Exhibit 10.35

 

THE NEIMAN MARCUS GROUP, INC.

 

NON-QUALIFIED STOCK OPTION AGREEMENT

ISSUED PURSUANT TO 1997 INCENTIVE PLAN

 

AGREEMENT made as of this          day of                      ,             ,
by and between THE NEIMAN MARCUS GROUP, INC., a corporation duly organized under
the laws of the State of Delaware (the “Corporation”), and Name, an employee of
the Corporation or of one or more of its subsidiaries (the “Optionee”).

 

WITNESSETH THAT:

 

WHEREAS, the Corporation has adopted for the benefit of key employees The Neiman
Marcus Group, Inc. 1997 Incentive Plan on January 17, 1997 (the “Plan”) and
approved by its stockholders on that date;

 

WHEREAS, in accordance with the terms of the Plan, two or more disinterested
members of the Board of Directors of the Corporation (the “Board”) have been
designated as a committee (the “Committee”) to administer the Plan in accordance
with the terms and provisions thereof; and

 

WHEREAS, the Committee has selected the Optionee to participate in the Plan by
the grant of a stock option which it is understood and agreed will not qualify
as an incentive stock option under the provisions of Section 422 of the Internal
Revenue Code of 1986;

 

NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, it is agreed as follows:

 

1.  GRANT OF OPTION.  The Corporation hereby grants to the Optionee a
non-qualified stock option (the “Option”) to purchase up to Amount shares of its
Class A Common Stock at $          per share, being equal to 100% of the fair
market value of such stock on the date hereof, determined in accordance with the
provisions of said Plan.  The Optionee’s right to purchase said stock shall be
exercised in the manner and subject to the terms and conditions hereinafter
provided.  The Corporation shall, at all times while the Option is in force,
reserve such number of shares of Class A Common Stock as will be sufficient to
satisfy the requirements of this Agreement.

 

2.  TIME OF EXERCISE OF THE OPTION.  During the first year the Option is
outstanding it may not be exercised with respect to any of the shares covered
thereby; during the second year it may be exercised as to not more than 20% of
the total number of shares covered thereby, less the number of shares previously
purchased thereunder;

 

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during the third year it may be exercised as to not more than 40% of the total
number of shares covered thereby, less the number of shares previously purchased
thereunder; during the fourth year it may be exercised as to not more than 60%
of the total number of shares covered thereby, less the number of shares
previously purchased thereunder; during the fifth year it may be exercised as to
not more than 80% of the total number of shares covered thereby, less the number
of shares previously purchased thereunder; and during the sixth year and
thereafter the Option may be exercised as to all or any of the shares covered
thereby, less the number of shares previously purchased thereunder, but it shall
not be exercisable after the expiration of 10 years and one day from the date
hereof.

 

3.  METHOD OF EXERCISE.  Stock purchased under the Option shall at the time of
exercise be paid for in full.  The Option may be exercised from time to time by
written notice to the Corporation stating the number of shares with respect to
which the Option is being exercised, and the time of the delivery thereof, which
time shall be at least 15 days after the giving of such notice unless an earlier
date shall have been mutually agreed upon.  At the time specified in such
notice, the Corporation shall, without transfer or issue tax to the Optionee (or
other person entitled to exercise the Option), deliver to the Optionee (or other
person entitled to exercise the Option) at the main office of the Corporation,
or such other place as shall be mutually acceptable, a certificate or
certificates for such shares out of theretofore authorized but unissued shares
or reacquired shares of its common stock, as the Corporation may elect, against
payment of the Option price in full for the number of shares to be delivered by
certified or bank cashier’s check or the equivalent thereof acceptable to the
Corporation (including, but not limited to, shares of capital stock of the
Corporation); provided, however, that the time of such delivery may be postponed
by the Corporation for such period as may be required for it with reasonable
diligence to comply with any applicable listing requirements of any national
securities exchange.  If the Optionee (or other person entitled to exercise the
Option) fails to accept delivery of and pay for all or any part of the number of
shares specified in such notice upon tender of delivery thereof, his or her
right to exercise the Option with respect to such undelivered shares may be
terminated by the Committee.

 

4.  TERMINATION OF EMPLOYMENT; RETIREMENT.  (a) Subject to the last paragraph of
this Section 4(a), the Optionee or the Optionee’s Permitted Transferee (as
defined in Section 11) or Transferees, if any, may, at any time within three
months after the date of termination of the Optionee’s employment with the
Corporation and its subsidiaries for any reason, but not later than the date of
expiration of the Option, exercise the Option to the extent the Optionee was
entitled to do so on the date of termination; provided that the Optionee shall
not be deemed to be so entitled on the date of termination, if the Committee
shall find that the Optionee’s employment was terminated because of any activity
on the Optionee’s part in competition with, or detrimental to, the Corporation
or its subsidiaries, or that the Optionee terminated such employment of the
Optionee’s own volition in order to engage, or because the Optionee had engaged,
in any such activity.  If the Option or any portion of the Option is not so
exercised, or if the Optionee shall be deemed not to be entitled to exercise it,
the Option

 

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or unexercised portion thereof shall terminate.  However, the Option shall not
be affected by any change in the duties or position of the Optionee (including
transfer to or from a subsidiary) so long as the Optionee continues in the
employ of the Corporation or one of its subsidiaries.

 

Notwithstanding the foregoing provisions of this Section 4(a), in the event of
the death or Eligible Retirement, as defined in Section 4(b), of an Optionee,
this Option may be exercised beyond three months after the date of termination
of employment.  The time of exercising this Option in the case of an Eligible
Retirement is described in Section 4(b), and the time of exercising this Option
in the event of the death of an Optionee is described in Section 5.

 

(b)  The Optionee or the Optionee’s Permitted Transferee or Transferees, if any,
may, at any time within twelve months after the date of the Optionee’s Eligible
Retirement from the Corporation or its subsidiaries, but not later than the date
of expiration of the Option, exercise the Option to the extent the Optionee was
entitled to do so on the date of Eligible Retirement; provided that the Optionee
or the Permitted Transferee or Transferees, if any, shall not be deemed to be so
entitled on the date of Eligible Retirement, if the Committee shall find that
the Optionee retired in order to engage, or because the Optionee had engaged, in
any activity in competition with, or detrimental to, the Corporation or its
subsidiaries.  If the Option or any portion of the Option is not so exercised,
or if the Optionee or the Permitted Transferee or Transferees, if any, shall be
deemed not to be entitled to exercise it, the Option or unexercised portion
thereof shall terminate.  As used herein, “Eligible Retirement” shall mean that
(i) the Optionee is eligible for a retirement benefit under the terms of a
retirement plan of the Corporation or its subsidiaries applicable to the
Optionee in effect at the time of such retirement and (ii) the Optionee is not
less than age 55 and has not less than twenty (20) years of vesting or credited
service under the terms of such retirement plan.

 

(c)  Nothing in the Plan or in this Agreement shall confer on the Optionee any
right to continue in the employ of the Corporation or its subsidiaries; affect
the right of the Corporation or its subsidiaries to terminate his or her
employment at any time; or be deemed a waiver or modification of any provision
contained in any agreement between the Optionee and the Corporation or any such
subsidiary.  A cessation of the Optionee’s employment by reason of a leave of
absence of not more than six months approved by the Company shall not be deemed
a termination of employment.

 

5.  EXERCISE BY REPRESENTATIVE, ETC.  If the Optionee dies while in the employ
of the Corporation or its subsidiaries or within three months after termination
of employment other than termination as the result of Eligible Retirement (as
defined in Section 4(b)), the person or persons to whom the Option is
transferred by will or the laws of descent and distribution, or the Permitted
Transferee or Transferees, if any, (the “Representative”), may at any time
within one year after the date of death but not later than the date of
expiration of the Option, exercise the entire Option.  If the Optionee dies
within twelve months after termination of employment as the result of an
Eligible Retirement, the Representative may, at any time during the period
ending on the later of

 

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(i) one year after the date of Eligible Retirement or (ii) three months from the
date of death, but not later than the date of expiration of the Option, exercise
the entire Option.  If the Option or any portion of the Option of the deceased
Optionee is not so exercised, it shall terminate.

 

6.  RESTRICTIONS ON TRANSFERABILITY OF OPTION.  The Option may not be
transferred except to one or more Permitted Transferees, or except by will or
the laws of descent and distribution, nor may it be otherwise assigned,
transferred, pledged, hypothecated or disposed of in any way (by operation of
law or otherwise) and it shall not be subject to execution, attachment or
similar process.  The Option may be exercised only by the Optionee, by a
Permitted Transferee, or by the Optionee’s or Permitted Transferee’s duly
appointed guardian or personal representative.  The Optionee may transfer all or
part of the Option to one or more Permitted Transferees at any time prior to the
exercise of the Option in full.  Upon any such transfer, a Permitted Transferee
shall succeed, to the extent of the Option or part of the Option so transferred
and the shares covered thereby, to all of the Optionee’s rights hereunder,
subject to the restrictions and performance of the obligations set forth
herein.  A Permitted Transferee to whom is transferred all or a portion of the
Option may transfer such portion (or any part thereof) to another person or
entity who or which is a Permitted Transferee with respect to the Optionee.

 

The Corporation shall be entitled to treat the Option as belonging to the
Optionee unless the Optionee or a Permitted Transferee, as the case may be,
shall inform the Secretary of the Corporation, in writing, of the identity of
any Permitted Transferee or Transferees, and the Secretary is of the opinion
that all required legal matters necessitated in connection therewith have been
satisfied.

 

7.  CHANGES IN COMMON STOCK.  In the event of any reorganization,
recapitalization, stock split, stock dividend, merger, consolidation,
combination of shares or other change affecting the Corporation’s common stock,
the Committee shall make such adjustments as it may deem appropriate in the
number and kind of securities to be subject to the Option.  Any such adjustment
made by the Committee shall be conclusive.  The Plan shall not affect the right
of the Corporation or any of its subsidiaries to reclassify, recapitalize or
otherwise change its capital or debt structure or to merge, consolidate, convey
any or all of its assets, dissolve, or liquidate, wind up or otherwise
reorganize.

 

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8.   RESTRICTION ON ISSUANCE OF SHARES.  The Corporation shall not be obligated
to sell or issue any shares pursuant to the Option unless the shares with
respect to which the Option is being exercised are at that time effectively
registered or exempt from registration under the Securities Act of 1933, as
amended.

 

9.   RIGHTS AS A STOCKHOLDER.  The Optionee or any Permitted Transferee shall
have no rights as a stockholder with respect to any shares covered by the Option
until the date of issuance of a stock certificate to the Optionee for such
shares.  No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.

 

10. WITHHOLDING.  The Corporation or any subsidiary that employs the Optionee
shall have the right to deduct any sums that federal, state or local tax law
requires to be withheld with respect to the exercise of the Option.  If the
Option or any portion thereof is transferred to a Permitted Transferee, the tax
withholding obligations with respect to such Option or portion thereof shall
remain with the Optionee.  In the alternative, the Optionee or other person
exercising the Option may elect to pay such sums to the employer corporation
either by check or with capital stock of the Corporation by delivering written
notice of that election to the Secretary of the employer corporation (or the
Corporation) no less than 30 days nor more than 60 days prior to exercise. 
There is no obligation hereunder that the Optionee be advised of the amount
which the employer corporation or the Corporation will be required to withhold.

 

11. INTERPRETATION OF PLAN AND OPTION.  This Agreement is being entered into
pursuant to the Plan and shall be governed in all respects by the terms and
provisions thereof.  As used herein the term “employee” shall mean an employee
of the Corporation or of any subsidiary of the Corporation, including officers
or members of the Board of Directors of the Corporation, and the term
“subsidiary of the Corporation” shall mean a subsidiary corporation as defined
in Section 424 of the Internal Revenue Code of 1986.  As used herein the term
“Permitted Transferee” shall mean the child (natural or adopted) or grandchild
(natural or adopted) of the Optionee, a trust or custodian for the benefit of
any such child or grandchild, or any other legal entity created for the benefit
of the children or grandchildren of the Optionee, which the Committee
determines, in its sole discretion, is an appropriate holder of the Option
consistent with the purposes and objectives of the Plan.  In the event of a
Permitted Transferee’s death prior to the expiration of the Option, the person
or persons to whom the Option is transferred by will of the Permitted Transferee
or the laws of descent and distribution shall have all of the rights transferred
to such Permitted Transferee hereunder, subject to the restrictions and
performance of the obligations set forth herein.  In all respects, questions of
interpretation and application of the Plan and of this Agreement shall be
determined by a majority of the Committee, as it may from time to time be
constituted, and the determinations of such majority shall be final and binding
upon all persons.

 

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12.                SUBMISSION TO JURISDICTION.  The Corporation and Optionee
hereby agree that all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby will be resolved exclusively
by a court of competent jurisdiction sitting in Dallas County, Texas.  Optionee
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have (i) to the laying of the venue of any such
proceedings brought in such a court, and (ii) any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

 

EXECUTED at Dallas, Texas, as of the date appearing in the first paragraph of
this Agreement.

 

 

 

THE NEIMAN MARCUS GROUP, INC.

 

 

 

 

 

By

 

 

 

 

Nelson A. Bangs

 

 

 

Senior Vice President &

 

 

 

General Counsel

 

 

 

 

 

 

 

 

 

 

 

 

Name, Optionee

 

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