitted assigns a security interest in the
Subject Shares and any Cash Collateral that may be collateral after the date
hereof, (B) to the fullest extent permitted by applicable law, give, execute,
file and record any notice, financing statement, continuation statement or other
instrument, document or agreement that the Company may reasonably consider
necessary or desirable to create, perfect, continue or validate such security
interest or to exercise or enforce the Company's rights with respect to such
security interest and (C) appoint the Company as its attorney-in-fact to
execute, file and record any such documents. The Company hereby acknowledges and
agrees that, in the event the Trust shall enter into a Credit Agreement
containing an obligation on the part of the Trust for borrowed money for which
any Subject Shares shall be pledged as security, the security interest referred
to in this Section 3.04(a)(vi) shall be subordinated to any security interest in
such Subject Shares required by and granted to any lender (or agent thereof) in
connection with any such borrowing.
(b) Upon any exercise of the Section 2.02 Redemption Right, each Holder
(other than the Trust (the obligations of which are set forth in Section
3.04(a)) and a Permitted Pledgee (the obligations of which will be set forth in
agreements to be entered into between the Company and such Permitted Pledgee)
shall deliver the Subject Shares being redeemed free and clear of (x) in the
case of any pledgee to whom the Subject Shares shall have been pledged in
accordance with Section 2.04(c) hereof, or any other Holder following a Transfer
contemplated by clause (ii), (iii) or (iv) of such Section 2.04(c), all claims,
charges, encumbrances or security interests created by or arising or attaching
through such pledgee or Holder and (y) in the case of any other Holder, all
claims, charges, encumbrances or security interests of any nature whatsoever.
Section 3.05. Substitution of Collateral. (a) The Trust shall be
permitted, from time to time, to withdraw Subject Shares from the Custody
Account and the security
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interest under the Pledge Agreement, provided, however, that the Trust
shall substitute therefor, in a manner and pursuant to agreements and
arrangements reasonably satisfactory to the Company under which the Company
shall have a perfected security interest therein subject to no prior liens or
security interests other than liens and security interests theretofore
applicable to the Subject Shares withdrawn prior to or concurrently with any
such withdrawal, either (i) an amount in cash (the "CASH COLLATERAL") at least
equal to the Minimum Required Amount or (ii) an equal number of Subject Shares
(the number of Subject Shares from time to time so withdrawn, "WITHDRAWN
SHARES"). The "MINIMUM REQUIRED AMOUNT" means 120% of the product of the fair
market value of the assets comprising a Subject Share and the number of
Withdrawn Shares. For purposes of the preceding sentence, the fair market value
(i) of a share of Common Stock shall be the Current Market Price Per Common
Share as of the Determination Date or (ii) of any other publicly traded
securities shall be deemed to be the average (weighted by trading volume) of the
daily closing prices (as reported in The Wall Street Journal or other
recognized source of financial information) of such securities on the principal
securities exchange on which, or the principal securities market in which, such
securities are traded during the 20 consecutive trading days immediately prior
to such date and (iii) of any other assets, as determined in good faith by the
Board of Directors of the Company. The required amount of Cash Collateral shall
be recalculated weekly by the Custodian, which shall deliver promptly (by
telecopier in accordance with Section 4.05) a written notice of such
recalculation to the Trust (a "CUSTODIAN'S NOTICE"). Cash Collateral shall be
remitted by the Custodian to, or additional Cash Collateral (or Subject Shares)
which may be required shall be deposited in the Custody Account by, the Trust
based upon the most recent Custodian's Notice, to the extent, but only to the
extent, the value of the Cash Collateral is greater or less than, as the case
may be, the then current Minimum Required Amount. Any payment by or to the Trust
shall be made on the second Business Day after the date of the Custodian's
Notice. Any income in respect of the Cash Collateral shall be paid to the Trust;
provided that any such income shall be retained by the Custodian to the
extent necessary to bring the Trust into compliance with the provisions of this
Section 3.05. Cash Collateral may be invested only in U.S. Government debt
securities having a maturity of less than 90 days.
(b) If the Company exercises its Section 2.02 Redemption Right, or the Trust
fails to satisfy its obligations pursuant to Section 3.05(a), upon the Company's
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instruction the Custodian shall utilize the Cash Collateral to purchase (within
three Business Days after the Redemption Notice in respect of the Section 2.02
Redemption Right shall have been given) such number of Subject Shares as are
required to satisfy the Trust's obligations in respect of the Section 2.02
Redemption Right so exercised.
Section 3.06. Covenants of the Company. The Company agrees that it
shall, prior to the Effective Date (or as promptly as practicable thereafter),
provide credit support in respect of its obligations hereunder on terms
reasonably satisfactory to the Company and the Trust which may include, among
other things, the creation of a bankruptcy remote vehicle, the funding of such
vehicle and the provision by such vehicle of guarantees of or collateral to
support such obligations of the Company, letters of credit to support such
guarantees or obligations and/or reimbursement obligations in respect of such
letters of credit.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Expenses. (a) Except as otherwise agreed by the parties
and except as provided in Section 4.01(b) hereof, each party hereto will pay all
of its own expenses in connection with the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of its counsel
and other advisers, whether or not the transactions contemplated herein are
consummated. Any fees, commissions, and other payments owing to a party's
financial advisors in connection with this Agreement shall be borne solely by
that party.
(b) The Company shall pay any transfer taxes incurred by the Holder as a
result of the exercise of the Section 2.01 Redemption Right or the Section 2.02
Redemption Right, provided, however, that if the Holder shall request the
Company to pay any portion of the aggregate Redemption Price to a Person other
than the registered holder of the Subject Shares represented by the certificate
or certificates surrendered in exchange therefor, it shall be a condition to
such payment that the Holder shall pay to the Company any transfer taxes
required to be paid as a result of such payment to a Person other than the
registered holder of such Subject Shares or establish to the satisfaction of the
Company that such tax has been paid or is not payable.
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Section 4.02. Public Announcements. Except as required by applicable
law or regulations, the Principal Stockholder and the Company shall jointly
approve any public announcements relating to the transactions described herein.
Each party agrees to cooperate with the other in the preparation of any
governmental filing relating to the transactions contemplated hereby.
Section 4.03. Mutual Cooperation. Each of the parties hereto hereby
agrees to reasonably cooperate with each other party in seeking the successful
consummation of the transactions contemplated herein and to use its or his best
efforts promptly to take all such actions as may be necessary or appropriate to
consummate the transactions contemplated herein.
Section 4.04. Amendment; Assigns. This Agreement may not be modified,
amended, altered or supplemented except by an agreement in writing executed by
each of the parties hereto. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
Section 4.05. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be either (i)
hand-delivered, (ii) delivered by reputable overnight courier delivery or (iii)
sent by telecopy (with receipt confirmed) and shall be deemed given upon
delivery when hand-delivered, or one business day after having been deposited
with the overnight courier service or upon receipt of confirmation of
telecopier, addressed as follows (or to such other address as a party may
designate by notice to the other):
If to the Principal Stockholder:
Leslie H. Wexner
c/o The Limited, Inc.
Three Limited Parkway
P. O. Box 1600
Columbus, Ohio 43216
Facsimile: (614) 479-7208
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If to the Trust:
The Wexner Children's Trust
c/o The Limited, Inc.
Three Limited Parkway
P. O. Box 1600
Columbus, Ohio 43216
Attn: Leslie H. Wexner, Trustee
Facsimile: (614) 479-7208
With a copy to:
Weil Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Attn: Dennis J. Block
Facsimile: (212) 310-8007
If to the Company:
The Limited, Inc.
Three Limited Parkway
P.O. Box 1600
Columbus, Ohio 43216
Attn: Samuel P. Fried
Facsimile: (614) 479-7188
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attn: David L. Caplan
Facsimile: (212) 450-4800
Section 4.06. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same document.
Section 4.07. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York.
Section 4.08. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
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effect and shall in no way be affected, impaired or invalidated.
Section 4.09. Third Party Beneficiaries. Nothing in this Agreement,
expressed or implied, shall be construed to give any person other than the
parties hereto and their successors and permitted assigns any legal or equitable
right, remedy or claim under or by reason of this Agreement or any provision
contained herein.
Section 4.10. Entire Agreement. This Agreement and any documents
delivered by the parties pursuant hereto, constitutes the entire understanding
and agreement of the parties hereto with regard to the subject matter hereof and
thereof, and supersedes all prior agreements and understandings, written or
oral, between the parties relating to the subject matter hereof.
Section 4.11. Injunctive Relief. Each of the parties hereto
acknowledges and agrees that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that,
to the fullest extent permitted under applicable law, the parties shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specific performance of the terms
and provisions hereof in any court of the United States of America or any state
thereof having jurisdiction, this being in addition to any other remedy to which
they may be entitled at law or in equity.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
THE LIMITED, INC.
By: /s/ Kenneth B. Gilman
------------------------
Name: Kenneth B. Gilman
Title: Vice Chairman
LESLIE H. WEXNER
/s/ Leslie H. Wexner
-----------------------------
/s/ Leslie H. Wexner
-----------------------------
LESLIE H. WEXNER,
as Trustee of The
Wexner Children's Trust
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