**Exhibit 10.56**

 

**SECOND AMENDMENT TO THE**

**NEIMAN MARCUS, INC.**

**MANAGEMENT EQUITY INCENTIVE PLAN**

 

ThisSecond Amendment to the Neiman Marcus, Inc. Management Equity IncentivePlan (the “Amendment”) is made effective as of November 16, 2009, byNeiman Marcus, Inc., a Delaware corporation (formerly known as NewtonAcquisition, Inc.) (the“Company”).

 

W I T N E S S E T H:

 

WHEREAS,the Company established the Newton Acquisition, Inc. Management EquityIncentive Plan (the “Plan”) effective as of November 29, 2005; and

 

WHEREAS,the Company subsequently amended the Plan effective January 1, 2009 forcompliance with Internal Revenue Code Section 409A and to change the nameof the Plan to the Neiman Marcus, Inc. Management Equity Incentive Plan;and

 

WHEREAS,the Company now desires to amend the definitions of Fair Value Option andPerformance Option under the Plan to allow more flexibility in the design ofthe awards, and to make certain other related changes;

 

NOW,THEREFORE, pursuant to the authority reserved in Section 4.12, the Plan isamended as follows:

 

1.             Section 2(a) ofthe Plan is hereby amended and restated in its entirety as follows:

 

(a)           “Accreting Exercise Price” shall mean,with respect to an Option, except as otherwise provided in a Participant’sStock Option Grant Agreement, an Exercise Price that increases at a 10.00%compound rate on each anniversary of the Grant Date of such Option until theearlier to occur of (i) Exercise of such Option, (ii) the fifthanniversary of the Grant Date of such Option, and (iii) the occurrence ofa Change of Control of the Company; provided, however, that the ExercisePrice shall cease to increase as provided herein on a portion of theoutstanding Performance Options following the sale by the Majority Stockholderof shares of Common Stock as follows:  the pro rata portion of the Performance Options held by aParticipant with respect to which the Exercise Price shall cease to increaseshall be the portion of the Performance Options that bears the same ratio tothe total Performance Options held by a Participant as the total number ofshares of Common Stock sold by the Majority 

 

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Stockholderbears to the total number of shares of Common Stock owned by the MajorityStockholder immediately prior to such sale.

 

2.             Section 2(r) ofthe Plan is hereby amended and restated in its entirety as follows:

 

(r)  “Fair ValueOption” shall mean, except as otherwise provided in a Participant’sStock Option Grant Agreement, an Option with a fixed Exercise Price equal tothe Fair Market Value of the underlying Common Stock on the Grant Date.

 

3.             Section 2(cc) of thePlan is hereby amended and restated in its entirety as follows:

 

(cc)  “Performance Option” shall mean,except as otherwise provided in a Participant’s Stock Option Grant Agreement,an Option with an Accreting Exercise Price that starts at the Fair Market Valueof the underlying Common Stock on the Grant Date.

 

4.             Section 2(kk) of thePlan is hereby amended and restated in its entirety as follows:

 

(kk)         “Stock Option Grant Agreement” shall mean an agreement which isentered into by a Participant and the Company evidencing the Grant of an Optionpursuant to the Plan in substantially the same form as one of the agreementsattached hereto as Exhibit A or such other agreement form as may beapproved by the Board.

 

5.             The second to last sentenceof Section 4.4(a) is hereby amended and restated in its entirety asfollows:

 

Unless otherwise specifiedin a Participant’s Stock Option Grant Agreement, the portion of an Option thatvests on any Vesting Date will be allocated equally among the portion of theOption that is a Fair Value Option and the portion of the Option that is aPerformance Option.

 

6.             Exhibit A to the Planis hereby amended by the addition of the forms of Stock Option Grant Agreementattached hereto as Exhibit A.

 

7.             Except as otherwisespecifically set forth herein, all other terms and conditions of the Plan shallremain in full force and effect.

 

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IN WITNESS WHEREOF, the Companyhas caused this Amendment to be executed on its behalf by its duly authorizedofficer on this the 16th day of November 2009.

 
| ** ** | **NEIMAN MARCUS, INC.** |
|------------|-------------------------|
|       |                    |   |
|       |                    |   |
|       | By:                     | /s/ Nelson A. Bangs |
|       |                    | Senior Vice President |

 

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Exhibit A

 

**Form of**

 

**AMENDED AND RESTATED**

**STOCK OPTION GRANT AGREEMENT**(Non-Qualified Stock Option)

 

This Amended and RestatedStock Option Grant Agreement (the “Agreement”) is made effective as of this           day of                               ,2009 between Neiman Marcus, Inc. (the “Company”) and                                                   (the “Participant”).

 

WHEREAS, the Company hasadopted and maintains the Neiman Marcus, Inc. Management Equity IncentivePlan, as amended (the “Plan”);

 

WHEREAS, the Plan providesfor the grant to Participants in the Plan of Non-Qualified Stock Options topurchase shares of Common Stock of the Company;

 

WHEREAS, the Companypreviously granted a Non-Qualified Stock Option to the Participant pursuant tothe Plan evidenced by a Stock Option Grant Agreement dated as of                               ,20      , that contained both a PerformanceOption and a Fair Value Option (the “Original Option”);

 

WHEREAS, the Stock OptionGrant Agreement with respect to the Original Option was amended effective January 1,2009;

 

WHEREAS, the Fair MarketValue of the shares of Common Stock subject to the Original Option is less thanthe Exercise Price of the Original Option immediately prior to theeffectiveness of this Agreement;

 

WHEREAS, pursuant to anexchange offer accepted by the Participant, the Company and the Participanthave cancelled the portion of the Original Option that is a Performance Optionas consideration for the grant of a new Performance Option as provided herein;

 

WHEREAS, the Company hasapproved the modification of the Expiration Date of the Original Option withrespect to both the Performance Option and the Fair Value Option; and

 

WHEREAS, the portion of theOriginal Option that is a Fair Value Option shall otherwise remain unchanged;

 

NOW, THEREFORE, pursuant tothe authority reserved in Section 4.12 of the Plan and in consideration ofthe premises and the mutual covenants hereinafter set forth, the parties heretohereby agree to amend and restate the Stock Option Grant Agreement with respectto the Original Option in its entirety as follows:

 

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1.             Incorporation of Plan.  All terms, conditions and restrictions of thePlan are incorporated herein and made part hereof as if stated herein. Allcapitalized terms used and not defined herein shall have the meaning given tosuch terms in the Plan.

 

2.             Grant of Options.  Pursuant to, and subject to, the terms andconditions set forth herein and in the Plan, the Company hereby restates theprior grant to the Participant of a Fair Value Option with respect to                     shares of Common Stock of the Company and now hereby grants to the Participanta new Performance Option with respect to                     shares of Common Stock of the Company, such that the total number of shares ofCommon Stock of the Company granted to the Participant hereunder as aNon-Qualified Stock Option is                     shares (the “Option”).

 

3.             Grant Date.  The Grant Date of the Performance Optionhereby granted is                               ,2009. The Grant Date of the Fair Value Option shall remain                               ,20      .

 

4.             Exercise Price.

 

(a)           The Exercise Price of eachshare of Common Stock underlying the portion of the Option that is a Fair ValueOption is $                    .

 

(b)           The Exercise Price of eachshare of Common Stock underlying the portion of the Option that is aPerformance Option shall be an increasing amount starting with $                    on the Grant Date and increasing at a 10.00% compound rate on each anniversaryof the Grant Date of such Performance Option until the earlier to occur of (i) theexercise of the Option, (ii) the fourth anniversary of the Grant Date of suchPerformance Option, or (iii) the occurrence of a Change of Control of theCompany; provided, however, that the Exercise Price shall cease to increase asprovided herein on a portion of the outstanding Performance Option followingthe sale by the Majority Stockholder of shares of Common Stock asfollows:  the pro rataportion of the Performance Option held by a Participant with respect to whichthe Exercise Price shall cease to increase shall be the portion of thePerformance Option that bears the same ratio to the total Performance Optionheld by a Participant as the total number of shares of Common Stock sold by theMajority Stockholder bears to the total number of shares of Common Stock ownedby the Majority Stockholder immediately prior to such sale.

 

5.             Vesting Date.

 

(a)           The Fair Value Option shallbecome exercisable as follows:  20% ofthe shares underlying such Fair Value Option shall vest and become exercisableon the first anniversary of the Grant Date of such Fair Value Option and theremaining portion of the Fair Value Option shall vest and become exercisable inforty-eight (48) equal monthly installments over the forty-eight (48) monthsfollowing the first anniversary of the Grant Date of such Fair Value Option,beginning on the one-month anniversary of such first anniversary, until 100% ofthe Fair Value Option is fully vested and exercisable

 

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thereafter, provided thatthe Participant is still employed by the Company on each such anniversary.

 

(b)           The Performance Option shallbecome exercisable as follows:  25% ofthe shares underlying such Performance Option shall vest and become exercisableon the first anniversary of the Grant Date of such Performance Option and theremaining portion of the Performance Option shall vest and become exercisablein thirty-six (36) equal monthly installments over the thirty-six (36) monthsfollowing the first anniversary of the Grant Date of such Performance Option,beginning on the one-month anniversary of such first anniversary, until 100% ofthe Performance Option is fully vested and exercisable thereafter, providedthat the Participant is still employed by the Company on each such anniversary.

 

6.             Expiration Date.  With respect to the Option or any portion thereofwhich has not become exercisable, the Option shall expire on the date theParticipant’s Employment is terminated for any reason, and with respect to theOption or any portion thereof which has become exercisable, the Option shallexpire (i) 90 days after the Participant’s termination of Employment forreasons other than Retirement, Cause, death or Disability; (ii) one yearafter termination of the Participant’s Employment by reason of Retirement,death or Disability; (iii) as of the commencement of business on the datethe Participant’s Employment is, or is deemed to have been, terminated forCause; or (iv) on                               ,2017, if the Option has not previously expired for any of the reasons specifiedabove in this Section 6.

 

7.             Certain Rights on a Changeof Control.  If (a) a Change of Control occurs,(b) the surviving corporation following such Change of Control is anentity for whose stock there is no Public Market, (c) the survivingcorporation assumes the Participant’s outstanding Options in connection withsuch Change of Control and such Options convert into options to purchase commonstock or other equity interests of the surviving corporation (the “AssumedOptions”) and (d) the Participant thereafter experiences a Qualifying Terminationat any time prior to the occurrence of an Initial Public Offering of thesurviving corporation, the Participant will be entitled to sell to the Companyor such surviving corporation, within ninety (90) days of such QualifyingTermination, all or any portion of the Assumed Options that the Participant hadnot exercised at the time of such sale and elects to sell to the Company orsuch surviving corporation (the “Eligible Assumed Options”), and the Company orsuch surviving corporation will be obligated to purchase from the Participant,in full satisfaction of the Participant’s rights with respect to such EligibleAssumed Options, all such Eligible Assumed Options, for a price equal to theaggregate fair market value, as determined in accordance with Treas. Reg. §1.409A-1(b)(5)(iv), of the shares of common stock or other equity interestsunderlying such Eligible Assumed Options, minus the aggregate exercise price ofsuch Eligible Assumed Options that such Participant would have been required topay in order to exercise such Eligible Assumed Options.

 

8.             Construction of Agreement.  Any provision of this Agreement (or portionthereof) which is deemed invalid, illegal or unenforceable in any jurisdictionshall, as to that jurisdiction and subject to this section, be ineffective tothe extent of such invalidity, 

 

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illegality orunenforceability, without affecting in any way the remaining provisions thereofin such jurisdiction or rendering that or any other provisions of thisAgreement invalid, illegal, or unenforceable in any other jurisdiction. If anycovenant should be deemed invalid, illegal or unenforceable because its scopeis considered excessive, such covenant shall be modified so that the scope of thecovenant is reduced only to the minimum extent necessary to render the modifiedcovenant valid, legal and enforceable. No waiver of any provision or violationof this Agreement by the Company shall be implied by the Company’s forbearanceor failure to take action. It is intended that the Option be exempt from Code Section 409A,and this Agreement shall be administered and construed to the fullest extentpossible to reflect and implement such intent.

 

9.             Delays orOmissions.  No delay oromission to exercise any right, power or remedy accruing to any party heretoupon any breach or default of any party under this Agreement, shall impair anysuch right, power or remedy of such party nor shall it be construed to be awaiver of, or acquiescence in, any such breach or default, or any similarbreach or default thereafter occurring nor shall any waiver of any singlebreach or default be deemed a waiver of any other breach or default theretoforeor thereafter occurring. Any waiver, permit, consent or approval of any kind orcharacter on the part of any party of any breach or default under thisAgreement, or any waiver on the part of any party or any provisions orconditions of this Agreement, shall be in writing and shall be effective onlyto the extent specifically set forth in such writing.

 

10.           Limitation on Transfer.  The Option shall be exercisable only by theParticipant or the Participant’s Permitted Transferee(s), as determined inaccordance with the terms of the Plan (including without limitation the requirementthat the Participant obtain the prior written approval by the Board of anyproposed Transfer to a Permitted Transferee during the lifetime of theParticipant). Each Permitted Transferee shall be subject to all therestrictions, obligations, and responsibilities as apply to the Participantunder the Plan and this Agreement and shall be entitled to all the rights ofthe Participant under the Plan, provided that in respect of any PermittedTransferee which is a trust or custodianship, the Option shall becomeexercisable and/or expire based on the employment and termination of employmentof the Participant. All shares of Common Stock obtained pursuant to the Optiongranted herein shall not be transferred except as provided in the Plan and,where applicable, the Management Stockholders’ Agreement.

 

11.           Integration.  This Agreement, and the other documentsreferred to herein or delivered pursuant hereto which form a part hereofcontain the entire understanding of the parties with respect to its subjectmatter. There are no restrictions, agreements, promises, representations,warranties, covenants or undertakings with respect to the subject matter hereofother than those expressly set forth herein and in the Plan. This Agreement,including without limitation the Plan, supersedes all prior agreements andunderstandings between the parties with respect to its subject matter.

 

12.           Counterparts.  This Agreement may be executed in two or morecounterparts, each of which shall be deemed an original, but all of which shallconstitute one and the same instrument.

 

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13.           Governing Law.  This Agreement shall be governed by andconstrued and enforced in accordance with the laws of the State of Delawarewithout regard to the provisions governing conflict of laws.

 

14.           Participant Acknowledgment.  The Participant hereby acknowledges receiptof a copy of the Plan. The Participant hereby acknowledges that all decisions,determinations and interpretations of the Board in respect of the Plan, thisAgreement and the Option shall be final and conclusive. The Participant furtheracknowledges that, prior to the existence of a Public Market, no exercise ofthe Option or any portion thereof shall be effective unless and until theParticipant has executed the Management Stockholders’ Agreement and theParticipant hereby agrees to be bound thereby.

 

IN WITNESS WHEREOF, theCompany has caused this Agreement to be duly executed by its duly authorizedofficer and said Participant has hereunto signed this Agreement on his ownbehalf, thereby representing that he has carefully read and understands thisAgreement, the Plan and the Management Stockholders’ Agreement as of the dayand year first written above.

 
|   | **NEIMAN  MARCUS, INC.**   |
|--------|----------------------------|
|   | ** **                 |
|   |                       |
|   | By:                        |   |
|   |                       |
|   |                       |
|   | **PARTICIPANT**            |
|   | ** **                 |
|   | ** **                 |
|   |                       |
|   | [Participant’s  Name] |

 

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**Form of**

 

**SECOND AMENDED AND RESTATED**

 

**STOCK OPTION GRANT AGREEMENT**(Non-Qualified Stock Option)

 

This Second Amended andRestated Stock Option Grant Agreement (the “Agreement”) is made effective as ofthis            day of                               ,2009 between Neiman Marcus, Inc. (the “Company”) and                                                   (the “Participant”).

 

WHEREAS, the Company hasadopted and maintains the Neiman Marcus, Inc. Management Equity IncentivePlan, as amended (the “Plan”);

 

WHEREAS, the Plan providesfor the grant to Participants in the Plan of Non-Qualified Stock Options topurchase shares of Common Stock of the Company;

 

WHEREAS, the Companypreviously granted a Non-Qualified Stock Option to the Participant pursuant tothe Plan evidenced by a Stock Option Grant Agreement dated as of                               ,20      , that contained both a PerformanceOption and a Fair Value Option (the “Original Option”);

 

WHEREAS, the Stock OptionGrant Agreement with respect to the Original Option was amended effective January 1,2009;

 

WHEREAS, the Stock OptionGrant Agreement with respect to the Original Option was amended and restatedeffective as of                               ,2009 (the “Amended and Restated Stock Option Grant Agreement”) to reflect theexchange of the Performance Option and to modify the Expiration Date of boththe Performance Option and the Fair Value Option;

 

WHEREAS, the Fair MarketValue of the shares of Common Stock subject to the Fair Value Option is lessthan the Exercise Price of the Fair Value Option immediately prior to theeffectiveness of this Agreement;

 

WHEREAS, the Company and theParticipant have agreed to cancel the Fair Value Option as consideration forthe grant of a new Fair Value Option as provided herein; and

 

WHEREAS, the PerformanceOption shall remain unchanged;

 

NOW, THEREFORE, pursuant tothe authority reserved in Section 4.12 of the Plan and in consideration ofthe premises and the mutual covenants hereinafter set forth, the parties heretohereby agree to amend and restate the Amended and Restated Stock Option GrantAgreement in its entirety as follows:

 

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1.             Incorporation of Plan.  All terms, conditions and restrictions of thePlan are incorporated herein and made part hereof as if stated herein. Allcapitalized terms used and not defined herein shall have the meaning given tosuch terms in the Plan.

 

2.             Grant of Options.  Pursuant to, and subject to, the terms andconditions set forth herein and in the Plan, the Company hereby restates theprior grant to the Participant of a Performance Option with respect to                     shares of Common Stock of the Company and now hereby grants to the Participanta new Fair Value Option with respect to                     shares of Common Stock of the Company, such that the total number of shares ofCommon Stock of the Company granted to the Participant hereunder as aNon-Qualified Stock Option is                     shares (the “Option”).

 

3.             Grant Date.  The Grant Date of the Fair Value Optionhereby granted is                               ,2009. The Grant Date of the Performance Option shall remain                               ,2009.

 

4.             Exercise Price.

 

(a)           The Exercise Price of eachshare of Common Stock underlying the portion of the Option that is a Fair ValueOption is $                    .

 

(b)           The Exercise Price of eachshare of Common Stock underlying the portion of the Option that is aPerformance Option shall be an increasing amount starting with $                    on the Grant Date and increasing at a 10.00% compound rate on each anniversaryof the Grant Date of such Performance Option until the earlier to occur of (i) theexercise of the Option, (ii) the fourth anniversary of the Grant Date ofsuch Performance Option, or (iii) the occurrence of a Change of Control ofthe Company; provided, however, that the Exercise Price shall cease to increaseas provided herein on a portion of the outstanding Performance Option followingthe sale by the Majority Stockholder of shares of Common Stock asfollows:  the pro rataportion of the Performance Option held by a Participant with respect to whichthe Exercise Price shall cease to increase shall be the portion of thePerformance Option that bears the same ratio to the total Performance Optionheld by a Participant as the total number of shares of Common Stock sold by theMajority Stockholder bears to the total number of shares of Common Stock ownedby the Majority Stockholder immediately prior to such sale.

 

5.             Vesting Date.

 

(a)           The Fair Value Option shallbecome exercisable as follows:  25% ofthe shares underlying such Fair Value Option shall vest and become exercisableon                               ,2010 and the remaining portion of the Fair Value Option shall vest and becomeexercisable in thirty-six (36) equal monthly installments over the followingthirty-six (36) months, beginning on the one-month anniversary of such date,until 100% of the Fair Value Option is fully vested and exercisable thereafter,provided that the Participant is still employed by the Company at such time.

 

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(b)           The Performance Option shallbecome exercisable as follows:  25% ofthe shares underlying such Performance Option shall vest and become exercisableon the first anniversary of the Grant Date of such Performance Option and theremaining portion of the Performance Option shall vest and become exercisablein thirty-six (36) equal monthly installments over the thirty-six (36) monthsfollowing the first anniversary of the Grant Date of such Performance Option,beginning on the one-month anniversary of such first anniversary, until 100% ofthe Performance Option is fully vested and exercisable thereafter, providedthat the Participant is still employed by the Company on each such anniversary.

 

6.             Expiration Date.  With respect to the Option or any portion thereofwhich has not become exercisable, the Option shall expire on the date theParticipant’s Employment is terminated for any reason, and with respect to theOption or any portion thereof which has become exercisable, the Option shallexpire (i) 90 days after the Participant’s termination of Employment forreasons other than Retirement, Cause, death or Disability; (ii) one yearafter termination of the Participant’s Employment by reason of Retirement,death or Disability; (iii) as of the commencement of business on the datethe Participant’s Employment is, or is deemed to have been, terminated forCause; or (iv) on                               ,2017, if the Option has not previously expired for any of the reasons specifiedabove in this Section 6.

 

7.             Certain Rights on a Changeof Control.  If (a) a Change of Control occurs,(b) the surviving corporation following such Change of Control is anentity for whose stock there is no Public Market, (c) the survivingcorporation assumes the Participant’s outstanding Options in connection withsuch Change of Control and such Options convert into options to purchase commonstock or other equity interests of the surviving corporation (the “AssumedOptions”) and (d) the Participant thereafter experiences a Qualifying Terminationat any time prior to the occurrence of an Initial Public Offering of thesurviving corporation, the Participant will be entitled to sell to the Companyor such surviving corporation, within ninety (90) days of such QualifyingTermination, all or any portion of the Assumed Options that the Participant hadnot exercised at the time of such sale and elects to sell to the Company orsuch surviving corporation (the “Eligible Assumed Options”), and the Company orsuch surviving corporation will be obligated to purchase from the Participant,in full satisfaction of the Participant’s rights with respect to such EligibleAssumed Options, all such Eligible Assumed Options, for a price equal to theaggregate fair market value, as determined in accordance with Treas. Reg. §1.409A-1(b)(5)(iv), of the shares of common stock or other equity interestsunderlying such Eligible Assumed Options, minus the aggregate exercise price ofsuch Eligible Assumed Options that such Participant would have been required topay in order to exercise such Eligible Assumed Options.

 

8.             Construction of Agreement.  Any provision of this Agreement (or portionthereof) which is deemed invalid, illegal or unenforceable in any jurisdictionshall, as to that jurisdiction and subject to this section, be ineffective tothe extent of such invalidity, illegality or unenforceability, withoutaffecting in any way the remaining provisions thereof in such jurisdiction orrendering that or any other provisions of this Agreement 

 

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invalid, illegal, orunenforceable in any other jurisdiction. If any covenant should be deemedinvalid, illegal or unenforceable because its scope is considered excessive,such covenant shall be modified so that the scope of the covenant is reducedonly to the minimum extent necessary to render the modified covenant valid,legal and enforceable. No waiver of any provision or violation of thisAgreement by the Company shall be implied by the Company’s forbearance orfailure to take action. It is intended that the Option be exempt from Code Section 409A,and this Agreement shall be administered and construed to the fullest extentpossible to reflect and implement such intent.

 

9.             Delays or Omissions.  No delay or omission to exercise any right,power or remedy accruing to any party hereto upon any breach or default of anyparty under this Agreement, shall impair any such right, power or remedy ofsuch party nor shall it be construed to be a waiver of, or acquiescence in, anysuch breach or default, or any similar breach or default thereafter occurringnor shall any waiver of any single breach or default be deemed a waiver of anyother breach or default theretofore or thereafter occurring. Any waiver,permit, consent or approval of any kind or character on the part of any partyof any breach or default under this Agreement, or any waiver on the part of anyparty or any provisions or conditions of this Agreement, shall be in writingand shall be effective only to the extent specifically set forth in suchwriting.

 

10.           Limitation on Transfer.  The Option shall be exercisable only by theParticipant or the Participant’s Permitted Transferee(s), as determined inaccordance with the terms of the Plan (including without limitation the requirementthat the Participant obtain the prior written approval by the Board of anyproposed Transfer to a Permitted Transferee during the lifetime of theParticipant). Each Permitted Transferee shall be subject to all therestrictions, obligations, and responsibilities as apply to the Participantunder the Plan and this Agreement and shall be entitled to all the rights ofthe Participant under the Plan, provided that in respect of any PermittedTransferee which is a trust or custodianship, the Option shall becomeexercisable and/or expire based on the employment and termination of employmentof the Participant. All shares of Common Stock obtained pursuant to the Optiongranted herein shall not be transferred except as provided in the Plan and,where applicable, the Management Stockholders’ Agreement.

 

11.           Integration.  This Agreement, and the other documentsreferred to herein or delivered pursuant hereto which form a part hereofcontain the entire understanding of the parties with respect to its subject matter.There are no restrictions, agreements, promises, representations, warranties,covenants or undertakings with respect to the subject matter hereof other thanthose expressly set forth herein and in the Plan. This Agreement, includingwithout limitation the Plan, supersedes all prior agreements and understandingsbetween the parties with respect to its subject matter.

 

12.           Counterparts.  This Agreement may be executed in two or morecounterparts, each of which shall be deemed an original, but all of which shallconstitute one and the same instrument.

 

13.           Governing Law.  This Agreement shall be governed by andconstrued and 

 

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enforced in accordance withthe laws of the State of Delaware without regard to the provisions governingconflict of laws.

 

14.           Participant Acknowledgment.  The Participant hereby acknowledges receiptof a copy of the Plan. The Participant hereby acknowledges that all decisions,determinations and interpretations of the Board in respect of the Plan, thisAgreement and the Option shall be final and conclusive. The Participant furtheracknowledges that, prior to the existence of a Public Market, no exercise ofthe Option or any portion thereof shall be effective unless and until the Participanthas executed the Management Stockholders’ Agreement and the Participant herebyagrees to be bound thereby.

 

IN WITNESS WHEREOF, theCompany has caused this Agreement to be duly executed by its duly authorizedofficer and said Participant has hereunto signed this Agreement on his ownbehalf, thereby representing that he has carefully read and understands thisAgreement, the Plan and the Management Stockholders’ Agreement as of the dayand year first written above.

 
|   | **NEIMAN  MARCUS, INC.**   |
|--------|----------------------------|
|   |                       |
|   |                       |
|   | By:                        |   |
|   |                       |
|   |                       |
|   | **PARTICIPANT**            |
|   |                       |
|   |                       |
|   |                       |
|   | [Participant’s  Name] |

 

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