Exhibit 10.24

 

CONFIDENTIALITY, NON-COMPETITION AND TERMINATION BENEFITS
AGREEMENT

 

This Confidentiality, Non-Competition and Termination Benefits Agreement
(“Agreement”) is entered into effective as of November 20, 2002 between Marita
O’Dea (“Executive”) and The Neiman Marcus Group, Inc., a Delaware corporation,
(“NMG”), and replaces and supersedes in its entirety that certain Termination
and Change of Control Agreement between Executive and NMG dated October 31, 2001
(the “2001 Agreement”). All capitalized terms used but not defined herein shall
have the meanings assigned to them in Appendix A, which is attached hereto and
incorporated fully herein by reference.

 

WHEREAS, Executive is employed “at will” as Senior Vice President, Human
Resources of NMG and either Executive or NMG may terminate Executive’s
employment at any time, with or without notice, and for any reason;

 

WHEREAS, in connection with the restructuring of the compensation and benefits
provided to senior executives of NMG, including Executive, the Board of
Directors of NMG has determined that stock option and restricted stock awards
should be combined with appropriate post-employment and other restrictions
designed to protect the legitimate business interests of NMG and its Affiliates;

 

WHEREAS, NMG and Executive have entered into separate stock option and
restricted stock agreements (the “Incentive Agreements”), effective November 20,
2002 that set forth the rights and obligations of NMG and Executive with respect
to such awards;

 

WHEREAS, NMG has granted to Executive an ownership interest in NMG in the form
of NMG stock;

 

WHEREAS, by virtue of her position and responsibilities, Executive has unique
access to and knowledge of NMG’s trade secrets and other confidential and
proprietary business information;

 

WHEREAS, Executive’s association with NMG to the exclusion of its competitors is
anticipated to enhanced NMG’s goodwill and Executive’s earning capacity;

 

WHEREAS, NMG and Executive mutually desire to protect NMG’s goodwill created by
Executive’s association with NMG and NMG’s trade secrets and other confidential
and proprietary business information and in recognition of the possible
interruption of Executive’s earnings after the end of her NMG employment; and

 

WHEREAS, NMG and Executive accordingly desire to make certain modifications to
the provisions of the 2001 Agreement, necessitating its replacement with this
Agreement;

 

NOW, THEREFORE, in consideration of the Incentive Agreements and the promises
and undertakings of the parties set out herein, and intending to be legally
bound, Executive and NMG agree as follows:

 

1.     (a)   While Executive is employed at-will by NMG, if NMG terminates
Executive’s employment for any reason other than for “Cause,” her “Total
Disability,” or her death, subject to paragraphs 1(c) and 1(d) below, NMG shall
provide Executive with benefits (“Termination Benefits”) consisting of:

 

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(1)   an amount equivalent to 1.5 times her then-current annual base salary,
less required withholding, which amount would be paid over an 18-month period
(hereinafter, the “Salary Continuance Period”) in regular, bi-weekly
installments following such termination; and

 

(2)   if, at the time of her termination, Executive participates in a group
medical insurance plan offered by NMG and Executive is eligible for and elects
to receive continued coverage under such plan in accordance with the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any
successor law, NMG will reimburse Executive during the Salary Continuance Period
or, if shorter, the period of such actual COBRA continuation coverage, for the
total amount of the monthly COBRA medical insurance premiums actually paid by
Executive for such continued medical insurance benefits.

 

For the purposes of determining whether or not NMG has terminated Executive’s
employment under this paragraph 1(a), any material, adverse change in the terms
and conditions of her employment, including but not limited to a relocation of
Executive’s place of business 50 miles or more from the current location, which
change causes Executive to resign her employment with NMG, will be deemed a
termination by NMG. A transfer of employment between NMG and its Affiliates
shall not be considered as a termination of employment for purposes of this
Agreement.

 

(b)   NMG shall require any successor or assignee (whether direct or indirect,
by purchase, merger, consolidation, or otherwise) to all or substantially all
the business and/or assets of NMG, by agreement in writing in form and substance
reasonably satisfactory to Executive, expressly, absolutely, and unconditionally
to assume and agree to perform this Agreement in the same manner and to the same
extent that NMG would be required to perform it if no such succession or
assignment had taken place. If NMG fails to obtain such agreement by the
effective time of any such succession or assignment, such failure shall be
considered a material, adverse change in the terms and conditions of Executive’s
employment and will be deemed a termination by NMG for purposes of paragraph
1(a) of this Agreement if such failure causes Executive to resign her employment
with NMG; provided that the Termination Benefits to which Executive would be
entitled after such resignation pursuant to paragraph 1(a) of this Agreement
shall be the sole remedy of Executive for any failure by NMG to obtain such
agreement. As used in this Agreement, “NMG” shall include any successor or
assignee (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all the business and/or assets of NMG that
executes and delivers the agreement provided for in this paragraph 1(b) or that
otherwise becomes obligated under this Agreement by operation of law.

 

(c)   If, in the reasonable judgment of NMG, Executive engages in any of the
Restricted Activities described in paragraph 3 of this Agreement, NMG’s
obligation to provide the Termination Benefits shall end as of the date NMG so
notifies Executive in writing.

 

(d)   If Executive is arrested or indicted for any felony, other serious
criminal offense, or any violation of federal or state securities laws, or has
any civil enforcement action brought against him by any regulatory agency, for
actions or omissions related to her employment with NMG, or if NMG reasonably
believes in its sole judgment that Executive has committed any act or omission
that would have entitled NMG to terminate her employment for Cause, whether such
act or omission was committed during her employment with NMG or during the
Salary Continuance Period, NMG may suspend any payments remaining pursuant to
paragraph l(a) of this Agreement until the [mal resolution of such criminal or
civil proceedings

 

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or until NMG has made a final determination in its sole judgment as to whether
Executive committed such an act or omission. If Executive is found guilty or
enters into a plea agreement, consent decree or similar arrangement with respect
to any such criminal or civil proceedings, or if NMG determines in its sole
judgment that Executive has committed such an act or omission, (1) NMG’s
obligation to provide the Termination Benefits shall immediately end, and (2)
Executive shall repay to NMG any amounts paid to him pursuant to paragraph 1(a)
of this Agreement within 30 days after a written request to do so by NMG. If any
such criminal or civil proceedings do not result in a finding of guilt or the
entry of a plea agreement or consent decree or similar arrangement, or NMG
determines in its sole judgment that Executive has not committed such an act or
omission, NMG shall pay to Executive any payments pursuant to paragraph 1(a) of
this Agreement that it has suspended, with interest on such suspended payments
at its cost of funds, and shall make any remaining payments due thereunder.

 

2.     Executive acknowledges and agrees that (a) NMG is engaged in a highly
competitive business; (b) NMG has expended considerable time and resources to
develop goodwill with its customers, vendors, and others, and to create,
protect, and exploit Confidential Information; (c) NMG must continue to prevent
the dilution of its goodwill and unauthorized use or disclosure of its
Confidential Information to avoid irreparable harm to its legitimate business
interests; (d) in the specialty retail business, her participation in or
direction of NMG’s day-to-day operations and strategic planning as a result of
her promotion will be an integral part of NMG’s continued success and goodwill;
(e) given her new position and responsibilities, she necessarily will be
creating Confidential Information that belongs to NMG and enhances NMG’s
goodwill, and in carrying out her new responsibilities she in turn will be
relying on NMG’s goodwill and the disclosure by NMG to her of Confidential
Information; (f) she will have access to Confidential Information that could be
used by any Competitor of NMG in a manner that would irreparably harm NMG’s
competitive position in the marketplace and dilute its goodwill; and (g) she
necessarily would use or disclose Confidential Information if she were to engage
in competition with NMG. NMG acknowledges and agrees that Executive must have
and continue to have throughout her employment the benefits and use of its
goodwill and Confidential Information in order to properly carry out her new
responsibilities. NMG accordingly promises upon execution and delivery of this
Agreement and in connection with Executive’s promotion to provide Executive
immediate access to new and additional Confidential Information and authorize
her to engage in activities that will create new and additional Confidential
Information. NMG and Executive thus acknowledge and agree that upon execution
and delivery of this Agreement and in connection with the promotion of Executive
and during her employment in her new position, Executive (a) will receive
Confidential Information that is unique, proprietary, and valuable to NMG, (b)
will create Confidential Information that is unique, proprietary, and valuable
to NMG, and (c) will benefit, including without limitation by way of increased
earnings and earning capacity, from the goodwill NMG has generated and from the
Confidential Information. Accordingly, Executive acknowledges and agrees that at
all times during her employment by NMG and thereafter:

 

(a)           all Confidential Information shall remain and be the sole and
exclusive property of NMG;

 

(b)          she will protect and safeguard all Confidential Information;

 

(c)    she will hold all Confidential Information in strictest confidence and
not, directly or indirectly, disclose or divulge any Confidential Information to
any person other than an officer, director, or employee of NMG to the extent
necessary for the proper performance of her

 

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responsibilities unless authorized to do so by NMG or compelled to do so by law
or valid legal process;

 

(d)    if she believes she is compelled by law or valid legal process to
disclose or divulge any Confidential Information, she will notify NMG in writing
sufficiently in advance of any such disclosure to allow NMG the opportunity to
defend, limit, or otherwise protect its interests against such disclosure;

 

(e)    at the end of her employment with NMG for any reason or at the request of
NMG at any time, she will return to NMG all Confidential Information and all
copies thereof, in whatever tangible form or medium including electronic; and

 

(f)     absent the promises and representations of Executive in this paragraph
and paragraph 3 below, NMG would not promote Executive, would require her
immediately to return any tangible Confidential Information in her possession,
would not provide Executive with new and additional Confidential Information,
would not authorize Executive to engage in activities that will create new and
additional Confidential Information, and would not enter into this Agreement or
the Incentive Agreements.

 

3.             In consideration of NMG’s promises to promote Executive, provide
her with new and additional Confidential Information, and to authorize her to
engage in activities that will create new and additional Confidential
Information upon execution and delivery of this Agreement, and the other
promises and undertakings of NMG in this Agreement and the Incentive Agreements,
Executive agrees that, while she is employed by NMG and for a period of 18
months following the end of that employment for any reason, she shall not engage
in any of the following activities (the “Restricted Activities”):

 

(a)    She will not directly or indirectly disparage NMG or its Affiliates, any
products, services, or operations of NMG or its Affiliates, or any of the
former, current, or future officers, directors, or employees of NMG or its
Affiliates;

 

(b)    She will not, whether on her own behalf or on behalf of any other
individual, partnership, firm, corporation or business organization, either
directly or indirectly solicit, induce, persuade, or entice, or endeavor to
solicit, induce, persuade, or entice, any person who is then employed by or
otherwise engaged to perform services for NMG or its Affiliates to leave that
employment or cease performing those services;

 

( c)   She will not, whether on her own behalf or on behalf of any other
individual, partnership, firm, corporation or business organization, either
directly or indirectly solicit, induce, persuade, or entice, or endeavor to
solicit, induce, persuade, or entice, any person who is then a customer,
supplier, or vendor of NMG or any of its Affiliates to cease being a customer,
supplier, or vendor of NMG or any of its Affiliates or to divert all or any part
of such person’s or entity’s business from NMG or any of its Affiliates; and

 

(d)    She will not associate directly or indirectly, as an employee, officer,
director, agent, partner, stockholder, owner, representative, or consultant,
with any Competitor of NMG or any of its Affiliates, unless (1) she has advised
NMG in writing in advance of her desire to undertake such activities and the
specific nature of such activities; (2) NMG has received written assurances
(that will be designed, among other things, to protect NMG’s and its Affiliates’
goodwill, Confidential Information, and other important commercial interests)
from the Competitor and Executive that are, in NMG’s sole discretion, adequate
to protect its interests; (3) NMG, in its sole discretion, has approved in
writing such association; and (4)

 

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Executive and the Competitor adhere to such assurances. This restriction (1)
extends to the performance by Executive, directly or indirectly, of the same or
similar activities Executive has performed for NMG or any of its Affiliates or
such other activities that by their nature are likely to lead to the disclosure
of Confidential Information, and (2) with respect to the post-employment
restriction, applies to any Competitor that has a retail store within 50 miles
of, or in the same Metropolitan Statistical Area as, any retail store of NMG or
any of its Affiliates. Executive shall not be in violation of this paragraph
3(d) solely as a result of her investment in stock or other securities of a
Competitor or any of its Affiliates listed on a national securities exchange or
actively traded in the over-the-counter market if she and the members of her
immediate family do not, directly or indirectly, hold more than a total of one
(1) percent of all such shares of stock or other securities issued and
outstanding. Executive acknowledges and agrees that engaging in the activities
restricted by this subparagraph would result in the inevitable disclosure or use
of Confidential Information for the Competitor’s benefit or to the detriment of
NMG.

 

Executive acknowledges and agrees that the restrictions contained in this
paragraph 3 are ancillary to an otherwise enforceable agreement, including
without limitation the mutual promises and undertakings set forth in paragraph 2
of this Agreement and in the Incentive Agreements; that NMG’s promises and
undertakings set forth in paragraph 2 of this Agreement and in the Incentive
Agreements, Executive’s new position and responsibilities with NMG, and NMG
granting to Executive ownership in NMG in the form of NMG stock, give rise to
NMG’s interest in restricting Executive’s post-employment activities; that such
restrictions are designed to enforce Executive’s promises and undertakings set
forth in this paragraph 3 and her common-law obligations and duties owed to NMG;
that the restrictions are reasonable and necessary, are valid and enforceable
under Texas law, and do not impose a greater restraint than necessary to protect
NMG’s goodwill, Confidential Information, and other legitimate business
interests; that she will immediately notify NMG in writing should she believe or
be advised that the restrictions are not valid or enforceable under Texas law or
the law of any other state that she contends or is advised is applicable; that
the mutual promises and undertakings of NMG and Executive under paragraphs 2 and
3 of this Agreement are not contingent on the duration of Executive’s employment
with NMG; and that absent the promises and representations made by Executive in
this paragraph 3 and paragraph 2 above, NMG would not promote Executive, would
require her to return any Confidential Information in her possession, would not
provide Executive with new and additional Confidential Information, would not
authorize Executive to engage in activities that will create new and additional
Confidential Information, and would not enter into this Agreement or the
Incentive Agreements.

 

4.             The Termination Benefits constitute all of NMG’s obligations to
Executive with respect to the end of Executive’s employment with NMG. However,
nothing in this Agreement is intended to limit any earned, vested benefits
(other than any entitlement to severance or separation pay, if any) that
Executive may have under the applicable provisions of any benefit plan of NMG in
which Executive is participating at the time of her termination of employment or
resignation.

 

5.             Executive acknowledges and agrees that NMG would not have an
adequate remedy at law and would be irreparably harmed in the event that any of
the provisions of paragraphs 2 or 3 of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
Executive agrees that NMG shall be entitled to equitable relief, including
preliminary and permanent injunctions and specific performance, in the event
Executive breaches or threatens to breach any of the provisions of such
paragraphs, without the necessity of posting any bond or proving special damages
or

 

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irreparable injury. Such remedies shall not be deemed to be the exclusive
remedies for a breach or threatened breach of this Agreement by Executive, but
shall be in addition to all other remedies available to NMG at law or equity.
Executive acknowledges and agrees that NMG shall be entitled to recover its
attorneys’ fees, expenses, and court costs, in addition to any other remedies to
which it may be entitled, in the event she breaches this Agreement. Executive
acknowledges and agrees that no breach by NMG of this Agreement or failure to
enforce or insist on its rights under this Agreement shall constitute a waiver
or abandonment of any such rights or defense to enforcement of such rights.

 

6.             If the provisions of paragraphs 2 or 3 of this Agreement are ever
deemed by a court to exceed the limitations permitted by applicable law,
Executive and NMG agree that such provisions shall be, and are, automatically
reformed to the maximum limitations permitted by such law.

 

7.             This Agreement contains the entire agreement between the parties
and supersedes all prior agreements and understandings, oral or written, with
respect to the ending of Executive’s at-will employment and the subject matter
of this Agreement. This Agreement may not be changed orally. It may be changed
only by written agreement signed by the party against whom any waiver, change,
amendment, modification or discharge is sought to be enforced. This Agreement is
to be construed as a whole, according to its fair meaning, and not strictly for
or against any of the parties. If any provision of this Agreement shall be
determined by a court to be invalid or unenforceable, the remaining provisions
of this Agreement shall not be affected thereby, shall remain in full force and
effect, and shall be enforceable to the fullest extent permitted by applicable
law.

 

8.             The validity, performance and enforceability of this Agreement
shall be determined and governed by the laws of the State of Texas, without
regard to its conflict of laws principles. NMG and Executive agree that the
exclusive forum for any action concerning this Agreement shall be in a court of
competent jurisdiction in Dallas County, Texas, with respect to a state court,
or the Dallas Division of the United States District Court for the Northern
District of Texas, with respect to a federal court. EXECUTIVE HEREBY CONSENTS TO
THE EXERCISE OF JURISDICTION OF A COURT IN THE EXCLUSIVE FORUM AND WAIVES ANY
RIGHT HE MAY HAVE TO CHALLENGE OR CONTEST THE REMOVAL AT ANY TIME BY NMG TO
FEDERAL COURT OF ANY SUCH ACTION HE MAY BRING AGAINST IT IN STATE COURT.
EXECUTIVE AND NMG FURTHER HEREBY MUTUALLY WAIVE THEIR RIGHT TO TRIAL BY JURY IN
ANY ACTION CONCERNING THIS AGREEMENT.

 

9.             Executive’s promises and obligations under this Agreement shall
survive the end of her employment with NMG, and such promises and obligations
shall inure to the benefit of any Affiliates, subsidiaries, divisions,
successors, or assigns of NMG.

 

 

 

THE NEIMAN MARCUS GROUP, INC.

 

 

 

 

 

 

s/s  Marita O’Dea

 

By:

/s/  Nelson A. Bangs

 

Marita O’Dea

 

Nelson A. Bangs, Senior Vice President

 

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APPENDIX A

 

Definitions

 

1.             “Affiliate” means, with respect to any entity, any other
corporation, organization, association, partnership, sole proprietorship or
other type of entity, whether incorporated or unincorporated, directly or
indirectly controlling or controlled by or under direct or indirect common
control with such entity.

 

2.             “Cause” means, in NMG’s reasonable judgment, (i) a breach of duty
by Executive in the course of her employment involving fraud, acts of dishonesty
(other than inadvertent acts or omissions), disloyalty, or moral turpitude; (ii)
conduct that is materially detrimental to NMG, monetarily or otherwise, or
reflects unfavorably on NMG or Executive to such an extent that NMG’s best
interests reasonably require the termination of Executive’s employment; (iii)
acts of Executive in violation of her obligations under this Agreement or at
law; (iv) Executive’s failure to comply with or enforce NMG’s policies
concerning equal employment opportunity, including engaging in sexually or
otherwise harassing conduct; (v) Executive’s repeated insubordination or failure
to comply with or enforce other personnel policies of NMG or its Affiliates;
(vi) Executive’s failure to devote her full working time and best efforts to the
performance of her responsibilities to NMG or its Affiliates; or (vii)
Executive’s conviction of or entry of a plea agreement or consent decree or
similar arrangement with respect to, a felony, other serious criminal offense,
or any violation of federal or state securities laws; provided, however, that
with respect to items (v) and (vi), Executive has been provided prior written
notice of the failure and afforded a reasonable opportunity to correct same.

 

3.             “Competitor” means (i) the person or entity that owns or operates
Saks Incorporated, Nordstrom, Inc., or Barneys New York, Inc.; (ii) the
successors to or assigns of the persons or entities identified in (i); and (iii)
any other person or entity that owns or operates a luxury specialty retail
store.

 

4.             “Confidential Information” shall mean, without limitation, all
documents or information, in whatever form or medium, concerning or evidencing
sales; costs; pricing; strategies; forecasts and long range plans; financial and
tax information; personnel information; business, marketing and operational
projections, plans and opportunities; and customer, vendor, and supplier
information; but excluding any such information that is or becomes generally
available to the public other than as a result of any breach of this Agreement
or other unauthorized disclosure by Executive.

 

5.             “Total Disability” means that, in NMG’s reasonable judgment,
either (i) Executive has been unable to perform her duties because of a physical
or mental impairment for 80% or more of the normal working days during six
consecutive calendar months or 50% or more of the normal working days during
twelve consecutive calendar months, or (ii) Executive has become totally and
permanently incapable of performing the usual duties of her employment with NMG
on account of a physical or mental impairment.

 

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