-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D744CYk09CrYDuqxbrhpWXJvMOnfd0F08jco5n5dfWjlQe1XMFbXkbTrw2trJObJ ss6mBkMa1qpfAxSE8Rnwyg== 0000950144-01-501820.txt : 20010511 0000950144-01-501820.hdr.sgml : 20010511 ACCESSION NUMBER: 0000950144-01-501820 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20010510 GROUP MEMBERS: INTER HIM NV GROUP MEMBERS: RONALD DE WAAL GROUP MEMBERS: W. HOWARD LESTER SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HAROLDS STORES INC CENTRAL INDEX KEY: 0000818682 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-FAMILY CLOTHING STORES [5651] IRS NUMBER: 731308796 STATE OF INCORPORATION: OK FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-40218 FILM NUMBER: 1627987 BUSINESS ADDRESS: STREET 1: 765 ASP CITY: NORMAN STATE: OK ZIP: 73069 BUSINESS PHONE: 4053294045 MAIL ADDRESS: STREET 1: 765 ASP CITY: NORMAN STATE: OK ZIP: 73069 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INTER HIM NV CENTRAL INDEX KEY: 0000923789 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: PROF KERNKAMPWEG 8A P O BOX 3361 STREET 2: CURACAO NETHERLANDS ANTILLES MAIL ADDRESS: STREET 1: PROF KERNKAMPWEG 8A P O BOX 3361 STREET 2: CURACAO NETHERLANDS ANTILLES SC 13D/A 1 g69182sc13da.txt HAROLD'S STORES, INC. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (AMENDMENT NO. 7)(*) Under the Securities Exchange Act of 1934 Harold's Stores, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.01 Par Value Series 2001-A Preferred Stock, $0.01 Par Value - -------------------------------------------------------------------------------- (Title of Class of Securities) 413353103 - -------------------------------------------------------------------------------- (CUSIP Number) Robert J. Pile Sutherland Asbill & Brennan LLP 999 Peachtree Street NE Atlanta, GA 30309 (404) 853-8000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 1, 2001 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 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. (*)The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). The Exhibit Index is located following page 20. 2 SCHEDULE 13D
- ------------------------------------------------------------------------------------------------------------- CUSIP No. 413353103 Page 2 of 24 Pages - ----------------------------------- ------------------------------------- - ------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) RONALD DE WAAL - ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(*) (A) [X] (B) [ ] - ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS(*) N/A - ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION THE NETHERLANDS - ------------------------------------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES N/A BENEFICIALLY ---------------------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH COMMON STOCK: 3,692,706 SHARES REPORTING SERIES 2001-A PREFERRED STOCK: 300,000 SHARES PERSON ---------------------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER N/A ---------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER COMMON STOCK: 3,692,706 SHARES SERIES 2001-A PREFERRED STOCK: 300,000 SHARES - ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON COMMON STOCK: 3,692,706 SHARES SERIES 2001-A PREFERRED STOCK: 300,000 SHARES - ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES(*) [ ] - ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) COMMON STOCK: 58.1% SERIES 2001-A PREFERRED STOCK: 100.0% - ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON(*) IN - -------------------------------------------------------------------------------------------------------------
3 SCHEDULE 13D
- ------------------------------------------------------------------------------------------------------------- CUSIP No. 413353103 Page 3 of 24 Pages - ----------------------------------- ------------------------------------- - ------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) INTER-HIM N.V. - ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(*) (A) [X] (B) [ ] - ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS(*) WC - ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION NETHERLANDS ANTILLES - ------------------------------------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES N/A BENEFICIALLY ----------------------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH COMMON STOCK: 3,692,706 SHARES REPORTING SERIES 2001-A PREFERRED STOCK: 300,000 SHARES PERSON ----------------------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER N/A ----------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER COMMON STOCK: 3,692,706 SHARES SERIES 2001-A PREFERRED STOCK: 300,000 SHARES - ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON COMMON STOCK: 3,692,706 SHARES SERIES 2001-A PREFERRED STOCK: 300,000 SHARES - ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES(*) [ ] - ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) COMMON STOCK: 58.1% SERIES 2001-A PREFERRED STOCK: 100.0% - ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON(*) CO - -------------------------------------------------------------------------------------------------------------
4 SCHEDULE 13D
- ------------------------------------------------------------------------------------------------------------- CUSIP No. 413353103 Page 4 of 24 Pages - ----------------------------------- ------------------------------------- - ------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) W. HOWARD LESTER - ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(*) (A) [X] (B) [ ] - ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS(*) PF - ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - ------------------------------------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES N/A BENEFICIALLY ----------------------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH COMMON STOCK: 3,692,706 SHARES REPORTING SERIES 2001-A PREFERRED STOCK: 300,000 SHARES PERSON ----------------------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER N/A ----------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER COMMON STOCK: 3,692,706 SHARES SERIES 2001-A PREFERRED STOCK: 300,000 SHARES - ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON COMMON STOCK: 3,692,706 SHARES SERIES 2001-A PREFERRED STOCK: 300,000 SHARES - ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES(*) [ ] - ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) COMMON STOCK: 58.1% SERIES 2001-A PREFERRED STOCK: 100.0% - ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON(*) IN - -------------------------------------------------------------------------------------------------------------
5 This Amendment No. 7 to Schedule 13D (this "Amendment No. 7") relates to the Schedule 13D originally filed on January 31, 1994 on behalf of Inter-Him N.V., a Netherlands Antilles corporation ("Inter-Him"), with regard to Inter-Him's beneficial ownership of shares of the common stock, par value $0.01 per share (the "Common Stock"), of Harold's Stores, Inc., as previously amended by Amendment No. 1 thereto filed on March 4, 1994, Amendment No. 2 thereto filed on April 11, 1995, Amendment No. 3 thereto filed on March 27, 2000, Amendment No. 4 thereto filed on October 27, 2000, Amendment No. 5 thereto filed on January 30, 2001, and Amendment No. 6 thereto filed on March 21, 2001 (as so amended, the "Schedule 13D"). This Amendment No. 6 is being filed pursuant to Rules 13d-1(k)(1), 13d-1(k)(2) and 13d-2 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to report (1) Inter-Him's disposition of 37,500 shares of Series 2001-A Preferred Stock, par value $0.01 per share (the "Preferred Stock") to W. Howard Lester, (2) the addition of Mr. Lester to the "group" (as such term is defined in Rule 13d-5) previously reported in Amendment No. 6 to this Schedule 13D, and (3) information required by Schedule 13D regarding Arvest Trust Company, one of the group members, which information was not made available or known prior to the filing of Amendment No. 6. Mr. de Waal, Mr. Lester and Inter-Him are collectively referred to herein as the "Reporting Persons." Item 1. Security and Issuer. The information set forth in the Schedule 13D with respect to this Item has not changed as of the date of this Amendment No. 7. Item 2. Identity and Background Certain of the information set forth in the Schedule 13D with respect to this Item 2 is hereby amended and supplemented to read as follows: On May 1, 2001, Inter-Him sold 37,500 shares of Preferred Stock to Howard Lester for an aggregate purchase price of $750,000. Each of the shares of Preferred Stock will be convertible into approximately 15.6863 shares of Common Stock; provided, however, that the conversion feature of the Preferred Stock will become effective only if approved by shareholders of the Company at its 2001 annual meeting of shareholders (the "2001 Annual Meeting"). Until converted, the Preferred Stock will be entitled to receive quarterly dividends that cumulate annually at a rate of 10% per annum, which would be reduced to 8% per annum if the Company's operating income for any fiscal year ending after February 28, 2001 exceeds $4,735,000. Dividends will be payable 50% in cash and 50% in additional shares of Preferred Stock until February 28, 2003 and thereafter in additional shares of Preferred Stock or cash as the holder of the Preferred Stock may elect. Shares of Preferred Stock issued in respect of dividends will be convertible into Common Stock based upon an average market price of the Common Stock as of the respective dividend date. The Preferred Stock is also redeemable at the Company's option beginning on February 28, 2004 at a price equal to the stated value of the Preferred Stock plus all accrued but unpaid cumulated dividends on each such share. The holders of the Preferred Stock also have preemptive rights with respect to certain future issuances of Company securities. The Preferred Stock will vote together with all the other holders of the Company's voting stock with general voting power and each share of Preferred Stock shall be entitled to cast a number of votes equal to the number of shares of Common Stock into which such share of Preferred Stock could be converted. Further, all holders of the Preferred Stock shall be entitled to vote as a single voting group for Page 5 of 24 6 the election of a number of members of the Company's board of directors such that the number of directors so elected by the holders of the Preferred Stock represents a percentage of the total membership of such board of directors that equals, as nearly as practicable, the percentage of the Common Stock represented by the outstanding Preferred Stock on an as-converted basis. One such director elected by the holders of the Preferred Stock shall be Chairman of the Board and another shall be Vice Chairman of the Board, except that if such holders are entitled to elect only one director, that director shall serve as Chairman of the Board. For so long as the outstanding shares of Preferred Stock continue to represent at least 10% of the outstanding Common Stock on an as-converted basis, the Company has agreed not to take certain actions without the prior approval of the holders of a majority of the outstanding Preferred Stock, including, among other things: - amending the Company's Certificate of Incorporation or Bylaws; - redeeming any shares of the Company's capital stock (except for the Preferred Stock); - authorizing the issuance of any class or series of capital stock, other than (i) the issuance of Preferred Stock in payment of dividends upon the Preferred Stock and (ii) for options and other stock-based awards (and shares of capital stock issued upon the exercise thereof) issued pursuant to the Company's 1993 Performance and Equity Incentive Plan and the 1993 Employee Stock Purchase Plan, each as amended; - paying or declaring any dividend or other distribution on securities junior in priority to the Preferred Stock; - authorizing mergers or other similar transactions involving the Company or any subsidiary; - changing the size of the Company's Board of Directors; - incurring more than $1,000,000 of indebtedness in excess of existing indebtedness as of February 28, 2001 and the then current availability under credit facilities that existed as of February 28, 2001, excluding the extension of trade credit in the ordinary course of business consistent with past practices; - making or becoming obligated to make capital expenditures in excess of $2,500,000 in the aggregate in any fiscal year; and - entering into any affiliated transaction, except for transactions in the ordinary course of business and on terms no less favorable to the Company than those that would be reasonably likely to be obtained from arms-length negotiations; In connection with the purchase and sale of the Preferred Stock and as a condition to Inter-Him's obligation to purchase the Preferred Stock, certain persons who are officers, directors and/or beneficial owners of Common Stock (in their individual capacities and/or, in certain cases, as custodians for minor children or as trustees of certain trusts) (collectively, the "Family Shareholders") entered into that certain Voting Agreement, dated February 28, 2001, with Inter-Him and the Company. The Family Shareholders currently beneficially own in the aggregate approximately 48% of the Common Stock. Pursuant to the Voting Agreement, Inter-Him and the Family Shareholders agreed to vote or act with respect to all shares of capital stock of the Company presently or thereafter owned by them, so as to elect as directors of the Company (a) the number of individuals required to be elected by the holders of the Preferred Stock pursuant to the terms thereof, as described above, for so long as such holders are entitled to designate at least one director, and (b) one individual selected by a majority-in-interest of the Family Page 6 of 24 7 Shareholders, for so long as the Family Shareholders or their lineal descendants own at least 10% of the Common Stock (assuming conversion in full of all shares of Preferred Stock). In addition, pursuant to the Voting Agreement, all of the Family Shareholders have agreed to give the holders of the Preferred Stock an irrevocable proxy to vote all shares of capital stock held by them that may be cast at the 2001 Annual Meeting in favor of approving the conversion rights of the Preferred Stock. This proxy shall terminate at the conclusion of the 2001 Annual Meeting. Further, pursuant to the Voting Agreement, each of Rebecca P. Casey and Michael T. Casey, who are husband and wife and beneficially own in the aggregate approximately 20% of the Common Stock, have given the holders of the Preferred Stock an irrevocable proxy to vote all shares of capital stock held by them, except that such proxy shall not extend to or affect the rights of Ms. Casey and Mr. Casey to participate in the designation or vote in favor of the election of the director to be designated by the Family Shareholders, as described above. This proxy shall terminate upon the later of (a) February 28, 2004 or (b) one year after the termination of Ms. Casey's employment with the Company. As a condition to Inter-Him's obligation to purchase the Preferred Stock, the following changes in management of the Company were made at or prior to the closing: - The Board of Directors was reduced from 10 to seven directors, and Mr. Casey, Robert B. Cullum, Jr., Harold G. Powell, H. Rainey Powell and William F. Weitzel resigned from the Board of Directors. - Clark Hinkley was appointed Chief Executive Officer and a director of the Company, replacing Ms. Casey, who became Executive Vice President - Trend and Design. - H. Rainey Powell, formerly the President, Chief Operating Officer and Secretary of the Company, resigned from such positions with the Company. Further, there is currently one vacancy on the Board of Directors that may be filled by a designee of Inter-Him pursuant to the terms of the Preferred Stock. The Company, the Family Shareholders and Inter-Him have also entered into a Right of First Refusal Agreement, dated as of February 28, 2001, whereby they have agreed to grant to the holders of the Preferred Stock rights of first refusal with respect to certain sales or other dispositions of the Company's capital stock by such Family Shareholders. Further, the Company has entered into an Investor Rights Agreement, dated as of February 28, 2001, whereby the Company has granted to the holders of the Preferred Stock certain demand and piggyback registration rights with respect to the shares of Common Stock underlying the Preferred Stock. Concurrent with the sale of the Preferred Stock to Mr. Lester, Mr. Lester became a party to the transaction documents executed by Inter-Him in connection with its original acquisition of the Preferred Stock, including the Voting Agreement and the Investor Rights Agreement, by executing a Joinder Agreement relating thereto. Mr. Lester and Inter-Him also entered into a Shareholders Agreement pursuant to which they have agreed to vote their shares of Preferred Stock in the manner determined by holders of a majority of the outstanding shares of Preferred Stock and granted mutual rights of first refusal on certain transfers of their respective shares of Preferred Stock. Page 7 of 24 8 Because Inter-Him and the Family Shareholders have entered into the Voting Agreement, the Reporting Persons and the Family Shareholders collectively (the "Group") may be deemed to be a "group," as such term is defined under section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Mr. Lester's business address is 3250 Van Ness Avenue, San Francisco, California 94109. His present principal occupation is Chairman of the Board of Williams-Sonoma, Inc. a California corporation. Mr. Lester is a citizen of the United States. To the extent known by the Reporting Persons, information with respect to each member of the Group, other than the Reporting Persons, is provided below.
- ------------------------------------------------------------------------------------------------------------------- Name of Group Member Residence or Present Principal Occupation or Citizenship or Place Business Address Employment of Organization - ------------------------------------------------------------------------------------------------------------------- Harold G. Powell 2516 Walnut Road Chairman Emeritus United States Norman, OK 73072 Harold's Stores, Inc. 765 Asp Norman, OK 73069 - ------------------------------------------------------------------------------------------------------------------- Anna M. Powell 2516 Walnut Road Retired United States Norman, OK 73072 - ------------------------------------------------------------------------------------------------------------------- Rebecca Powell Casey 3835 Shenandoah Executive Vice President - Trend United States Dallas, TX 75205 and Design Harold's Stores, Inc. 765 Asp Norman, OK 73069 - ------------------------------------------------------------------------------------------------------------------- Michael T. Casey 3835 Shenandoah Chairman of the Board United States Dallas, TX 75205 Grand Prairie State Bank 2341 S.E. 8th Grand Prairie, TX 75051 Privately-owned Bank - ------------------------------------------------------------------------------------------------------------------- Lisa Powell Hunt 3940 Marquette Community Volunteer United States Dallas, TX 75225 - ------------------------------------------------------------------------------------------------------------------- Clay M. Hunt 3940 Marquette Vice-President United States Dallas, TX 75225 Atropos Exploration Co. 8325 Douglas Avenue Dallas, TX - ------------------------------------------------------------------------------------------------------------------- H. Rainey Powell 1926 Pin Oak Circle Chief Executive Officer and Manager United States Norman, OK 73072 329 Holdings, L.L.C. 1926 Pin Oak Circle Norman, OK 73072 Privately owned real estate investment company - ------------------------------------------------------------------------------------------------------------------- Mary U. Powell 1926 Pin Oak Circle Teacher United States Norman, OK 73072 Norman Public School System 131 South Flood Norman, OK 73069 - -------------------------------------------------------------------------------------------------------------------
Page 8 of 24 9
- ------------------------------------------------------------------------------------------------------------------- Name of Group Member Residence or Present Principal Occupation or Citizenship or Place Business Address Employment of Organization - ------------------------------------------------------------------------------------------------------------------- Arvest Bank Group, Inc. 125 West Central, No. 218 Bank holding company that owns and Arkansas Bentonville, AR 72712 manages banks and other financial service subsidiaries. - ------------------------------------------------------------------------------------------------------------------- Arvest Trust Company, 201 W. Walnut Limited purpose national bank United States N.A., as Trustee Rogers, AR 72756 providing trust and related services. - ------------------------------------------------------------------------------------------------------------------- Elizabeth M. Powell c/o Arvest Trust Company, N/A Oklahoma Trust A N.A., as Trustee 200 East Main Norman, OK 73069 - ------------------------------------------------------------------------------------------------------------------- Elizabeth M. Powell c/o Arvest Trust Company, N/A Oklahoma Trust B N.A., as Trustee 200 East Main Norman, OK 73069 - ------------------------------------------------------------------------------------------------------------------- H. Rainey Powell and c/o Michael T. Casey, Trustee N/A Oklahoma Mary U. Powell 1997 3835 Shenandoah Irrevocable Trust Dallas, TX 75205 - ------------------------------------------------------------------------------------------------------------------- Harold G. Powell Family c/o Harold G. Powell, Trustee N/A Oklahoma Revocable Trust, UA 2516 Walnut Road dated 9/7/93 Norman, OK 73072 - ------------------------------------------------------------------------------------------------------------------- Harold G. Powell c/o Harold G. Powell and Anna N/A Oklahoma Revocable Trust dated M. Powell, Trustees 9/8/93 2516 Walnut Road Norman, OK 73072 - -------------------------------------------------------------------------------------------------------------------
The following table sets forth certain information as to the executive officers and directors of Arvest Trust Company, N.A. ("Arvest"), and Arvest Bank Group, Inc. ("ABGI"), its parent company. ABGI is a bank holding company which owns and manages banks and other financial service subsidiaries. Arvest is a limited purpose national bank engaged in the business of providing trust and related services. In that capacity, it manages fiduciary accounts for the benefit of others. Page 9 of 24 10
- ------------------------------------------------------------------------------------------------------------------- Residence or Present Principal Occupation Name Business Address or Employment Citizenship - ------------------------------------------------------------------------------------------------------------------- Jim C. Walton 125 West Central, No. 218 President, Arvest Bank Group, Inc. United States Bentonville, AR 72712 - ------------------------------------------------------------------------------------------------------------------- Howard M. Thurman 201 W. Walnut President, Arvest Trust Company, United States Rogers, AR 72756 N.A. - ------------------------------------------------------------------------------------------------------------------- J. Robert Kelly 913 W. Monroe Chief Executive Officer, Arvest United States Lowell, AR 72745 Bank Operations, Inc. - ------------------------------------------------------------------------------------------------------------------- Dennis Smiley 415 W. Emma Avenue President, Springdale Bank & Trust United States Springdale, AR 72764 - ------------------------------------------------------------------------------------------------------------------- Alan S. Greear 201 W. Walnut Executive Vice President, Arvest United States Rogers, AR 72756 Trust Company, N.A. - ------------------------------------------------------------------------------------------------------------------- David A. Short 201 NE "A" Street President, Bank of Bentonville United States Bentonville, AR 72712 - ------------------------------------------------------------------------------------------------------------------- Burton E. Stacy 4600 S.E. 29th Street Chairman, Arvest Central Oklahoma United States Oklahoma City, OK 73115 - ------------------------------------------------------------------------------------------------------------------- Donald E. Walker 502 South Main Mall President, Arvest State Bank United States Tulsa, OK 74103 - ------------------------------------------------------------------------------------------------------------------- Warren Fields 1645 Highway 412 West President, First Arvest Bank United States Siloam Springs, AR 72761 - ------------------------------------------------------------------------------------------------------------------- Gary Head One McIlroy Plaza President, McIlroy Bank and Trust United States Fayetteville, AR 72701 - ------------------------------------------------------------------------------------------------------------------- Robert V. Brothers 201 W. Walnut President, Arvest Bank United States Rogers, AR 72756 - ------------------------------------------------------------------------------------------------------------------- Donny Story 121 W. 4th Street President, WestStar Bank United States Bartlesville, OK 74003 - ------------------------------------------------------------------------------------------------------------------- Jim Cargill 1501 S. Main Street President, Central Bank & Trust United States Little Rock, AR 72202 - ------------------------------------------------------------------------------------------------------------------- Neil Schemmer 200 E. Main Street President, Arvest Bank United States Norman, OK 73069 - ------------------------------------------------------------------------------------------------------------------- Rex Wolstenholm 201 W. Walnut Senior Vice President, Arvest Trust United States Rogers, AR 72756 Company, N.A. - ------------------------------------------------------------------------------------------------------------------- Bob O'Neal 502 S. Main Mall Senior Vice President, Arvest Trust United States Tulsa, OK 74103 Company, N.A. - ------------------------------------------------------------------------------------------------------------------- Raymond S. Rhoades One McIlroy Plaza Senior Vice President, Arvest Trust United States Fayetteville, AR 72701 Company, N.A. - ------------------------------------------------------------------------------------------------------------------- Fred Lookadoo 201 W. Walnut Senior Vice President, Arvest Trust United States Rogers, AR 72756 Company, N.A. - -------------------------------------------------------------------------------------------------------------------
Page 10 of 24 11 - ------------------------------------------------------------------------------------------------------------------- Pat Kunnecke 201 NE "A" Street Senior Vice President, Arvest Trust United States Bentonville, AR 72712 Company, N.A. - ------------------------------------------------------------------------------------------------------------------- Homer L. Looper 201 N. Broadway Senior Vice President, Arvest Trust United States Shawnee, OK 74802 Company, N.A. - ------------------------------------------------------------------------------------------------------------------- Betty Dalrymple 121 W. 4th Street Senior Vice President, Arvest Trust United States Bartlesville, OK 74003 Company, N.A. - ------------------------------------------------------------------------------------------------------------------- Patricia K. Hampton 121 W. 4th Street Senior Vice President, Arvest Trust United States Bartlesville, OK 74003 Company, N.A. - ------------------------------------------------------------------------------------------------------------------- Lewis Beckett 200 E. Main Street Senior Vice President, Arvest Trust United States Norman, OK 73069 Company, N.A. - ------------------------------------------------------------------------------------------------------------------- William A. "Bill" Smith 1501 S. Main Street Senior Vice President, Arvest Trust United States Little Rock, AR 72202 Company, N.A. - ------------------------------------------------------------------------------------------------------------------- Karla Payne 913 W. Monroe Executive Vice President, Arvest United States Lowell, AR 72745 Bank Operations, Inc. - ------------------------------------------------------------------------------------------------------------------- Rick Chapman 125 West Central, No. 218 Vice President, Arvest Bank Group, United States Bentonville, AR 72712 Inc. - -------------------------------------------------------------------------------------------------------------------
To the knowledge of the Reporting Persons, none of the members of the Group, the managing directors of Inter-Him, or the executive officers or directors of Arvest and ABGI, has been convicted during the last five years in any criminal proceeding (excluding traffic violations or similar misdemeanors). Further, to the knowledge of the Reporting Persons, none of the members of the Group and, in the case of Inter-Him, the managing directors of Inter-Him, and in the case of each of Arvest and ABGI, each of their executive officers and directors, has been a party during the last five years to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws. The remainder of the information set forth in the Schedule 13D with respect to this Item 2 has not changed as of the date of this Amendment No. 7. Item 3. Source and Amount of Funds or Other Consideration Item 3 is hereby supplemented as follows to update the information provided therein, as follows: The source of funds for the purchase of the shares of Preferred Stock was personal funds of Mr. Lester. Page 11 of 24 12 Item 4. Purpose of Transaction Item 4 is hereby supplemented to add the following information: Effective as of May 1, 2001, Mr. Lester purchased from Inter-Him 37,500 shares of Preferred Stock for an aggregate purchase price of $750,000. The material terms of the Preferred Stock and the transactions relating to this sale have been provided in response to Item 2. The purpose of the transaction was to include Mr. Lester as an investor in the Preferred Stock. Inter-Him may sell shares of Preferred Stock to additional persons (some of whom may be affiliated with Inter-Him) that are "accredited investors" within the meaning of Rule 501(a) under the Securities Act of 1933, as amended. Other than as may have resulted from the consummation of the purchase of the Preferred Stock, or as otherwise set forth herein, none of the Reporting Persons have any plans or proposals that relate to or would result in: (a) any person acquiring additional securities of the Company or disposing of securities of the Company, other than (i) through the potential conversion of shares of Preferred Stock (assuming that such conversion rights are approved at the 2001 Annual Meeting), (ii) the receipt of additional shares of Preferred Stock as dividends thereupon, (iii) Inter-Him's potential sale of shares of Preferred Stock to other accredited investors as discussed above, (iv) the potential exercise by the Reporting Persons of preemptive rights granted pursuant to the terms of the Preferred Stock in connection with certain issuances by the Company of its securities, (v) the potential operation of the Reporting Persons' rights of first refusal pursuant to the Right of First Refusal Agreement in the event of certain proposed transfers of the Company's capital stock by any of the Family Shareholders, and (vi) such other transactions that may be contemplated by the terms of the Preferred Stock, the Voting Agreement, the Right of First Refusal Agreement or the Investor Rights Agreement; (b) an extraordinary corporate transaction involving the Company; (c) a sale or transfer of a material amount of the assets of the Company or any of its subsidiaries; (d) any change in the present board of directors or management of the Company, other than the Reporting Persons' right to appoint a seventh member of the Board of Directors or to exercise such other voting rights pursuant to the terms of the Preferred Stock and the Voting Agreement; (e) any material change in the present capitalization or dividend policy of the Company, other than (i) as described in clauses (a)(i) through (a)(vi) above, and (ii) otherwise pursuant to the terms of the Preferred Stock; (f) any other material change in the Company's business or corporate structure; (g) any changes in the Company's Certificate of Incorporation or Bylaws or other actions that might impede the acquisition of control of the Company; (h) the delisting of the Common Stock from the American Stock Exchange; (i) the eligibility of Common Stock for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to any of those enumerated in items (a) through (i) above. Other than as set forth above, the Reporting Persons have no knowledge of whether any other members of the Group (or any other person to which the disclosure required by Item 4 would be required) have any plans or proposals that relate to or would result in any of the events described in items (a) through (j) above. Item 5. Interest in Securities of the Issuer Item 5 is hereby amended as follows to update the information provided therein: Page 12 of 24 13 (a) and (b) The percentages set forth below and on pages 2-3 hereof are based on 6,084,097 shares of Common Stock outstanding, based upon the Company's Form 10-K for the year ended February 3, 2001, as filed with the Securities and Exchange Commission on April 30, 2001, and, pursuant to Rule 13d-3(d)(1)(i), 258,090 additional shares of Common Stock issuable to certain of the Family Shareholders and 13,438 additional shares of Common Stock issuable to Mr. Lester upon exercise of currently exercisable stock options. Statements with respect to each member of the Group other than the Reporting Persons (including statements with respect to the Reporting Persons that may be derived from or based upon such information) have been provided to the Reporting Persons by such Group members or are based upon statements made in filings with the Securities and Exchange Commission made by such Group members or the Company, and therefore the accuracy, truthfulness or completeness of such statements have not been independently verified by the Reporting Persons. Each member of the Group may be deemed to share beneficial ownership of 3,692,706 shares of Common Stock, or approximately 58.1% of the outstanding Common Stock, as well as 300,000 shares of Preferred Stock, or 100% of the outstanding Preferred Stock. Information required by Item 5(a) and (b) with respect to the share ownership of each member of the Group is provided below. Arvest is a limited purpose national bank engaged in the business of providing trust and related services. In such capacity, Arvest serves as trustee of the Elizabeth M. Powell Trust A and the Elizabeth M. Powell Trust B. In the ordinary course of its business Arvest also serves as trustee of other trusts or as manager of fiduciary accounts for the benefit of others that are unrelated to the Powell family or the Company that may from time to time own shares of Common Stock of the Company. Such shares are referred to as "Arvest Unrelated Account Shares." Arvest, in its capacity as trustee or fiduciary account manager, exercises voting and investment power with respect to the Arvest Unrelated Account Shares, and the Arvest Unrelated Account Shares are not subject to Voting Agreement, the Right of First Refusal Agreement, any irrevocable proxies granted by the Family Shareholders described herein or the Powell Family Shareholders Agreement (as defined below). Each of the Reporting Persons disclaims beneficial ownership of the Arvest Unrelated Account Shares except as such shares may otherwise be included as part of the beneficial ownership of stock by the Group. As of May 1, 2001, there were 9,443 Arvest Unrelated Account Shares. Inter-Him and Mr. de Waal. Each of Inter-Him and Mr. de Waal beneficially owns (a) 685,319 shares of Common Stock directly; (b) 262,500 shares of Preferred Stock directly; (c) 3,007,387 shares of Common Stock indirectly through the other members of the Group; and (d) 37,500 shares of Preferred Stock indirectly through another member of the Group. Mr. de Waal may be deemed to beneficially own all such shares through his control over Inter-Him. Inter-Him and Mr. de Waal have shared voting and investment power over all such shares, as follows: (a) with respect to all such stock, voting power is shared with the other members of the Group solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by all the Family Shareholders to Inter-Him; (b) with respect to 860,885 shares of Common Stock beneficially owned by Ms. Casey, voting power is shared with her with respect to all matters that may be voted on by holders of the Common Stock, pursuant to an irrevocable proxy given by Ms. Casey to Inter-Him; (c) with respect to 376,031 shares of Common Stock beneficially owned by Mr. Casey, voting power is shared with him with respect to all matters that may be voted on by holders of the Common Stock, pursuant to an irrevocable proxy Page 13 of 24 14 given by Mr. Casey to Inter-Him; and (d) with respect to 2,720,602 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with each of the Family Shareholders with respect to certain potential dispositions of Common Stock by the Family Shareholders pursuant to the terms of the Right of First Refusal Agreement. W. Howard Lester. Mr. Lester beneficially owns (a) 19,252 shares of Common Stock directly; (b) 37,500 shares of Preferred Stock directly; (c) 3,673,454 shares of Common Stock indirectly through the other members of the Group; and (d) 262,500 shares of Preferred Stock through the other members of the Group. Mr. Lester has shared voting and investment power over all such shares, as follows: (a) with respect to all such stock, voting power is shared with the other members of the Group solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by all the Family Shareholders to Inter-Him; (b) with respect to 860,885 shares of Common Stock beneficially owned by Ms. Casey, voting power is shared with her with respect to all matters that may be voted on by holders of the Common Stock, pursuant to an irrevocable proxy given by Ms. Casey to Inter-Him; (c) with respect to 376,031 shares of Common Stock beneficially owned by Mr. Casey, voting power is shared with him with respect to all matters that may be voted on by holders of the Common Stock, pursuant to an irrevocable proxy given by Mr. Casey to Inter-Him; and (d) with respect to 2,720,602 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with each of the Family Shareholders with respect to certain potential dispositions of Common Stock by the Family Shareholders pursuant to the terms of the Right of First Refusal Agreement. Harold G. Powell. Mr. Powell beneficially owns (a) 144,975 shares of Common Stock indirectly through a revocable trust of which Mr. Powell is the sole trustee (the "Powell Revocable Trust I"); (b) 11,000 shares of Common Stock indirectly through a revocable trust of which Mr. Powell and Anna M. Powell, his wife, are trustees (the "Powell Revocable Trust II"); (c) 73,484 shares of Common Stock indirectly through the Elizabeth M. Powell Trust A (the "EMP Trust A"), over which Mr. Powell possesses a general power of appointment exercisable at his death; (d) 73,226 shares of Common Stock directly that may be received pursuant to the exercise of Company stock options; and (e) 3,390,021 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. Mr. Powell has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; (b) with respect to 144,975 shares of Common Stock owned by the Powell Revocable Trust I, voting power and investment power are exercised by Mr. Powell as sole trustee of such trust; (c) with respect to 11,000 shares of Common Stock owned by the Powell Revocable Trust II, voting power and investment power are shared with Mrs. Powell as co-trustees of such trust; (d) with respect to 73,484 shares of Common Stock owned by the EMP Trust A, voting power and investment power are shared with Arvest, as trustee of such trust, pursuant to Mr. Powell's general power of appointment exercisable at his death; and (e) (1) Page 14 of 24 15 with respect to 229,459 shares of Common Stock beneficially owned by Mr. Powell, investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by Mr. Powell pursuant to the terms of the Right of First Refusal Agreement and (2) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in that certain Shareholders Agreement, by and among the Family Shareholders, as amended to date (the "Powell Family Shareholders Agreement"). Anna M. Powell. Mrs. Powell beneficially owns (a) 11,000 shares of Common Stock indirectly through the Powell Revocable Trust II, of which Mrs. Powell and Mr. Powell are co-trustees and (b) 3,681,706 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. Mrs. Powell has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; (b) with respect to 11,000 shares of Common Stock owned by the Powell Revocable Trust II, voting power and investment power are shared with Mr. Powell as co-trustees of the Powell Revocable Trust II; and (c) (1) with respect to 11,000 shares of Common Stock owned by the Powell Revocable Trust II, investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by Mrs. Powell pursuant to the terms of the Right of First Refusal Agreement and (2) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. Rebecca Powell Casey. Ms. Casey beneficially owns (a) 670,942 shares of Common Stock directly; (b) 105,123 shares of Common Stock indirectly through custodial accounts for the benefit of each of her three minor children; (c) 84,820 shares of Common Stock directly that may be received pursuant to the exercise of Company stock options; and (d) 2,831,821 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. Ms. Casey does not include in her beneficial ownership 376,031 shares of Common Stock that are beneficially owned by her husband, Michael T. Casey, and, based upon filings with the Commission, the Reporting Persons believe that Ms. Casey has disclaimed beneficial ownership of such shares except as may otherwise be included as part of the beneficial ownership of stock by the Group. Ms. Casey has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; (b) with respect to 860,885 shares of Common Stock beneficially owned by Ms. Casey, voting power is Page 15 of 24 16 shared by her with the Reporting Persons with respect to all matters that may be voted on by holders of the Common Stock, pursuant to an irrevocable proxy given by Ms. Casey to Inter-Him; and (c) (1) with respect to 776,065 shares of Common Stock beneficially owned by Ms. Casey, investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by Ms. Casey pursuant to the terms of the Right of First Refusal Agreement and (2) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. Michael T. Casey. Mr. Casey beneficially owns (a) 320,593 shares of Common Stock directly; (b) 13,438 shares of Common Stock directly that may be received pursuant to the exercise of Company stock options; (c) 42,000 shares of Common Stock indirectly through the H. Rainey and Mary U. Powell Family 1997 Irrevocable Trust Agreement (the "H. Rainey Powell Trust"), of which Mr. Casey is sole trustee; and (d) 3,316,675 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. Mr. Casey does not include in his beneficial ownership 860,885 shares of Common Stock that are beneficially owned by Ms. Casey, and, based upon filings with the Commission, the Reporting Persons believe that Mr. Casey has disclaimed beneficial ownership of such shares except as may otherwise be included as part of the beneficial ownership of stock by the Group. Mr. Casey has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; (b) with respect to 42,000 shares owned by the H. Rainey Powell Trust, voting power and investment power are exercised by Mr. Casey as sole trustee of such trust; (c) with respect to 376,031 shares of Common Stock beneficially owned by Mr. Casey, voting power is shared with the Reporting Persons with respect to all matters that may be voted on by holders of the Common Stock, pursuant to an irrevocable proxy given by Mr. Casey to Inter-Him; and (d) (1) with respect to 362,593 shares of Common Stock beneficially owned by Mr. Casey, investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by Mr. Casey pursuant to the terms of the Right of First Refusal Agreement and (2) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. H. Rainey Powell. Mr. Rainey Powell beneficially owns (a) 389,137 shares of Common Stock directly; (b) 72,182 shares of Common Stock indirectly through custodial accounts for the benefit of each of his two minor children; (c) 67,668 shares of Common Stock directly that may be received pursuant to the exercise of Company stock options; and (d) 3,163,719 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. Mr. Rainey Powell does not include in his beneficial ownership 66,875 shares of Common Stock that are beneficially owned by his wife, Mary U. Powell, and, based upon filings with the Commission, the Reporting Persons believe that Mr. Page 16 of 24 17 Rainey Powell has disclaimed beneficial ownership of such shares except as may otherwise be included as part of the beneficial ownership of stock by the Group. Mr. Rainey Powell has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; and (b) (1) with respect to 459,219 shares of Common Stock beneficially owned by Mr. Rainey Powell, investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by Mr. Rainey Powell pursuant to the terms of the Right of First Refusal Agreement and (2) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. Mary U. Powell. Ms. Powell beneficially owns (a) 66,875 shares of Common Stock directly; and (b) 3,625,831 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. Ms. Powell does not include in her beneficial ownership 536,487 shares of Common Stock that are beneficially owned by her husband, H. Rainey Powell, and, based upon filings with the Commission, the Reporting Persons believe that Ms. Powell has disclaimed beneficial ownership of such shares except as may otherwise be included as part of the beneficial ownership of stock by the Group. Ms. Powell has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; and (b) (1) with respect to 66,875 shares of Common Stock beneficially owned by Ms. Powell, investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by Ms. Powell pursuant to the terms of the Right of First Refusal Agreement and (2) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. Lisa Powell Hunt. Ms. Hunt beneficially owns (a) 301,097 shares of Common Stock directly; (b) 85,656 shares of Common Stock indirectly through custodial accounts for the benefit of each of her three minor children; (c) 11,438 shares of Common Stock directly that may be received pursuant to the exercise of Company stock options; and (d) 3,294,515 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. Ms. Hunt does not include in her beneficial ownership 35,041 shares of Common Stock that are beneficially owned by her husband, Clay M. Hunt, and, based upon filings with the Commission, the Reporting Persons believe that Ms. Hunt has Page 17 of 24 18 disclaimed beneficial ownership of such shares except as may otherwise be included as part of the beneficial ownership of stock by the Group. Ms. Hunt has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) to the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; and (b) (1) with respect to 386,753 shares of Common Stock beneficially owned by Ms. Hunt, investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by Ms. Hunt pursuant to the terms of the Right of First Refusal Agreement and (2) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain rights of first refusal provisions contained in the Powell Family Shareholders Agreement. Clay M. Hunt. Mr. Hunt beneficially owns (a) 35,041 shares of Common Stock directly; and (b) 3,657,665 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. Mr. Hunt does not include in his beneficial ownership 398,191 shares of Common Stock that are beneficially owned by his wife, Lisa Powell Hunt, and, based upon filings with the Commission, the Reporting Persons believe that Mr. Hunt has disclaimed beneficial ownership of such shares except as may otherwise be included as part of the beneficial ownership of stock by the Group. Mr. Hunt has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; and (b) (1) with respect to 35,041 shares of Common Stock beneficially owned by Mr. Hunt, investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by Ms. Hunt pursuant to the terms of the Right of First Refusal Agreement and (2) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. Elizabeth M. Powell Trust A. The EMP Trust A beneficially owns (a) 73,484 shares of Common Stock directly and (b) 3,619,222 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. The EMP Trust A has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Page 18 of 24 19 Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; (b) with respect to 73,484 shares of Common Stock owned directly by the EMP Trust A, (1) voting power and investment power may be deemed to be shared with Mr. Powell pursuant to his general power of appointment exercisable at his death, (2) voting power and investment power are exercised through Arvest as sole trustee of such trust and (3) investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by the EMP Trust A pursuant to the terms of the Right of First Refusal Agreement; and (c) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. Elizabeth M. Powell Trust B. The Elizabeth M. Powell Trust B ("EMP Trust B") beneficially owns (a) 402,497 shares of Common Stock directly and (b) 3,290,209 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. The EMP Trust B has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; (b) with respect to 402,497 shares of Common Stock owned directly by the EMP Trust B, (1) voting power and investment power are exercised through Arvest as sole trustee of such trust and (2) investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by the EMP Trust B pursuant to the terms of the Right of First Refusal Agreement; and (c) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. Arvest and ABGI. Arvest beneficially owns (a) 475,981 shares of Common Stock indirectly through the EMP Trust A and the EMP Trust B, as trustee of each such trust, (b) 9,443 shares of Common Stock indirectly as trustee or as manager of fiduciary accounts unrelated to the Powell family or the Company (such shares being referred to herein as the Arvest Unrelated Account Shares) and (c) 3,207,282 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. ABGI may be deemed to beneficially own all of such shares through its ownership of Arvest. Arvest and ABGI share voting and investment power with respect to the Arvest Unrelated Account Shares. Arvest and ABGI have shared voting power and investment power with respect to the remainder of such shares, as follows: (a) with respect to 73,484 shares of Common Stock owned by the EMP Trust A, voting power and investment power are shared with Mr. Powell pursuant to his general power of appointment exercisable at his death; (b) with respect to 402,497 shares of Common Stock owned by EMP Trust B, voting power and investment power are exercised by Arvest as sole trustee of such trust; (c) with respect to all such stock (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) Page 19 of 24 20 the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; and (d) (1) with respect to 475,981 shares of Common Stock beneficially owned by Arvest and ABGI, investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by Arvest pursuant to the terms of the Right of First Refusal Agreement and (2) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. H. Rainey Powell and Mary U. Powell 1997 Irrevocable Trust. The H. Rainey Powell Trust beneficially owns (a) 42,000 shares of Common Stock directly and (b) 3,650,706 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. The H. Rainey Powell Trust has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; (b) with respect to 42,000 shares of Common Stock owned directly by the H. Rainey Powell Trust, (1) voting power and investment power are exercised through Mr. Casey as sole trustee of such trust and (2) investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by the H. Rainey Powell Trust pursuant to the terms of the Right of First Refusal Agreement; and (c) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. Harold G. Powell Family Revocable Trust, UA dated September 7, 1993. The Powell Revocable Trust I beneficially owns (a) 144,975 shares of Common Stock directly and (b) 3,547,731 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. The Powell Revocable Trust I has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares), voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; (b) with respect to 144,975 shares of Common Stock owned directly by the Powell Revocable Trust I, (1) voting power and investment power are exercised through Mr. Powell as sole trustee of such trust and (2) investment power is shared with the Reporting Persons with respect to certain potential dispositions of Common Stock by the Powell Revocable Trust I pursuant to the terms of the Right of First Refusal Agreement; and (c) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain Page 20 of 24 21 potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. Harold G. Powell Revocable Trust dated September 8, 1993. The Powell Revocable Trust II beneficially owns (a) 11,000 shares of Common Stock directly and (b) 3,681,706 shares of Common Stock and 300,000 shares of Preferred Stock indirectly through the other members of the Group. The Powell Revocable Trust II has shared voting power and investment power with respect to such shares, as follows: (a) with respect to all such shares (other than the Arvest Unrelated Account Shares) voting power is shared with the Reporting Persons and the other Family Shareholders solely with respect to (1) the election of one member of the Company's Board of Directors pursuant to the terms of the Voting Agreement and (2) the approval of the conversion rights of the Preferred Stock at the 2001 Annual Meeting, pursuant to an irrevocable proxy given by each of the Family Shareholders to Inter-Him; (b) with respect to 11,000 shares of Common Stock owned directly by the Powell Revocable Trust II, (1) voting power and investment power are exercised through Mr. Powell and Mrs. Powell as trustees of such trust and (2) investment power is also shared with the Family Shareholders with respect to certain potential dispositions of Common Stock by the Powell Revocable Trust II pursuant to the terms of the Right of First Refusal Agreement; and (c) with respect to 2,978,692 shares of Common Stock beneficially owned by the Family Shareholders, investment power is shared with the other Family Shareholders with respect to certain potential dispositions of Common Stock by any of them pursuant to certain right of first refusal provisions contained in the Powell Family Shareholders Agreement. (c) Other than as reported in this Amendment No. 7, there have been no transactions by the Reporting Persons, or, with respect to Inter-Him, by any managing director of Inter-Him, in Common Stock or Preferred Stock since the date of Amendment No. 6 to this Schedule 13D. To the knowledge of the Reporting Persons, no other member of the Group or, with respect to Arvest, each entity or corporation controlling or ultimately in control of Arvest, and each such entity's executive officers and directors, has effected any transactions in Common Stock or Preferred Stock during the past 60 days. (d) With respect to the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Company stock owned by the Reporting Persons. To the knowledge of the Reporting Person, with respect to other members of the Group, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Company stock owned by such other members of the Group, except: (i) Harold G. Powell has the right to revoke the Powell Revocable Trust I and the Powell Revocable Trust II and would upon such revocation have the right to receive any dividends from or proceeds from the sale of shares of Common Stock held by such trusts; (ii) Harold G. Powell is a beneficiary of EMP Trust A and under the terms of EMP Trust A has the right to receive the income of EMP Trust A, including any cash dividends with respect to the Common Stock held by EMP Trust A, and to receive annual distributions of the principal of such trust, including shares of Common Stock held by such trust, up to an amount not to exceed in any year 5% of the principal of such trust; and (iii) Arvest, as trustee of EMP Trust B, has the authority under the terms of EMP Trust B to distribute income of EMP Trust B, including any cash Page 21 of 24 22 dividends with respect to the Common Stock held by EMP Trust B, to Harold G. Powell, Rebecca Powell Casey, H. Rainey Powell and Lisa Powell Hunt, in Arvest's sole discretion. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Other than as may be described in response to Item 2, there are no other contracts, arrangements, understandings or relationships required to be described in this Item 6. Page 22 of 24 23 Item 7. Material to be filed as Exhibits EXHIBIT A Agreement with respect to joint filing of Amendment No. 7 to Schedule 13D pursuant to Rule 13d-1(k)(1)(iii), dated May 9, 2001, by and among Ronald de Waal, Inter-Him N.V. and W. Howard Lester. EXHIBIT B Voting Agreement, dated February 28, 2001, by and among the Company, Inter-Him and each of the Family Shareholders.(1) EXHIBIT C Right of First Refusal Agreement, dated February 28, 2001, by and among the Company, Inter-Him and each of the Family Shareholders.(1) EXHIBIT D Investor Rights Agreement, dated February 28, 2001, by and between the Company and Inter-Him.(1) EXHIBIT E Series 2001-A Preferred Stock Purchase Agreement, dated February 23, 2001, by and between the Company and Inter-Him. (1) EXHIBIT F Certificate of Designations with respect to the Preferred Stock.(1) EXHIBIT G First Amended and Restated Stockholders' Agreement, dated June 15, 1998 (2). EXHIBIT H First Amendment, dated February 28, 2001, to First Amended and Restated Stockholders' Agreement.(1) EXHIBIT I Form of Irrevocable Proxy granted by each of the Family Shareholders to Inter-Him.(1) EXHIBIT J Joinder Agreement, dated May 1, 2001, by W. Howard Lester. EXHIBIT K Shareholders Agreement (with respect to the Preferred Stock) dated May 1, 2001, by and among the Company, Inter-Him N.V. and W. Howard Lester.
- --------------- (1) Incorporated by reference from Amendment No. 6 to this Schedule 13D, as filed with the Securities and Exchange Commission on March 21, 2001. (2) Incorporated by reference from Exhibit 10.2 to the Company's Form 10-Q for the quarter ended August 1, 1998, as filed with the Securities and Exchange Commission on September 15, 1998. Page 23 of 24 24 SIGNATURES 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. Date: May 9, 2001 Inter-Him N.V. By: /s/ Victor Hoogstraal --------------------------------------- Victor Hoogstraal Managing Director /s/ Ronald de Waal ------------------------------------------ Ronald de Waal /s/ W. Howard Lester ------------------------------------------ W. Howard Lester Page 24 of 24 25 INDEX TO EXHIBITS
Exhibit Description of Exhibit - ------- ---------------------- EXHIBIT A Agreement with respect to joint filing of Amendment No. 7 to Schedule 13D pursuant to Rule 13d-1(k)(1)(iii), dated May 9, 2001, by and among Ronald de Waal, Inter-Him N.V. and W. Howard Lester. EXHIBIT B Voting Agreement, dated February 28, 2001, by and among the Company, Inter-Him and each of the Family Shareholders.(1) EXHIBIT C Right of First Refusal Agreement, dated February 28, 2001, by and among the Company, Inter-Him and each of the Family Shareholders.(1) EXHIBIT D Investor Rights Agreement, dated February 28, 2001, by and between the Company and Inter-Him.(1) EXHIBIT E Series 2001-A Preferred Stock Purchase Agreement, dated February 23, 2001, by and between the Company and Inter-Him. (1) EXHIBIT F Certificate of Designations with respect to the Preferred Stock.(1) EXHIBIT G First Amended and Restated Stockholders' Agreement, dated June 15, 1998(2). EXHIBIT H First Amendment, dated February 28, 2001, to First Amended and Restated Stockholders' Agreement.(1) EXHIBIT I Form of Irrevocable Proxy granted by each of the Family Shareholders to Inter-Him.(1) EXHIBIT J Joinder Agreement, dated May 1, 2001, by W. Howard Lester. EXHIBIT K Shareholders Agreement (with respect to the Preferred Stock) dated May 1, 2001, by and among the Company, Inter-Him N.V. and W. Howard Lester.
- --------------- (1) Incorporated by reference from Amendment No. 6 to this Schedule 13D, as filed with the Securities and Exchange Commission on March 21, 2001. (2) Incorporated by reference from Exhibit 10.2 to the Company's Form 10-Q for the quarter ended August 1, 1998, as filed with the Securities and Exchange Commission on September 15, 1998. 26 EXHIBIT A AGREEMENT Pursuant to Securities Exchange Act Rule 13d-1(k)(1)(iii) The undersigned hereby agree that Amendment No. 7 to the Schedule 13D, filed pursuant to the Securities Exchange Act of 1934 and executed by each of the undersigned of even date herewith, is filed on behalf of each of the undersigned. DULY EXECUTED this 9th day of May, 2001. Inter-Him N.V. By: /s/ Victor Hoogstraal --------------------------------- Victor Hoogstraal Managing Director /s/ Ronald de Waal ------------------------------------ Ronald de Waal /s/ W. Howard Lester ------------------------------------ W. Howard Lester EX-99.J 2 g69182ex99-j.txt JOINDER AGREEMENT 1 EXHIBIT 99.J JOINDER AGREEMENT This Joinder Agreement (this "Agreement") is executed and delivered by W. Howard Lester, a resident of the State of California ("Lester"), effective as of May 1, 2001. RECITALS WHEREAS, Inter-Him N.V., a Netherlands Antilles corporation ("Inter-Him"), and Harold's Stores, Inc., an Oklahoma corporation (the "Company"), entered into a Series 2001-A Preferred Stock Purchase Agreement dated as of February 28, 2001 (the "Stock Purchase Agreement"), pursuant to which Inter-Him purchased from the Company 300,000 shares of Series 2001-A Preferred Stock, $.01 par value per share (the "Preferred Stock"); WHEREAS, in connection with Inter-Him's purchase of the Preferred Stock, Inter-Him entered into an Investor Rights Agreement, Right of First Refusal Agreement and Voting Agreement, each dated as of February 28, 2001 and delivered pursuant to the Stock Purchase Agreement (the "Ancillary Agreements"); WHEREAS, effective as of May 1, 2001, Inter-Him has sold 37,500 shares of Preferred Stock (the "Shares") to Lester for an aggregate cash purchase price of $750,000; and WHEREAS, in connection with Lester's purchase of the Shares, Lester shall become a party to the Stock Purchase Agreement and the Ancillary Agreements (the "Transaction Agreements") as an "Investor" thereunder. AGREEMENT NOW, THEREFORE, for good and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged: 1. Joinder. Lester hereby agrees that as of the date hereof he shall, and hereby does, become a party to and bound by the Transaction Agreements as an "Investor" thereunder, and shall perform the obligations contained therein as if he had originally executed the Transaction Agreements as an Investor. 2. Acknowledgement. Lester acknowledges that he has been provided with copies of the executed Transaction Agreements and has had an adequate opportunity to review such agreements, to have answered any questions concerning such agreements, and to consult with his attorney regarding the terms of such agreements and the consequences of his becoming a party to them. 3. Certain Representations. Without limiting any other representation or warranty in the Transaction Agreements that Lester is making by the execution and delivery of this 2 Agreement, Lester represents and warrants for the benefit of Inter-Him and the Company that: (a) he has the power and authority to enter into the Transaction Agreements and to carry out the terms and conditions of the Transaction Agreements as an Investor thereunder; (b) the execution and delivery of the Transaction Agreements and this Agreement and compliance with or performance under them has been duly authorized by all necessary action on his part in compliance with applicable law; (c) the carrying out of the terms and conditions of the Transaction Agreements by Lester is not restricted by or in violation either of any applicable law to which he is subject or of any agreement, commitment, order, ruling or proceeding to which he is a party; and (d) each of the Transaction Agreements and this Agreement constitutes the valid and binding agreement of Lester. DULY EXECUTED by the undersigned, effective as of May 1, 2001. /s/ W. Howard Lester ----------------------------------- W. Howard Lester -2- EX-99.K 3 g69182ex99-k.txt SHAREHOLDERS AGREEMENT 1 EXHIBIT 99.K SHAREHOLDERS AGREEMENT This Shareholders Agreement (this "Agreement") is made and entered into as of May 1, 2001, by and among Harold's Stores, Inc., an Oklahoma corporation (the "Company"), Inter-Him N.V., a Netherlands Antilles corporation ("Inter-Him"), and W. Howard Lester, an individual resident of the State of California ("Lester"). RECITALS WHEREAS, Inter-Him has acquired 300,000 shares of Series 2001-A Preferred Stock (the "Preferred Stock") of the Company, pursuant to a Series 2001-A Preferred Stock Purchase Agreement dated February 23, 2001 (the "Preferred Stock Purchase Agreement"), which transaction closed on February 28, 2001; and WHEREAS, effective as of the date of this Agreement, Inter-Him is transferring to Lester 37,500 shares of Preferred Stock; and WHEREAS, Inter-Him and Lester (individually, an "Investor" and collectively, the "Investors") desire to enter into this Agreement to provide for rights of first refusal in the event that any of them wish to transfer any of their shares of Preferred Stock and to enter into certain agreements relating to the voting of their shares of Preferred Stock; NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. RIGHT OF FIRST REFUSAL 1.1 General. Before any shares of Preferred Stock held by any of the Investors may be sold or otherwise transferred, including any act of selling, assigning, transferring, pledging, encumbering, giving and any other form of conveying, whether voluntary or by operation of law (each a "transfer"), the other Investors shall have rights of first refusal to purchase such shares on the terms and conditions set forth herein. 1.2 Notice of Proposed Transfer. If an Investor (a "Selling Investor") proposes to transfer any shares of Preferred Stock, such Selling Investor shall deliver to the other Investors (the "Non-Selling Investors") a written notice (the "Notice") stating: (i) the Selling Investor's bona fide intention to transfer shares of Preferred Stock; (ii) the name of each proposed transferee; (iii) the number of shares of Preferred Stock to be transferred to each proposed transferee and the consideration, if any, for which the Selling Investor proposes to transfer the shares of Preferred Stock; and (iv) the deadline for submission of the Initial Purchase Notice in 2 accordance with the time limits set forth in Section 1.3 below. The Notice shall be accompanied by an opinion of reputable legal counsel that the proposed transfer would be exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), or would be sold pursuant to an effective registration statement under the Securities Act. 1.3 Exercise of Right of First Refusal. (a) After receipt of the Notice, the Non-Selling Investors may, by giving written notice to the Selling Investor (the "Initial Purchase Notice"), elect to purchase all, but not less than all, of the shares of Preferred Stock proposed to be transferred, at the purchase price determined in accordance with Section 1.4 below. If the total number of shares that the Non-Selling Investors elect to purchase exceeds the number of shares of Preferred Stock that the Selling Investor proposes to transfer, each Non-Selling Investor electing to purchase (each a "Purchasing Investor") shall be entitled to purchase such holder's Pro Rata Share (as defined in Section 1.3(d)), of the shares of Preferred Stock to be transferred. The Initial Purchase Notice shall be given to the Selling Investor within twenty (20) days after receipt of the Notice. (b) If the Purchasing Investors do not choose to purchase all of the available shares of Preferred Stock, the Selling Investor shall promptly give written notice (the "Second Notice") to the Purchasing Investors, which shall set forth (i) the number of shares of Preferred Stock elected to be purchased by the Purchasing Investors and the identity of the Purchasing Investors so electing and number of shares of Preferred Stock so elected to be purchased by each of them, (ii) the number of shares of Preferred Stock remaining available for purchase, if the Purchasing Investors have not elected to purchase all of the available shares of Preferred Stock, and (iii) the deadline for submission of the Second Purchase Notice in accordance with the time limits set forth in this Section 1.3. The Purchasing Investors may then elect by giving written notice to the Selling Investor (the "Second Purchase Notice") to purchase the remaining available shares of Preferred Stock at the purchase price determined in accordance with Section 1.4 below, as to each Purchasing Investor in accordance with its Pro Rata Share. The Second Purchase Notice shall be given to the Selling Investor within ten (10) days after receipt of the Second Notice. (c) For purposes of this Agreement, a Purchasing Investor's "Pro Rata Share" is a fraction, the numerator of which is the number of shares of Preferred Stock held by such holder, and the denominator of which is the total number of shares of Preferred Stock held by all Purchasing Investors. If the Purchasing Investors do not elect to purchase all of the available shares of Preferred Stock following receipt of the Notice, then as to the remaining available shares of Preferred Stock, the Pro Rata Shares of Purchasing Investors electing to purchase such available shares shall be proportionately increased to reflect a fraction, the numerator of which is the number of shares of Preferred Stock held by each such holder, and the denominator of which is the total number of shares of Preferred Stock held by all Purchasing Investors electing to purchase such available shares. If any Purchasing Investor does not elect to purchase its full entitlement, it may convey its unused right to purchase to any other Purchasing Investor(s). 2 3 1.4 Purchase Price. The purchase price for the shares of Preferred Stock purchased by the Purchasing Investors shall be the same price as the price offered to the proposed transferee, subject to the following: (a) If such price includes consideration other than cash, or if the Company's common stock (the "Common Stock") is no longer traded on a securities exchange or on the over-the-counter market, the cash equivalent value of the non-cash consideration or the value of the shares to be purchased shall be determined by the mutual consent of the Selling Investor and a majority-in-interest of the Purchasing Investors or, in the absence of such agreement, by a third party appraiser mutually agreed upon by such holder and a majority-in-interest of the Purchasing Investors; provided that the fees and expenses of such appraiser shall be proportionately shared by the Selling Investor and the Purchasing Investors. (b) In the context of a proposed transfer for no consideration while the Common Stock is traded on a securities exchange or on the over-the-counter market, the price shall be equal to the following applicable average market price (the "Average Market Price") of the Common Stock into which the Preferred Stock to be transferred may be converted, as of the trading day immediately preceding the date of the Notice, or such other price as may be agreed by the Selling Investor and a majority-in-interest of the Purchasing Investors: (i) If traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the Common Stock on such exchange over the twenty (20) trading day period ending on the trading day prior to the date of the Notice, adjusted appropriately for any stock splits, stock dividends or similar changes in capitalization occurring during such period; (ii) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the twenty (20) trading day period ending on the trading day prior to the date of the Notice, adjusted appropriately for any stock splits, stock dividends or similar changes in capitalization occurring during such period. 1.5 Payment. Payment of the purchase price shall be made in cash (by wire transfer or check) within 15 days after delivery of the Initial Purchase Notice or, if applicable, the Second Purchase Notice. The Purchasing Investors' obligation to consummate such purchase shall be conditioned upon the Selling Investor's delivery of original share certificates representing the shares of Preferred Stock to be sold, together with customary representations and warranties and instruments of conveyance, so that the Purchasing Investors take title to such shares free of all liens and encumbrances. The Selling Investors will cooperate in good faith with the Purchasing Investors to provide such deliveries and otherwise to consummate the transactions contemplated hereby. 1.6 Selling Investor's Right to Transfer. If all of the shares of Preferred Stock proposed in the Notice to be transferred are not purchased by the Non-Selling Investors within the time frames provided herein, the Selling Investor may transfer all of such shares of Preferred Stock in accordance with the terms described in the Notice, provided that such transfer (i) is 3 4 consummated within 90 days after the date of the Notice, (ii) is in accordance with all of the terms of this Agreement and all other agreements between or among such Selling Investor, the Non-Selling Investors and the Company and (iii) is effected in accordance with any applicable securities laws. As a condition of any transfer of shares of Preferred Stock pursuant to this Section 1.6, the transferee shall agree in writing to be bound by the restrictions set forth in this Agreement as to the transferred shares of Preferred Stock as an "Investor" hereunder. If the shares of Preferred Stock described in the Notice are not transferred in accordance with the terms described in the Notice within such period, a new Notice shall be given to the Non-Selling Investors, and the Non-Selling Investors shall again be offered a right of first refusal pursuant to this Agreement, before any shares of Preferred Stock held by the Selling Investors may be sold or otherwise transferred. SECTION 2. LIMITATIONS ON RIGHT OF FIRST REFUSAL 2.1 Non-applicable Transfers. The restrictions on transfers set forth in Section 1 of this Agreement shall not apply where the transfer of securities by an Investor is: (a) to such Investor's "immediate family" (for purposes of this Agreement, such Selling Investor's spouse, parents and siblings, and children, grandchildren or other lineal descendants, whether natural or adopted, and the spouses of any of them), or to a custodian, trustee or other fiduciary for the account of the Investor or members of the Investor's immediate family in connection with an estate planning transaction, or a distribution by any trustee of shares to an Investor or a member of the Investor's immediate family; (b) by operation of law, or pursuant to a bequest or inheritance, in connection with the distribution of the estate of a deceased Investor upon his or her death; (c) to one or more other Investors; (d) to a corporation or other entity that would be considered an "affiliate" (as defined in the Securities Act) of such Investor; (e) pursuant to a public offering registered under the Securities Act; or (f) to a bona fide pledgee reasonably acceptable to a majority-in-interest of the Investors in connection with the granting of a security interest with respect to the pledged shares (and a U.S. FDIC-insured commercial bank or savings bank with assets in excess of $100 million shall be deemed to be reasonably acceptable to the Investors); provided that, except in the case of transfers pursuant to subsection (e), as to which this Agreement shall cease to apply to the transferee, the transferee agrees in writing to be bound by the restrictions set forth in this Agreement as to such transferred shares of Preferred Stock as an "Investor" hereunder. 4 5 2.2 Legends; Transfer. (a) Each certificate representing the Investors' shares of Preferred Stock, and any certificates issued to their successors and assigns who remain bound by this Agreement, shall be endorsed by the Company with a legend reading substantially as follows: "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO, AND MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH, AN AGREEMENT AMONG THE COMPANY, THE HOLDER OF THESE SECURITIES AND CERTAIN OTHER HOLDERS OF THE COMPANY'S STOCK, WHICH INCLUDES RIGHTS OF FIRST REFUSAL, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY." (b) The Company shall not transfer any of the shares of Preferred Stock on its books without first ascertaining compliance with all of the applicable provisions of this Agreement with respect to such transfer. SECTION 3. VOTING AND PROXIES 3.1 Voting Agreement. Each Investor hereby agrees to cast all votes entitled to be cast by the shares of Preferred Stock held by such Investor, whether in connection with a vote of shareholders of the Company generally or any matter as to which the shares of Preferred Stock are entitled to vote as a separate class, in the manner determined by holders of a majority of the outstanding shares of Preferred Stock. The Investors shall execute and deliver one or more irrevocable proxies, together with any and all other agreements, documents or instruments deemed necessary or desirable by any of them, to vote their shares of Preferred Stock in accordance with this Section 3.1. 3.2 Irrevocable Proxy is Coupled With an Interest. Any irrevocable proxies granted pursuant to this Agreement are and shall be coupled with an interest sufficient in law to support an irrevocable proxy, and are and shall be granted in consideration of and as an inducement to cause the Investors to enter into this Agreement. 3.3 Revocation of Prior Proxies. Except for any proxies that may be granted pursuant to Section 3.1 hereof, (i) the proxies granted hereunder shall revoke all other proxies granted by such person at any time with respect to the shares of capital stock of the Company and (ii) no subsequent proxies will be given with respect thereto by such person (except for other proxies that may be granted from time to time to any of the holders of the Preferred Stock). 3.4 Filings with Securities and Exchange Commission. In the event that the Investors or their counsel determine that the execution and delivery of this Agreement or the giving of any proxies as provided herein shall constitute or form a "group," as such term is defined in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules 5 6 and regulations promulgated thereunder, and for as long as such group is deemed to exist, each such person that the Investors or their counsel determine to be members of such group shall agree to: (a) furnish to the Investors or their counsel such information regarding such person or the shares of Common Stock beneficially owned by such person as the Investors or their counsel shall request in order to prepare all necessary or appropriate reports, schedules or other filings with the Securities and Exchange Commission (the "Commission"), including any amendments thereto; (b) execute and deliver all filings, joint filing agreements, powers of attorney, or other agreements, documents or instruments as the Investors or their counsel shall request in order to prepare, file or cause to be filed with the Commission the documents described in Section 3.4(a); (c) agree to file such reports, schedules or other filings jointly with the Investors if so requested by the Investors or their counsel; and (d) do or cause to be done all things necessary, proper or advisable to effectuate the purpose and intent of this Section 3.4 and to cooperate fully with the Investors and their counsel and other agents or representatives in connection with any steps required to be taken as part of such person's obligations hereunder. SECTION 4. MISCELLANEOUS 4.1 Successors and Assigns. Subject to the exceptions specifically set forth in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective executors, administrators, heirs, successors and permitted assigns of the parties. Notwithstanding the foregoing, this Agreement shall terminate, and shall no longer be applicable, as to any shares of Common Stock acquired upon the conversion of shares of Preferred Stock. 4.2 Representations of Investors. Each Investor represents to each other Investor that such Investor (a) is an "accredited investor" as defined in Rule 501 of Regulation D promulgated under the Securities Act; (b) is acquiring or has acquired the Preferred Stock for investment for the Investor's own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof; and (c) understands that the Preferred Stock has not been, and will not be when issued, registered under the Securities Act or any state securities laws by reason of specific exemptions from the registration provisions of the Securities Act and such state laws, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the representations as expressed herein. 6 7 4.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma without regard to the conflicts of laws principles thereof. 4.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. 4.5 Headings. The section headings of this Agreement are for convenience and shall not by themselves determine the interpretation of this Agreement. 4.6 Notices. Any notice required or permitted hereunder shall be given in writing and shall be conclusively deemed effectively given upon personal delivery, or by delivery by overnight courier, or delivery via telecopy (with confirmation of receipt), or five (5) days after deposit in the United States mail, by registered or certified mail, postage prepaid, addressed: (i) if to the Company, as follows: Harold's Stores, Inc. 765 Asp Norman, Oklahoma 73070 Attn: Chief Financial Officer Telecopy: (405) 366-2538 with a copy to: Crowe & Dunlevy 1800 Mid-America Tower 20 North Broadway Oklahoma City, Oklahoma 73102 Attn: Michael M. Stewart, Esq. Telecopy: (405) 272-5238 and (ii) if to an Investor, to such Investor's address as set forth on the Schedule of Investors attached hereto, or at such other address as the parties may designate by ten (10) days advance written notice to the other parties, with a copy to: Sutherland Asbill & Brennan LLP 999 Peachtree Street, N.E. Atlanta, Georgia 30309 Attn: Thomas C. Herman, Esq. Telecopy: (404) 853-8806 and Robert Anderson Consulting LLC 4401 Northside Parkway Suite 340 Atlanta, Georgia 30327 Attn: Robert L. Anderson 7 8 Telecopy: (404) 949-3156 4.7 Amendment of Agreement. Any provision of this Agreement may be amended by a written instrument signed by Investors holding a majority of the then outstanding shares of Preferred Stock held by the Investors. 4.8 Entire Agreement. This Agreement constitutes the entire agreement between the Investors and the Company relative to the subject matter hereof and supersedes any previous agreements or negotiations among the parties. [Signatures Appear on Following Page] 8 9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date above set forth. Harold's Stores, Inc. By: /s/ Jodi Taylor --------------------------------- Jodi Taylor Chief Financial Officer Inter-Him N.V. By: /s/ Victor Hoogstraal --------------------------------- Victor Hoogstraal Managing Director /s/ W. Howard Lester ------------------------------------- W. Howard Lester Signature Page to Shareholders Agreement 10 SCHEDULE OF INVESTORS INTER-HIM, N.V. Switzerland Representative Office Im Langacker 16 Postfach CH - 5401 Baden Schweiz Attn.: Mr. Victor Hoogstraal Telecopy: +41 56 483 0389 W. Howard Lester c/o Williams-Sonoma, Inc. 3250 Van Ness Ave. San Francisco, CA 94109 Telecopy: 415-616-8359 -----END PRIVACY-ENHANCED MESSAGE-----