THE PERIOD OR WHOSE ELECTION OR
NOMINATION FOR ELECTION WAS PREVIOUSLY SO APPROVED, CEASE FOR ANY REASON (OTHER
THAN DEATH OR DISABILITY) TO CONSTITUTE AT LEAST A MAJORITY THEREOF; OR
(4)
UPON THE COMPLETE LIQUIDATION OF THE COMPANY OR THE SALE OR
DISPOSITION 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.
VII.
"CLASS B COMMON STOCK" MEANS CLASS B COMMON STOCK, PAR VALUE $.01
PER SHARE, OF THE COMPANY.
VIII.
"COBRA" MEANS THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF
1985, AS AMENDED.
IX.
"CODE" MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
A-3
X.
"COMPANY" MEANS THE NEIMAN MARCUS GROUP, INC. AND, AFTER A CHANGE
OF CONTROL, ANY SUCCESSOR OR SUCCESSORS THERETO.
XI.
"EMPLOYMENT AGREEMENT" MEANS THE EMPLOYMENT AGREEMENT BETWEEN
EXECUTIVE AND THE COMPANY DATED AUGUST 3, 2003.
XII.
"EXCHANGE ACT" MEANS THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
XIII.
"GOOD REASON" MEANS ANY OF THE FOLLOWING ACTIONS ON OR AFTER A
CHANGE OF CONTROL, WITHOUT EXECUTIVE'S EXPRESS PRIOR WRITTEN APPROVAL, OTHER
THAN DUE TO EXECUTIVE'S TOTAL DISABILITY OR DEATH:
(1)
ANY DECREASE IN, OR ANY FAILURE TO INCREASE IN ACCORDANCE WITH AN
AGREEMENT BETWEEN EXECUTIVE AND THE COMPANY OR ANY OF ITS SUBSIDIARIES, BASE
SALARY OR TARGET BONUS;
(2)
ANY MATERIAL DIMINUTION IN THE AGGREGATE EMPLOYEE BENEFITS
AFFORDED TO THE EXECUTIVE IMMEDIATELY PRIOR TO THE CHANGE OF CONTROL; FOR THIS
PURPOSE EMPLOYEE BENEFITS SHALL INCLUDE, BUT NOT BE LIMITED TO PENSION BENEFITS,
LIFE INSURANCE AND MEDICAL AND DISABILITY BENEFITS (EXCLUDING, FOR THE AVOIDANCE
OF DOUBT, THE COMPANY'S ELECTION NOT TO EXTEND THE AGREEMENT IN ACCORDANCE WITH,
AND SUBJECT TO, THE PROVISIONS OF SECTION 2 OF THIS AGREEMENT);
(3)
ANY DIMINUTION IN EXECUTIVE'S TITLE OR PRIMARY REPORTING
RELATIONSHIP, OR SUBSTANTIAL DIMINUTION IN DUTIES OR RESPONSIBILITIES
(INCLUDING, WITHOUT LIMITATION, THE COMPANY BECOMING A SUBSIDIARY OR DIVISION OF
A PARENT OPERATING ENTITY (UNLESS EXECUTIVE RETAINS OR ASSUMES THE TITLE AND
PRIMARY REPORTING RELATIONSHIP (WITHOUT DIMINUTION) AND DUTIES AND
RESPONSIBILITIES (WITHOUT SUBSTANTIAL DIMINUTION), AS IN EFFECT WITH RESPECT TO
THE COMPANY IMMEDIATELY PRIOR TO THE CHANGE OF CONTROL, AT, AND WITH RESPECT TO,
SUCH PARENT OPERATING ENTITY)); PROVIDED, HOWEVER, THAT NO SUCH DIMINUTION OR
SUBSTANTIAL DIMINUTION, AS APPLICABLE, SHALL BE DEEMED TO OCCUR SOLELY AS A
RESULT OF THE COMPANY CEASING TO BE A PUBLICLY HELD CORPORATION;
(4)
ANY RELOCATION OF EXECUTIVE'S PRINCIPAL PLACE OF BUSINESS OF
50 MILES OR MORE, OTHER THAN NORMAL TRAVEL CONSISTENT WITH PAST PRACTICE, OR ANY
REQUIREMENT THAT EXECUTIVE ENGAGE IN EXCESSIVE BUSINESS-RELATED TRAVEL IN A
MANNER INCONSISTENT WITH PAST PRACTICE IN ANY MATERIAL RESPECT;
(5)
THE FAILURE OF ANY SUCCESSOR OR ASSIGNEE (WHETHER DIRECT OR
INDIRECT, BY PURCHASE, MERGER, CONSOLIDATION, OR OTHERWISE) TO ALL OR
SUBSTANTIALLY ALL OF THE BUSINESS AND/OR ASSETS OF THE COMPANY IN CONNECTION
WITH ANY CHANGE OF CONTROL, BY AGREEMENT IN WRITING IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO EXECUTIVE, EXPRESSLY, ABSOLUTELY AND UNCONDITIONALLY
TO ASSUME AND AGREE TO PERFORM THIS AGREEMENT, THE EMPLOYMENT AGREEMENT