Exhibit 10.8

 

Award Number:       

 

NM MARIPOSA HOLDINGS, INC.

 

Time-Vested Option

Non-Qualified Stock Option Agreement
 Pursuant to the
 NM Mariposa Holdings, Inc.
  Management Equity Incentive Plan

 

AGREEMENT (“Agreement”), dated as of [·], 2013 between NM Mariposa Holdings, Inc., a Delaware corporation (the “Company”), and [·] (the “Participant”).

 

Preliminary Statement

 

The Committee hereby grants this non-qualified stock option (the “Option”) as of [·], 2013 (the “Grant Date”), pursuant to the NM Mariposa Holdings, Inc. Management Equity Incentive Plan, as it may be amended from time to time (the “Plan”),  to purchase the number of shares of Class A Common Stock, $0.001 par value per share of the Company (the “Class A Common Stock”), and Class B Common Stock, par value $0.001 per share, of the Company (the “Class B Common Stock,” and, together with the Class A Common Stock, the “Common Stock”), set forth below to the Participant, as an Eligible Employee. The Company and its Subsidiaries collectively shall be referred to as the “Employer”.  Except as otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan.  By signing and returning this Agreement, the Participant acknowledges having received and read a copy of the Plan and agrees to comply with it, this Agreement and all applicable laws and regulations.  The Participant acknowledges that the Participant is required to execute and return to the Company the Accredited Investor Questionnaire provided herewith as a condition of acceptance of the Option.

 

Accordingly, the parties hereto agree as follows:

 

1.                                      Tax Matters.  No part of the Option is intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

2.                                      Common Stock Subject to Option;  Unit Exercise Price.  Subject to the Plan and the terms and conditions set forth herein and therein, the Option entitles the Participant to purchase from the Company, upon exercise thereof, [·] shares of Class A Common Stock and [·] shares of Class B Common Stock, provided that any exercise of the Option shall be with respect to an equal number of shares of Class A Common Stock and Class B Common Stock concurrently. The exercise price under the Option is $[·] for each unit (a “Unit”) consisting of one share of Class A Common Stock and one share of Class B Common Stock (the “Unit Exercise Price”).

 

Form of Time-Vested Option

 











 

3.                                      Vesting.

 

(a)                                 Vesting Schedule. The Option shall vest and become exercisable on the dates and in the cumulative percentages provided in the table below (which percentages shall apply equally with respect to the Class A Common Stock and the Class B Common Stock subject to such Option) based on the anniversaries of the “Closing Date” (as such term is defined in the Agreement and Plan of Merger by and among the Company, Mariposa Merger Sub LLC and Neiman Marcus Group LTD Inc., dated as of September 9, 2013) set forth below; provided, that, except as expressly provided below, the Participant has not experienced a Termination prior to each of the applicable vesting dates.  There shall be no proportionate or partial vesting in the periods prior to each vesting date.

 

	
Vesting Date
    	
 
    	
Cumulative Percent
   Vested
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
First Anniversary of   Closing Date
    	
 
    	
20
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Second Anniversary of   Closing Date
    	
 
    	
40
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Third Anniversary of   Closing Date
    	
 
    	
60
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Fourth Anniversary of   Closing Date
    	
 
    	
80
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Fifth Anniversary of   Closing Date
    	
 
    	
100
    	
%
    


 

(b)                                 Forfeiture.  If the Participant experiences a Termination for any reason whatsoever, then the outstanding and unvested portion of the Option shall be immediately forfeited, cancelled and terminated.  If the Participant’s employment is Terminated by the Employer for Cause, then the entire Option (including vested and unvested portions) shall be immediately forfeited, cancelled and terminated.

 

4.                                      Exercise.

 

(a)                                 Exercise Requirements. To the extent that the Option has become vested and exercisable with respect to a number of shares of Common Stock, the Option may thereafter be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration of the Option in accordance with the Plan; provided, that the Participant must exercise the Option with respect to an equal number of shares of Class A Common Stock and Class B Common Stock subject to the Option concurrently.  Notwithstanding the foregoing, the Participant may not exercise the Option unless the offering of shares of Common Stock issuable upon such exercise (i) is then registered under the Securities Act, or, if such offering is not then so registered, the Company has determined that such offering is exempt from the registration requirements of the Securities Act and (ii) complies with all other applicable laws and regulations; provided that, if the Option cannot be exercised by reason of this Section 4(a), then, to the extent the circumstances preventing the exercise of the Option can reasonably be remedied, the Company shall use commercially reasonable efforts to remedy

 

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such circumstances, which method of remediation shall be determined by the Company in its sole discretion.

 

(b)                                 Contingent Exercise. In connection with a Drag-Along Sale, a Tag-Along Sale or a Piggyback Registration (as such terms are defined in the Stockholders Agreement) (in each case a “Sale”), the Company shall deliver a notice informing the Participant of such Sale (a “Sale Notice”) prior to the date of consummation of the Sale.  During the period from the date on which the Sale Notice is delivered to the date specified in the Sale Notice, the Participant shall have the right to exercise the Options in accordance with the Plan, provided, that such exercise shall be contingent upon and subject to the consummation of the Sale, and, if the Sale does not take place within a specified period after delivery of the Sale Notice for any reason whatsoever, the exercise pursuant thereto shall be null and void.

 

5.                                      Option Term.  The term of the Option shall be until the tenth anniversary of the Grant Date, after which time it shall expire (the “Expiration Date”).  Notwithstanding anything herein to the contrary, upon the Expiration Date, the Option (whether vested or not) shall be immediately forfeited, canceled and terminated for no consideration and no longer shall be exercisable.  The Option is subject to termination prior to the Expiration Date to the extent provided in this Agreement.

 

6.                                      Detrimental Activity.  The provisions in the Plan regarding Detrimental Activity shall apply to the Option.  The restrictions regarding Detrimental Activity are necessary for the protection of the business and goodwill of the Company and are considered by the Participant to be reasonable for such purposes.

 

7.                                      Termination and Change in Control.  The provisions in the Plan regarding Termination and Change in Control shall apply to the Option.

 

8.                                      Restriction on Transfer of Option.  Unless otherwise determined by the Committee in accordance with the Plan, (a) no part of the Option shall be Transferable other than by will or by the laws of descent and distribution and (b) during the lifetime of the Participant, the Option may be exercised only by the Participant or the Participant’s guardian or legal representative.  Any attempt to Transfer the Option other than in accordance with the Plan shall be void.

 

9.                                      Company’s Right to Repurchase; Other Restrictions.

 

(a)                                 Company’s Repurchase Rights. The provisions in Section 13.1 (except for Section 13.1(d)(3)) of the Plan regarding the Company’s repurchase rights shall apply to the Option; provided, however, that, solely for this Section 9(a), a Termination by the Participant on Retirement shall not constitute a voluntary Termination without Good Reason, the repurchase price per Unit shall be calculated pursuant to Sections 13.1(a)(ii) and 13.1(b) of the Plan, as applicable, and the Repurchase Period shall be determined in accordance with Sections 2.49(a)(2) and 2.49(b) of the Plan, as applicable.  “Retirement” means the Participant’s “separation from service,” as defined under Section 409A of the Code solely due to the Participant’s retirement on or after reaching age 62 and providing at least 12 years of service to the Employer (including service prior to the Closing Date).

 

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(b)                                 Effect of Registration. Notwithstanding the foregoing, the Company shall cease to have rights of repurchase pursuant to Section 9(a) or Section 13.1 of the Plan, on and after a Registration Date.

 

(c)                                  Placing Shares in Escrow. Prior to an Initial Public Offering, to ensure that the shares of Common Stock issuable upon exercise of the Option are not transferred in contravention of the terms of the Plan and this Agreement, and to ensure compliance with other provisions of the Plan and this Agreement, the Company may deposit any certificates evidencing such shares with an escrow agent designated by the Company to be held on terms consistent with the Plan, this Agreement and the Stockholders Agreement.

 

10.                               Securities Representations.  Upon the exercise of the Option prior to registration of the offering of the Common Stock subject to the Option pursuant to the Securities Act or other applicable securities laws, the Participant shall be deemed to acknowledge and make the representations, warranties and covenants set forth below and as otherwise may be requested by the Company for compliance with applicable laws, and any issuances of Common Stock by the Company shall be made in reliance upon the express representations and warranties of the Participant.  The Company is relying on the Participant’s representations set forth in this Section 10.

 

(a)                                 The Participant is acquiring and will hold the Units for investment for his or her account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or other applicable securities laws.

 

(b)                                 The Participant has been advised that offerings of the Units or shares of Common Stock have not been registered under the Securities Act or other applicable securities laws, and that the Units must be held indefinitely, unless the resales thereof are subsequently registered under the applicable securities laws or the Participant obtains an opinion of counsel (in the form and substance satisfactory to the Company and its counsel) that registration is not required.  The Company is under no obligation to register offerings of the Units or shares of Common Stock.

 

(c)                                  The Participant is an “Accredited Investor” as such term is defined under Rule 501(a) of Regulation D promulgated under the Securities Act.  The Participant has such knowledge and experience in financial and business matters that the Participant is capable of evaluating the merits and risks of investment in the Company and of making an informed investment decision.  The Participant, or the Participant’s professional advisor, has the capacity to protect the Participant’s concerns in connection with the investment in the shares of Common Stock, and the Participant is able to bear the economic risk, including the complete loss, of an investment in the shares of Common Stock.

 

(d)                                 The Participant will not sell, transfer or otherwise dispose of the Units or shares of Common Stock in violation of the Plan, this Agreement, the Securities Act (or the rules and regulations promulgated thereunder) or any other applicable laws.

 

(e)                                  The Participant has been furnished with, and has had access to, such information as he or she considers necessary or appropriate for deciding whether to exercise the

 

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Option, and the Participant has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions hereof.

 

(f)                                   The Participant is aware that any investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss.  The Participant is able, without impairing his or her financial condition, to hold the Units for an indefinite period and to suffer a complete loss of his or her investment.

 

11.                               No Rights as Stockholder.  The Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by the Option unless and until the Participant has become the holder of record of such shares, and no adjustments shall be made for dividends (whether in cash, in kind or other property), distributions or other rights in respect of any such shares, except as otherwise specifically provided for in the Plan.

 

12.                               Provisions of Plan Control.  This Agreement is subject to all the terms, conditions and provisions of the Plan, including the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time.  The Plan is incorporated herein by reference.

 

13.                               Notices.  All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party to which the notice, demand or request is being made:

 

(a)                                 unless otherwise specified by the Company in a notice delivered by the Company in accordance with this Section 13, any notice required to be delivered to the Company shall be properly delivered if delivered to:

 

NM Mariposa Holdings, Inc.
 c/o Ares Management LLC
 2000 Avenue of the Stars, 12th Floor
 Los Angeles, CA 90067
 Attention:                                         Adam Stein
 Telephone:                                   (310) 201-4100
 Facsimile:                                         (310) 201-4170

 

with a copy (which shall not constitute notice) to:

 

Proskauer Rose LLP
 2049 Century Park East, Suite 3200
 Los Angeles, CA 90067
 Attention:                                         Michael A. Woronoff, Esq.
 Telephone:                                   (310) 284-4550
 Facsimile:                                         (310) 557-2193

 

(b)                                 if to the Participant, to the address on file with the Employer.

 

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Any notice, demand or request, if made in accordance with this Section 13 shall be deemed to have been duly given:  (i) when delivered in person; (ii) three days after being sent by United States mail; or (iii) on the first business day following the date of deposit if delivered by a nationally recognized overnight delivery service.

 

14.                               No Right to Employment.  This Agreement is not an agreement of employment.  None of this Agreement, the Plan or the grant of the Option hereunder shall (a) guarantee that the Employer or any other person or entity will employ the Participant for any specific time period or (b) modify or limit in any respect the Employer’s or any other person’s or entity’s right to terminate or modify the Participant’s employment or compensation.

 

15.                               Stockholders Agreement.  As a condition to the receipt of shares of Common Stock when the Option is exercised, the Participant shall execute and deliver a Joinder Agreement or such other documentation as required by the Committee.  The Participant acknowledges receipt of a copy of the Stockholders Agreement as in effect on the date hereof.

 

16.                               Lock-Up Period. The Option shall be subject to the lock-up provisions of Section 14.18 of the Plan, except that any Lock-Up Period to which the Participant may be subject in connection with the Option shall not be longer or more restrictive than the lock-up period that applies to Ares or CPPIB.

 

17.                               Dispute Resolution.  All controversies and claims arising out of or relating to this Agreement, or the breach hereof, shall be settled by the dispute resolution provisions in any employment agreement, or similar agreement, between the Employer and the Participant or, if none, the Employer’s mandatory dispute resolution procedures as may be in effect from time to time with respect to matters arising out of or relating to Participant’s employment with the Employer.

 

18.                               Severability of Provisions.  If any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Agreement shall be construed and enforced as if such provisions had not been included.

 

19.                               Governing Law.  All matters arising out of or relating to this Agreement and the transactions contemplated hereby, including its validity, interpretation, construction, performance and enforcement, shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to its principles of conflict of laws that would require the application of the laws of another jurisdiction.

 

20.                               Section 409A.  The Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent; provided, that the Company does not guarantee to the Participant any particular tax treatment of the Option.  The Company shall not be liable to the Participant for any additional tax, interest or penalties that may be imposed on the Participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. For purposes of determining the Fair Market Value of the shares of Common Stock underlying the Options, any appraisal of a nationally recognized independent valuation firm shall be

 

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determined in a manner generally consistent with prior valuations relating to Stock Options with respect to minority discounts and discounts for lack of marketability or liquidity, to the extent permitted by the applicable requirements of Section 409A of the Code.

 

21.                               Interpretation.  Wherever any words are used in this Agreement in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply.  As used herein, (i) “or” shall mean “and/or” and (ii) “including” or “include” shall mean “including, without limitation.”

 

22.                               No Strict Construction.  This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

 

23.                               Other Shares.                   Notwithstanding anything in this Agreement or the Plan to the contrary, none of the shares of Common Stock owned from time to time by a Participant that were not acquired in connection with the grant of an Award to such Participant shall be subject to any of the terms, conditions or provisions of this Agreement or the Plan.

 

24.                               Confidentiality. The Participant hereby agrees to hold all confidential and proprietary information of the Company and its Affiliates received in connection with the grant of the Option, including any plan summaries or risk factors, in the strictest confidence.  The Participant shall not, directly or indirectly, disclose or divulge any such confidential or proprietary information to any Person other than the Participant’s legal counsel and financial advisors, or an officer, director or employee of, or legal counsel for, the Company or its Affiliates, to the extent necessary for the proper performance of his or her responsibilities, unless authorized to do so by the Company or compelled to do so by law or valid legal process.

 

[Remainder of Page Left Intentionally Blank]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.

 

	
 
    	
NM   MARIPOSA HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Employee   Name:
    	
 
    
				


 

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