<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
PROFFITT'S, INC.
----------------
(Name of Issuer)
Common Stock, par value $0.10 per share
---------------------------------------
(Title of Class of Securities)
742925100
---------
(CUSIP Number)
Charles J. Hansen
Carson Pirie Scott & Co.
414-347-5307
331 West Wisconsin Avenue
Milwaukee, Wisconsin 53203
--------------------------
(Name, address and telephone number of person authorized
to receive notices and communications)
February 3, 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 this statement: X
-
Page 1 of 33 Pages
Exhibit Index on Page 9
<PAGE>
CUSIP NO. 742925100 Page 2 of 33 pages
- ------------------- -------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Carson Pirie Scott & Co. 37-0175980
________________________________________________________________________
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
________________________________________________________________________
3. SEC USE ONLY
________________________________________________________________________
4. SOURCE OF FUNDS
OO
________________________________________________________________________
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2 (d) or 2 (e)
[_]
________________________________________________________________________
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
- --------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 1,026,550
BENEFICIALLY ------------------------
OWNED BY 8. SHARED VOTING POWER
EACH Not Applicable
REPORTING ------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 1,026,550
------------------------
10. SHARED DISPOSITIVE POWER
Not Applicable
------------------------
________________________________________________________________________
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,026,550
<PAGE>
CUSIP NO. 742925100 Page 3 of 33 pages
- ------------------- -------------------
________________________________________________________________________
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[_]
________________________________________________________________________
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.38% (See Item 5)
________________________________________________________________________
14. TYPE OF REPORTING PERSON
CO
________________________________________________________________________
<PAGE>
CUSIP NO. 742925100 Page 4 of 33 pages
- ------------------- ------------------
Item 1. Security and Issuer
This Statement on Schedule 13D relates to shares of Common Stock, par value
$0.10 per share ("COMPANY COMMON STOCK"), of Proffitt's, Inc., a Tennessee
corporation (the "COMPANY"). The address of the principal executive offices of
the Company is P.O. Box 9388, Alcoa, Tennessee.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c) This Statement is being filed by Carson Pirie Scott & Co.
("CPS"), an Illinois corporation principally engaged in the business of
operating retail department stores in several midwestern states. CPS's principal
offices are located at 331 West Wisconsin Avenue, Milwaukee, Wisconsin 53203.
The name, business address, present principal occupation or employment and
citizenship of each of the directors and executive officers of CPS are set forth
in Schedule 1 hereto and are incorporated herein by reference.
(d) - (e) During the last five years, neither CPS nor any of its directors
or executive officers (i) has been convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors), or (ii) has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
CPS owned 1,047,500 shares of the common stock of Younkers, Inc.
("YOUNKERS") as of February 3, 1996, the effective time of a merger in which
Younkers merged with a subsidiary of the Company (the "MERGER") pursuant to an
Agreement and Plan of Merger dated as of October 22, 1995 among the Company, the
Company's subsidiary, and Younkers (the "MERGER AGREEMENT"). The Merger
Agreement provides that as of the Effective Time (as defined in the Merger
Agreement) of the Merger, each outstanding share of Younkers Common Stock will
be converted into 0.98 of a share of Company Common Stock. Based on and in
accordance with the terms of the Merger Agreement, CPS expects to receive from
the Company a certificate or certificates representing in the aggregate
1,026,550 shares of Company Common Stock. CPS has submitted to the exchange
agent for the Merger all documentation CPS believes is necessary in order for
the exchange agent to issue the certificate or certificates representing the
shares.
ITEM 4. PURPOSES OF THE TRANSACTION
CPS will receive 1,026,550 shares of Company Common Stock in accordance
with the Merger Agreement.
<PAGE>
CUSIP NO. 742925100 Page 5 of 33 pages
- ------------------- ------------------
CPS reserves the right to (i) sell or otherwise dispose of any or all of
the shares of Company Common Stock or other securities of the Company owned by
CPS from time to time, (ii) acquire additional shares of Company Common Stock or
other securities of the Company, and (iii) take any other action with respect to
the Company or any of its debt or equity securities in any manner permitted by
law.
CPS, the Company, and Younkers are parties to a Transaction Agreement dated
as of January 2, 1996 in which, among other agreements, CPS has agreed not to
sell or otherwise dispose of any shares of Company Common Stock during a period
beginning on the 30th day prior to the Effective Time and ending on the day that
the Company publicly releases combined financial results of the operations of
Younkers and the Company for at least 30 days following the Effective Time (the
"LIMITATION PERIOD") if, in the reasonable opinion of Coopers & Lybrand, the
proposed sale or other disposition would materially and adversely affect the
availability of pooling-of-interests accounting for the Merger. In the
Transaction Agreement, the Company has agreed to publish, not later than 60 days
after the Effective Time, combined financial results of the Company and Younkers
for at least 30 days following the Effective Time. A copy of the Transaction
Agreement is attached as Exhibit 1 and is incorporated in this Item by
reference.
On January 11, 1996, CPS notified the Company that it intended to sell some
or all of the 1,047,500 shares of Younkers common stock then owned by Carson. On
January 15, 1996, Coopers & Lybrand notified CPS that Coopers & Lybrand believed
that the proposed sale of the 1,047,500 shares of Younkers common stock or sale
of shares of Company Common Stock during the Limitation Period would adversely
affect the availability of pooling-of-interest accounting for the Merger. CPS is
continuing its efforts to convince Coopers & Lybrand that CPS's sale or other
disposition of Company Common Stock during the Limitation Period would not
adversely affect the availability of pooling-of-interests accounting for the
Merger.
Except as disclosed in this Item 4, CPS has no current plans or proposals
which relate to or would result in any of the events described in (a) through
(j) of the instructions to Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) CPS beneficially owns 1,026,550 shares of Company Common Stock,
representing approximately 5.38% of the shares of Company Common Stock
outstanding, as reported by the Company as of January 3, 1996.
(b) CPS has sole power to vote and sole power to dispose of each of the
shares described in (a) of this Item.
(c) CPS became the beneficial owner of each of the shares described in
(a) of this Item as of February 3, 1996 in accordance with the Merger Agreement.
<PAGE>
CUSIP NO. 742925100 Page 6 of 33 pages
- ------------------- ------------------
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
CPS and the Company are parties to a Registration Rights Agreement dated as
of January 2, 1996. A copy of the Registration Rights Agreement is attached as
Exhibit 2 and is incorporated in this Item by reference. Exhibit 1 is
incorporated in this Item by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Transaction Agreement dated as of January 2, 1996 among
CPS, the Company, and Younkers.
Exhibit 2 Registration Rights Agreement dated as of January 2,
1996 between CPS and the Company.
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: March 8, 1996
CARSON PIRIE SCOTT & CO.
By: _______________________
Charles J. Hansen
Vice President, General Counsel,
and Secretary
<PAGE>
SCHEDULE 1
The name and present principal occupation or employment of the executive
officers and directors of Carson Pirie Scott & Co. are set forth below. Unless
otherwise indicated, each person listed below is a citizen of the United States
of America. Unless otherwise indicated, the business address of each person
listed below is 331 West Wisconsin Avenue, Milwaukee, Wisconsin 53203.
1. STANTON J. BLUESTONE
President and Chief Executive Officer and a Director, Carson Pirie Scott &
Co.
2. MICHAEL R. MACDONALD
Executive Vice President and Chief Administrative Officer and a Director,
Carson Pirie Scott & Co.
3. JOHN R. FREUDENTHAL
Executive Vice President - Merchandising, Carson Pirie Scott & Co.
4. CATHERINE A. SHAW
Executive Vice President - Stores and Visual Presentation, Carson Pirie
Scott & Co.
5. EDWARD P. CARROLL, JR.
Executive Vice President - Sales Promotion and Marketing, Carson Pirie Scott
& Co.
6. ROGER GASTON
Executive Vice President - Human Resources, Carson Pirie Scott & Co.
7. JOHN W. BURDEN III
Director, Carson Pirie Scott & Co. Partner of Retail Options, Inc., a retail
consultant, since November 1993. Formerly Chairman and Chief Executive
Officer of Federated Department Stores, Inc. and Allied Stores Corporation,
each a department store chain. Mr. Burden's business address is Retail
Options, Inc., 15 East 26th Street, New York, New York 10010.
8. MARK DICKSTEIN
Chairman of the Board of Directors, Carson Pirie Scott & Co. President of
Dickstein Partners Inc. - primarily responsible for directing operations of
Dickstein & Co., L.P., Dickstein Focus Fund L.P. and Dickstein International
Limited, each of which invests primarily in securities and debt obligations
of financially distressed companies and other special situations. The
business address of Dickstein Partners Inc. is 9 West 57th Street, New York,
New York 10019.
<PAGE>
9. CHAIM Y. EDELSTEIN
Director, Carson Pirie Scott & Co. Chairman, Hills Stores Company, a
discount store chain, since February 1996. Formerly, Chairman and Chief
Executive Officer of Abraham & Straus, a division of Federated Department
Stores, Inc., a department store chain. Mr. Edelstein's business address is
Hills Stores Company, 15 Dan Road, Canton, Massachusetts 02021.
10. MARK L. KAUFMAN
Director, Carson Pirie Scott & Co. Vice President of Dickstein Partners
Inc., 9 West 57th Street, New York, New York 10019.
11. ROBERT TAMMERO
Director, Carson Pirie Scott & Co. President and Chief Executive Officer of
Pergament Home Centers, Inc., a home center chain. Mr. Tammero's business
address is Pergament Home Centers, Inc., 101 Marcus Drive, Melville, New
York 11747.
<PAGE>
EXHIBIT INDEX
PAGE
1 Transaction Agreement dated as of January 2, 1996 10
2 Registration Rights Agreement dated as of January 2, 1996 19
Page 9 of 33 pages
<PAGE>
EXHIBIT 1
TRANSACTION AGREEMENT
JANUARY 2, 1996
This is a Transaction Agreement among PROFFITT'S, INC., a Tennessee
corporation ("PROFFITT'S"), YOUNKERS, INC., a Delaware corporation ("YOUNKERS"),
and CARSON PIRIE SCOTT & CO., an Illinois corporation ("CPS").
PRELIMINARY STATEMENTS
A. On October 22, 1995, Proffitt's, Baltic Merger Corporation, and Younkers
entered into an Agreement and Plan of Merger (the "MERGER AGREEMENT"). The
Merger Agreement, which is subject to the approval of the Proffitt's
stockholders and the Younkers stockholders, provides for the merger of Baltic
Merger Corporation into Younkers (the "MERGER"). As of the date of this
Agreement, CPS is the record and beneficial owner of 1,047,500 shares of the
Younkers common stock. The shares of Younkers common stock owned by CPS from
time to time during the term of this Agreement are defined as the "CPS SHARES".
B. This Agreement includes the following agreements, among others, all of
which are subject to the terms of this Agreement:
1. CPS agrees to support publicly, and vote all of the CPS Shares in
favor of approval of, the Merger Agreement;
2. CPS agrees not to transfer for specified periods any shares of
common stock of Younkers or of Proffitt's if the effect of the transfer would
materially and adversely affect pooling-of-interests accounting for the Merger;
3. CPS agrees for a specified period not to make a competing offer for
Younkers; and
4. Proffitt's agrees, in a separate Registration Rights Agreement, to
register under the Securities Act of 1933, as amended (the "1933 ACT"), the
shares of common stock of Proffitt's to be received by CPS upon consummation of
the Merger.
TERMS AND CONDITIONS
Proffitt's, Younkers, and CPS agree as follows:
SECTION 1 VOTING OF THE CPS SHARES.
(a) THE MERGER. Subject to paragraphs (b) and (d) of this section, CPS
will announce publicly its support, and vote the CPS Shares in favor of
approval, of the
<PAGE>
Merger Agreement and each Amendment (defined in paragraph (c) of this section)
at the Company Stockholder Meeting (as defined in the Merger Agreement) and at
all adjournments and postponements of that meeting.
(b) EXCEPTIONS. CPS will have no obligation to announce publicly its
support or to vote the CPS Shares in accordance with paragraph (a) of this
section, and may withdraw publicly its support and revoke any vote made in
accordance with paragraph (a) of this section, if in CPS's reasonable judgment
any of the following occur:
(i) a third party has made and has not withdrawn a bona fide proposal
or offer to acquire Younkers pursuant to a tender or exchange offer, a merger,
consolidation, or other business combination or a sale of all or substantially
all of Younkers's assets on terms that are more favorable to Younkers's
stockholders than the transactions contemplated in the Merger Agreement unless
the Younkers board of directors announces publicly that the consideration
contemplated to be paid pursuant to the proposal or offer is "grossly
inadequate";
(ii) Proffitt's or Younkers suffers a Material Adverse Change (as
defined in the Merger Agreement);
(iii) Proffitt's or Younkers breaches any agreement with CPS provided
in this Agreement or in the Registration Rights Agreement and the breach, either
alone or together with other breaches by Proffitt's or Younkers, has, or with
the lapse of time would have, a material adverse effect on CPS; or
(iv) the Merger does not qualify for pooling-of-interests accounting
treatment but only if the nonqualification is due to causes other than the
failure of CPS to perform its obligations in this Agreement.
(c) DEFINITION OF AMENDMENT. For purposes of this section, "AMENDMENT"
means an amendment to the Merger Agreement if, in CPS's reasonable judgment,
each of the following conditions is satisfied:
(i) the amendment does not reduce the per share or aggregate amount of
consideration to be received by CPS in or as a result of the Merger or otherwise
to be paid to CPS in the Merger;
(ii) the amendment does not purport to treat, or have the effect of
treating, CPS, as a shareholder of Younkers or Proffitt's, differently with
respect to or as a result of the Merger than any other similarly situated
shareholder of Younkers or Proffitt's; and
(iii) CPS is not otherwise adversely affected by the amendment.
2
<PAGE>
(d) NOMINATION RIGHTS UNAFFECTED. Nothing in this section, in Section 2,
or otherwise in this Agreement will restrict CPS's rights as a stockholder of
Younkers (i) to nominate persons to serve as directors of Younkers or (ii) after
March 1, 1996 to take all actions necessary to elect such persons to the
Younkers board of directors.
SECTION 2 NO COMPETING OFFERS.
During the period that CPS will be obligated to vote the CPS Shares in
favor of approval of the Merger Agreement and each Amendment in accordance with
Section 1, CPS will not do any of the following without the prior approval of
the Younkers board of directors: (a) acquire, agree to acquire, or make any
proposal to acquire, directly or indirectly, any securities of Younkers; (b)
propose to enter into any merger, consolidation, recapitalization, business
combination, or other similar transaction involving Younkers; (c) subject to
Section 1(d), make or participate in any "solicitation" of "proxies" (as these
terms are used in the proxy rules of the Securities and Exchange Commission (the
"SEC")) to vote any voting securities of Younkers; (d) form, join, or
participate in a "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 ACT") with respect to
voting securities of Younkers; or (e) otherwise act alone or in concert with
others to seek to control Younkers.
SECTION 3 RESTRICTIONS ON TRANSFERS.
(a) CPS NOT AN AFFILIATE. Younkers and Proffitt's each (i) will honor and
rely on a legal opinion of qualified counsel, who may be the Vice President and
General Counsel of CPS, that CPS is not an "affiliate" of Younkers and, after
consummation of the Merger, is not an "affiliate" of Proffitt's (as "affiliate"
is used for purposes of the 1933 Act, the 1934 Act, and the related rules and
regulations of the SEC, including without limitation Accounting Series Releases
130 and 135, as amended, and Staff Accounting Bulletins 65 and 76 of the SEC and
paragraphs (c) and (d) of Rule 145 ("RULE 145") promulgated by the SEC under the
1933 Act) and (ii) will not refer to CPS as, or in any way assert that CPS is,
an affiliate of Younkers or Proffitt's for any purpose except as required by
law.
(b) TRANSFER RESTRICTION. During the Limitation Period (defined in
paragraph (c) of this section), CPS will not, sell, transfer, or otherwise
dispose of, or direct or cause the sale, transfer, or other disposition of, any
shares of Younkers common stock or any shares of common stock of Proffitt's, or
warrants or options to purchase any such shares, whether owned on the date of
this Agreement or acquired after this date, if, in the reasonable opinion of
Coopers & Lybrand (expressed in writing and addressed to CPS (a "PROHIBITED SALE
NOTICE")), the Merger would otherwise qualify for pooling-of-interests
accounting and the proposed sale, transfer, or other disposition would
materially and adversely affect the availability of pooling-of-interests
accounting for the Merger. CPS will give Proffitt's seven days' advance written
notice of any proposed sale, transfer, or other disposition by CPS, that would
occur during the Limitation Period, of any shares
3
<PAGE>
of Younkers common stock of any shares of common stock of Proffitt's (a "SALE
NOTICE"). The first sentence of this paragraph will not restrict or otherwise
apply to the proposed sale, transfer, or other disposition referred to in the
Sale Notice unless Proffitt's delivers to CPS a Prohibited Sale Notice by 5:00
p.m. (Central Time) on the seventh day after the day Proffitt's receives the
Sale Notice. The parties acknowledge that paragraph (a) of this section will not
be binding on Coopers & Lybrand.
(c) DEFINITION OF LIMITATION PERIOD. For purposes of this section,
"LIMITATION PERIOD" means the period beginning on the 30th day prior to the
Effective Time (as defined in the Merger Agreement) and ending on the day that
Proffitt's publicly releases a report in the form of a quarterly earnings
report, registration statement filed with the SEC, a report filed with the SEC
on Forms 10-K, 10-Q, or 8-K, or any other public filing, statement, or
announcement which includes the combined financial results (including combined
sales and net income) of the operations of Younkers and Proffitt's for at least
30 days following the Effective Time.
(d) REPORT OF COMBINED RESULTS. Not later than the 60th day following the
Effective Time, Proffitt's will publish, within the meaning of Section 201.01 of
the SEC's Codification of Financial Reporting Policies, combined financial
results (including combined sales and net income) of the operations of Younkers
and Proffitt's for at least 30 days following the Effective Time.
(e) PROFFITT'S TO FILE REPORTS. Proffitt's will use all reasonable
efforts to file all reports required to be filed by it pursuant to the 1934 Act
and the related rules of the SEC so as to satisfy the requirements of paragraph
(c) of Rule 144 under the 1933 Act that there be available current public
information with respect to Proffitt's and to that extent to make available to
CPS the exemption afforded by Rule 145 with respect to the sale, transfer, or
other disposition of shares of Proffitt's common stock owned by CPS.
SECTION 4 REGISTRATION RIGHTS AGREEMENT.
Proffitt's will register for offer and sale under the 1933 Act the shares
of Proffitt's common stock received by CPS in or as a result of the Merger in
accordance with and subject to the Registration Rights Agreement attached to
this Agreement as Attachment A (the "REGISTRATION RIGHTS AGREEMENT"). The
Registration Rights Agreement has been executed by CPS and Proffitt's as of the
date of this Agreement and is incorporated into this Agreement by reference. The
performance in good faith by Proffitt's of its obligations in the Registration
Rights Agreement is an inducement and a condition to the performance by CPS of
its obligations in this Agreement. Except as provided in the Registration Rights
Agreement, Proffitt's is not obligated to register under the 1933 Act any sale,
transfer, or other disposition of the shares of Proffitt's common stock received
by CPS in or as a result of the Merger.
4
<PAGE>
SECTION 5 DISMISSAL OF LITIGATION.
Not later than the fifteenth day after the date of execution of this
Agreement, CPS will use its reasonable best efforts to cause the litigation
entitled Carson Pirie Scott & Co. v. W. Thomas Gould, et al. (Del. Chan. Civil
Action No. 14359) to be dismissed without prejudice. Subject to the next
sentence, not later than the first anniversary of the Effective Time, CPS will
use its reasonable best efforts to cause the litigation to be dismissed with
prejudice. CPS will have no obligation to dismiss the litigation in accordance
with this section if Younkers or Proffitt's breaches any agreement with CPS
provided in this Agreement or in the Registration Rights Agreement and the
breach, either alone or together with other breaches by Proffitt's or Younkers,
in CPS's reasonable judgment has, or would have with the lapse of time, a
material adverse effect on CPS.
SECTION 6 REPRESENTATIONS AND WARRANTIES.
(a) OF PROFFITT'S. Proffitt's represents and warrants to Younkers and
CPS as follows:
(i) Proffitt's has full power and authority to execute and deliver,
and to consummate the transactions contemplated by, this Agreement and the
Registration Rights Agreement (together, the "CONSTITUENT AGREEMENTS");
(ii) all acts required to be taken by or on the part of Proffitt's to
authorize it to perform the Constituent Agreements have been duly and properly
taken;
(iii) the Constituent Agreements have been duly executed and delivered
by Proffitt's and constitute the valid and binding obligations of Proffitt's
enforceable in accordance with their terms; and
(iv) the execution and delivery by Proffitt's of the Constituent
Agreements will not (A) violate any law or (B) conflict with or result in any
breach of or constitute a default (or event which with notice or lapse of time
or both would become a default) under, any agreement or instrument to which
Proffitt's is a party or by which any of its property may be bound or affected
in any case in which the conflict, breach, or default would have a material
adverse effect on the business, financial condition, or results of operations of
Proffitt's.
(b) OF YOUNKERS. Younkers represents and warrants to Proffitt's and
CPS as follows:
(i) Younkers has full power and authority to execute and deliver,
and to consummate the transactions contemplated by, this Agreement;
5
<PAGE>
(ii) all acts required to be taken by or on the part of Younkers to
authorize it to perform this Agreement have been duly and properly taken;
(iii) this Agreement has been duly executed and delivered by Younkers
and constitute the valid and binding obligations of Younkers enforceable in
accordance with its terms; and
(iv) the execution and delivery by Younkers of this Agreement will not
(A) violate any law or (B) conflict with or result in any breach of or
constitute a default (or event which with notice or lapse of time or both would
become a default) under, any agreement or instrument to which Younkers is a
party or by which any of its property may be bound or affected in any case in
which the conflict, breach, or default would have a material adverse effect on
the business, financial condition, or results of operations of Younkers.
(c) OF CPS. CPS represents and warrants to Proffitt's and Younkers as
follows:
(i) CPS has full power and authority to execute and deliver, and to
consummate the transactions contemplated by, the Constituent Agreements;
(ii) all acts required to be taken by or on the part of CPS to
authorize it to perform the Constituent Agreements have been duly and properly
taken;
(iii) the Constituent Agreements have been duly executed and delivered
by CPS and constitute the valid and binding obligations of CPS enforceable in
accordance with their terms; and
(iv) the execution and delivery by CPS of the Constituent Agreements
will not (A) violate any law or (B) conflict with or result in any breach of or
constitute a default (or event which with notice or lapse of time or both would
become a default) under, any agreement or instrument to which CPS is a party or
by which any of its property may be bound or affected in any case in which the
conflict, breach, or default would have a material adverse effect on the
business, financial condition, or results of operations of CPS.
SECTION 7 TERMINATION.
This Agreement may be terminated as follows:
(a) by mutual written consent of Proffitt's, Younkers, and CPS;
(b) by CPS upon five days' written notice to Proffitt's and Younkers, if
Proffitt's or Younkers fails to comply in any material respect with any of its
obligations in the Constituent Agreements;
6
<PAGE>
(c) by Proffitt's or Younkers upon five days' written notice to CPS if CPS
fails to comply in any material respect with any of its obligations in the
Constituent Agreements;
(d) by Proffitt's, Younkers, or CPS if the Merger Agreement has been
terminated;
(e) by CPS if the Merger has not been consummated on or before the close
of business on June 30, 1996, but CPS may not terminate this Agreement in
accordance with this subparagraph if the failure to consummate the Merger is due
to the failure of CPS to perform its obligations in this Agreement; or
(f) by CPS if the stockholders of Younkers do not approve the Merger
Agreement at the Company Stockholder Meeting or at any adjournment or
postponement of that meeting, but CPS may not terminate this Agreement in
accordance with this subparagraph if the stockholders of Younkers do not approve
the Merger Agreement due to the failure of CPS to perform its obligations in
this Agreement.
SECTION 8 PUBLIC ANNOUNCEMENTS.
Each party to this Agreement will use its reasonable best efforts to
consult with the other parties to this Agreement before making any news release
or governmental filing regarding this Agreement, except (a) as may be required
by law or any listing agreement with or rules of the New York Stock Exchange,
Inc. or NASDAQ, or (b) as may be reasonably necessary in order to use any
registration form under the 1933 Act.
SECTION 9 GENERAL.
(a) AMENDMENTS. No amendment or waiver of any provision of this Agreement
will be effective unless in writing and signed by Proffitt's, Younkers, and CPS.
(b) SUCCESSORS AND ASSIGNS; ASSIGNMENTS RESTRICTED. Subject to the next
sentence, this Agreement is binding upon each party to this Agreement and its
successors and permitted assigns and all references to a party includes their
successors and permitted assigns. Neither this Agreement nor any right under
this Agreement may be assigned (whether by operation of law or otherwise) by any
party, and no purported assignment will be given effect, without the prior
written consent of the other parties to this Agreement.
(c) NOTICES. All notices, demands, and requests required or permitted
under this Agreement will be in writing, and must be personally served,
telecopied, telexed or sent by courier service or United States mail and will be
deemed to have been given when delivered in person or by courier service, upon
receipt of a telecopy (such
7
<PAGE>
receipt evidenced by a confirmation from the sender's telecopy machine that the
notice was sent) or telex or if mailed, five days after deposit in the United
States mail (registered or certified, with postage prepaid and return receipt
requested) addressed to the party so notified and sent to the address so
indicated as follows:
if to Proffitt's:
Proffitt's, Inc.
5810 Shelby Oaks Drive
Memphis, Tennessee 38134
Attention: Mr. R. Brad Martin
Proffitt's, Inc.
3455 Highway 80 West
Jackson, Mississippi 39209
Attention: Mr. Brian J. Martin
if to Younkers:
Younkers, Inc.
7th and Walnut Streets
Des Moines, Iowa 50397
Attention: Mr. W. Thomas Gould
if to CPS:
Carson Pirie Scott & Co.
331 West Wisconsin Avenue
Milwaukee, Wisconsin 53203
Attention: Mr. Michael R. MacDonald
with a copy to:
Mr. Charles J. Hansen
Carson Pirie Scott & Co.
331 West Wisconsin Avenue
Milwaukee, Wisconsin 53203
Each party may specify a different address or addressee upon giving five days'
written notice to the other parties.
(d) TIME OF THE ESSENCE. Time will be of the essence for the
performance of this Agreement.
8
<PAGE>
(e) INTEGRATION; INDUCEMENTS; NO THIRD-PARTY BENEFICIARIES. The
Constituent Agreements constitute the entire agreements among Proffitt's,
Younkers, and CPS concerning all matters covered by the Constituent Agreements.
Any other understandings concerning the matters covered by the Constituent
Agreements are void and of no effect. The performance in good faith by each of
Younkers, Proffitt's, and CPS of its obligations in the Constituent Agreements
is an inducement and a condition to the performance by each other party of its
obligations in the Constituent Agreements. This Agreement is not intended to
confer upon any person other than Proffitt's, Younkers, and CPS any rights or
remedies.
(f) HEADINGS. All section and paragraph headings in this Agreement are for
convenience of reference and are not to be used to interpret this Agreement.
(g) GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the laws of the State of Illinois (without giving effect to
choice of laws principles).
PROFFITT'S, INC.
By: /s/ BRIAN J. MARTIN
---------------------------------
Senior Vice President
YOUNKERS, INC.
By: /s/ W. THOMAS GOULD
---------------------------------
Chief Executive Officer
CARSON PIRIE SCOTT & CO.
By: /s/ CHARLES J. HANSEN
---------------------------------
Vice President
9
<PAGE>
EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of January 2, 1966, by and between Proffitt's, Inc., a Tennessee
corporation ("Proffitt's") and Carson Pirie Scott & Co., an Illinois corporation
("CPS").
RECITALS
WHEREAS, on October 22, 1995, Proffitt's, Baltic Merger Corporation, a
Delaware corporation and wholly-owned subsidiary of Proffitt's, and Younkers,
Inc., a Delaware corporation ("Younkers"), entered into an Agreement and Plan of
Merger (the "Merger Agreement");
WHEREAS, the Merger Agreement provides for the merger of Baltic with and
into Younkers (the "Merger"), with each share of the Younkers common stock, par
value $0.01 per share, being converted into 0.98 shares of the Proffitt's common
stock, par value $0.10 per share ("Proffitt's Common Stock");
WHEREAS, CPS is the record and beneficial owner of 1,047,500 shares of
Younkers Common Stock and, accordingly, will receive shares of Proffitt's Common
Stock (the "Shares") in connection with the Merger;
WHEREAS, subject to the terms, provisions and conditions contained in this
Agreement, Proffitt's agrees to register the Shares for offer and sale pursuant
to the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the good faith performance by Proffitt's of its obligations
hereunder is an inducement and a condition to the performance by CPS of its
obligations under that certain Transaction Agreement dated as of an even date
herewith by and among Proffitt's, Younkers and CPS.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, Proffitt's and CPS agree as follows:
Section 1. Definitions.
As used in this Agreement, the following defined terms shall have the
following meanings:
(a) Agreement. See the definition set forth in the Preamble.
(b) CPS. See the definition set forth in the Preamble.
(c) Demand Registration. See the definition set forth in Section
2(a).
<PAGE>
(d) Exchange Act. See the definition set forth in Section 4(m).
(e) Holder. CPS and the subsequent registered holder of Registrable
Securities, if any, becoming the Holder upon assignment and delegation in
accordance with Section 9(b).
(f) Indemnified Party. See the definitions set forth in Sections 5(a)
and 5(b).
(g) Indemnifying Party. See the definition set forth in Section 5(c).
(h) Limitation Period. See the definition set forth in Section 8.
(i) Merger. See the definition set forth in the Recitals.
(j) Merger Agreement. See the definition set forth in the Recitals.
(k) NASDAQ National Market System. The National Association of
Securities Dealers Automated Quotation System National Market System.
(l) Person. An individual, partnership, corporation, trust, or
unincorporated organization, or a government or agency or political
subdivision thereof.
(m) Piggyback Notice. See the definition set forth in Section 3(a).
(n) Piggyback Registration. See the definition set forth in Section
3(a).
(o) Proffitt's. See the definition set forth in the Preamble.
(p) Proffitt's Common Stock. See the definition set forth in the
Recitals.
(q) Prospectus. The prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement with respect to the
terms of the offering of Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material
incorporated by reference in such prospectus.
(r) Registrable Securities. Shares of Proffitt's Common Stock to be
obtained by CPS in connection with the Merger.
(s) Registration Expenses. See the definition set forth in Section 6.
(t) Registration Period. See the definition set forth in Section
2(b).
2
<PAGE>
(u) Registration Statement. Any registration statement of Proffitt's
which covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to
such Registration Statement, including post-effective amendments, all
exhibits and all material incorporated by reference in such Registration
Statement.
(v) SEC. The Securities and Exchange Commission.
(w) Shares. See the definition set forth in the Recitals.
(x) Smith Barney. Smith Barney Inc.
(y) Termination Date. The earlier of (i) December 31, 1997, or (ii)
the date upon which CPS's ownership of Registrable Securities first
constitutes less than 2.5% of the issued and outstanding shares of
Proffitt's Common Stock.
(z) Underlying Registration. See the definition set forth in Section
3(a).
(aa) Underwriter. See the definition set forth in Section 5(a).
(bb) Younkers. See the definition set forth in the Recitals.
(cc) 1933 Act. See the definition set forth in the Recitals.
Section 2. Demand Registration.
(a) Obligation to File. Prior to the Termination Date and upon written
notice to Proffitt's, the Holder may request that Proffitt's effect the
registration under the 1933 Act of the Registrable Securities (a "Demand
Registration"); provided, however, that the Holder shall not give notice
requesting a Demand Registration within 120 days after the termination of
an offering in which the Holder could have exercised its "piggyback
registration rights" under Section 3 of this Agreement with respect to all
of the Registrable Securities. Proffitt's shall be obligated to effect and
maintain only one Demand Registration pursuant to this Section 2. Upon
receipt of notice under this Section 2(a), Proffitt's shall as promptly as
practicable file a Registration Statement for the offering of all of the
Registrable Securities on a continuous or delayed basis and shall use its
reasonable best efforts to have the Registration Statement declared
effective as soon as practicable after such filing. Proffitt's may postpone
the filing of a Registration Statement under this Section 2(a) for a
reasonable period (not to exceed sixty (60) days) if in its judgment such
filing would require the disclosure of material information that Proffitt's
has a bona fide business purpose for preserving as confidential.
(b) Obligation to Maintain. Proffitt's will use its reasonable best
efforts
3
<PAGE>
to keep the Demand Registration continuously effective for the period (the
"Registration Period") beginning on the date the Demand Registration
Statement is declared effective and ending on the later of (i) six months
following the date on which the Demand Registration Statement is declared
effective plus the total number of days of suspension of the Holder's right
to sell under subparagraphs (a) and (d) of this section, Section 4, and
Section 8(a); and (ii) the Termination Date plus the total number of days
of suspension of the Holder's right to sell under subparagraphs (a) and (d)
of this section, Section 4, and Section 8(a). During the Registration
Period, Proffitt's shall supplement or make amendments to the Demand
Registration Statement as required by the 1933 Act or by the rules and
regulations promulgated thereunder and shall use its reasonable best
efforts to have any such supplement or amendment declared effective as soon
as practicable after its filing.
(c) Selection of Underwriters. If any of the Registrable Securities
covered by the Demand Registration are to be sold in an underwritten
offering, Proffitt's will engage Smith Barney or Merrill, Lynch & Co., as
the Holder may select, or a similar firm mutually acceptable to Proffitt's
and Holder, to act as the lead underwriter of the offering on terms
customary for this type of offering, provided, however, that, in the event
that any firm other than Smith Barney is selected as lead underwriter, such
selection shall be subject to the execution by the selected firm of a
confidentiality agreement of customary form reasonably acceptable to
Proffitt's.
(d) Suspension of Sales. Proffitt's shall have the right to require
the Holder not to sell any Registrable Securities under the Demand
Registration during one or more periods aggregating not more than 120 days
in each twelve month period during the Demand Registration if (i)
Proffitt's would, in accordance with advice of its counsel, be required to
disclose in the Prospectus information not otherwise then required by law
to be publicly disclosed; and (ii) in the sole judgment of Proffitt's Board
of Directors, there is a reasonable likelihood that such disclosure, or any
other action to be taken in connection with the Prospectus, would
materially and adversely affect any existing or prospective material
business situation, transaction or negotiation, or otherwise materially and
adversely affect Proffitt's.
(e) Notice. In the event that (i) Proffitt's suspends sales of
Registrable Securities pursuant to Section 2(d) of this Agreement, or (ii)
the Registration Statement or any related Prospectus ceases to be accurate
and requires revision so that such Registration Statement or Prospectus
will not contain any untrue statement of a material fact nor omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, Proffitt's shall give the Holder prompt
notice of such event.
(f) Inclusion of Other Securities. Proffitt's , and any other holder
of Proffitt's securities who has registration rights, may include its
securities in any Demand Registration effected pursuant to this Section 2;
provided, however, that if
4
<PAGE>
the offering is an underwritten offering and the lead underwriter advises
the Holder in writing that the total amount or kind of securities which
Proffitt's or any such holder intends to include in such proposed offering
is sufficiently large to materially adversely affect the success of the
proposed offering requested by the Holder, then the amount or kind of
securities to be offered for the account of Proffitt's or any such holder
shall be reduced to the extent necessary to reduce the total amount or kind
of securities to be included in such proposed offering to the amount and
kind recommended by such lead underwriter.
Section 3. Piggyback Registration.
(a) Right to Piggyback. Except during the Registration Period and
subject to this Section 3, in the event Proffitt's proposes to register any
of its securities under the 1933 Act (an "Underlying Registration") and the
registration form to be used in connection with the Underlying Registration
may be used for the registration of the Registrable Securities, Proffitt's
shall give the Holder prompt notice of its intention to effect the
registration (the "Piggyback Notice"). Upon written notice to Proffitt's
within thirty (30) days after its receipt of the Piggyback Notice, the
Holder may request that Proffitt's include the Registrable Securities in
the Underlying Registration (the "Piggyback Registration"). Proffitt's
shall be obligated to cause a Piggyback Registration Statement to become
effective pursuant to this Section 3 only once, unless any shares of
Registrable Securities are excluded from the offering by the lead
underwriter in accordance with paragraph (b) of this Section, in which
event CPS will be entitled to request that Proffitt's include the excluded
Registrable Securities in an Underlying Offering in accordance with this
Section until all of the Registrable Securities have been included in a
Piggyback Registration.
(b) Underwritten Registrations. If the Underlying Registration is an
underwritten registration and the lead underwriter advises Proffitt's in
writing that, in their opinion, inclusion of the Registrable Securities in
the offering would materially adversely affect the success of the offering,
the lead underwriter for the offering may, in its sole discretion, exclude
some or all of the Registrable Securities from the offering before the
securities offered by Proffitt's or any other holder of demand or piggyback
rights included therein that have been granted in an agreement executed
prior to the date of this Agreement are so excluded.
5
<PAGE>
(c) Merger, Consolidation, etc. Notwithstanding anything in this
Section 3 to the contrary, the Holder shall have no right to a Piggyback
Registration in connection with any distribution or registration of equity
securities by Proffitt's which is a result of a merger, consolidation,
acquisition, exchange offer, recapitalization, other reorganization,
dividend reinvestment plan, stock option plan or other employee benefit
plan, or any similar transaction having the same effect.
(d) Right to Terminate Underlying Registration. Proffitt's shall have
the right in good faith to terminate or withdraw the Underlying
Registration at any time prior to its effectiveness.
Section 4. Registration Procedures. In connection with Proffitt's
obligations with respect to the Demand Registration and a Piggyback Registration
pursuant to this Agreement, Proffitt's shall use its reasonable best efforts to
effect or cause to be effected the registration of the Registrable Securities
under the 1933 Act to permit the sale of such Registrable Securities by the
Holder in accordance with the intended method or methods of distribution
thereof, and pursuant thereto, Proffitt's shall, as soon as practicable:
(a) prepare and file with the SEC, in accordance with the time periods
specified herein, the requisite Registration Statement with respect to the
Demand Registration or the Piggyback Registration, as the case may be, on
any appropriate form under the 1933 Act, which form shall be available for
the sale of the Registrable Securities in accordance with the intended
method or methods of distribution thereof and shall include all financial
statements required by the SEC to be filed therewith, and use its
reasonable best efforts to cause such Registration Statement to become
effective and remain effective in accordance with this Agreement;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep the
Registration Statement effective for the applicable period; cause the
Prospectus to be supplemented by any required prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the 1933 Act; and to
comply with the provisions of the 1933 Act with respect to the disposition
of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the Holder set forth in such Registration Statement or
supplement to the Prospectus;
(c) furnish to the Holder and to each underwriter, if any, a
reasonable number of copies of a Prospectus and preliminary Prospectus for
delivery in conformity with the requirements of the 1933 Act, and such
other documents as the Holder or underwriter may reasonably request, in
order to facilitate the public sale or other disposition of the Registrable
Securities, but only while Proffitt's shall be required under the
provisions hereof to cause the Registration Statement to remain
6
<PAGE>
effective;
(d) use its reasonable best efforts to register or qualify the
Registrable Securities covered by the Registration Statement under all
other applicable state securities or "blue sky" laws of such jurisdictions
as the Holder shall reasonably request by the time the applicable
Registration Statement is declared effective by the SEC, and do any and all
other acts and things which may be reasonably necessary or advisable to
enable the Holder to consummate the disposition in each such jurisdiction
of such Registrable Securities owned by the Holder; provided, however, that
Proffitt's shall not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but
for this Section 4(d), (ii) subject itself to taxation in any such
jurisdiction, or (iii) submit to the general service of process in any such
jurisdiction;
(e) notify the Holder promptly, and if requested by the Holder,
confirm such advice in writing (i) when the Registration Statement has
become effective and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to the Registration
Statement and Prospectus or for additional information, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iv) if, between the
effective date of any Registration Statement and the closing of any sale of
securities to which it relates, the representations and warranties of
Proffitt's contained in the underwriting agreement, if any, relating to the
offering cease to be true and correct of if Proffitt's receives any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of
any proceeding for such purpose, and (v) of the happening of any event
during the period the Registration Statement is effective which in the
judgment of Proffitt's makes any statement made in the Registration
Statement or the Prospectus untrue in any material respect or which
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading;
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the
qualification of any Registrable Securities for sale in any jurisdiction,
at the earliest possible moment;
(g) upon request, furnish to the lead underwriter of an underwritten
offering, if any, of Registrable Securities, without charge, at least one
signed copy of the Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits;
(h) cooperate with the Holder and the lead underwriter of an
underwritten
7
<PAGE>
offering of Registrable Securities, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and enable
such Registrable Securities to be in such denominations and registered in
such names as such lead underwriter may reasonably request at least three
business days prior to any sale of Registrable Securities to the
underwriters;
(i) upon the occurrence of any event contemplated by Section 4(e)(iv)
or Section 4(e)(v) hereof, use its reasonable best efforts to prepare a
supplement or post-effective amendment to the Registration Statement or the
related Prospectus or any document incorporated therein by reference or
file any other document so that, as thereafter delivered to the purchasers
of the Registrable Securities, the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein in light of the circumstances under which they
were made, not misleading;
(j) enter into an underwriting agreement, if the Registrable
Securities are to be sold in an underwritten offering, with each
underwriter, which agreement is customary in form, substance and scope,
use its reasonable best efforts to obtain any opinions of counsel or
accountants' "cold comfort" letters referred to therein, and take all such
other reasonable actions in connection therewith in order to expedite or
facilitate the disposition of Registrable Securities in an underwritten
offering or, if the Registrable Securities are to be sold pursuant to a
"best efforts" underwriting, to enter into an agreement therefore with each
underwriter, which agreement is customary in form, substance and scope;
(k) make available for inspection by any underwriter participating in
any disposition pursuant to such Registration Statement and any attorney or
accountant retained by any such underwriter, all financial and other
records, pertinent corporate documents and properties of Proffitt's, and
cause Proffitt's officers, directors and employees to supply all
information reasonably requested by such underwriter, and any attorney or
accountant in connection with any such Registration Statement; provided,
however, that such underwriter, and such other attorney or accountant agree
in writing to keep confidential any records, information or documents that
are designated by Proffitt's as confidential unless disclosure of such
records, information or documents is required by court or administrative
order after the exhaustion of appeals therefrom;
(l) deliver to the Holder and to each underwriter of any underwritten
offering of Registrable Securities, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as the Holder or such underwriters may reasonably
request;
(m) promptly prior to the filing of the Registration Statement, any
8
<PAGE>
Prospectus or any other document (other than periodic reports on Form 10-K,
Form 10-Q or Form 8-K, or any successor forms to be filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) which is
to be incorporated by reference into the Registration Statement or the
Prospectus after initial filing of the Registration Statement, provide
copies of such document to the Holder and the lead underwriter of an
underwritten offering of Registrable Securities, if any, and make
Proffitt's representatives available for discussion of such document;
(n) use its reasonable best efforts to cause all Registrable
Securities covered by the Registration Statement to be listed on the NASDAQ
National Market System, or any securities exchange on which similar
securities issued by Proffitt's are then listed;
(o) comply with all applicable rules of the SEC relating to
registration statements and the distribution of securities and otherwise
necessary in order to perform the obligations of Proffitt's under this
Agreement; and
(p) take all other reasonable steps necessary and appropriate to
effect all registrations in the manner contemplated by this Agreement.
Proffitt's may require the Holder to use its reasonable best efforts to
furnish to Proffitt's such information regarding the distribution of such
Registrable Securities as Proffitt's may from time to time reasonably request in
writing.
The Holder agrees that, upon receipt of any notice from Proffitt's of the
happening of any event of the kind described in Section 4(e)(iv) or Section
4(e)(v), the Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering the Registrable
Securities until the Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4(e) hereof, and, if so directed by
Proffitt's, the Holder will deliver to Proffitt's (at Proffitt's expense) all
copies in its possession, other than permanent file copies then in the Holder's
possession, of the Prospectus covering the Registrable Securities current at the
time of receipt of such notice. In the event Proffitt's shall give any notice,
Proffitt's shall extend the period during which such Registration Statement
shall be maintained effective pursuant to this Agreement by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 4(e) hereof to and including the date when the Holder shall
have received copies of the supplemented or amended Prospectus contemplated by
Section 4(e) hereof.
Section 5. Indemnification and Contribution.
(a) Indemnification by Proffitt's. In the event Proffitt's registers
Registrable Securities pursuant to Section 2 or Section 3 hereof,
Proffitt's agrees to indemnify and hold harmless each Person who
participates as a underwriter
9
<PAGE>
("Underwriter"), the Holder and each Person, if any, who controls the
Holder or an Underwriter within the meaning of Section 15 of the 1933 Act,
and their respective directors and officers (an "Indemnified Party") as
follows:
(i) against any and all loss, claim, damage and expense
whatsoever arising out of any untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto)
pursuant to which Registrable Securities were registered under the
1933 Act, including all documents incorporated therein by reference,
or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is
effected with the written consent of Proffitt's; and
(iii) against any and all expense whatsoever (including
reasonable fees and disbursements of counsel chosen by the Holder or
any Underwriter) reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subsections (i) and (ii) of this Section
5(a);
provided, however, that this indemnity agreement does not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
Proffitt's by the Holder or any Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto);
provided, further, however, that this indemnity agreement with respect to
any preliminary or amended preliminary Prospectus shall not inure to the
benefit of any
10
<PAGE>
Underwriter (or to the benefit of any Person controlling such Underwriter)
from whom the Person asserting any such loss, expense, liability or claim
purchased the Registrable Securities which are the subject thereof if the
Prospectus corrected any such alleged untrue statement or omission and if
such Underwriter failed to send or give a copy of the Prospectus to such
Person at or prior to the written confirmation of the sale of such
Registrable Securities to such Person.
(b) Indemnification by the Holder. The Holder agrees to indemnify and
hold harmless Proffitt's and each Underwriter, and each of their
respective directors and officers (including each officer of Proffitt's who
signed the Registration Statement), and each Person, if any, who controls
Proffitt's and any Underwriter within the meaning of Section 15 of the 1933
Act (an "Indemnified Party"), against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 5(a)
hereof, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary Prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to Proffitt's by the Holder expressly for use
in the Registration Statement (or any amendment thereto) or such
preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Conduct of Indemnification Proceedings. Each Indemnified Party
shall give prompt notice to each indemnifying party (the "Indemnifying
Party") of any action commenced against it in respect of which indemnity
may be sought hereunder, but failure to so notify an Indemnifying Party
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. An Indemnifying Party may, at its own
expense, participate in and direct the defense of such action. In no event
shall the Indemnifying Parties be liable for the fees and expenses of more
than one counsel for all Indemnified Parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) Contribution. If the indemnification provided for in this Section
5 is unavailable to a party entitled to indemnification in respect of any
losses, liabilities, claims, damages and expenses referred to herein, then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as
a result of such losses, liabilities, claims, damages and expenses (i) in
such proportion as is appropriate to reflect the relative benefits received
by the parties or (ii) if such allocation is not permitted by applicable
law, the relative fault of the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand, in connection with the statements or
omissions which resulted in losses, liabilities, claims, damages and
expenses as well as other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of
11
<PAGE>
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 statement or
omission. Proffitt's and the Holder acknowledge that it would not be just
and equitable if contribution pursuant to this Section 5(d) 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 prior provisions of this Section 5(d). Notwithstanding anything herein
to the contrary, no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
Section 6. Registration Expenses. All expenses incident to the performance
by Proffitt's of its obligations under this Agreement, including, without
limitation, all (i) registration and filing fees, (ii) fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications and
registrations (or the obtaining of exemptions) of the Registrable Securities),
(iii) printing expenses (including expenses of printing Prospectuses), (iv)
messenger and delivery expenses, (v) internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (vi) fees and disbursements of its counsel and
independent certified public accountants (including the expenses associated with
any special audit or comfort letters required by or incident to performance or
compliance), (vii) reasonable fees and expenses of any special experts retained
by Proffitt's in connection with any registration, (viii) securities act
liability insurance, if any, and (ix) reasonable fees and expenses of other
Persons retained by Proffitt's (all such expenses referred to as the
"Registration Expenses"), will be borne by Proffitt's. Registration Expenses
shall not include any underwriting discounts, commissions or fees attributable
to the sale of the Registrable Securities, or any fees, expenses and
disbursements of counsel, accountants or other Persons retained by the Holder in
connection with the offering of Registrable Securities pursuant to this
Agreement. Such expenses shall be borne by the Holder.
Section 7. Rule 144. Proffitt's shall use its reasonable best efforts to
file the reports required to be filed by it under the 1933 Act and the Exchange
Act and all rules and regulations promulgated by the SEC thereunder. Proffitt's
shall take such additional actions as the Holder shall reasonably request to the
extent required from time to time to enable the Holder to sell Registrable
Securities without registration under the 1933 Act within the limitations of the
exemptions provided by Rule 144 thereunder.
Section 8. Holdback Agreements.
(a) Restrictions on Public Sales by the Holder. If the Holder is
timely notified in writing by the lead underwriter for an underwritten
offering by Proffitt's to be effected by a registration under the 1933 Act,
the Holder shall not effect any
12
<PAGE>
public sale or distribution (including a sale pursuant to Rule 144) of
Registrable Securities during a Limitation Period (as defined below),
except as part of a Demand Registration or a Piggyback Registration.
(b) Restriction on Public Sales by Proffitt's. Proffitt's shall not
effect any public sale or distribution of the following securities during a
Limitation Period:
(i) securities of Proffitt's that are the same class or series as
Registrable Securities (other than pursuant to an employee stock
option, stock purchase, stock bonus or similar plan, pursuant to a
merger, consolidation, exchange offer or a transaction of the type
specified in Rule 145(a) under the 1933 Act); or
(ii) securities of Proffitt's similar to securities referred to
in clause (i) immediately above or securities of Proffitt's
convertible into or exchangeable or exercisable for the securities
referred to in clause (i) immediately above.
(c) Limitation Period. For purposes of this Section 8, "Limitation
Period" shall mean the period beginning on the 10th day prior to the
effective date of a Registration Statement and ending on the later of (i)
the completion of the distribution of the securities pursuant to the
offering and (ii) 90 days after the effective date of the applicable
Registration Statement.
Section 9. Miscellaneous.
(a) Amendments. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented
except in writing and signed by Proffitt's and the Holder.
(b) Successors, Assigns and Transferees. This Agreement will be
binding upon and will inure to the benefit of Proffitt's, CPS, the Person,
if any, that becomes the Holder after the date of this Agreement and each
person that succeeds to any of them by operation of law. CPS may assign its
rights, and delegate its obligations, under this Agreement to any Person
that acquires from CPS all Registrable Securities that CPS owns at the time
of the assignment and delegation, if the Person acquires at least 513,276
shares of the Registrable Securities (the number of shares to be reduced
appropriately to reflect reverse stock splits, recapitalizations, and other
transactions that have the effect of reducing proportionately the number of
shares of Proffitt's Common Stock held by Proffitt's stockholders). Upon
the assignment and delegation, the Person will become the Holder for all
purposes of this Agreement and, subject to Section 5(b), CPS will have no
liability or obligation under this Agreement from and after the time of
assignment and delegation.
13
<PAGE>
(c) Integration. This Agreement and the documents referred to in, or
delivered pursuant to, this Agreement that form a part of this Agreement
contain the entire understanding of Proffitt's and CPS with respect to its
subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly provided in this
Agreement. This Agreement supersedes all prior agreements and
understandings between Proffitt's and CPS with respect to its subject
matter.
(d) Notices. All notices, demands and requests required or permitted
hereunder shall be in writing, and shall be personally delivered,
telecopied, telexed or sent by courier service or United States mail and
will be deemed to have been given when delivered in person or by courier
service, upon receipt of a telecopy (such receipt evidenced by a
confirmation from the sender's telecopy machine that the notice was sent)
or telexed, or if mailed, five days after deposit in the United States mail
(registered or certified, with postage prepaid return receipt requested)
addressed to the party so notified and sent to the address or number so
indicated as follows:
if to Proffitt's:
Proffitt's, Inc.
5810 Shelby Oaks Drive
Memphis, Tennessee 38134
Attention: Mr. R. Brad Martin
Proffitt's, Inc.
3455 Highway 80 West
Jackson, Mississippi 39209
Attention: Mr. Brian J. Martin
if to CPS:
Carson Pirie Scott & Co.
331 West Wisconsin Avenue
Milwaukee, Wisconsin 53203
Attention: Mr. Michael R. MacDonald
With a Copy to:
Mr. Charles J. Hansen
Carson Pirie Scott & Co.
331 West Wisconsin Avenue
Milwaukee, Wisconsin 53203
14
<PAGE>
Each party may specify a different address or addressee upon giving five days'
prior written notice to the other party.
(e) Headings. All section and paragraph headings in this Agreement are
for convenience of reference and are not to be used to interpret this
Agreement.
(f) Severability. If any provision, paragraph, sentence, clause,
phrase or sentence in this Agreement is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of the provision, paragraph, sentence, clause, phrase or
sentence, in every other respect and of the remaining provisions,
paragraphs, sentences, clauses, phrases and sentences of this Agreement
will not be in any way impaired, it being intended that all rights, powers
and privileges of Proffitt's and the Holder will be enforceable to the
fullest extent permitted by law.
(g) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Tennessee (without giving
effect to choice of law principles).
(h) Termination. This Agreement shall terminate on the Termination
Date; provided, however, Section 5 shall survive the termination of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first written above.
Proffitt's, Inc.
("Proffitt's")
By: /s/ Brian J. Martin
---------------------------------
Printed: Brian J. Martin
----------------------------
Its: Senior Vice President
--------------------------------
Carson Pirie Scott & Co.
("CPS")
By: /s/ Charles J. Hansen
---------------------------------
Printed: Charles J. Hansen
----------------------------
Its: Vice President
--------------------------------
15
