EXHIBIT 10.10


 


CONFIDENTIALITY, NON-COMPETITION AND TERMINATION BENEFITS AGREEMENT


 


This Confidentiality, Non-Competition and Termination Benefits
Agreement (“Agreement”) is entered into effective as of May 3, 2004 between
James J. Gold (“Executive”) and Bergdorf Goodman, Inc., a New York corporation
(“Bergdorf’) and a wholly-owned subsidiary of The Neiman Marcus Group, Inc., a
Delaware corporation (“NMG”). 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 has been promoted to the position of President and
Chief Executive Officer of Bergdorf, and Executive understands and agrees that
his employment in such position shall be on an “at will” basis, and that either
Executive or Bergdorf 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 and its Affiliates, 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, including Bergdorf;


 


WHEREAS, effective as of this date and as a consequence of his
promotion, (i) NMG and Executive l1ave entered into separate stock option and
purchase restricted stock agreements (the “Incentive Agreements”) that set
forth the rights and obligations of NMG and Executive with respect to such
awards, and (ii) NMG has granted to Executive an ownership interest in NMG in
the form of NMG stock; ;’


 


WHEREAS, by virtue of his new position and responsibilities, Executive
has and will have unique access to and knowledge of Bergdorf’s trade secrets
and other confidential and proprietary business information;


 


WHEREAS, Executive’s association with Bergdorf to the exclusion of its
competitors will enhance Bergdorf’s goodwill and Executive’s earning capacity;
and


 


WHEREAS, Bergdorf and Executive mutually desire to protect Bergdorf’s
goodwill created by Executive’s association with Bergdorf and Bergdorf’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 his Bergdorf employment;


 


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 Bergdorf agree as follows:


 


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


 

















 


(1) an amount equivalent to 1.5 times his 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 his termination, Executive participates in a
group medical insurance plan offered by Bergdorf and Executive is eligible for
and elects to receive continued coverage under such plan in accordance with the
Consolidated I Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any
successor law, Bergdorf 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 Bergdorf has terminated
Executive’s employment under this paragraph l(a), any material, adverse change
in the terms and conditions of his 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 his employment with Bergdorf,
will be deemed a termination by Bergdorf. 
A transfer of employment between Bergdorf and NMG or any Affiliate of
NMG shall not be considered as a termination of employment for purposes of this
Agreement.


 


(b) Bergdorf 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 Bergdorf, 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 Bergdorf would be required to
perform it if no such succession or assignment had taken place. If Bergdorf
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 Bergdorf for purposes of paragraph l(a) of this Agreement if such failure
causes Executive to resign his employment with Bergdorf; provided that the
Termination Benefits to which Executive would be entitled after such
resignation pursuant to paragraph l(a) of this Agreement shall be the sole
remedy of Executive for any failure by Bergdorf to obtain such agreement. As
used in this Agreement, “Bergdorf’ 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 Bergdorf 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.


 


It is the expectation of the parties that any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to an or substantially all the business and/or assets of NMG, if such assets
continue to include a controlling interest in the stock of Bergdorf as of the
time of such succession or assignment, shall by agreement in writing, in form
and substance reasonably satisfactory to Executive, expressly, absolutely, and
unconditionally agree to cause Bergdorf to honor and agree to perform this
Agreement following such succession or assignment. If such agreement has not
been executed and delivered 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 Bergdorf for purposes of paragraph l(a) of this Agreement if such failure
causes Executive to resign his employment with Bergdorf; provided that the
Termination Benefits to which Executive would be entitled after such
resignation pursuant to paragraph l(a) of this Agreement shall be the sole
remedy of Executive if no such agreement has been executed and delivered as of the
effective time of such succession or assignment. 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 or that otherwise becomes obligated under II this
Agreement by operation of law.


 

















 


(c) If, in the reasonable judgment of Bergdorf, Executive engages in
any of the Restricted Activities described in paragraph 3 of this Agreement,
Bergdorf s obligation to provide the Termination Benefits shall end as of the
date Bergdorf 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 his employment with Bergdorf, or if Bergdorf
reasonably believes in its sole judgment that Executive has committed any act
or omission that would have entitled Bergdorf to terminate his employment for
Cause, whether such act or omission was committed during his employment with
Bergdorf or during the Salary Continuance Period, Bergdorf may suspend any
payments remaining pursuant to paragraph l(a) of this Agreement until the final
resolution of such criminal or civil proceedings or until Bergdorf 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 Bergdorf determines in its sole judgment
that Executive has committed such an act or omission, (1) Bergdorf’s obligation
to provide the Termination Benefits shall immediately end, and (2) Executive
shall repay to Bergdorf any amounts paid to him pursuant to paragraph 1 (a) of
this Agreement within 30 days after a written request to do so by Bergdorf. If
any such criminal or civil proceedings do not result in 11 finding of guilt or
the entry of a plea agreement or consent decree or similar arrangement, or
Bergdorf determines in its sole judgment that Executive has not committed such
an act or omission, Bergdorf shall pay to Executive any payments pursuant to
paragraph l(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) Bergdorf is engaged in a
highly competitive business; (b) Bergdorf has expended considerable time and
resources to develop goodwill with its customers, vendors, and others, and to
create, protect, and exploit Confidential Information; (c) Bergdorf 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, his
participation in or direction of Bergdorf’s day-today operations and strategic
planning are an integral part of Bergdorf’s continued success and goodwill; (
e) given his position and responsibilities, he necessarily will be creating Confidential
Information that belongs to Bergdorf and enhances Bergdorf s goodwill, and in
carrying out his responsibilities he in turn will be relying on Bergdorf’s
goodwill and the disclosure by Bergdorf to him of Confidential Information; (f)
he will have access to Confidential Information that could be used by any
Competitor of Bergdorf in a manner that would irreparably harm Bergdorf’s
competitive position in the marketplace and dilute its goodwill; and (g) he
necessarily would use or disclose Confidential Information if he were to engage
in competition with Bergdorf.  Bergdorf
acknowledges and agrees that Executive must have and continue to have
throughout his employment the benefits and use of its goodwill and Confidential
Information in order to properly carry out his responsibilities. Bergdorf
accordingly promises upon execution and delivery of this Agreement to provide
Executive immediate access to new and additional Confidential Information and
authorize him to engage in activities that will create new and additional
Confidential Information. Bergdorf and Executive thus acknowledge and agree
that I during Executive’s employment with Bergdorf and upon execution and
delivery of this Agreement he (a) has received, will receive, and will continue
to receive, Confidential Information that is unique, proprietary, and valuable
to Bergdorf, (b) has created, will create, and will continue to create,
Confidential Information that is unique, proprietary, and valuable to Bergdorf,
and (c) has benefited, will benefit, and will continue to benefit, including
without limitation by way of increased earnings and earning capacity, from the
goodwill Bergdorf has generated and from the Confidential Information.
Accordingly, Executive acknowledges and agrees that at all times during his
employment by Bergdorf and thereafter:


 

















 


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


 


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


 


(c) he 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
Bergdorf or NMG to the extent necessary for the proper performance of his responsibilities
unless authorized to do so by Bergdorf or compelled to do so by law or valid
legal process;


 


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


 


(e) at the end of his employment with Bergdorf for any reason or at the
request of Bergdorf at any time, he will return to Bergdorf 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, Bergdorf would require him immediately to
return any tangible Confidential Information in his 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, and NMG would
not have entered into the Incentive Agreements.


 


3. In consideration of Bergdorf’s promises to provide Executive with
new and additional Confidential Information and to authorize him 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 Bergdorf in this Agreement and NMG in the Incentive Agreements,
Executive agrees that, while he is employed by Bergdorf and for a period of
eighteen months following the end of that employment for any reason, he shall
not engage in any of the following activities (the “Restricted Activities”):


 

















 


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


 


(b) He will not, whether on his 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 Bergdorf, NMG, or their Affiliates to
leave that employment or cease performing those services;


 


(c) He will not, whether on his 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 Bergdorf, NMG, or any of their Affiliates to cease being
a customer, supplier, or vendor of Bergdorf, NMG or their Affiliates or to
divert all or any part of such person’s or entity’s business from Bergdorf, NMG
or their Affiliates; and


 


(d) He will not associate directly or indirectly, as an employee,
officer, director, agent, partner, stockholder, owner, representative, or
consultant, with any Competitor unless (1) he has advised Bergdorf in writing
in advance of his desire to undertake, such activities and the specific nature
of such activities; (2) Bergdorf has received written assurances (that will be
designed, among other things, to protect Bergdorf’s, NMG’s and their
Affiliates’ goodwill, Confidential Information, and other important commercial
interests) from the Competitor and Executive that are, in Bergdorf’s sole
discretion, adequate to protect its interests; (3) Bergdorf, in its sole
discretion, has approved in writing such association; and (4) Executive and the
Competitor adhere to such assurances. Executive shall not be in violation of
this paragraph 3( d) solely as a result of his 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 he and
the members of his 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
Restricted Activities described in this subparagraph would result in the
inevitable disclosure or use of Confidential Information for the Competitor’s
benefit or to the detriment of Bergdorf.


 


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 the promises and
undertakings of Bergdorf set forth in paragraph 2 of this Agreement and those
of NMG in the Incentive Agreements, Executive’s position and responsibilities
with Bergdorf, and NMG granting to Executive ownership in NMG in the form of
NMG stock, give rise to Bergdorf’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 his
common-law obligations and duties owed to Bergdorf; that the restrictions are
reasonable and necessary, are valid and enforceable under New York law, and do
not impose a greater restraint than necessary to protect Bergdorf’s goodwill,
Confidential Information, and other legitimate business interests; that he will
immediately notify Bergdorf in writing should he believe or be advised that the
restrictions are not valid or enforceable under New York law or the law of any
other state that he contends or is advised is applicable; that the mutual
promises and undertakings of Bergdorf and Executive under paragraphs 2 and 3 of
this Agreement are not contingent on the duration of Executive’s employment
with Bergdorf; and that absent the promises and representations made by
Executive in this paragraph 3 and paragraph 2 above, Bergdorf would require him
to return any Confidential Information in his 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, and NMG
would not have entered into the Incentive Agreements.


 

















 


4. The Termination Benefits constitute all of Bergdorf’s obligations to
Executive with respect to the end of Executive’s employment with Bergdorf.
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
Bergdorf in which Executive is participating at the time of his termination of
employment or resignation.


 


5. Executive acknowledges and agrees that Bergdorf 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 Bergdorf 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 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 Bergdorf at law or
equity. Executive acknowledges and agrees that Bergdorf 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 he breaches this
Agreement. Executive acknowledges and agrees that no breach by Bergdorf 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 Bergdorf 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 New York, without regard
to its conflict of laws principles. 
Bergdorf and Executive agree that the exclusive forum for any action
concerning this Agreement shall be in a court of competent jurisdiction in New
York County, New York, with respect to a state court, or the United States
District Court for the Southern District of New York, 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 BERGDORF TO FEDERAL COURT OF ANY SUCH ACTION HE MAY
BRING AGAINST IT IN STATE COURT. EXECUTIVE AND BERGDORF 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 his employment with Bergdorf, and such promises and
obligations shall inure to the benefit of any Affiliates, subsidiaries,
divisions, successors, or assigns of Bergdorf.


 


 


	
   

  	
   

  	
  BERGDORF GOODMAN,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
     /S/  James J. Gold

  	
   

  	
  By:

  	
  /s/ 
  Nelson A. Bangs

  	
   

  
	
   

  	
   

  	
  Nelson A. Bangs, Vice President

  	
   

  
						



 

















 


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 Bergdorf’s reasonable judgment, (i) a breach of
duty by Executive in the course of his employment involving fraud, acts of
dishonesty (other than inadvertent acts or omissions), disloyalty, or moral
turpitude; (ii) conduct that is materially detrimental to Bergdorf, monetarily
or otherwise, or reflects unfavorably on Bergdorf or Executive to such an
extent that Bergdorf’s best interests reasonably require the termination of
Executive’s employment; (iii) acts of Executive in violation of his obligations
under this Agreement or at law; (iv) Executive’s failure to comply with or
enforce Bergdorf’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 Bergdorf or its Affiliates; (vi) Executive’s failure to devote his full
working time and best efforts to the performance of his responsibilities to
Bergdorf 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) each of Saks Incorporated, Nordstrom, Inc.,
Barneys New York, Inc., any Affiliate of any of them, and any other person or
entity that owns, operates or controls any of them or any of their Affiliates,
directly or indirectly; (ii) the successors to or assigns of the persons or
entities identified in (i); and (iii) any other person or entity (and any
Affiliate of such person or entity) that owns, operates or controls, directly
or indirectly, 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 excludin1! 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 Bergdorf’s reasonable judgment,
either (i) Executive has been unable to perform his 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 his employment with
Bergdorf on account of a physical or mental impairment.