**Exhibit 10.46**

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**THE NEIMAN MARCUS GROUP, INC.GENERAL**

**CHANGE OF CONTROL SEVERANCE PLAN**

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THIS GENERAL CHANGE OF CONTROL SEVERANCE PLAN, made and executed atDallas, Texas, by THE NEIMAN MARCUS GROUP, INC., a Delaware corporation, isbeing established to provide for the payment of severance benefits to certainof its eligible employees.

 

# Section 1.               Definitions.  Unless the context clearly indicatesotherwise, when used in this Plan:

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## (a)           “Affiliate” means, with respect to any entity, anyother corporation, organization, association, partnership, sole proprietorshipor other type of entity, whether incorporated or unincorporated, directly orindirectly controlling or controlled by or under direct or indirect commoncontrol with such entity.

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## (b)           “Board” means the board of directors of the Company.

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## (c)           “Bonus” means the amount payable to Employee underthe Company’s applicable annual incentive bonus plan with respect to a fiscalyear of the Company.

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## (d)           “Cause” means

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### (1)           the willful and continued failure by Employee tosubstantially perform duties consistent with Employee’s position with theCompany (other than any such failure resulting from incapacity due to physicalor mental illness), after a demand for substantial performance is delivered toEmployee, and Employee has failed to resume substantial performance of Employee’sduties on a continuous basis within 14 days of receiving such demand;

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### (2)           the willful engaging by Employee in conduct that isdemonstrably and materially injurious to the Company, monetarily or otherwise;or

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### (3)           Employee’s commission of a felony, commission of amisdemeanor involving assets of the Company, or violation of the Companymerchandise discount policy.

 

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### For purposes of thisdefinition, no act, or failure to act, on Employee’s part shall be deemed “willful”unless done, or omitted to be done, by Employee not in good faith and withoutreasonable belief that Employee’s action or omission was in the best interestof the Company.

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## (e)           “Change of Control” means, and shall be deemed tohave occurred:

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### (1)           upon the consummation of any transaction or series oftransactions under which the Company is merged or consolidated with any othercompany, other than a merger or consolidation that would result in thestockholders of the Company immediately prior thereto owning voting securitiesimmediately thereafter (either by the securities such stockholders ownedimmediately prior thereto remaining outstanding or by the securities suchstockholders owned immediately prior thereto being converted into votingsecurities of the surviving entity) representing more than 50% of the combinedvoting power of the voting securities of the Company, the acquiring entity orsuch surviving entity, as the case may be, outstanding immediately after suchmerger or consolidation;

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### (2)           if any person or group (as used in Section 13(d) of theExchange Act) (other than the Company, any trustee or other fiduciary holdingsecurities under an employee benefit plan of the Company, or any company owned,directly or indirectly, by the stockholders of the Company in substantially thesame proportions as their ownership of stock of the Company) becomes the “beneficialowner” (as defined in Rule 13d-3 under the Exchange Act) of securities of theCompany representing more than 40% of (a) the shares of the Company’s Class BCommon Stock then outstanding or (b) the combined voting power (other than inthe election of directors) of all voting securities of the Company thenoutstanding;

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### (3)           if, during any period of 24 consecutive months, individualswho at the beginning of such period constituted the Board, and any directorwhose election or nomination for election by the Company’s stockholders wasapproved by a vote of at least two-thirds (2/3) of the directors then still inoffice who either were directors at the beginning of the period or whoseelection or nomination for election was previously so approved, cease for anyreason (other than death or disability) to constitute at least a majoritythereof; or

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### (4)           upon the complete liquidation of the Company or the sale ordisposition by the Company of all or substantially all of the Company’s assets,other than a liquidation of the Company into a wholly-owned subsidiary.

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## (f)            “COBRA” means theConsolidated Omnibus Budget Reconciliation Act of 1985, as amended.

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## (g)           “Code” means the Internal Revenue Code of 1986, asamended.

 

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## (h)           “Committee” means the committee designated pursuantto Section 7 to administer this Plan.

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## (i)            “Company” means TheNeiman Marcus Group, Inc., a Delaware corporation and, after a Change ofControl, any successor or successors thereto.

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## (j)            “Eligible Employee” meansan Employee whose employment with Employee’s Employer is involuntarilyterminated by the Employer for any reason other than Cause (i) inconnection with or in anticipation of a Change of Control at the request of, orupon the initiative of, the buyer in the Change of Control transaction (an “AnticipatoryTermination”),****butonly if an anticipated Change of Control actually occurs during the period inwhich this Plan is effective (in which case the Employee’s date of terminationshall be deemed to have occurred immediately following the Change of Control)or (ii) during the two-year period beginning on the effective date of aChange of Control;****provided, however, that:

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### (1)           the term “Eligible Employee” shall not include:

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#### (i)            anyEmployee who is eligible to receive severance or similar type payments underthe provisions of any other severance pay plan of, or any agreement (includingbut not limited to any employment or severance agreement) with, an Employer oran Affiliate,

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#### (ii)           atemporary Employee, including a project Employee, of an Employer or any otherEmployee who is not a regular, part-time or full-time Employee (as determinedby the Employer in accordance with employment policies and practicesestablished by such Employer),

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#### (iii)          anyEmployee who is not, as of the date immediately prior to his or her terminationof employment, being paid on the Employer’s U.S.A. payroll,

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#### (iv)          anyindividual performing services for an Employer who is treated by such Employeras an independent contractor, or

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#### (v)           anEmployee who is a member of a collective bargaining unit with which an Employernegotiates and with respect to whom no coverage under this Plan has been providedby a collective bargaining agreement; and

 

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### (2)           the employment of an Employee shall not be considered tohave been “involuntarily terminated” in any of the following circumstances:

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#### (i)            anEmployee whose employment with an Employer is terminated by reason of atransfer to the employ of another Employer or an Affiliate,

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#### (ii)           anEmployee whose employment with an Employer is terminated by reason of atransfer to the employ of another entity into which the Employer is merged orotherwise consolidated; provided such entity adopts this Plan,

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#### (iii)          anEmployee whose employment is terminated upon the expiration of a leave ofabsence by reason of his or her failure to return to work at such time or theabsence at such time of an available position for which the Employee isqualified,

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#### (iv)          anEmployee whose employment with an Employer is terminated in connection with thesale of stock or the sale or lease by such Employer of all or part of itsassets if (i) such Employer determines in its sole discretion that either(A) in connection with such sale or lease such Employee was offeredemployment for a comparable position at a comparable salary, annual bonusopportunity and employee benefits with the purchaser or lessee, as the case maybe, of the Employer’s stock or assets or (B) such Employee voluntarilyelected not to participate in the selection process for such employment and(ii) the purchaser or lessee adopts this Plan,

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#### (v)           anEmployee who resigns from employment with an Employer for any reason, or

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#### (vi)          anEmployee whose employment is terminated due to death or Total Disability.

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## (k)           “Employee” means an employee of an Employer who holdsone of the position classifications specified in Schedule A annexed heretoat the time of a Change of Control or an equivalent position as determined bythe Committee, who is not eligible to receive benefits pursuant to The NeimanMarcus Group, Inc. Executive Change of Control Severance Plan and who is notperforming services for an Employer as a leased worker or an independentcontractor.

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## (l)            “Employer” means theCompany and any other Affiliate of the Company which adopts this Plan with theconsent of the Board.

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## (m)          “Exchange Act” means the Securities Exchange Act of1934, as amended.

 

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## (n)           “Plan” means THE NEIMAN MARCUS GROUP, INC. GENERALCHANGE OF CONTROL SEVERANCE PLAN as in effect from time to time.

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## (o)           “Plan Year” means the calendar year.

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## (p)           “Release” means a release to be signed by an EligibleEmployee in such form as the Company shall determine, which shall, to theextent permitted by law, waive all claims and actions against the Employers andAffiliates and such other related parties and entities as the Company choosesto include in the release except for claims and actions for benefits providedunder the terms of this Plan (which Release is not revoked by the EligibleExecutive).

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## (q)           “Total Disability” means that, in the Company’sreasonable judgment, either (1) Employee has been unable to performEmployee’s duties because of a physical or mental impairment for 80% or more ofthe normal working days during six consecutive calendar months or 50% or moreof the normal working days during 12 consecutive calendar months, or(2) Employee has become totally and permanently incapable of performingthe usual duties of his employment with the Company on account of a physical ormental impairment.

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## (r)            “Weekly Base Compensation”means the greater of (A) the annual base compensation or salary being paidby an Employer to the Employee in effect immediately prior to the date of theChange of Control and (B) the annual base compensation or salary beingpaid by an Employer to the Employee in effect immediately prior to theeffective date of the Employee’s termination, in each case, determined prior toreduction for any employee-elected salary reduction contributions made to anEmployer-sponsored non-qualified deferred compensation plan or anEmployer-sponsored plan pursuant to Section 401(k) or 125 of the InternalRevenue Code, and excluding bonuses, overtime, allowances, commissions,deferred compensation payments and any other extraordinary remuneration,multiplied by a fraction, the numerator of which shall equal 1 and thedenominator of which shall equal 52.

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## (s)           “Years of Service” means the number of whole years ofcontinuous service commencing on an Eligible Employee’s initial date ofemployment as an Eligible Employee or, if later, his or her date ofreemployment as an Eligible Employee with an Employer or an Affiliate andending on the date such Eligible Employee’s employment as an Eligible Employeewith an Employer terminates entitling such Eligible Employee to severance paybenefits hereunder; provided, however, that service prior to anEmployee’s reemployment with an Employer or an Affiliate shall not be includedin computing Years of Service if (i) ten or more years elapsed from thedate of the Employee’s prior termination of employment with an Employer or anAffiliate and the Employee’s date of reemployment as an Eligible Employee withan Employer or an Affiliate, or (ii) the Employee was provided severancepay or other severance benefits by an Employer or Affiliate at the time of suchearlier termination of employment under this Plan or any other severance payplan, program, arrangement, policy or

 

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## practice of anEmployer or an Affiliate.  In determiningthe number of an Employee’s Years of Service, an Employee’s period of serviceconsisting of a partial year shall be rounded up or down to the nearest wholeyear.  Transfers of employment betweenand among Employers and Affiliates shall not be considered an interruption ortermination of continuous service for purposes of determining an EligibleEmployee’s Years of Service.

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# Section 2.               Severance Benefits.  Each Eligible Employee who executes a Releaseat the time and in the manner prescribed by the Company (and who does notrevoke such Release) and who agrees to be subject to the restrictive covenantsset forth on Exhibit A shall be entitled to the following:

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## (a)           Severance Pay.  Such an Eligible Employee shall be entitledto receive severance pay from his or her Employer in a lump sum amount equal tothe sum of (i) the amount of the Eligible Employee’s Weekly BaseCompensation multiplied by a minimum number of weeks based on suchEligible Employee’s completion of two or less Years of Service (the “MinimumWeeks of Severance”) and (ii) an additional number of weeks of WeeklyBase Compensation (the “Additional Weeks of Severance”) multipliedby each Year of Service above the initial two Years of Service referenced in thepreceding clause (i), subject to a specified a maximum number of weeks ofseverance (the “Maximum Weeks of Severance”).  The Minimum Weeks of Severance, AdditionalWeeks of Severance and Maximum Weeks of Severance shall be based on theEligible Employee’s position classification, as specified in Schedule Aannexed hereto.  For purposes ofclarification and by way of example only, if a Company Vice President was anEligible Employee with ten Years of Service and entitled to 16 MinimumWeeks of Severance, four Additional Weeks of Severance and 52 MaximumWeeks of Severance, the such Eligible Employee would be entitled to48 weeks of severance (16 weeks, plus four weeks multipliedby eight Years of Service (32 weeks)). In the event that an Eligible Employee has previously received severanceor retention pay from an Employer or an Affiliate, the amount of which wascalculated pursuant to a formula based upon the Employee’s prior period ofemployment, and all or part of such prior period of employment is also takeninto account in determining such Employee’s Years of Service hereunder (suchcommon period of employment to be referred to herein as the “Overlap Years”),then the portion of the amount of the cash severance benefit such Employeeshall be eligible to receive pursuant to this Plan in accordance with thepreceding provisions of this Section 2 that is attributable to the OverlapYears shall be offset (but not below zero) by an amount equal to the amount ofsuch prior payment that was attributable to the Overlap Years.  In the event of an Anticipatory Termination,such Eligible Employee shall also be entitled to receive an amount equal toEmployee’s Weekly Base Compensation from the date of Employee’s terminationthrough the date immediately following the Change of Control and any Bonus forthe previously completed fiscal year, if not previously paid due to Employee’searlier termination of employment.

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## (b)           Medical and Dental InsuranceBenefit Continuation.  For the number of weeks with respect to whichsuch Eligible Employee receives severance which follow such Eligible Employee’stermination of employment (the “Welfare Continuation Period”), theEligible Employee and such Eligible Employee’s spouse and dependents (each asdefined under the

 

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## applicable program)shall receive the following benefits: medical and dental insurance coverages atthe same benefit level as provided to the Eligible Employee immediately priorto the Change of Control, for which the Company will (A) reimburse theEligible Employee during the Welfare Continuation Period or, if shorter, theperiod of actual COBRA continuation coverage received by the Eligible Employeeduring the Welfare Continuation Period, for the excess of (x) the totalamount of the COBRA medical and dental insurance premiums payable by theEligible Employee for such continued benefits over (y) the premiums thatwould otherwise have been payable by the Eligible Employee for such coverage asan active employee of the Company (by reducing such premium obligations by suchexcess) and (B) provide such coverage for any remaining portion of theWelfare Continuation Period at the same cost to the Eligible Employee as isgenerally provided to similarly situated active employees of the Company (provided,however, that if, during the Welfare Continuation Period, the EligibleEmployee becomes employed by a new employer, continuing medical and dentalcoverage from the Company will become secondary to any coverage afforded by thenew employer in which the Eligible Employee becomes enrolled).

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## (c)           Accrued Benefits.  Such Eligible Employee shall be entitled toreceive any unpaid Weekly Base Compensation through the date of such EligibleEmployee’s termination, any Bonus earned but unpaid as of the date of suchEligible Employee’s termination for any previously completed fiscal year of theCompany, and all compensation previously deferred by such Eligible Employee butnot yet paid as well as the Company’s matching contribution with respect tosuch deferred compensation with respect to the year in which such terminationof employment occurs and all accrued interest thereon.  In addition, such Eligible Employee shall beentitled to prompt reimbursement of any unreimbursed expenses properly incurredby such Eligible Employee in accordance with Company policies prior to the dateof such Eligible Employee’s termination. Such Eligible Employee shall also receive such other benefits, if any,to which such Eligible Employee may be entitled pursuant to the terms andconditions of the employee compensation, incentive, equity, benefit or fringebenefit plans, policies or programs of the Company, other than any Companyseverance policy and as provided in Section 11.

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## (d)           Outplacement.  Such an Eligible Employee shall be providedprofessional outplacement services by qualified consultants selected by theCompany at the Employer’s cost, at a benefit level based on the EligibleEmployee’s position classification as specified in Schedule A annexedhereto (but for no longer than the date the Eligible Employee first obtainsfull-time employment after the date of termination of employment).

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## (e)           Discount.  At all times from and following such EligibleEmployee’s termination of employment during which the Employee also meets theage and service requirements for retirement eligibility pursuant to theEmployer’s applicable programs and policies, the Company shall provide to theEligible Employee and the Eligible Employee’s spouse and dependents (each asdefined under the Company’s applicable policies) all merchandise discountsavailable to the Company’s employees immediately prior to the Change ofControl.

 

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## (f)            Equity Incentive Awards.  Any time periods, conditions or contingenciesrelating to the exercise or realization of, or lapse of restrictions under, anyoutstanding equity incentive award then held by such Eligible Employee, if notpreviously accelerated or waived pursuant to Section 3, shall be automaticallyaccelerated or waived effective as of the effective date of Employee’stermination of employment.

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## (g)           Restrictive Covenants.  In consideration of the provision of theforegoing benefits provided in this Section 2 and as otherwise set forthin the Plan, Employee hereby agrees to be bound by the restrictive covenantsset forth in Exhibit A attached hereto.

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# Section 3.               Treatment of Equity IncentiveAwards.  Upon the occurrence of a Change of Controlduring the period in which this Plan is effective, any time periods, conditionsor contingencies relating to the exercise or realization of, or lapse of restrictionsunder, any outstanding equity incentive award then held by the EligibleEmployee shall be automatically accelerated or waived effective as of the dateof the Change of Control; provided, however, that in the eventany such outstanding equity incentive award is replaced as of the occurrence ofthe Change of Control by comparable types of awards of greater or at leastsubstantially equivalent value, as determined in the sole discretion of theadministrator of the equity incentive award plan under which the outstandingaward was granted, no such automatic acceleration or waiver shall occur, exceptto the extent the administrator of the applicable equity incentive award plan,in its sole discretion, provides for such acceleration or waiver, or unless suchacceleration or waiver is expressly provided for in connection with suchreplacement or under the terms of the applicable award agreement.

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# Section 4.               Form and Time of Payment.  The cash severance pay benefits payable to anEligible Employee by his or her Employer under Section 2 shall be paid tosuch Eligible Employee in a single lump sum less applicable withholdings,except as provided pursuant to Section 5, within the later of (i) 15business days after the Eligible Employee’s date of termination or (ii) theexpiration of the revocation period, if applicable, under the Release.

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# Section 5.               Tax Withholding and Deferral.  Each Employer shall withhold from any amountpayable to an Eligible Employee pursuant to this Plan, and shall remit to theappropriate governmental authority, any income, employment or other tax theEmployer is required by applicable law to so withhold from and remit on behalfof such Eligible Employee. Notwithstanding any other provision of this Plan or certain compensationand benefit plans of the Employer, any payments or benefits due under this Planor such Employer compensation and benefit plans upon or in connection with atermination of Employee’s employment shall be deferred and paid no earlier thansix months following such termination of Employee’s employment, if, and only tothe extent, required to comply with Section 409A of the Code.

 

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# Section 6.               Limitation of Certain Payments.

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## (a)           In the event the Employer determines, based upon the adviceof the independent public accountants for the Employer, that part or all of theconsideration, compensation or benefits to be paid to Employee under this Planconstitute “parachute payments” under Section 280G(b)(2) of the Code, asamended, then, if the aggregate present value of such parachute payments,singularly or together with the aggregate present value of any consideration,compensation or benefits to be paid to Employee under any other plan,arrangement or agreement which constitute “parachute payments” (collectively,the “Parachute Amount”) exceeds 2.99 times the Employee’s “baseamount”, as defined in Section 280G(b)(3) of the Code (the “EmployeeBase Amount”), the amounts constituting “parachute payments” which wouldotherwise be payable to or for the benefit of Employee shall be reduced to theextent necessary so that the Parachute Amount is equal to 2.99 times theEmployee Base Amount (the “Reduced Amount”).

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## (b)           If the determination made pursuant to clause (a) ofthis Section 6 results in a reduction of the payments that would otherwisebe paid to Employee except for the application of clause (a) of thisSection 6, Employee may then elect, in his sole discretion, which and howmuch of any particular entitlement shall be eliminated or reduced and shalladvise the Employer in writing of his election within ten days of thedetermination of the reduction in payments. If no such election is made by Employee within such ten-day period, theEmployer may elect which and how much of any entitlement shall be eliminated orreduced and shall notify Employee promptly of such election.  Within ten days following such determinationand the elections hereunder, the Employer shall pay to or distribute to or forthe benefit of Employee such amounts as are then due to Employee under thisPlan and shall promptly pay to or distribute to or for the benefit of Employeein the future such amounts as become due to Employee pursuant to this Plan.

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## (c)           As a result of the uncertainty in the application ofSection 280G of the Code at the time of a determination hereunder, it ispossible that payments will be made by the Employer which should not have beenmade under clause (a) of this Section 6 (“Overpayment”) orthat additional payments which are not made by the Employer pursuant toclause (a) of this Section 6 should have been made (“Underpayment”).  In the event that there is a finaldetermination by the Internal Revenue Service, or a final determination by acourt of competent jurisdiction, that an Overpayment has been made, any suchOverpayment shall be repaid by the Employee to the Employer together withinterest at the applicable Federal rate provided for in Section 7872(f)(2)of the Code.  In the event that there isa final determination by the Internal Revenue Service, a final determination bya court of competent jurisdiction or a change in the provisions of the Code orregulations pursuant to which an Underpayment arises under this Plan, any suchUnderpayment shall be promptly paid by the Employer to or for the benefit ofEmployee, together with interest at the applicable Federal rate provided for inSection 7872(f)(2) of the Code.

 

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# Section 7.               Plan Administration.  This Plan shall be administered by theCompensation Committee of the Board.  TheCommittee shall have discretionary and final authority to interpret andimplement the provisions of this Plan and to determine eligibility for benefitsunder the Plan.  The Committee shallperform all of the duties and exercise all of the powers and discretion that theCommittee deems necessary or appropriate for the proper administration of thisPlan.  Every interpretation, choice,determination or other exercise by the Committee of any power or discretiongiven either expressly or by implication to it shall be conclusive and bindingupon all parties having or claiming to have an interest under this Plan orotherwise directly or indirectly affected by such action, without restriction,however, upon the right of the Committee to reconsider or redetermine suchaction.  The Committee may adopt suchrules and regulations for the administration of this Plan as are consistentwith the terms hereof, and shall keep adequate records of its proceedings andacts.  The Committee may employ suchagents, accountants and legal counsel (who may be agents, accountants and legalcounsel for an Employer) as may be appropriate for the administration of thePlan.  All reasonable administrationexpenses incurred by the Committee in connection with the administration of thePlan shall be paid by the Employer.

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# Section 8.               Claims Procedure.  If any person (hereinafter called the “Claimant”)feels he or she is being denied a benefit to which he or she is entitled underthis Plan, such Claimant may file a written claim for said benefit with theChairman of the Committee.  Within60 days of the receipt of such claim the Committee shall determine andnotify the Claimant as to whether he or she is entitled to such benefit.  Such notification shall be in writing and, ifdenying the claim for benefit, shall set forth the specific reason or reasonsfor the denial, make specific reference to the pertinent Plan provisions, andadvise the Claimant that he or she may, within 60 days of the receipt ofsuch notice, request in writing to appear before the Committee or itsdesignated representative for a hearing to review such denial.  Any such hearing shall be scheduled at themutual convenience of the Committee or its designated representative and theClaimant, and at such hearing the Claimant and/or his or her duly authorizedrepresentative may examine any relevant documents and present evidence andarguments to support the granting of the benefit being claimed.  The final decision of the Committee withrespect to the claim being reviewed shall be made within 60 days followingthe hearing thereon, and the Committee shall in writing notify the Claimant ofits final decision, again specifying the reasons therefor and the pertinentPlan provisions upon which such decision is based.  The final decision of the Committee shall beconclusive and binding upon all parties having or claiming to have an interestin the matter being reviewed.

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# Section 9.               Plan Amendment and Termination.  The Company shall have the right and power atany time and from time to time to amend this Plan, in whole or in part, bywritten document executed by its duly authorized representative and at any timeto terminate this Plan; provided, however, that no such amendmentor termination shall reduce the amount of severance pay payable under this Planto a former Employee whose employment with an Employer terminated prior to thedate of such amendment or termination, or defer the date for the payment ofsuch former Employee’s benefit hereunder except as provided pursuant toSection 5, without the consent of such former Employee.  Any provision of this Plan to the contrarynotwithstanding, any action to amend or terminate this Plan on or after thedate on which a Change of Control occurs shall not be effective prior to theend of the two-year period beginning on the effective date of the Change ofControl.

 

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# Section 10.             Nature of Plan and Rights.  This Plan is an unfunded employee welfarebenefit plan and no provision of this Plan shall be deemed or construed tocreate a trust fund of any kind or to grant a property interest of any kind toany Employee or former Employee.  Anypayment which becomes due under this Plan to an Eligible Employee shall be madeby his or her Employer out of its general assets, and the right of any EligibleEmployee to receive a payment hereunder from his or her Employer shall be nogreater than the right of any unsecured general creditor of such Employer.

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# Section 11.             Entire Agreement; Offset;Modification.

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## (a)           This Plan constitutes the entire agreement between theparties and, except as expressly provided herein, supersedes the provisions ofall other prior agreements expressly concerning the payment of severancebenefits upon a termination of employment of an Employee in connection with orfollowing a Change of Control (the “Prior Agreements”).  In all other respects, any Prior Agreementshall remain in full force and effect, including with respect to any amountspayable or benefits to be provided prior to and otherwise not in connectionwith a Change of Control; provided, that in no event shall payments orbenefits provided pursuant to any Prior Agreement or any other severanceagreement or policy entitle Employee to a duplication of payments and benefitspursuant to this Plan and, in the event of an Anticipatory Termination, anyamount payable hereunder shall be offset and reduced by the amount of anytermination payments or benefits previously provided to Employee under anyPrior Agreement.

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## (b)           Except as expressly provided herein, this Plan shall notinterfere in any way with the right of the Company to reduce Employee’scompensation or other benefits or terminate Employee’s employment, with orwithout Cause.  Any rights that Employeeshall have in that regard shall be as set forth in any applicable employmentagreement between Employee and the Company.

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# Section 12.             Spendthrift Provision.  No right or interest of an Eligible Employeeunder this Plan may be assigned, transferred or alienated, in whole or in part,either directly or by operation of law, and no such right or interest shall beliable for or subject to any debt, obligation or liability of such EligibleEmployee.

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# Section 13.             Applicable Law.  This Plan shall be governed and construed inaccordance with applicable federal law.

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# Section 14.             Effectiveness.  This Plan shall be effective as of the date ofadoption by the Board and shall remain in effect until terminated pursuant toSection 9 of this Plan.

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IN WITNESS WHEREOF, this Plan has been executed this 1st dayof April, 2005, to be effective as of April 1, 2005.

 

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| ** ** | ** ** | **THE NEIMAN MARCUS GROUP, IN.C**           |
|------------|------------|---------------------------------------------|
|       |       |                                        |
|       | By:        | /s/ Nelson a. Bangs                         |   |
|       |       | Nelson A. Bangs                             |
|       |       | Senior Vice President & General Counsel |

 

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**SCHEDULE A**

 
| **Position  Classification**                                                   | ** ** | **“Minimum Weeks  of Severance”  (for under 2  Years of Service)** | ** ** | **“Additional Weeks  of Severance”  (for each year over 2  Years of Service)** | ** ** | **“Maximum  Weeks of  Severance”** | ** ** | **Outplacement  Benefit Level** |
|--------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------|------------|----------------------------------------------|------------|---------------------------------|
| * Div. SVP (Benefit Levels 57, 47, 45);  * NMG Officer (Benefit Levels 56, 53) |       | 16                                                                           |       | 4                                                                                        |       | 52                                           |       | Executive                       |
| Div. VP (Benefit Levels 54, 56, 44, 46)                                        |       | 12                                                                           |       | 3                                                                                        |       | 52                                           |       | Executive                       |
| NMG or Div. Director (Benefit Levels 53, 43)                                   |       | 10                                                                           |       | 3                                                                                        |       | 36                                           |       | Executive                       |
| All Other Exempt (Benefit Levels 52, 42, 51)                                   |       | 8                                                                            |       | 2                                                                                        |       | 26                                           |       | 2-Day Workshop                  |
| Hourly (Benefit Levels 50, 40)                                                 |       | 6                                                                            |       | 2                                                                                        |       | 26                                           |       | 2-Day Workshop                  |

 

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* The division and subsidiary Senior Vice Presidents and Officers ofthe Company that are eligible to receive benefits under this Plan are thoseindividuals who are not otherwise entitled to receive benefits under The NeimanMarcus Group, Inc. Executive Change of Control Severance Plan.

 

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**Exhibit A**

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**CONFIDENTIALITY AND RESTRICTIVE COVENANTS**

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**I.**              Employeeacknowledges and agrees that (a) the Company is engaged in a highlycompetitive business; (b) the Company has expended considerable time andresources to develop goodwill with its customers, vendors, and others, and tocreate, protect, and exploit Confidential Information (as defined in Section Vbelow); (c) the Company must continue to prevent the dilution of itsgoodwill and unauthorized use or disclosure of its Confidential Information toavoid irreparable harm to its legitimate business interests; (d) in thespecialty retail business, Employee’s participation in or direction of theCompany’s day-to-day operations and strategic planning are and will be anintegral part of the Company’s continued success and goodwill; (e) givenEmployee’s position and responsibilities, Employee necessarily will be creatingConfidential Information that belongs to the Company and enhances the Company’sgoodwill, and in carrying out Employee’s responsibilities Employee in turn willbe relying on the Company’s goodwill and the disclosure by the Company to himof Confidential Information; (f) Employee will have access to ConfidentialInformation that could be used by any competitor of the Company in a mannerthat would irreparably harm the Company’s competitive position in themarketplace and dilute its goodwill; and (g) Employee necessarily woulduse or disclose Confidential Information if Employee were to engage incompetition with the Company.  TheCompany acknowledges and agrees that Employee must have and continue to havethroughout Employee’s employment the benefits and use of its goodwill andConfidential Information in order to properly carry out Employee’sresponsibilities.  The Companyaccordingly promises upon execution and delivery of the Plan to provideEmployee immediate access to new and additional Confidential Information andauthorize him to engage in activities that will create new and additionalConfidential Information.  The Companyand Employee thus acknowledge and agree that upon execution and delivery of thePlan Employee (x) has received, will receive, and will continue toreceive, Confidential Information that is unique, proprietary, and valuable tothe Company, (y) has created, will create, and will continue to create, ConfidentialInformation that is unique, proprietary, and valuable to the Company, and(z) has benefited, will benefit, and will continue to benefit, includingwithout limitation by way of increased earnings and earning capacity, from thegoodwill the Company has generated and from the Confidential Information.  Accordingly, Employee acknowledges and agreesthat at all times during Employee’s employment by the Company and thereafter:

 

(i)            all ConfidentialInformation shall remain and be the sole and exclusive property of the Company;

 

(ii)           Employee will protectand safeguard all Confidential Information;

 

(iii)          Employee will hold allConfidential Information in strictest confidence and not, directly orindirectly, disclose or divulge any Confidential Information to any personother than an officer, director, or employee of the Company to the extentnecessary for the proper performance of Employee’s responsibilities unlessauthorized to do so by the Company or compelled to do so by law or valid legalprocess;

 

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(iv)          if Employee believesEmployee is compelled by law or valid legal process to disclose or divulge anyConfidential Information, Employee will notify the Company in writingsufficiently in advance of any such disclosure to allow the Company the opportunityto defend, limit, or otherwise protect its interests against such disclosure;

 

(v)           at the end of Employee’semployment with the Company for any reason or at the request of the Company atany time, Employee will return to the Company all Confidential Information andall copies thereof, in whatever tangible form or medium (including electronic);and

 

(vi)          absent the promises andrepresentations of Employee in this Section I and in Section II below, theCompany would require him immediately to return any tangible ConfidentialInformation in Employee’s possession, would not provide Employee with new andadditional Confidential Information, would not authorize Employee to engage inactivities that will create new and additional Confidential Information, andwould not enter or have entered into the Plan.

 

**II.**            Inconsideration of the Company’s promises to provide Employee with new andadditional Confidential Information and to authorize him to engage inactivities that will create new and additional Confidential Information uponexecution and delivery of the Plan, and the other promises and undertakings ofthe Company in the Plan, Employee agrees that, while Employee is employed bythe Company and for a period of 12 months following the end of that employmentfor any reason, Employee shall not engage in any of the following activities(the “Restricted Activities”):

 

(a)           Employee will notdirectly or indirectly disparage the Company or its Affiliates, any products,services, or operations of the Company or its Affiliates, or any of the former,current, or future officers, directors, or employees of the Company or itsAffiliates;

 

(b)           Employee will not,whether on Employee’s own behalf or on behalf of any other individual,partnership, firm, corporation or business organization, either directly orindirectly solicit, induce, persuade, or entice, or endeavor to solicit,induce, persuade, or entice, any person who is then employed by or otherwiseengaged to perform services for the Company or its Affiliates to leave thatemployment or cease performing those services; and

 

(c)           Employee will not,whether on Employee’s own behalf or on behalf of any other individual,partnership, firm, corporation or business organization, either directly orindirectly, solicit, induce, persuade, or entice, or endeavor to solicit,induce, persuade, or entice, any person who is then a customer, supplier, orvendor of the Company or any of its Affiliates to cease being a customer,supplier, or vendor of the Company or any of its Affiliates or to divert all orany part of such person’s or entity’s business from the Company or any of itsAffiliates.

 

Employee acknowledges and agrees that the restrictions contained inthis Section II are ancillary to an otherwise enforceable agreement, includingwithout limitation the mutual promises and undertakings set forth in SectionII; that the Company’s promises and undertakings set forth in Section II, andEmployee’s position and responsibilities with the Company, give rise to theCompany’s interest in restricting Employee’s post-employment activities; thatsuch

 

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restrictions are designed to enforce Employee’s promises andundertakings set forth in this Section II and Employee’s common-law obligationsand duties owed to the Company; that the restrictions are reasonable andnecessary, are valid and enforceable under Texas law, and do not impose agreater restraint than necessary to protect the Company’s goodwill,Confidential Information, and other legitimate business interests; thatEmployee will immediately notify the Company in writing should Employee believeor be advised that the restrictions are not valid or enforceable under Texaslaw or the law of any other state that Employee contends or is advised is applicable;that the mutual promises and undertakings of the Company and Employee underSection I and Section II are not contingent on the duration of Employee’semployment with the Company; and that absent the promises and representationsmade by Employee in Section I and Section II, the Company would require him toreturn any Confidential Information in Employee’s possession, would not provideEmployee with new and additional Confidential Information, would not authorizeEmployee to engage in activities that will create new and additionalConfidential Information, and would not enter or have entered into the Plan.

 

**III.****          **Employeeacknowledges and agrees that the Company would not have an adequate remedy atlaw and would be irreparably harmed in the event that any of the provisions ofSection I or Section II were not performed in accordance with their specificterms or were otherwise breached. Accordingly, Employee agrees that the Company shall be entitled toequitable relief, including preliminary and permanent injunctions and specificperformance, in the event Employee breaches or threatens to breach any of theprovisions of such Sections, without the necessity of posting any bond orproving special damages or irreparable injury. Such remedies shall not be deemed to be the exclusive remedies for abreach or threatened breach of the provisions of Section I or Section II byEmployee, but shall be in addition to all other remedies available to theCompany at law or equity.  Employeeacknowledges and agrees that the Company shall be entitled to recover itsattorneys’ fees, expenses, and court costs, in addition to any other remediesto which it may be entitled, in the event Employee breaches the provisions ofSection I or Section II.  Employeeacknowledges and agrees that no breach by the Company of this Plan or failureto enforce or insist on its rights under this Plan shall constitute a waiver orabandonment of any such rights or defense to enforcement of such rights.

 

**IV.****          **Ifthe provisions of Section I or Section II are ever deemed by a court to exceedthe limitations permitted by applicable law, Employee and the Company agreethat such provisions shall be, and are, automatically reformed to the maximumlimitations permitted by such law.

 

**V.****            Definitions:**

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“Confidential Information” shall mean, without limitation, alldocuments or information, in whatever form or medium, concerning or evidencingsales; costs; pricing; strategies; forecasts and long range plan; financial andtax information; personnel information; business, marketing and operationalprojections, plans and opportunities; and customer, vendor, and supplierinformation; **but excluding**any such information that is or becomes generally available to the public otherthan as a result of any breach of Section I or Section II above or otherunauthorized disclosure by Employee.

 

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