NEIMAN MARCUS GROUP INC, SC 13D, 1999-11-01

NEIMAN MARCUS GROUP INC
SC 13D, 1999-11-01
DEPARTMENT STORES

Previous: FIDELITY CONCORD STREET TRUST, 497, 1999-11-01

Next: ALBANY INTERNATIONAL CORP /DE/, S-8, 1999-11-01

<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No.__)

The Neiman Marcus Group, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)

Class B Common Stock, $.01 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)

640204 30 1
--------------
(CUSIP Number)

Richard A. Smith
27 Boylston Street
Chestnut Hill, Massachusetts 02467
(617) 278-5600
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)

October 22, 1999
-------------------------------------------------------
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].

Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.

(Continued on following pages)
(Page 1 of 26 Pages)
<PAGE> 2

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 2 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Richard A. Smith

- --------------------------------------------------------------------------------
(a) [X]
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
939,897

---------------------------------------------------------------
NUMBER OF 8. SHARED VOTING POWER
SHARES 2,578,915
BENEFICIALLY
OWNED BY ---------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH ---------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,518,812

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,518,812

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE> 3

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 3 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nancy L. Marks

- --------------------------------------------------------------------------------
(a) [X]
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(b) [ ]

- --------------------------------------------------------------------------------
3. SEC USE ONLY

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
770,737
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 2,157,853
EACH
REPORTING --------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
2,928,590

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,928,590

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.7%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE> 4

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 4 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Susan F. Smith

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
557,026
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 215,427
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
772,453
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
772,453

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.6%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE> 5

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 5 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Amy Smith Berylson

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
106,381
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 175,735
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
282,116

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
282,116

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.3%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE> 6

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 6 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert A. Smith

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
89,023
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 160,423
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
249,446

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
249,446

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.2%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE> 7

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 7 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Debra Smith Knez

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
42,670
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 126,736
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
169,406
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
169,406

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.8%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE> 8

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 8 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jeffrey R. Lurie

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
20,059
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 3,205
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
23,264

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,264

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.1%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------

<PAGE> 9

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 9 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Cathy J. Lurie

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
482
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
482

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
482

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than .1%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE> 10

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 10 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John G. Berylson

- --------------------------------------------------------------------------------
2. (a) [X]
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
96
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 190,644
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
190,740

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
190,740

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.9%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE> 11

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 11 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dana A. Weiss

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
0
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 165,075
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
165,075

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
165,075

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.8%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE> 12

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 12 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Brian J. Knez

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
5,287
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 133,701
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
138,988

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
138,988

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.6%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------

<PAGE> 13

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 13 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jennifer L. Berylson

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
6,685
NUMBER OF
SHARES --------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH
REPORTING --------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0

--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
6,685

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,685

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than .1%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------

<PAGE> 14

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 14 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mark D. Balk

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
0

NUMBER OF --------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 676,148
OWNED BY
EACH --------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH
--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
676,148

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
676,148

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.2%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------

<PAGE> 15

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 15 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Darline M. Lewis

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
0

NUMBER OF --------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 289,248
OWNED BY
EACH --------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH
--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
289,248

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
289,248

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.3%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN

- --------------------------------------------------------------------------------

<PAGE> 16

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 16 of 25 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Smith Management Company

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
0

NUMBER OF --------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 189,770
OWNED BY
EACH --------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH
--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
189,770

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
189,770

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.9%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
CO

- --------------------------------------------------------------------------------

<PAGE> 17

- --------------------- --------------------
CUSIP No. 640204 30 1 13D Page 17 of 26 Pages
- --------------------- --------------------

- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Marian Realty Company

- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00

- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.

- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
0

NUMBER OF --------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 86,991
OWNED BY
EACH --------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH
--------------------------------------------------------
10. SHARED DISPOSITIVE POWER
86,991

- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
86,991

- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.4%

- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
CO

- --------------------------------------------------------------------------------

<PAGE> 18

--------------------
Page 18 of 26 Pages
--------------------

Item 1. SECURITY AND ISSUER.

The class of equity securities to which this statement on Schedule 13D
(the "Statement") relates is the Class B Common Stock, par value $.01
per share (the "Class B Common Stock"), of The Neiman Marcus Group,
Inc. (the "Company"), a Delaware corporation. The principal executive
offices of the Company are located at 27 Boylston Street, Chestnut
Hill, Massachusetts 02467.

Item 2. IDENTITY AND BACKGROUND.

This statement is filed by a group consisting of: Richard A. Smith and
his wife, Susan F. Smith; Nancy L. Marks (the sister of Richard A.
Smith); the children of Richard A. Smith and Susan F. Smith, namely
Amy Smith Berylson, Robert A. Smith and Debra Smith Knez and their
spouses, John G. Berylson, Dana A. Weiss and Brian J. Knez; one of the
children of Amy Smith Berylson and John G. Berylson, namely Jennifer
L. Berylson; two of the children of Nancy L. Marks, namely Cathy J.
Lurie and Jeffrey R. Lurie; Mark D. Balk and Darline M. Lewis, who are
family attorneys and trustees of family trusts and foundations; and
two family corporations, Smith Management Company and Marian Realty
Company (collectively the "Smith Family Group").

Richard A. Smith's business address is c/o Harcourt General, Inc., 27
Boylston Street, Chestnut Hill, Massachusetts 02467. Mr. Smith is
Chairman of the Board of Directors of the Company, and is Chairman of
the Board of Directors and Chief Executive Officer of Harcourt
General, Inc. The address for Susan F. Smith, Nancy L. Marks, Amy
Smith Berylson, John G. Berylson, Robert A. Smith, Dana A. Weiss,
Debra Smith Knez, Brian J. Knez, Cathy J. Lurie and Jeffrey R. Lurie
is c/o Richard A. Smith, Harcourt General, Inc., 27 Boylston Street,
Chestnut Hill, Massachusetts 02467. Robert A. Smith is Co-Chief
Executive Officer and a director of the Company and is President,
Co-Chief Operating Officer and a director of Harcourt General, Inc.
Brian J. Knez is Co-Chief Executive Officer and a director of the
Company and is President and Co-Chief Operating Officer of Harcourt
General, Inc. Effective November 1, 1999, Richard A. Smith is stepping
down as Chief Executive Officer of Harcourt General, Inc. and Robert
A. Smith and Brian J. Knez have been chosen to succeed him as Co-Chief
Executive Officers of Harcourt General, Inc., effective November 1,
1999. Jeffrey R. Lurie is a director of Harcourt General, Inc. and is
a business executive with Chestnut Hill Productions, Inc., a company
involved in the production of motion pictures, and is the Chief
Executive Officer of Philadelphia Eagles, Inc., the General Partner of
Philadelphia Eagles Limited Partnership, a National Football League
franchise. John G. Berylson is Senior Vice President and Chief
Investment Officer of GC Companies, Inc. which operates a leading
motion picture exhibition circuit in the United States under the name
General Cinema Theatres, and also manages a pool of capital used for
investments. Mark D. Balk and Darline M. Lewis are attorneys with the
firm of Goulston & Storrs. Their address is c/o Goulston & Storrs, 400
Atlantic Avenue, Boston, Massachusetts 02110.

<PAGE> 19

--------------------
Page 19 of 26 Pages
--------------------

Smith Management Company is a Delaware corporation whose principal
assets are securities of Harcourt General, Inc., GC Companies, Inc.,
and the Company. Its principal business and office address is c/o
Richard A. Smith, Harcourt General, Inc., 27 Boylston Street, Chestnut
Hill, Massachusetts 02467. Marian Realty Company is a Massachusetts
corporation whose principal assets are securities of Harcourt General,
Inc., GC Companies, Inc., and the Company. Its principal business and
office address is c/o Richard A. Smith, 27 Boylston Street, Chestnut
Hill, Massachusetts 02467.

During the five years prior to the date hereof, none of the
individuals or corporations listed above have been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors), nor were any of them a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding were or are 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.

All of the individuals listed above are citizens of the United States
of America.

Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

On October 22, 1999, Harcourt General, Inc., a Delaware corporation
("Harcourt General") distributed all of the outstanding shares of
Class B Common Stock of the Company to holders of record of Harcourt
General's common stock and Class B stock (the "Harcourt General
Stock") on October 12, 1999 (the "Distribution"). Holders of Harcourt
General Stock received .3013 of a share of the Company's Class B
Common Stock for each share of Harcourt General Stock held, and no
fractional shares were distributed. All of the shares of the Company's
stock held by the Smith Family Group were acquired in the
Distribution.

Item 4. PURPOSE OF THE TRANSACTION.

The Smith Family Group is the beneficial owner of 6,027,890 shares of
Class B Common Stock.

Certain members of the Smith Family Group have agreed to impose
certain restrictions on the transfer of shares of Class B Common Stock
held by them, and have memorialized their agreement in a written
stockholders' agreement (the "Stockholders' Agreement"). The
Stockholders' Agreement restricts the ability of such persons to
dispose of their shares of Class B Common Stock for three years from
the date of the Distribution except that the restrictions on transfer
will not apply to: (i) transfers of shares to family members and
affiliated entities who agree to be bound by the Stockholders'
Agreement; (ii) transfers to charitable organizations; (iii) transfers
in connection with the merger or consolidation of the Company with a
nonaffiliate of the Company (other than a transaction not approved by
the

<PAGE> 20

--------------------
Page 20 of 26 Pages
--------------------

Company's Board of Directors); (iv) transfers in connection with the
sale of substantially all of the stock of the Company to a
nonaffiliate of the Company (other than a transaction not approved by
the Company's Board of Directors); or (v) transfers in connection with
redemptions of shares by the Company. 5,908,210 shares of Class B
Common Stock are subject to the terms of the Stockholders' Agreement.
The members of the Smith Family Group who are subject to the
Stockholders' Agreement are named on the signature pages to the
Stockholders' Agreement, which is attached as an Exhibit to this
Statement.

All of the members of the Smith Family Group have entered into an
agreement (the "Stockholders' Agreement (180-Day)") which imposes
certain other restrictions on the transfer of shares of Class B Common
Stock held by certain members of the Smith Family Group. The
Stockholders' Agreement (180-Day) restricts the ability of members of
the Smith Family Group to dispose of their shares of Class B Common
Stock for 180 days from the date of the Distribution except that the
restrictions on transfer will not apply to: (i) transfers of shares to
family members and affiliated entities who agree to be bound by the
stockholders' agreement; (ii) transfers to charitable organizations;
(iii) transfers in connection with a bona fide tender offer, exchange
offer, merger, consolidation or similar transaction in which the
opportunity to transfer shares is made available on the same basis to
all holders of Class B Common Stock. 6,024,685 shares of Class B
Common Stock are subject to the terms of the Stockholders' Agreement
(180-Day).

Except as set forth above, none of the members of the Smith Family
Group have any plans or proposals with respect to the matters set
forth in paragraphs (a) - (j) of Item 4.

Item 5. INTEREST IN SECURITIES OF THE ISSUER.

(a) The aggregate number and percentage of shares of Class B
Common Stock beneficially owned by the Smith Family Group and each
member thereof is set forth in the attached Table 5(a). The
percentages have been calculated using the number of shares
outstanding as of October 8, 1999, which are 27,643,543 shares of
Class A Common Stock, par value $.01 per share, of the Company (the
"Class A Common Stock") and 21,440,960 shares of Class B Common Stock.

Pursuant to Rule l3d-5 of the Rules and Regulations promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Smith Family Group is deemed to have beneficial ownership,
for purposes of Section 13(d), of all equity securities of the Company
beneficially owned by any member of the Smith Family Group.
Accordingly, while 5,908,210 shares of

<PAGE> 21

--------------------
Page 21 of 26 Pages
--------------------

Class B Common Stock are subject to the terms of both the
Stockholders' Agreement and the Stockholders' Agreement (180-Day), the
total number of shares of Class B Common Stock held by or for the
benefit of the Smith Family Group, as to which the Smith Family Group
is deemed to be the beneficial owner, is 6,027,890 shares, which
represents 28.1% of the outstanding shares of Class B Common Stock and
12.3% of the total voting power (other than in an election of
directors) of the Company.

Harcourt General will retain, through a wholly owned subsidiary,
4,988,542 shares of Class A Common Stock (the "Retained Shares"), or
18% of the total outstanding shares of Class A Common Stock and 10.2%
of the total outstanding shares of Class A Common Stock and Class B
Common Stock following the Distribution. Harcourt General has agreed
to vote the Retained Shares on all matters in proportion to the votes
cast affirmatively or negatively by all other holders of Class A
Common Stock. Harcourt General intends to, and has represented to the
Internal Revenue Service that it will, dispose of the Retained Shares
as market conditions permit and, in any event, within five years of
the Distribution.

(b) Table 5(b) attached hereto sets forth the required
information with respect to voting power and investment power.

(c) On October 22, 1999, Harcourt General distributed all of the
outstanding shares of Class B Common Stock to holders of record of
Harcourt General Stock on October 12, 1999. As a result of the
Distribution each member of the Smith Family Group received the shares
of the Company that are the subject of this filing.

(d) Not applicable.

(e) Not applicable.

Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.

Members of the Smith Family Group have agreed to impose certain
restrictions on the transfer of shares of Class B Common Stock held by
members of the Smith Family Group, and have memorialized their
agreements as to such restrictions by entering into the Stockholders'
Agreement and the Stockholders' Agreement (180-Day) described in Item
4.

Except for (a) the agreements described above, (b) various Smith
family trusts and foundations which own securities of the Company and
which have been included in the beneficial ownership figures under
Item 5, and (c) attorney-client relationships between Goulston &
Storrs, P.C., the law firm in which Mark D. Balk and Darline M. Lewis
are attorneys,

<PAGE> 22

--------------------
Page 22 of 26 Pages
--------------------

and members of the Smith family, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the Smith
Family Group or between members of the Smith Family Group and any
other person with respect to securities of the Company.

Item 7. MATERIAL TO BE FILED AS EXHIBITS.

Exhibit 99.1: Agreement and Power of Attorney.

Exhibit 99.2: Stockholders' Agreement, dated as of September 1, 1999,
by and among certain members of the Smith Family Group.

Exhibit 99.3: Stockholders' Agreement (180-Day), dated as of September
1, 1999, by and among certain members of the Smith Family Group.

<PAGE> 23

--------------------
Page 23 of 26 Pages
--------------------

Table 5(a)

BENEFICIAL OWNERSHIP OF SHARES
AND PERCENTAGE OF CLASS B COMMON STOCK

<TABLE>
<CAPTION>
Number of Percentage
shares of class
--------- ----------

<S> <C> <C>
Smith Family Group 6,027,890 28.1

Richard A. Smith(1) 3,518,812 16.4

Nancy L. Marks(2) 2,928,590 13.7

Susan F. Smith(3) 772,453 3.6

Cathy J. Lurie 482 *

Jeffrey R. Lurie(4) 23,264 .1

Amy Smith Berylson(5) 282,116 1.3

John G. Berylson(6) 190,740 .9
</TABLE>

- ------------------------------
* Less than .1%

(1) The beneficial ownership figures for Richard A. Smith include 2,987,345
shares held by trusts of which Richard A. Smith is a trustee, 189,770 shares
held by Smith Management Company, and 86,991 shares held by Marian Realty
Company. Richard A. Smith disclaims beneficial ownership of 2,056,706 of the
shares. This report shall not be deemed an admission that Richard A. Smith is
the beneficial owner of the disclaimed shares for purposes of Section 13 or for
any other purpose.

(2) The beneficial ownership figures for Nancy L. Marks include 2,302,477 shares
held by trusts of which Nancy L. Marks is a trustee, and 86,991 shares held by
Marian Realty Company. Nancy L. Marks disclaims beneficial ownership of
1,371,838 of the shares. This report shall not be deemed an admission that Nancy
L. Marks is the beneficial owner of the disclaimed shares for purposes of
Section 13 or for any other purpose.

(3) The beneficial ownership figures for Susan F. Smith include 504,675 shares
held by trusts of which Susan F. Smith is a trustee. Susan F. Smith disclaims
beneficial ownership of 360,374 of the shares. This report shall not be deemed
an admission that Susan F. Smith is the beneficial owner of the disclaimed
shares for purposes of Section 13 or for any other purpose.

(4) The beneficial ownership figures for Jeffrey R. Lurie include 20,056 shares
held by Jeffrey R. Lurie as a guardian of the property of his children, and
3,205 shares held by Philadelphia Eagles, Inc. Jeffrey R. Lurie disclaims
beneficial ownership of 20,056 of the shares. This report shall not be deemed an
admission that Jeffrey R. Lurie is the beneficial owner of the disclaimed shares
for purposes of Section 13 or for any other purpose.

(5) The beneficial ownership figures for Amy Smith Berylson include 162,363
shares held by trusts of which Amy Smith Berylson is a trustee, and 13,372
shares held by Amy Smith Berylson as a guardian of the property of her children.
Amy Smith Berylson disclaims beneficial ownership of 13,372 of the shares. This
report shall not be deemed an admission that Amy Smith Berylson is the
beneficial owner of the disclaimed shares for purposes of Section 13 or for any
other purpose.

(6) The beneficial ownership figures for John G. Berylson include 177,272 shares
held by trusts of which John G. Berylson is a trustee, and 13,372 shares held by
John G. Berylson as a guardian of the property of his children. John
<PAGE> 24

--------------------
Page 24 of 26 Pages
--------------------

<TABLE>
<CAPTION>
<S> <C> <C>
Jennifer L. Berylson 6,685 *

Robert A. Smith(7) 249,446 1.2

Dana A. Weiss(8) 165,075 .8

Debra Smith Knez(9) 169,406 .8

Brian J. Knez(10) 138,988 .6

Mark D. Balk(11) 676,148 3.2

Darline M. Lewis(12) 289,248 1.3

Smith Management Company 189,770 .9

Marian Realty Company 86,991 .4
</TABLE>

- --------------------------------------------------------------------------------
G. Berylson disclaims beneficial ownership of 190,644 of the shares. This report
shall not be deemed an admission that John G. Berylson is the beneficial owner
of the disclaimed shares for purposes of Section 13 or for any other purpose.

(7) The beneficial ownership figures for Robert A. Smith include 160,423 shares
held by trusts of which Robert A. Smith is a trustee.

(8) The beneficial ownership figure for Dana A. Weiss consists of shares held by
trusts of which Dana A. Weiss is a trustee. Dana A. Weiss disclaims beneficial
ownership of all 165,075 of such shares. This report shall not be deemed an
admission that Dana A. Weiss is the beneficial owner of the disclaimed shares
for purposes of Section 13 or for any other purpose.

(9) The beneficial ownership figures for Debra Smith Knez include 126,736 shares
held by trusts of which Debra Smith Knez is a trustee.

(10) The beneficial ownership figures for Brian J. Knez include 133,701 shares
held by trusts of which Brian J. Knez is a trustee. Brian J. Knez disclaims
beneficial ownership of all 133,701 of such shares. This report shall not be
deemed an admission that Brian J. Knez is the beneficial owner of the disclaimed
shares for purposes of Section 13 or for any other purpose.

(11) The beneficial ownership figure for Mark D. Balk consists of shares held by
trusts of which Mark D. Balk is a trustee. Mark D. Balk disclaims beneficial
ownership of all 676,148 of the shares. This report shall not be deemed an
admission that Mark D. Balk is the beneficial owner of the disclaimed shares for
purposes of Section 13 or for any other purpose.

(12) The beneficial ownership figure for Darline M. Lewis consists of shares
held by trusts of which Darline M. Lewis is a trustee. Darline M. Lewis
disclaims beneficial ownership of all 289,248 of the shares. This report shall
not be deemed an admission that Darline M. Lewis is the beneficial owner of the
disclaimed shares for purposes of Section 13 or for any other purpose.

<PAGE> 25

--------------------
Page 25 of 26 Pages
--------------------

Table 5(b)

BENEFICIAL OWNERSHIP OF COMMON STOCK

<TABLE>
<CAPTION>
Sole Shared Sole Shared
Beneficial Voting Voting Dispositive Dispositive
Ownership Power Power Power Power
---------- ------- --------- ----------- ------------

<S> <C> <C> <C> <C> <C>
Smith Family Group 6,027,890 0 6,027,890 0 6,027,890

Richard A. Smith 3,518,812 939,897 2,578,915 0 3,518,812

Nancy L. Marks 2,928,590 770,737 2,157,853 0 2,928,590

Susan F. Smith 772,453 557,026 215,427 0 772,453

Amy Smith Berylson 282,116 106,381 175,735 0 282,116

Robert A. Smith 249,446 89,023 160,423 0 249,446

Debra Smith Knez 169,406 42,670 126,736 0 169,406

Jeffrey R. Lurie 23,264 20,059 3,205 0 23,264

Cathy J. Lurie 482 482 0 0 482

John G. Berylson 190,740 96 190,644 0 190,740

Dana A. Weiss 165,075 0 165,075 0 165,075

Brian J. Knez 138,988 5,287 133,701 0 138,988

Jennifer L. Berylson 6,685 6,685 0 0 6,685

Mark D. Balk 676,148 0 676,148 0 676,148

Darline M. Lewis 289,248 0 289,248 0 289,248

Smith Management . 189,770 0 189,770 0 189,770
Company

Marian Realty Company 86,991 0 86,991 0 86,991
</TABLE>

<PAGE> 26

--------------------
Page 26 of 26 Pages
--------------------

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: November 1, 1999

/s/ Richard A. Smith
--------------------
Richard A. Smith, individually and as
attorney-in-fact for each of
Nancy L. Marks,
Susan F. Smith,
Amy Smith Berylson,
Robert A. Smith,
Debra Smith Knez,
Jeffrey R. Lurie,
Cathy J. Lurie,
John G. Berylson,
Jennifer L. Berylson,
Dana A. Weiss,
Brian J. Knez,
Mark D. Balk,
Darline M. Lewis,
Smith Management Company and
Marian Realty Company

ATTENTION: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).

<PAGE> 1
Exhibit 99.1

AGREEMENT AND POWER OF ATTORNEY

WHEREAS, the undersigned are beneficial owners, as determined pursuant to
Rule 13d-3 of the General Rules and Regulations of the Securities Exchange Act
of 1934, as amended, of certain shares of Class B Common Stock, $.01 par value,
of The Neiman Marcus Group, Inc. ("Class B Common Stock").

WHEREAS, certain individuals, trustees and corporations have agreed to act
together for certain purposes including acquiring, holding and disposing of
Class B Common Stock.

NOW, THEREFORE, the undersigned agree that:

A joint statement containing the information required by Schedule 13D
shall be filed with the Securities and Exchange Commission on behalf of each of
the undersigned.

The undersigned hereby severally constitute and appoint Richard A.
Smith and Mark D. Balk and each of them singly, our true and lawful attorneys,
with full power to them, and each of them to sign for us, and in our names and
in the capacities indicated below, the Schedule 13D relating to the shares of
Common Stock owned by us and any and all amendments thereto filed or to be filed
with the Securities and Exchange Commission with respect to any agreement
entered into by us relating to the Common Stock owned by us, hereby ratifying
and confirming our signatures as they may be signed by our said attorneys to
said Schedule 13D and any and all amendments thereto.

-1-
<PAGE> 2

<TABLE>
<CAPTION>
<S> <C>
/s/ Richard A. Smith /s/ Nancy L. Marks
- ---------------------------------- ----------------------------------
Richard A. Smith Nancy L. Marks

/s/ Susan F. Smith /s/ Cathy J. Lurie
- ---------------------------------- ----------------------------------
Susan F. Smith Cathy J. Lurie

/s/ Amy Smith Berylson /s/ Jeffrey R. Lurie
- ---------------------------------- ----------------------------------
Amy Smith Berylson Jeffrey R. Lurie

/s/ John G. Berylson /s/ Debra Smith Knez
- ---------------------------------- ----------------------------------
John G. Berylson Debra Smith Knez

/s/ Jennifer L. Berylson /s/ Brian J. Knez
- ---------------------------------- ----------------------------------
Jennifer L. Berylson Brian J. Knez

/s/ Robert A. Smith /s/ Dana A. Weiss
- ---------------------------------- ----------------------------------
Robert A. Smith Dana A. Weiss

MARIAN REALTY COMPANY
/s/ Mark D. Balk
- ---------------------------------- /s/ Richard A. Smith
Mark D. Balk ----------------------------------
By: Richard A. Smith

/s/ Darline M. Lewis
- ---------------------------------- SMITH MANAGEMENT COMPANY
Darline M. Lewis
/s/ Richard A. Smith
----------------------------------
By: Richard A. Smith

</TABLE>

-2-

<PAGE> 1
Exhibit 99.2

SMITH-LURIE/MARKS FAMILY

STOCKHOLDERS' AGREEMENT

RE THE NEIMAN MARCUS GROUP, INC.

THIS AGREEMENT, dated as of the first day of September, 1999, is among
certain parties (herein individually referred to as a "Stockholder" and
collectively as the "Stockholders") who are currently shareholders of Harcourt
General, Inc. and anticipate a distribution of Class B Common Stock of THE
NEIMAN MARCUS GROUP, INC., a Delaware corporation (the "Company") in accordance
with an Amended and Restated Distribution Agreement between Harcourt General,
Inc. and the Company dated July 1, 1999 and who, by executing this instrument,
or a supplemental instrument, elect to become parties hereto and to subject the
shares of Class B Common Stock identified herein (or in such supplemental
instrument) to the terms and provisions hereof.

WITNESSETH:

The following sets forth the background of this Agreement:

A. The Company's authorized capital stock consists of 200,000,000 shares,
150,000,000 of which are common stock, par value $.01 per share (the "Common
Stock") and 50,000,000 of which are preferred stock, par value $.01 per share
("Preferred Stock"). As of the date hereof, 49,039,068 shares of Common Stock
and no shares of Preferred Stock are issued and outstanding.

B. The Company, subject to shareholder approval, intends to create a new
class of common stock ("Class B Common Stock") while maintaining its present
class of common stock (renamed "Class A Common Stock") and its Preferred Stock.
21,440,960 shares of Company Common Stock owned by Harcourt General, Inc.
("HGI"), a Delaware corporation, will be converted into 21,440,960 fully paid
shares of Class B Common Stock. HGI's shares of Class B Common Stock will be
distributed in a spinoff transaction to HGI's shareholders, including the
Stockholders. The date as of which the distribution of Class B Common Stock is
effective to vest ownership thereof in distributees is the "Distribution Date"
for purposes of this Agreement.

C. By reason of the Distribution, the parties hereto will on the
Distribution Date be the holders of approximately 28% of the Company's Class B
Common Stock which will generally have the same rights and privileges as Class A
Common Stock except that Class B Common Stock will be entitled to elect at least
82% of the members of the board of directors of the Company.

-1-
<PAGE> 2

D. The Stockholders have agreed that:

(i) in order to maximize the long-term value of the Company and its
stock, it is in the collective best interests of the Stockholders and in
the best interests of the Company that the Company be able to operate free
of the possibility of sale of the substantial amounts of Class B Common
Stock which will be held by the Stockholders on the Distribution Date for
the period and to the extent provided herein; and

(ii) it is in the collective best interests of the Stockholders that
no Stockholder sell the Class B Common Stock subject to this Agreement
without affording the other Stockholders the opportunity to purchase the
Class B Common Stock proposed to be sold, as provided herein.

E. To further the objectives referred to in Paragraph D, above, the
Stockholders have agreed that no Stockholder shall transfer any of the shares of
Class B Common Stock distributed to such Stockholder on the Distribution Date
("Restricted Stock") except in accordance with the terms of this Agreement.
Annexed hereto, made a part hereof and hereby incorporated herein by reference
is a Schedule of Stockholders (the "Schedule") which sets forth the Restricted
Stock which it is anticipated will be owned by each of the Stockholders on the
Distribution Date.

F. This instrument will set forth the agreements among the Stockholders
described in Paragraph E above.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby severally acknowledged, the parties hereto agree as
follows:

1. Paragraphs A through F above accurately set forth the background of
this Agreement.

2. Each Stockholder agrees that he, she or it shall not sell, assign,
encumber, hypothecate, pledge, transfer or otherwise dispose of or alienate in
any way (any such disposition being herein referred to as a "Transfer" or,
collectively, the "Transfers") all or any part of the Restricted Stock (or any
interest therein) owned or controlled by him, her or it except upon and subject
to the terms of this Agreement. All certificates evidencing each Stockholder's
ownership of such Restricted Stock shall bear the following legend (in addition
to any other legend thereon):

"The shares represented by this certificate are subject to the terms of a
Smith-Lurie/Marks Family Stockholders' Agreement Re The Neiman Marcus
Group, Inc. dated as of September 1, 1999, among certain of the Class B
Common Stock stockholders of the Company, by the terms of which such shares
cannot be sold, pledged or transferred except subject to the terms of such
Agreement, which Agreement limits transfers of such until [fill in third
anniversary of Distribution Date] and provides that

-2-
<PAGE> 3

certain stockholders have the right to purchase such shares and the Company
may have the opportunity to repurchase such shares under certain
circumstances set forth therein. A copy of such Agreement shall be
furnished without charge to the registered holder of this Certificate upon
written request therefor."

Nothing contained herein shall preclude a pledge of the Restricted Stock so long
as the pledgee shall hold such pledge subject to the restrictions of this
Agreement and satisfies each of the terms and conditions set forth in this
Agreement.

3. Each Stockholder agrees that, except as otherwise provided in
Paragraph 4 herein, he, she or it will not, directly or indirectly, sell, offer,
contract to sell, grant any option to purchase or otherwise transfer or dispose
of any Restricted Stock for a period of three (3) years from the Distribution
Date. Notwithstanding the foregoing, Restricted Stock which is transferred or
distributed to a Permitted Transferee (as defined in Paragraph 4 herein) by
reason of the death of a Stockholder (including Restricted Stock which is held
by a revocable trust which has become irrevocable by reason of the death of a
stockholder, provided that such trust is a Permitted Transferee) may thereafter
be transferred free of the restrictions imposed by the immediately preceding
sentence.

4. Notwithstanding the restrictions contained in Paragraphs 3 and 5 of
this Agreement, the following transfers ("Permitted Transfers") may be
consummated at any time, provided that (except in the case of transfers
described in Subsections (i)(C), (vi) and (vii), below) the transferee in such
Transfer (the "Permitted Transferee") shall execute such instruments as may be
necessary or appropriate (a) to extend the terms, conditions and provisions of
this Agreement to such Permitted Transferee while the owner of such Restricted
Stock, (b) to agree to comply with and not to suffer any violation of this
Agreement and (c) to agree that such Permitted Transferee shall not make or
suffer to be made any transfer of such Restricted Stock except upon compliance
with the provisions of this Agreement:

(i) In the case of a Stockholder who is a natural person,

(A) To the spouse of such Stockholder, any lineal descendant of
a grandparent of such Stockholder, and any spouse of such lineal
descendant (which lineal descendants, their spouses, the Stockholder,
and his or her spouse are herein collectively referred to as the
"Stockholder's Family Members");

(B) To the trustee of a trust (including a voting trust)
principally for the benefit of such Stockholder and/or one or more of
his or her Permitted Transferees described in each subclause of this
clause (i) other than this subclause (B), provided that such trust may
also grant a general or special power of appointment to one or more of
such Stockholder's Family Members and may permit trust assets to be
used to pay taxes, legacies and other obligations of the trust or of
the estates of

-3-
<PAGE> 4

one or more of such Stockholder's Family Members payable by reason of
the death of any such Family Members;

(C) To an organization (hereinafter called a "Charitable
Organization"), a contribution to which is deductible for federal
income, estate or gift tax purposes or any split-interest trust
described in Section 4947 of the Internal Revenue Code, as it may from
time to time be amended;

(D) To a corporation, a partnership or limited liability company
if, in the case of a corporation, a majority of its outstanding
capital stock entitled to vote for the election of directors is owned
by, or in the case of a partnership, a majority of its partnership
interests entitled to participate in the management of the partnership
are held by, or in the case of a limited liability company, a majority
of the membership interests in the limited liability company
controlling management of the limited liability company are held by,
the Stockholder or his or her Permitted Transferees determined under
this clause (i); and

(E) To the estate of such Stockholder.

(ii) In the case of a Stockholder holding the shares of Restricted
Stock in question as trustee pursuant to a trust (other than a trust which is a
Charitable Organization or a trust described in clause (iii) below), "Permitted
Transferee" means (A) any person transferring Restricted Stock to such trust and
(B) any Permitted Transferee of any such person determined pursuant to clause
(i) above.

(iii) In the case of a Stockholder holding the shares of Restricted
Stock in question as trustee pursuant to a trust (other than a Charitable
Organization) which is irrevocable on the date hereof, "Permitted Transferee"
means (A) any person to whom or for whose benefit principal may be distributed
either during or at the end of the term of such trust whether by power of
appointment or otherwise and (B) any Permitted Transferee of any such person
determined pursuant to clause (i) above.

(iv) In the case of a Stockholder which is a corporation, partnership
or limited liability company (other than a Charitable Organization), "Permitted
Transferee" means (A) any person (a "Prior Transferor") who theretofore
transferred such shares of Restricted Stock to such corporation, partnership or
limited liability company, (B) any Permitted Transferee of the Prior Transferor
and (C) the stockholders, partners or members, as the case may be, of the
Stockholder in connection with a distribution by the Stockholder, so long as
such stockholders, partners or managers (x) are stockholders, partners or
members of such corporation, partnership or limited liability company on the
date hereof or (y) would be Permitted Transferees of such stockholders, partners
or members on the date hereof pursuant to one of the other subsections of this
Paragraph 4.

-4-
<PAGE> 5

(v) In the case of a Stockholder which is the estate of a deceased
Stockholder, or which is the estate of a bankrupt or insolvent Stockholder,
which holds record and beneficial ownership of the shares of Restricted Stock in
question, "Permitted Transferee" means a Permitted Transferee of such deceased,
bankrupt or insolvent Stockholder as determined pursuant to clause (i), (ii),
(iii), or (iv), above, as the case may be.

(vi) Transfers of shares of Restricted Stock in connection with the
merger, consolidation or sale of all or substantially all of the Common Stock of
the Company if the surviving entity in such merger, consolidation, or sale is
not an affiliate of the Company, other than a transaction not approved by a
majority of the Company's Board of Directors (a "Non-Affiliate Merger"). For the
purposes of this clause (vi), "affiliate" shall mean any entity controlling,
controlled by or under direct or indirect common control of the Company.

(vii) Transfers of shares of Restricted Stock in connection with the
redemption by the Company of all or any portion of the Company's Class B Common
Stock, PROVIDED THAT if, at the time of such redemption, the Stockholder holds
Class B Common Stock which is not Restricted Stock, the number of shares of
Restricted Stock which may be transferred in connection with such redemption
shall not exceed that number of shares determined by multiplying the total
number of shares to be transferred by the Stockholder in connection with such
redemption by a fraction, the numerator of which is the total number of shares
of Restricted Stock owned by the Stockholder and the denominator of which is the
total number of shares of Class B Common Stock owned by such Stockholder.

All Permitted Transferees (other than Permitted Transferees who acquire
Restricted Stock pursuant to Paragraph 4(i)(C), 4(vi) or 4(vii) herein) shall be
deemed to be Stockholders for purposes of this Agreement. In applying the
provisions of this Paragraph 4, Restricted Stock owned by a revocable trust
shall be treated as if owned by the donor or grantor of such trust.

5. Without limiting the provisions of Paragraph 3 herein:

(a) Each Stockholder desiring to sell or otherwise transfer or
dispose of Restricted Stock (the "Selling Stockholder") other than to a
Permitted Transferee, shall give notice (the "Offer") to each other Stockholder
and to the Company setting forth (i) the number of shares of such Restricted
Stock to be transferred by such Selling Stockholder (the "Offered Shares"), (ii)
the total number of shares of Class B Common Stock owned by such Stockholder
and, (iii) if the transfer is not an Exchange Sale (as hereinafter defined), (x)
the identity of the proposed transferee and (y) the terms and conditions,
including price per share, at which the Offered Shares are to be sold (the
"Third Party Offer Price"). For purposes of this Agreement, "Exchange Sale"
shall mean a sale which a Selling Stockholder proposes to make through the New
York Stock Exchange or other principal exchange or recognized securities market.

-5-
<PAGE> 6

(b) Each Stockholder (other than the Selling Stockholder) may elect
to purchase all or any portion of the Offered Shares by written notice to the
Selling Stockholder given within fifteen (15) business days after receipt of the
Offer (the "Acceptance Deadline"); and each such Stockholder so electing is
herein referred to as a Purchasing Stockholder. The Company may also elect to
purchase all or any portion of the Offered Shares by written notice to the
Selling Stockholder given by the Acceptance Deadline provided, however, the
Company's acceptance is subject to the prior rights of Purchasing Stockholder
and further provided that the Company's acceptance shall only be effective if it
specifies that in the event fewer Offered Shares are available after acceptances
from Purchasing Stockholders than the number specified by the Company, the
Company will purchase such lesser number of Offered Shares. Any purchase by the
Company hereunder shall result in shares so purchased by the Company ceasing to
be Restricted Shares. Such notice from a Stockholder or from the Company
electing to purchase is referred to herein as an "Acceptance". The Acceptance
shall specify (i) the number of shares to be purchased by such Stockholder or
which the Company is willing to purchase, and (ii) if the Selling Stockholder's
proposed sale is an Exchange Sale, the "Trade Date" (which as to each Purchasing
Stockholder and, if applicable, the Company shall be such date as may be
selected by such Purchasing Stockholder or the Company, as the case may be,
which is subsequent to receipt of the Offer and prior to the Acceptance
Deadline). The aggregate purchase price for the Offered Shares shall be equal to
the number of Offered Shares described in the Acceptance multiplied by (i) in
the case of a proposed sale which is not an Exchange Sale, the Third Party Offer
Price, and (ii) in the case of a proposed Exchange Sale, (a) the closing price
for the Offered Shares on the New York Stock Exchange or other principal
exchange or recognized securities market on the Trade Date, less (b) all
reasonable costs and expenses that would have been incurred had such Offered
Shares been sold by the Selling Stockholder without regard to the right of first
refusal, such as brokerage commissions, costs of registration of the Offered
Shares pursuant to federal securities laws and taxes (other than income taxes
payable by the Selling Stockholder).

(c) If the number of Offered Shares is insufficient to enable each
Purchasing Stockholder to purchase the number of Offered Shares specified in his
Acceptance, the Company shall have no right to purchase any Offered Shares and
(i) each Purchasing Stockholder who is a member of the same "Stockholder Family"
(as defined in the Schedule) as the Selling Stockholder shall have the right to
purchase such portion or all of such shares as he, she or it may elect, to the
exclusion of all members of the other Stockholder Family; and (ii) if the number
of Offered Shares shall still be insufficient notwithstanding the application of
clause (a) above, then each Purchasing Stockholder who is a member of the same
Stockholder Family as the Selling Stockholder shall have the right to purchase
such number of shares as shall determined by multiplying the total number of
such Offered Shares by a fraction, the numerator of which is the number of
shares of Restricted Stock owned of record by such Purchasing Stockholder and
the denominator of which is the number of shares of Restricted Stock owned of
record by all Purchasing Stockholders who are members of the Stockholder Family,
and (iii) if the number of Offered Shares shall still be insufficient
notwithstanding the application of clauses (i) and (ii), above, then each
Purchasing Stockholder shall be entitled to purchase

-6-
<PAGE> 7

such number of shares as shall be determined by multiplying the total number of
such Offered Shares by a fraction, the numerator of which is the number of
shares of Restricted Stock owned of record by such Purchasing Stockholder, and
the denominator of which is the number of shares of Restricted Stock owned of
record by all persons or entities who are Purchasing Stockholders. However, any
Purchasing Stockholder may at any time transfer the right to purchase the whole
or any portion of the Offered Shares that such person may purchase as provided
herein to any other Stockholder (whether or not such other Stockholder shall
constitute a Purchasing Stockholder) on such terms and provisions as the parties
to such transfer may agree, without any obligation on the part of the transferor
to offer to transfer such right to purchase to any other Stockholder and without
obligation on the part of the transferee to acquire the right to purchase shares
from any other Purchasing Stockholder. In the event of any such transfer of the
right to purchase Offered Shares, the transferee shall constitute a Purchasing
Stockholder hereunder. If the number of Offered Shares is more than (the
"Excess") the number of Offered Shares specified in Acceptances from Purchasing
Stockholders, the Company's Acceptance shall, subject to Paragraph 5(e), be
effective for up to the number of Offered Shares specified in its Acceptance but
not more than the Excess.

(d) Payment for Offered Shares shall be made in immediately available
federal funds by each Purchasing Stockholder, and by the Company if applicable,
to the Selling Stockholder on or before the Closing Date (as hereinafter
defined). For purposes of this Agreement, the Closing Date shall be (i) seven
(7) business days from the date of a Purchasing Stockholder's Acceptance, or the
Company's Acceptance, in the case of a proposed Exchange Sale, or (ii) thirty
(30) days from the date of the Offer, in the case of a proposed sale which is
not an Exchange Sale. Payment shall be made at the Selling Stockholder's address
set forth in the Schedule against delivery by such Selling Stockholder of stock
certificates and instruments of conveyance sufficient to transfer the Offered
Shares to be transferred to the Purchasing Stockholder (and/or the Company) free
and clear of all liens and encumbrances. Such Selling Stockholder shall deliver
the stock certificates and instruments of conveyance sufficient to effect such
transfer at such time concurrently with the receipt of such Purchase Price;
provided, however, if the proposed sale was not an Exchange Sale and on the
Closing Date for the purchase by a particular Purchasing Stockholder other
Purchasing Stockholders have not yet performed, the Selling Stockholder may
create an escrow arrangement with an escrow agent reasonably acceptable to the
Purchasing Stockholder to hold the stock certificates and instruments of
conveyance pending the closing of the sale of all of the Offered Shares, and
shares held in such escrow shall be distributed to the appropriate Purchasing
Shareholders when all closings have occurred, but if there is a default in
performance as described in Paragraph 5(g) below such shares will be distributed
to Purchasing Shareholders or to the Selling Stockholder for disposition in
accordance with the remedies chosen by the Selling Stockholder. As used herein,
the term "business day(s)" shall mean day(s) on which the Executive Offices of
the Company are officially open for business.

(e) Notwithstanding any of the foregoing, in the case of a proposed
sale which is not an Exchange Sale, if, at the time the Acceptance Deadline for
all

-7-
<PAGE> 8

Stockholders has passed, Stockholders and the Company have elected to purchase
fewer Offered Shares, in the aggregate, than the Selling Stockholder proposes to
sell, the Selling Stockholder shall give notice of such fact to each other
Stockholder and the Company, and each other Stockholder and the Company shall
have three (3) business days after receipt of such notice within which to
subscribe for additional Offered Shares (the "Acceptance Extension Period"). If,
at the time the Acceptance Extension Period for all Stockholders and the Company
has passed, Purchasing Stockholders and the Company have still subscribed for
fewer Offered Shares, in the aggregate, than the Selling Stockholder proposes to
sell, the Selling Stockholder shall have no obligation to sell Offered Shares to
other Stockholders and the Company pursuant to the Offer but shall have the
option to (i) sell to Purchasing Stockholders and/or the Company the number of
Offered Shares subscribed for in the manner described in Paragraphs 5(d) and
(g), herein, or (ii) sell the Offered Shares to the third party named in the
Offer on the terms and conditions contained in the Offer, provided that such
transfer is effected within forty-five (45) days after delivery to Stockholders
of the Offer. If, at the time the Acceptance Extension Period for all
Stockholders and the Company has passed, Purchasing Stockholders and the Company
have subscribed for all or more than the Offered Shares, then Paragraphs 5(b)
through (d) inclusive and Paragraphs 5(g) through (j) inclusive shall be
applicable.

(f) Notwithstanding any of the foregoing, in the case of a proposed
Exchange Sale, any and all Offered Shares which Stockholders and/or the Company
have not purchased pursuant to the Offer and on the terms and conditions
described herein, may be sold by the Selling Stockholder on the New York Stock
Exchange or other principal exchange or recognized securities market, provided
that such sale is effected within forty five (45) days after delivery to the
Stockholders and the Company of the Offer.

(g) If Acceptances to purchase at least that number of Offered Shares
which the Selling Stockholder proposes to sell have been received by the Selling
Stockholder either in response to his original Offer, or, in the case of a sale
which is not an Exchange Sale, during the Acceptance Extension Period, but one
or more Purchasing Stockholders or the Company defaults in the performance of
its obligations to purchase the Offered Shares described in the Acceptances, the
Selling Stockholder shall give notice of such default to each other Stockholder
and the Company and each other Stockholder and the Company shall have three (3)
business days after receipt of such notice within which to cure, fully or
partially, such default by purchase of some or all of the Offered Shares with
respect to which there was a default. In the event that such default is not
timely cured by other Stockholders, the Selling Stockholder, (i) in the case of
a proposed Exchange Sale may sell such of the Offered Shares as were not
purchased pursuant to Acceptances or cure on the New York Stock Exchange or
other principal exchange or securities market or (ii) in the case of proposed
sale which is not an Exchange Sale shall have no obligation to sell any of the
Offered Shares to other Stockholders or to the Company pursuant to the Offer,
but shall have the option, in addition to pursuing any and all other remedies
available at law or in equity against the defaulting Stockholder or, if the
Company defaulted, against the Company to (A) sell the

-8-
<PAGE> 9

number of Offered Shares subscribed for by non-defaulting Stockholders in the
manner described in Paragraph 5(d), above and either (z) retain the Offered
Shares subscribed for by the defaulting Stockholder(s), or (y) sell to the third
party named in the Offer the Offered Shares subscribed for by the defaulting
Stockholder(s) or (B) sell the Offered Shares to the Third Party named in the
Offer on the terms and conditions contained in the Offer, provided that such
transfer is effected within forty-five (45) days after delivery to Stockholders
and the Company of the Offer.

(h) The provisions of this Paragraph 5 contemplate a separate
transaction between the Selling Stockholder and each Purchasing Stockholder and,
if applicable, between the Selling Stockholder and the Company with respect to
the shares offered by such Selling Stockholder.

(i) If any dispute shall arise among Stockholders as to the amount of
the Offered Shares that may be purchased initially or by reason of the default
of a Purchasing Stockholder, such Stockholders shall use their best efforts to
ensure that such default will not preclude the purchase of the Offered Shares
from the Selling Stockholder which are the subject of such controversy; and to
that end, shall, if appropriate, utilize escrow arrangements and arbitration to
facilitate acquisition of the Offered Shares and a prompt resolution of the
controversy subsequent to such acquisition.

(j) The provisions of Paragraphs 4(a), (b) and (c), requiring that
any Permitted Transferee execute such instruments as shall be necessary or
appropriate, inter alia, to extend the terms, conditions and provisions of this
Agreement to Restricted Stock acquired by the Transferee shall be applicable to
any purchase pursuant to this Paragraph 5, and each Purchasing Stockholder shall
execute the instruments contemplated by such Paragraphs 4(a), (b) and (c) at or
prior to his, her or its becoming entitled to receive certificates evidencing
the acquisition of the Offered Shares.

6. The attachment of the interest of any Stockholder in Restricted Stock
by a judgment creditor, or any person claiming a lien thereon, or the filing of
an involuntary petition in bankruptcy against a Stockholder or the appointment
of any receiver in bankruptcy proceedings against a Stockholder, if any of the
said proceedings have not been dismissed within thirty (30) days after the
filing thereof, or the filing of a voluntary petition in bankruptcy by a
Stockholder or the use of any insolvency act by a Stockholder, or the breach by
a Stockholder of any of the covenants or agreements contained herein (any or all
of the foregoing to be referred to herein as "Triggering Events") shall IPSO
FACTO be deemed for all purposes to be, and shall be, a continuing offer on the
part of such Stockholder, so long as such conditions exist and remain uncured,
to sell his, her or its Restricted Stock to the other Stockholders on the terms,
conditions and provisions set forth in Paragraph 5 hereof, at a price equal to
(a) the closing price for the Common Stock on the New York Stock Exchange on the
date of the Triggering Event or (b) if the Common Stock is not traded on the New
York Stock Exchange on the date of the Triggering Event, the closing price for
the Common Stock on such other principal exchange or recognized securities
market as the Common Stock shall then be traded or (c) if the Common Stock is
not traded on a principal exchange or recognized securities

-9-
<PAGE> 10

market on the date of the Triggering Event, then the fair market value of the
Common Stock, as determined in good faith by the Company's Board of Directors.

Without limitation, any Stockholder described in the preceding paragraph of
this paragraph 6 shall be a "Selling Stockholder" for purposes of Paragraph 5,
and the occurrence of any event described in this Paragraph 6 shall, for
purposes of Paragraph 5, be the functional equivalent of a decision by the
Selling Stockholder to transfer all of his, her or its Restricted Stock and to
give the notice constituting the Offer contemplated by Paragraph 5(a) above.

7. In the event that all Restricted Stock shall cease to be outstanding,
this Agreement shall automatically terminate and be of no further force and
effect. In any event, this Agreement shall terminate twenty-one (21) years after
the death of the last to die of the group consisting of Richard A. Smith, his
wife, Susan F. Smith, Nancy L. Marks, and their respective children and
grandchildren living on the date of execution of this Agreement.

8. Whenever by the terms of this Agreement notice or demand shall or may
be given to the Company or to any Stockholder, the same shall be in writing and
shall be sent, postage prepaid, Express Mail or registered or certified mail
return receipt requested, or by reputable expedited commercial delivery service
such as Federal Express, or by hand, addressed to the party for whom it is
intended at the addresses set forth in the Schedule.

Whenever by the terms hereof notice is, or is required to be, given to a
party hereto, a copy shall also be sent, postage prepaid, Express Mail or
registered or certified mail return receipt requested, or by expedited
commercial delivery service to Goulston & Storrs, Attention: Mark D. Balk,
Esquire, 400 Atlantic Avenue, Boston, Massachusetts 02110-3333.

Any address for the giving of notice may be changed from time to time by
written notice given to all parties to this Agreement.

Whenever by the terms hereof, notice may, or is required to be, given on or
before a specified date, notice shall be properly given only if deposited in the
United States mail (or with such commercial delivery service) in conformity with
the provisions of this Paragraph 8 on or before such date. All notices sent via
Express Mail or expedited commercial delivery service shall be deemed to have
been received on the date on which delivery is guaranteed by such Express Mail
or commercial delivery service. All notices sent by registered or certified mail
shall be deemed to have been received three (3) days from the date on which such
notices are mailed.

9. All of the parties hereto acknowledge that the stock of the Company is
of a unique and special character, and that in the event of a breach or
threatened breach of the covenants of this Agreement by any party hereto (other
than the payments of monetary obligations), any remedy at law would be
inadequate. It is, therefore, agreed that in the

-10-
<PAGE> 11

event of such a breach or threatened breach by any party, the party against whom
such relief is sought shall not raise the defense that there exists an adequate
remedy at law. Any party shall have said remedies in addition to any other
rights or remedies which may exist at law or in equity or under the provisions
of this Agreement.

10. If any term or provision of this Agreement or the application thereof
to any person or circumstance shall to any extent be invalid or unenforceable,
the remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and be enforced to the fullest extent permitted by
law, but only to the extent the same continues to reflect fairly the intent and
understanding of the parties expressed by this Agreement taken as a whole.

11. Unless the context otherwise requires, the terms "Company",
"Stockholder" and "Stockholders", as used herein, shall be construed to refer to
such parties, their respective legal representatives, successors and assigns,
and all of the terms, provisions and conditions hereunder shall be binding upon
and inure to the benefit of each Stockholder, but the foregoing reference to the
assigns of a Stockholder shall not be construed as permitting transfers by such
Stockholder of such Restricted Stock, except for such transfers as may be
permitted pursuant to this Agreement. Without limitations references to the
"Company" shall include any successor to the Company by merger, consolidation,
acquisition of assets, recapitalization, reorganization, or otherwise.

As used herein, any reference to Restricted Stock shall include the Restricted
Stock described in the Schedule, all stock distributed or transferred by the
Company with respect to the Restricted Stock, and all stock issued and from time
to time outstanding by reason of transfers of the Restricted Stock described in
the Schedule pursuant to Paragraphs 4(i) - (v) and 5. Without limiting the
generality of the foregoing, references to Restricted Stock shall include all
shares issued by reason of a stock split, stock dividend, so-called "reverse
stock split," combination of shares, exchange offer or otherwise, as well as
rights issuances, with respect to the Restricted Stock subject to this Agreement
(other than shares issued in connection with a Non-Affiliate Merger).

12. If action is required to be taken by or through a legal representative
of a Stockholder, and there is no such legal representative, the time within
which any action is required hereunder shall ipso facto be deemed to be extended
for such period as may be reasonably required to permit the designation and/or
appointment of a legal representative, and the Company or any Stockholder shall
have the right to apply to any court having jurisdiction for the appointment of
such legal representative.

13. The failure to insist upon strict compliance with any of the terms,
covenants and conditions herein shall not be deemed a waiver of such terms,
covenants and conditions, nor shall any waiver or relinquishment of any right at
any one or more times be deemed a waiver or relinquishment of such right at any
other time or times.

-11-
<PAGE> 12

14. Any reference in this instrument to the masculine gender shall be
deemed also to include the feminine and the neuter, and references to the
singular shall be deemed also to include the plural and vice-versa; unless the
context otherwise requires.

15. This Agreement may not be changed orally, but only by an agreement
executed by all of the record holders of the Restricted Stock which is
outstanding and subject to the terms of this Agreement at the time of such
amendment. However, any shares of Restricted Stock may be released from the
terms of this Agreement by a written instrument executed by the holders of
record of a majority of the Restricted Stock which is then outstanding.

IN WITNESS WHEREOF, the parties have hereto set their hands and seals as of
the day and year first above written.

/s/ Richard A. Smith
------------------------------------
RICHARD A. SMITH

/s/ Susan F. Smith
------------------------------------
SUSAN F. SMITH

/s/ Nancy L. Marks
------------------------------------
NANCY L. MARKS

TRUST U/W/O PHILIP SMITH F/B/O
RICHARD A. SMITH

By: /s/ Nancy L. Marks
--------------------------------
NANCY L. MARKS,
as Trustee and not individually

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

(Signatures continued on next page)

-12-
<PAGE> 13

TRUST U/W/O PHILIP SMITH F/B/O
NANCY L. MARKS

By: /s/ Nancy L. Marks
--------------------------------
NANCY L. MARKS,
as Trustee and not individually

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

A-D-R TRUST F/B/O DEBRA SMITH
KNEZ U/I/T dated 2/9/67

By: /s/ Susan F. Smith
--------------------------------
SUSAN F. SMITH a/k/a SUSAN M.
SMITH, as Trustee and not
individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

C-J-P TRUST F/B/O CATHY LURIE U/I/T
dated 12/10/73

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

C-J-P TRUST F/B/O PETER LURIE U/I/T
dated 12/10/73

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

(Signatures continued on next page)

-13-
<PAGE> 14

J-J-E 1988 TRUST F/B/O JAMES T.
BERYLSON U/D/T dated 11/1/88

By: /s/ John Berylson
--------------------------------
JOHN BERYLSON,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

J-J-E 1988 TRUST F/B/O JENNIFER L.
BERYLSON U/D/T dated 11/1/88

By: /s/ John Berylson
--------------------------------
JOHN BERYLSON,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

J-J-E 1988 TRUST F/B/O ELIZABETH S.
BERYLSON U/D/T dated 11/1/88

By: /s/ John Berylson
--------------------------------
JOHN BERYLSON,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

(Signatures continued on next page)

-14-
<PAGE> 15

DEBRA AND BRIAN KNEZ 1988 CHILDREN'S
TRUST F/B/O JESSICA M. KNEZ U/D/T
dated 12/1/88

By: /s/ Brian J. Knez
--------------------------------
BRIAN J. KNEZ,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

DEBRA AND BRIAN KNEZ 1988 CHILDREN'S
TRUST F/B/O ANDREW P. KNEZ U/D/T
dated 12/1/88

By: /s/ Brian J. Knez
--------------------------------
BRIAN J. KNEZ,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

ROBERT SMITH AND DANA WEISS 1994
CHILDREN'S TRUST F/B/O MADELEINE W.
SMITH U/D/T dated 12/1/94

By: /s/ Dana A. Weiss
--------------------------------
DANA A. WEISS,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

(Signatures continued on next page)

-15-
<PAGE> 16

ROBERT SMITH AND DANA WEISS 1994
CHILDREN'S TRUST F/B/O RYAN A. SMITH
U/D/T dated 12/1/94

By: /s/ Dana A. Weiss
--------------------------------
DANA A. WEISS,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

AMY SMITH BERYLSON 1978 INSURANCE
TRUST U/D/T dated 9/5/78

By: /s/ Amy Smith Berylson
--------------------------------
AMY SMITH BERYLSON,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

DEBRA SMITH KNEZ 1978 INSURANCE
TRUST U/D/T dated 9/5/78

By: /s/ Debra Smith Knez
--------------------------------
DEBRA SMITH KNEZ,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

(Signatures continued on next page)

-16-
<PAGE> 17

ROBERT A. SMITH 1978 INSURANCE TRUST
U/D/T dated 9/5/78

By: /s/ Robert A. Smith
--------------------------------
ROBERT A. SMITH,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

RICHARD A. SMITH FAMILY TRUST U/W/O
MARIAN J. SMITH F/B/O DEBRA SMITH
KNEZ

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

By: /s/ Nancy L. Marks
--------------------------------
NANCY L. MARKS,
as Trustee and not individually

RICHARD A. SMITH FAMILY TRUST U/W/O
MARIAN J. SMITH F/B/O ROBERT A.
SMITH

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

By: /s/ Nancy L. Marks
--------------------------------
NANCY L. MARKS,
as Trustee and not individually

(Signatures continued on next page)

-17-
<PAGE> 18

NANCY S. LURIE FAMILY TRUST U/W/O
MARIAN J. SMITH F/B/O CATHY J. LURIE

By: /s/ Nancy Lurie Marks
--------------------------------
NANCY LURIE MARKS,
as Trustee and not individually

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

PETER A. LURIE TRUST U/W/O MARIAN J.
SMITH

By: /s/ Nancy Lurie Marks
--------------------------------
NANCY LURIE MARKS,
as Trustee and not individually

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

MORRIS J. LURIE FAMILY TRUST U/I/T
dated 4/15/58 F/B/O CATHY J. LURIE,
ET AL

By: /s/ Nancy L. Marks
--------------------------------
NANCY L. MARKS,
as Trustee and not individually

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

(Signatures continued on next page)

-18-
<PAGE> 19

MORRIS J. LURIE FAMILY TRUST U/I/T
dated 4/15/58 F/B/O PETER A. LURIE,
ET AL

By: /s/ Nancy L. Marks
--------------------------------
NANCY L. MARKS,
as Trustee and not individually

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

SUSAN F. SMITH GRANTOR RETAINED
ANNUITY TRUST--15 YEARS U/D/T dated
8/10/94

By: /s/ Susan F. Smith
--------------------------------
SUSAN F. SMITH,
as Trustee and not individually

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

SUSAN F. SMITH GRANTOR RETAINED
ANNUITY TRUST--7 YEARS U/D/T dated
8/10/94

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

SUSAN F. SMITH 1998 GRANTOR RETAINED
ANNUITY TRUST--5 YEARS U/D/T dated
9/1/98

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

(Signatures continued on next page)

-19-
<PAGE> 20

NANCY LURIE MARKS GRANTOR RETAINED
ANNUITY TRUST U/D/T dated 1/15/97

By: /s/ Richard A. Smith
--------------------------------
RICHARD A. SMITH,
as Trustee and not individually

AMY SMITH BERYLSON GRANTOR RETAINED
ANNUITY TRUST U/D/T dated 10/25/94

By: /s/ Amy Smith Berylson
--------------------------------
AMY SMITH BERYLSON,
as Trustee and not individually

By: /s/ John G. Berylson
--------------------------------
JOHN G. BERYLSON,
as Trustee and not individually

AMY SMITH BERYLSON 1998 GRANTOR
RETAINED ANNUITY TRUST U/D/T dated
11/2/98

By: /s/ John G. Berylson
--------------------------------
JOHN G. BERYLSON,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

(Signatures continued on next page)

-20-
<PAGE> 21

ROBERT A. SMITH GRANTOR RETAINED
ANNUITY TRUST U/D/T dated 10/27/94

By: /s/ Robert A. Smith
--------------------------------
ROBERT A. SMITH,
as Trustee and not individually

By: /s/ Dana A. Weiss
--------------------------------
DANA A. WEISS,
as Trustee and not individually

ROBERT A. SMITH 1998 GRANTOR
RETAINED ANNUITY TRUST U/D/T dated
11/2/98

By: /s/ Dana A. Weiss
--------------------------------
DANA A. WEISS,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

DEBRA SMITH KNEZ GRANTOR RETAINED
ANNUITY TRUST U/D/T dated 10/27/94

By: /s/ Debra Smith Knez
--------------------------------
DEBRA SMITH KNEZ,
as Trustee and not individually

By: /s/ Brian J. Knez
--------------------------------
BRIAN J. KNEZ,
as Trustee and not individually

(Signatures continued on next page)

-21-
<PAGE> 22

DEBRA SMITH KNEZ 1998 GRANTOR
RETAINED ANNUITY TRUST U/D/T dated
11/2/98

By: /s/ Brian J. Knez
--------------------------------
BRIAN J. KNEZ,
as Trustee and not individually

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

RICHARD A. SMITH 1976 TRUST F/B/O
AMY SMITH BERYLSON U/D/T dated
12/16/76

By: /s/ Susan F. Smith
--------------------------------
SUSAN F. SMITH,
as Trustee and not individually

RICHARD A. SMITH 1976 TRUST F/B/O
ROBERT A. SMITH U/D/T dated 12/16/76

By: /s/ Susan F. Smith
--------------------------------
SUSAN F. SMITH,
as Trustee and not individually

RICHARD A. SMITH 1976 TRUST F/B/O
DEBRA SMITH KNEZ U/D/T dated
12/16/76

By: /s/ Susan F. Smith
--------------------------------
SUSAN F. SMITH,
as Trustee and not individually

(Signatures continued on next page)

-22-
<PAGE> 23

MARIAN SMITH D-R-A 1976 TRUST F/B/O
AMY SMITH BERYLSON U/D/T dated
12/16/76

By: /s/ Susan F. Smith
--------------------------------
SUSAN F. SMITH,
as Trustee and not individually

MARIAN SMITH D-R-A 1976 TRUST F/B/O
ROBERT A. SMITH U/D/T dated 12/16/76

By: /s/ Susan F. Smith
--------------------------------
SUSAN F. SMITH,
as Trustee and not individually

MARIAN SMITH D-R-A 1976 TRUST F/B/O
DEBRA SMITH KNEZ U/D/T dated
12/16/76

By: /s/ Susan F. Smith
--------------------------------
SUSAN F. SMITH,
as Trustee and not individually

(Signatures continued on next page)

-23-
<PAGE> 24

NANCY LURIE MARKS 1976 TRUST F/B/O
CATHY J. LURIE U/D/T dated 12/16/76

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

By: /s/ Darline M. Lewis
--------------------------------
DARLINE M. LEWIS,
as Trustee and not individually

NANCY LURIE MARKS 1976 TRUST F/B/O
PETER A. LURIE U/D/T dated 12/16/76

By: /s/ Mark D. Balk
--------------------------------
MARK D. BALK,
as Trustee and not individually

By: /s/ Darline M. Lewis
--------------------------------
DARLINE M. LEWIS,
as Trustee and not individually

MARIAN SMITH J-C-P 1976 TRUST F/B/O
JEFFREY R. LURIE U/D/T dated
12/16/76

By: /s/ Nancy Lurie Marks
--------------------------------
NANCY LURIE MARKS,
as Trustee and not individually

MARIAN SMITH J-C-P 1976 TRUST F/B/O
CATHY J. LURIE U/D/T dated 12/16/76

By: /s/ Nancy Lurie Marks
--------------------------------
NANCY LURIE MARKS,
as Trustee and not individually

(Signatures continued on next page)

-24-
<PAGE> 25

MARIAN SMITH J-C-P 1976 TRUST F/B/O
PETER A. LURIE U/D/T dated 12/16/76

By: /s/ Nancy Lurie Marks
--------------------------------
NANCY LURIE MARKS,
as Trustee and not individually

SMITH MANAGEMENT COMPANY

By: /s/ Richard A. Smith
--------------------------------
Its
Hereunto duly authorized

MARIAN REALTY COMPANY

By: /s/ Richard A. Smith
--------------------------------
Its
Hereunto duly authorized

/s/ Amy S. Berylson
------------------------------------
AMY S. BERYLSON

/s/ John G. Berylson
------------------------------------
JOHN G. BERYLSON

/s/ Jennifer L. Berylson
------------------------------------
JENNIFER L. BERYLSON

/s/ Robert A. Smith
------------------------------------
ROBERT A. SMITH

/s/ Debra S. Knez
------------------------------------
DEBRA S. KNEZ

(Signatures continued on next page)

-25-
<PAGE> 26

/s/ Brian J. Knez
------------------------------------
BRIAN J. KNEZ

/s/ Cathy J. Lurie
------------------------------------
CATHY J. LURIE

/s/ Amy Smith Berylson
------------------------------------
AMY SMITH BERYLSON, as Guardian of
the Property of James T. Berylson

/s/ John G. Berylson
------------------------------------
JOHN G. BERYLSON, as Guardian of the
Property of James T. Berylson

/s/ Amy Smith Berylson
------------------------------------
AMY SMITH BERYLSON, as Guardian of
the Property of Elizabeth S.
Berylson

/s/ John G. Berylson
------------------------------------
JOHN G. BERYLSON, as Guardian of the
Property of Elizabeth S. Berylson

-26-
<PAGE> 27

Receipt of a counterpart execution copy of this Smith-Lurie/Marks Family
Stockholders' Agreement is acknowledged this _______ day of
_____________________, 1999.

THE NEIMAN MARCUS GROUP, INC.

By:________________________________
Its
Hereunto duly authorized

-27-

<PAGE> 1
Exhibit 99.3

THIS AGREEMENT, dated as of the 1st day of September, 1999, is among
The Neiman Marcus Group, Inc., a Delaware corporation (the "Company") and
certain parties (herein individually referred to as a "Stockholder" and
collectively as the "Stockholders") who are currently stockholders of Harcourt
General, Inc., a Delaware corporation ("HGI") and anticipate a distribution of
Class B Common Stock of the Company in accordance with the Amended and Restated
Distribution Agreement between HGI and the Company dated July 1, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Distribution
Agreement") and who, by executing this instrument, or a supplemental instrument,
elect to become parties hereto and to subject the shares of Class B Common Stock
identified herein (or in such supplemental instrument) to the terms and
provisions hereof.

WITNESSETH:

The following sets forth the background of this Agreement:

A. The Company's authorized capital stock consists of 200,000,000
shares, 150,000,000 of which are common stock, par value $.01 per share (the
"Common Stock") and 50,000,000 of which are preferred stock, par value $.01 per
share ("Preferred Stock"). As of the date hereof, 49,039,068 shares of Common
Stock and no shares of Preferred Stock are issued and outstanding.

B. The Company, subject to stockholder approval, intends to, among
other things, effect a recapitalization of its common stock to create two
classes of common stock, the Class A Common Stock, par value $.01 per share
("Class A Common Stock") and the Class B Common Stock, par value $.01 per share
("Class B Common Stock"), while maintaining its Preferred Stock. 21,440,960
shares of Common Stock owned by HGI will be converted into 21,440,960 fully paid
shares of Class B Common Stock. HGI's shares of Class B Common Stock will be
distributed in a tax-free spinoff transaction (the "Distribution") to HGI's
common stockholders, including the Stockholders. The date as of which the
distribution of Class B Common Stock is effective to vest ownership thereof in
distributees is the "Distribution Date" for purposes of this Agreement.

C. By reason of the Distribution, the Stockholders will on the
Distribution Date be the holders of approximately 28% of the Class B Common
Stock which will generally have the same rights and privileges as the Class A
Common Stock except that the Class B Common Stock will be entitled to elect at
least 82% of the members of the board of directors of the Company.

D. In the Distribution Agreement, HGI has agreed to use its
commercially reasonable best efforts to procure the agreement of each of the
Stockholders that, for a period of 180 days from the Distribution Date, each
Stockholder shall not transfer any of the shares of

-1-
<PAGE> 2

Class B Common Stock distributed to such Stockholder on the Distribution Date
("Restricted Stock") other than, in accordance with the terms of this Agreement,
to any other Stockholder or any other person to whom such Stockholder would be
permitted to transfer shares of Class B Stock of HGI in accordance with the HGI
Restated Certificate of Incorporation (including for bona fide estate planning
or charitable purposes); provided, however, that such Stockholder shall be
permitted to transfer shares of Restricted Stock pursuant to a bona fide tender
offer, exchange offer, merger, consolidation or similar transaction in which the
opportunity to transfer shares is made available on the same basis to all
holders of Class B Common Stock. Annexed hereto, made a part hereof and hereby
incorporated herein by reference is a Schedule of Stockholders (the "Schedule")
which sets forth the Restricted Stock which it is anticipated will be owned by
each of the Stockholders on the Distribution Date.

NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby severally acknowledged, the parties
hereto agree as follows:

1. Each Stockholder agrees that he, she or it shall not sell, assign,
encumber, hypothecate, pledge, transfer or otherwise dispose of or alienate
in any way (any such disposition being herein referred to as a "Transfer"
or, collectively, the "Transfers") all or any part of the Restricted Stock
(or any interest therein) owned or controlled by him, her or it except upon
and subject to the terms of this Agreement.

Nothing contained herein shall preclude a pledge of the Restricted Stock so
long as the pledgee shall hold such pledge subject to the restrictions of
this Agreement and satisfies each of the terms and conditions set forth in
this Agreement.

2. Each Stockholder agrees that, except as otherwise provided in
Paragraph 3 herein, he, she or it will not, directly or indirectly, sell,
offer, contract to sell, grant any option to purchase or otherwise transfer
or dispose of any Restricted Stock for a period of 180 days from the
Distribution Date. Notwithstanding the foregoing, Restricted Stock which is
transferred or distributed to a Permitted Transferee (as defined in
Paragraph 3 herein) by reason of the death of a Stockholder (including
Restricted Stock which is held by a revocable trust which has become
irrevocable by reason of the death of a stockholder, provided that such
trust is a Permitted Transferee) may thereafter be transferred free of the
restrictions imposed by the immediately preceding sentence.

3. Notwithstanding the restrictions contained in Paragraph 2 of this
Agreement, the following transfers ("Permitted Transfers") may be
consummated at any time, provided that (except in the case of transfers
described in Subsections (i)(C), (vi) and (vii), below) the transferee in
such Permitted Transfer (the "Permitted Transferee") shall execute such
instruments as may be necessary or appropriate (a) to extend the terms,
conditions and provisions of this Agreement to such Permitted Transferee
while the owner of such Restricted Stock, (b) to agree to comply with and
not to suffer any violation of this Agreement and (c) to agree that such
Permitted Transferee shall not make or suffer to be made any Transfer of
such Restricted Stock except upon compliance with the provisions of this
Agreement:

-2-
<PAGE> 3

(i) In the case of a Stockholder who is a natural person,

(A) To the spouse of such Stockholder, any lineal descendant
of a grandparent of such Stockholder, and any spouse of such
lineal descendant (which lineal descendants, their spouses, the
Stockholder, and his or her spouse are herein collectively
referred to as the "Stockholder's Family Members");

(B) To the trustee of a trust (including a voting trust)
principally for the benefit of such Stockholder and/or one or
more of his or her Permitted Transferees described in each
subclause of this clause (i) other than this subclause (B),
provided that such trust may also grant a general or special
power of appointment to one or more of such Stockholder's Family
Members and may permit trust assets to be used to pay taxes,
legacies and other obligations of the trust or of the estates of
one or more of such Stockholder's Family Members payable by
reason of the death of any such Family Members;

(C) To an organization a contribution to which is deductible
for federal income, estate or gift tax purposes or any
split-interest trust described in Section 4947 of the Internal
Revenue Code, as it may from time to time be amended (such
organization or trust hereinafter called a "Charitable
Organization");

(D) To a corporation, a partnership or limited liability
company if, in the case of a corporation, a majority of its
outstanding capital stock entitled to vote for the election of
directors is owned by, or in the case of a partnership, a
majority of its partnership interests entitled to participate in
the management of the partnership are held by, or in the case of
a limited liability company, a majority of the membership
interests in the limited liability company controlling management
of the limited liability company are held by, the Stockholder or
his or her Permitted Transferees determined under this clause
(i); and

(E) To the estate of such Stockholder.

(ii) In the case of a Stockholder holding the shares of
Restricted Stock in question as trustee pursuant to a trust (other
than a trust which is a Charitable Organization or a trust described
in clause (iii) below), "Permitted Transferee" means (A) any person
transferring Restricted Stock to such trust and (B) any Permitted
Transferee of any such person determined pursuant to clause (i) above.

-3-
<PAGE> 4

whom or for whose benefit principal may be distributed either during
or at the end of the term of such trust whether by power of
appointment or otherwise and (B) any Permitted Transferee of any such
person determined pursuant to clause (i) above.

(iv) In the case of a Stockholder which is a corporation,
partnership or limited liability company (other than a Charitable
Organization), "Permitted Transferee" means (A) any person (a "Prior
Transferor") who theretofore transferred such shares of Restricted
Stock to such corporation, partnership or limited liability company,
(B) any Permitted Transferee of the Prior Transferor and (C) the
stockholders, partners or members, as the case may be, of the
Stockholder in connection with a distribution by the Stockholder, so
long as such stockholders, partners or members (x) are stockholders,
partners or members of such corporation, partnership or limited
liability company on the date hereof or (y) would be Permitted
Transferees of such stockholders, partners or members on the date
hereof pursuant to one of the other subsections of this Paragraph 3.

(v) In the case of a Stockholder which is the estate of a
deceased Stockholder, or which is the estate of a bankrupt or
insolvent Stockholder, which holds record and beneficial ownership of
the shares of Restricted Stock in question, "Permitted Transferee"
means a Permitted Transferee of such deceased, bankrupt or insolvent
Stockholder as determined pursuant to clause (i), (ii), (iii), (iv) or
(v), above, as the case may be.

(vi) Transfers of shares of Restricted Stock pursuant to a bona
fide tender offer, exchange offer, merger, consolidation or similar
transaction in which the opportunity to transfer shares is made
available on the same basis to all holders of Class B Common Stock.

(vii) Transfers of shares of Restricted Stock in connection with
the redemption by the Company of all or any portion of the Company's
Class B Common Stock, provided that if, at the time of such
redemption, the Stockholder holds Class B Common Stock which is not
Restricted Stock, the number of shares of Restricted Stock which may
be transferred in connection with such redemption shall not exceed
that number of shares determined by multiplying the total number of
shares to be transferred by the Stockholder in connection with such
redemption by a fraction, the numerator of which is the total number
of shares of Restricted Stock owned by the Stockholder and the
denominator of which is the total number of shares of Class B Common
Stock owned by such Stockholder.

All Permitted Transferees (other than Permitted Transferees who
acquire Restricted Stock pursuant to Paragraph 3(i)(C), 3(vi) or
3(vii) herein) shall be deemed to be Stockholders for purposes of this
Agreement.

-4-
<PAGE> 5

4. In the event that all Restricted Stock shall cease to be
outstanding, this Agreement shall automatically terminate and be of no further
force and effect. In any event, this Agreement shall terminate 181 days after
the Distribution Date.

5. Whenever by the terms of this Agreement notice or demand shall or
may be given to the Company or to any Stockholder, the same shall be in writing
and shall be sent, postage prepaid, Express Mail or registered or certified mail
return receipt requested, or by reputable expedited commercial delivery service
such as Federal Express, or by hand, addressed to the party for whom it is
intended at the addresses set forth in the Schedule.

Whenever by the terms hereof notice is, or is required to be, given to
a party hereto, a copy shall also be sent, postage prepaid, Express Mail or
registered or certified mail return receipt requested, or by expedited
commercial delivery service to Goulston & Storrs, Attention: Mark D. Balk,
Esquire, 400 Atlantic Avenue, Boston, Massachusetts 02110-3333.

Any address for the giving of notice may be changed from time to time
by written notice given to all parties to this Agreement.

Whenever by the terms hereof, notice may, or is required to be, given
on or before a specified date, notice shall be properly given only if deposited
in the United States mail (or with such commercial delivery service) in
conformity with the provisions of this Paragraph 5 on or before such date. All
notices sent via Express Mail or expedited commercial delivery service shall be
deemed to hove been received on the date on which delivery is guaranteed by such
Express Mail or commercial delivery service. All notices sent by registered or
certified mail shall be deemed to have been received three (3) days from the
date on which such notices are mailed.

6. All of the parties hereto acknowledge that the Stockholders'
relationship to and with the Company is of a unique and special character, and
that in the event of a breach or threatened breach of the covenants of this
Agreement by any party hereto (other than the payments of monetary obligations),
any remedy at law would be inadequate. It is, therefore, agreed that in the
event of such a breach or threatened breach by any party, the party against whom
such relief is sought shall not raise the defense that there exists an adequate
remedy at law. Any party shall have said remedies in addition to any other
rights or remedies which may exist at law or in equity or under the provisions
of this Agreement.

7. If any term or provision of this Agreement or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and be enforced to the fullest extent
permitted by law, but only to the extent the same continues to reflect fairly
the intent and understanding of the parties expressed by this Agreement taken as
a whole.

8. Unless the context otherwise requires, the terms "Company",
"Stockholder" and "Stockholders", as used herein, shall be construed to refer to
such parties, their respective

-5-
<PAGE> 6

legal representatives, successors and assigns, and all of the terms, provisions
and conditions hereunder shall be binding upon and inure to the benefit of each
Stockholder, but the foregoing reference to the assigns of a Stockholder shall
not be construed as permitting transfers by such Stockholder of such Restricted
Stock, except for such transfers as may be permitted pursuant to this Agreement.
Without limitations, references to the "Company" shall include any successor to
the Company by merger, consolidation, acquisition of assets, recapitalization,
reorganization, or otherwise.

As used herein, any reference to Restricted Stock shall include the
Restricted Stock described in the Schedule, all stock distributed or transferred
by the Company with respect to the Restricted Stock, and all stock issued and
from time to time outstanding by reason of transfers of the Restricted Stock
described in the Schedule pursuant to Paragraphs 3(i) - (v). Without limiting
the generality of the foregoing, references to Restricted Stock shall include
all shares issued by reason of a stock split, stock dividend, so-called "reverse
stock split," combination of shares, exchange offer or otherwise, as well as
rights issuances, with respect to the Restricted Stock subject to this
Agreement.

9. If action is required to be taken by or through a legal
representative of a Stockholder, and there is no such legal representative, the
time within which any action is required hereunder shall ipso facto be deemed to
be extended for such period as may be reasonably required to permit the
designation and/or appointment of a legal representative, and the Company or any
Stockholder shall have the right to apply to any court having jurisdiction for
the appointment of such legal representative.

10. The failure to insist upon strict compliance with any of the
terms, covenants and conditions herein shall not be deemed a waiver of such
terms, covenants and conditions, nor shall any waiver or relinquishment of any
right at any one or more times be deemed a waiver or relinquishment of such
right at any other time or times.

11. Any reference in this instrument to the masculine gender shall be
deemed also to include the feminine and the neuter, and references to the
singular shall be deemed also to include the plural and vice-versa; unless the
context otherwise requires.

12. This Agreement may not be changed orally, but only by an agreement
executed by all of the parties to this Agreement at the time of such amendment.

-6-
<PAGE> 7

IN WITNESS WHEREOF, the parties have hereto set their hands and seals
as of the day and year first above written.