Exhibit 10.39


 


THE NEIMAN MARCUS GROUP, INC.


 


RESTRICTED STOCK UNIT AGREEMENT


ISSUED PURSUANT TO 1997 INCENTIVE PLAN


 


 


THIS
AGREEMENT is made as of the
              
day of
                     ,
20     , by and between THE NEIMAN MARCUS GROUP, INC., a Delaware
corporation (the “Corporation”), and
                                                                     ,
an employee of the Corporation or one of its affiliates (the “Employee”).


 


Recitals:


 


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


 


2.                                       The
Plan is administered by the Compensation Committee (the “Committee”) of the
Corporation’s Board of Directors (the “Board”).


 


3.                                       The
Committee has selected the Employee to participate in the Plan by the grant of
Restricted Stock Units, each of which represents a fictional interest in a
share of Class A Common Stock of the Corporation, par value $.01 per share (“Common
Stock”), that shall be subject to the vesting, distribution and other
provisions specified herein.


 


Agreement:


 


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


 


1.                                       Grant of Restricted Stock Units.  The Corporation hereby grants to the Employee
                       
Restricted Stock Units (the “Award”), subject to the vesting schedule described
in Section 4 and the requirement that the Restricted Stock Units may be
forfeited to the Corporation under the circumstances set forth in that Section.


 


2.                                       No Rights as Equity Owner.  This
Award shall not entitle the Employee to any voting rights, rights upon
liquidation or other rights of owners of the Corporation with respect to any
Restricted Stock Units or Dividend Units unless and until shares of Common
Stock are issued to the Employee in respect of such Units as provided herein.


 


3.                                       Dividend Units.  In
the event a cash dividend is paid on the Common Stock while the Employee holds
undistributed Restricted Stock Units pursuant to this Award that have not been


 





















 


forfeited, whether or not
then vested, the Corporation shall credit to the account of the Employee an
additional fractional unit representing a fictional interest in a share of
Common Stock (a “Dividend Unit”) with respect to each such Restricted Stock
Unit, with a numerator equal to the amount of the per share cash dividend
declared on the Common Stock and a denominator equal to the closing price of a
share of Common Stock on the New York Stock Exchange on the date the cash
dividend is paid. Dividend Units shall be subject to all other terms and
conditions of this Agreement, provided that no additional Dividend Units shall
be credited with respect to outstanding Dividend Units.


 


4.                                       Vesting of Restricted Stock Units and Dividend Units and Distribution
of Common Stock; Separation from Service; Death; Disability; or Retirement.


 


(a)                                  The
Restricted Stock Units granted hereunder and all Dividend Units with respect
thereto shall vest on the third anniversary of the date of this Agreement (the “Vesting
Date”) if and only if the Employee remains an employee of the Corporation or
one of its affiliates through the Vesting Date. 
On the Vesting Date, the Corporation shall issue to the Employee a
certificate representing a number of shares of Common Stock equal to the number
of Restricted Stock Units and Dividend Units then subject to this Award;
provided, however, that pursuant to the irrevocable election made by the
Employee prior to the execution of this Agreement, distribution of
                   
% of the shares of Common Stock otherwise issuable to the Employee on the
Vesting Date (rounded down to the nearest whole share) shall be deferred beyond
the Vesting Date for distribution on
                              ,
20       (the “Deferred
Distribution Date”) or, if earlier, as soon as practicable following the date
of the Employee’s death after the Vesting Date, or six months following the
Employee’s separation from service with the Corporation and all of its
affiliates for any reason after the Vesting Date, at which time the Corporation
shall issue a certificate representing the number of shares of Common Stock
subject to such deferral election.


 


(b)                                 Subject
to the provisions of Sections 4(c), 4(d) and 4(e), upon the Employee’s
separation from service with the Corporation and all of its affiliates at a
time when the Restricted Stock Units and Dividend Units have not vested,
(i) the Employee shall have no rights whatsoever in and to any of the
Restricted Stock Units or Dividend Units; (ii) all the Restricted Stock
Units and Dividend Units shall be forfeited to the Corporation and shall no
longer be outstanding as of the date of such separation from service; and
(iii) neither the Employee nor any of his or her heirs, beneficiaries,
executors, administrators or other personal representatives shall have any
rights with respect thereto.


 


(c)                                  If
the Employee dies while in the employ of the Corporation or any of its affiliates,
the Restricted Stock Units and Dividend Units then subject to this Award shall
vest if not yet vested. The person or persons to whom the Employee’s rights
under this Agreement are transferred by will or the laws of descent and
distribution (collectively, the “Transferee”) shall be entitled to receive,
within 30 days after presentation to the Secretary of the Corporation of
documentation acceptable to the Secretary establishing the Transferee’s legal
rights, a certificate representing a number of shares of Common Stock equal to
the number of Restricted Stock Units and Dividend Units then subject to this
Award.


 


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(d)                                 If
while in the employ of the Corporation or any of its affiliates the Employee shall
become permanently disabled such that the Employee will be unable to return to
his or her employment with the Corporation or its affiliates (as shall be
conclusively determined by the Employee Benefits Committee of the Corporation),
the Restricted Stock Units and Dividend Units then subject to this Award shall
vest if not yet vested.  The Corporation
shall issue to the Employee a certificate representing a number of shares of
Common Stock equal to the number of Restricted Stock Units and Dividend Units
then subject to this Award six months following the Employee’s separation from
service with the Corporation and all of its affiliates on account of disability
or, if earlier, the Vesting Date or the Deferred Distribution Date, whichever
is applicable.


 


(e)                                  In
the event of the Employee’s separation from service with the Corporation and
all of its affiliates prior to the Vesting Date on account of his or her
Eligible Retirement, then a portion of the Restricted Stock Units and Dividend
Units then subject to this Award shall vest, with the number to be determined
by multiplying the number of Restricted Stock Units and Dividend Units then
subject to this Award by a fraction, the numerator of which is the number of
completed months from the date of this Agreement through the date of Eligible
Retirement and the denominator of which is 36. 
Six months following the date of such separation from service, the
Corporation shall issue to the Employee a certificate representing a number of
shares of Common Stock equal to such number of vested Restricted Stock Units
and vested Dividend Units.  The remaining
Restricted Stock Units and Dividend Units subject to this Agreement shall be
treated in the same manner as unvested Restricted Stock Units and unvested
Dividend Units subject to the provisions of Section 4(b).  For purposes of this Agreement, “Eligible
Retirement” shall mean the Employee’s separation from service with the
Corporation and all of its affiliates on or after the date as of which the
Employee (i) is eligible for a normal retirement benefit on account of reaching
normal retirement age under the terms of The Neiman Marcus Group, Inc.
Retirement Plan (or a successor plan); or (ii) is not less than age 55 and has
not less than 20 years of vesting or credited service under the terms of The
Neiman Marcus Group, Inc. Retirement Plan (or a successor plan); provided,
however, that the Employee’s separation from service shall not be an “Eligible
Retirement” if the Committee shall find that the Employee was terminated on account
of “Cause.”  For purposes of this
Agreement, “Cause” shall mean, in the Committee’s reasonable judgment, (i) a
breach of duty by the Employee in the course of his or her employment involving
fraud, acts of dishonesty (other than inadvertent acts or omissions),
disloyalty, or moral turpitude; (ii) conduct that is materially detrimental to
the Corporation or any of its affiliates, monetarily or otherwise, or reflects
unfavorably on the Corporation or any of its affiliates or the Employee; (iii)
the Employee’s failure to comply with or enforce the Corporation’s or any of
its affiliates’ policies concerning equal employment opportunity, including
engaging in sexually or otherwise harassing conduct; (iv) the Employee’s
repeated insubordination or failure to comply with or enforce other personnel
policies of the Corporation or any of its affiliates; (v) the Employee’s
failure to devote his or her full working time and best efforts to the
performance of his or her responsibilities to the Corporation or its affiliates;
or (vi) the Employee’s conviction of or entry of a plea agreement


 


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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 (iv) and (v), the Employee has
been provided prior written notice of the failure and afforded a reasonable
opportunity to correct.


 


5.                                       No Guarantee of Employment. 
Nothing in the Plan or in this Agreement shall (i) confer on the
Employee any right to continue in the employ of the Corporation or any of its
affiliates; (ii) affect the right of the Employee or the Corporation or
any of its affiliates to terminate the employment relationship at any time;
(iii) be deemed a waiver or modification of any provision contained in any
agreement between the Employee and the Corporation or any of its affiliates;
(iv) be construed as part of the Employee’s entitlement to remuneration or
benefit pursuant to a contract of employment or otherwise or as compensation
for past services rendered; (v) afford the Employee any rights or additional
rights to compensation or damages as a consequence of the loss or termination
of his or her office; or (vi) entitle the Employee to any compensation or
damages for any loss or potential loss he or she may suffer by reason of being
or becoming unable to vest in the Restricted Stock Units and any Dividend Units
attributable thereto as a consequence of the loss or termination of his or her
office, employment, or service with the Corporation or any of its
affiliates.  A cessation of the Employee’s
employment by reason of a leave of absence of not more than six months approved
by the Corporation shall not be deemed a separation from service.


 


6.                                       Changes in Common Stock. 
In the event of any reorganization, recapitalization, stock split, stock
dividend, merger, consolidation, combination of shares or other change
affecting the Common Stock, the Committee shall make such adjustments as it may
deem appropriate with respect to the Restricted Stock Units and Dividend Units.


 


7.                                       Fractional Units; Optional Issuance in Book-Entry Form.  Notwithstanding the foregoing, (i) any
fractional Restricted Stock Unit or Dividend Unit will be paid in cash in lieu
of Common Stock, with the amount of such payment to be based on the closing
price of a share of Common Stock on the New York Stock Exchange on the last
trading day prior to the date the payment amount is calculated; and (ii) any
shares of Common Stock that under the terms of this Agreement are issuable in
the form of a stock certificate may instead be issued in book-entry form if the
person in whose name the certificate would otherwise be issued so requests in
writing.


 


8.                                       Tax Withholding.  The
Corporation shall take any steps it deems necessary or desirable to satisfy any
obligations imposed by a Federal, state, local or other governmental entity to
withhold taxes; provided, however, that in furtherance of satisfying such
withholding obligations, the Employee shall have the right (by delivering
written notice to the Secretary of the Corporation no less than 30 days nor
more than 60 days prior to the date of distribution) to have a number of whole
shares of Common Stock withheld by the Corporation from the shares to be issued
upon distribution, or to tender to the Corporation other whole shares of Common
Stock, with a value not to exceed the statutory minimum tax withholding
obligation.  In addition, the Employee
and/or his or her beneficiary (including his or her estate) shall bear all
taxes on amounts paid under the Plan to the extent no taxes are withheld,
irrespective of whether withholding is required.


 


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9.                                       Interpretation of Plan and this Agreement.  This Agreement is being entered into pursuant
to the Plan and shall be governed in all respects by the terms and provisions
of the Plan, which are incorporated herein by this reference.  In the case of any inconsistency between the
Plan and this Agreement, the Plan provisions shall control.  Capitalized terms used and not defined in
this Agreement shall have the respective meanings given them in the Plan.  As used herein (i) the term “employee” shall
mean an employee of the Corporation or of any affiliate of the Corporation;
(ii) the term “affiliate” as used with respect to the Corporation shall mean
any corporation or other entity in which the Corporation or any such other
corporation or entity owns, directly or indirectly, 50% or more of the
outstanding capital stock (determined by aggregate voting rights) or other
voting interests, or that is considered to be under common control with the
Corporation pursuant to Section 414(b) or (c) of the Internal Revenue Code
of 1986, as amended (the “Code”); and (iii) the phrase “separation from service”
shall be interpreted in a manner consistent with the distribution requirements
of Section 409A of the Code.  In all
respects, questions of interpretation and application of the Plan and of this
Agreement shall be determined by a majority of the Committee, as it may from
time to time be constituted, and the determinations of such majority shall be
final and binding upon all persons.


 


10.                                 Choice of Law; Exclusive Forum; Consent to Jurisdiction; Waiver of Right
to Contest Removal and to Jury Trial.  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. The exclusive forum
for any action concerning this Agreement or the transactions contemplated
hereby 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.  THE EMPLOYEE HEREBY CONSENTS TO
THE EXERCISE OF JURISDICTION OF A COURT IN THE EXCLUSIVE FORUM AND WAIVES ANY
RIGHT HE OR SHE MAY HAVE TO CHALLENGE OR CONTEST THE REMOVAL AT ANY TIME BY THE
CORPORATION OR ANY OF ITS AFFILIATES TO FEDERAL COURT OF ANY SUCH ACTION HE OR
SHE MAY BRING AGAINST IT IN STATE COURT. 
THE EMPLOYEE AND THE CORPORATION FURTHER HEREBY MUTUALLY WAIVE THEIR
RIGHT TO TRIAL BY JURY IN ANY ACTION CONCERNING THIS AGREEMENT OR THE
TRANSACTION CONTEMPLATED HEREBY.


 


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


 


	
   

  	
  THE NEIMAN
  MARCUS GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
    Nelson
  A. Bangs,

  
	
   

  	
   

  	
    Senior
  Vice President & General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  , Employee

  
						



 


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