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:


 

















 


(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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