Document:

EXHIBIT 10.18

 

AMENDMENT TO THE

NEWTON ACQUISITION, INC.

MANAGEMENT EQUITY INCENTIVE PLAN

 

This Amendment
to the Newton Acquisition, Inc. Management Equity Incentive Plan (the “Amendment”)
is made effective as of January 1, 2009, with respect to all Options
outstanding as of such date and granted on or after such date, by Neiman Marcus, Inc.,
a Delaware corporation (formerly known as Newton Acquisition, Inc.) (the “Company”).

 

W I T N E S S
E T H:

 

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

 

WHEREAS, the
Company now desires to amend the Plan and the Options issued thereunder for
compliance with Internal Revenue Code Section 409A and the Treasury
Regulations thereunder, and to make certain other changes;

 

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

 

1.                                       The
Plan is hereby amended to be the Neiman Marcus, Inc. Management Equity
Incentive Plan.

 

2.                                       Section 2(b) of
the Plan is hereby amended and restated in its entirety as follows:

 

(b)  “Affiliate” shall mean any corporation in a chain of
corporations in which each corporation has a controlling interest (as
determined in accordance with Treas. Reg. § 1.409A-1(b)(5)(iii)(E)) in another
corporation in the chain beginning with the Company and ending with such
corporation.

 

3.                                       Section 2(i) of
the Plan is hereby amended and restated in its entirety as follows:

 

(i)  “Company” shall mean Neiman Marcus, Inc.

 

4.                                       Section 2(q) of
the Plan is hereby amended and restated in its entirety as follows:

 

(q)  “Fair Market Value” shall mean, as of any date:

 

 

a.                                       for
Common Stock not readily tradable on an established securities market (as
determined in accordance with Treas. Reg. §§ 1.409A-1(b)(5)(vi)(G) and
1.409A-1(k)), the value per share of Common Stock as determined in good faith
by the Board and based upon the reasonable application of a reasonable
valuation method in accordance with Treas. Reg. § 1.409A-1(b)(5)(iv)(B); or

 

b.                                      for Common Stock
readily tradable on an established securities market (as determined in
accordance with Treas. Reg. §§ 1.409A-1(b)(5)(vi)(G) and 1.409A-1(k)), (i) the
closing price on such day of a share of Common Stock as reported on the
principal securities exchange on which shares of Common Stock are then listed
or admitted to trading or (ii) if not so reported, the average of the
closing bid and ask prices on such day as reported on the National Association
of Securities Dealers Automated Quotation System or (iii) if not so
reported, as furnished by any member of the National Association of Securities
Dealers, Inc. (“NASD”) selected by the Board.  The Fair Market
Value of a share of Common Stock as of any such date on which the applicable
exchange or inter-dealer quotation system through which trading in the Common
Stock regularly occurs is closed shall be the Fair Market Value determined
pursuant to the preceding sentence as of the immediately preceding date on
which the Common Stock is traded, a bid and ask price is reported or a trading
price is reported by any member of NASD selected by the Board.  In the
event that the price of a share of Common Stock shall not be so reported or
furnished, the Fair Market Value shall be determined in good faith by the Board
and based upon any other reasonable method using actual transactions in such
Common Stock as reported by any member of NASD selected by the Board.  However, in no event shall the Fair Market
Value of Common Stock readily tradable on an established securities market be
determined in a manner which fails to satisfy the requirements of Treas. Reg. §
1.409A-1(b)(5)(iv)(A).

 

5.                                       Section 2(s) of
the Plan is hereby amended and restated in its entirety as follows:

 

(s)  “Good Reason”
shall mean any of the following actions if taken without the Participant’s
prior written consent:  (i) a material
diminution in a Participant’s duties and responsibilities other than a change
in such Participant’s duties and responsibilities that results from becoming
part of a larger organization following a Change of Control, (ii) a
material decrease in a Participant’s base compensation other than a decrease in
bonus opportunity or benefits that applies to all employees of 

 

2

 

the Company or its Affiliates otherwise eligible to participate in the
affected plan or (iii) a relocation of a Participant’s primary work
location more than 50 miles from the Participant’s work location on the Grant
Date; provided that, within thirty days following the initial occurrence of any
of the events set forth herein, the Participant shall have delivered written
notice to the Company of his or her intention to terminate his or her
Employment for Good Reason, which notice specifies in reasonable detail the
circumstances claimed to give rise to the Participant’s right to terminate
Employment for Good Reason, the Company shall not have cured such circumstances
within thirty days following the Company’s receipt of such notice, and the
Participant actually terminates Employment for Good Reason within ninety days
of the initial occurrence of the event constituting Good Reason.

 

6.                                       Section 2(w) of
the Plan is hereby amended and restated in its entirety as follows:

 

(w)  “Majority Stockholder” shall mean, collectively or individually
as the context requires, Newton Holding, LLC, TPG Newton III, LLC, TPG Partners
IV, L.P., TPG Newton Co-Invest I, LLC, Warburg Pincus Private Equity VIII,
L.P., Warburg Pincus Netherlands Private Equity VIII C.V. I, Warburg Pincus
Germany Private Equity VIII K.G, Warburg Pincus Private Equity IX, L.P and/or
their respective affiliates.

 

7.                                       The
second paragraph of Section 3.4 of the Plan is hereby amended and restated
in its entirety as follows:

 

The Company may, in its discretion, defer the
effectiveness of an exercise of an Option hereunder or the issuance or transfer
of Common Stock pursuant to any Grant to ensure compliance under federal or
state securities laws, provided that the Company shall take any
commercially reasonable steps to reduce or eliminate any restrictions requiring
such a period of deferral (it being understood that this proviso shall in no
event obligate the Company or its Affiliates to file a registration statement)
and that such a period of deferral not exceed more than 30 days after such
exercise, issuance or transfer would no longer violate federal or state
securities laws.  The Company shall
inform the Participant in writing of its decision to defer the effectiveness of
the exercise of an Option or the issuance or transfer of Common Stock pursuant
to any Grant.  During the period that the
effectiveness of the exercise of an Option has been deferred, the Participant
may, by written notice, withdraw such exercise and obtain the refund of any
amount paid with respect thereto.

 

8.                                       The
last sentence of Section 4.4(a) is hereby amended and restated in its
entirety as follows:

 

3

 

Unless the
Committee provides otherwise, the vesting of an Option granted under this Plan
may be suspended during any leave of absence as may be set forth by Company
policy, if any; provided that any such suspension occur during the original
term of the Option.

 

9.                                       Section 4.13(a) of
the Plan is hereby amended and restated in its entirety as follows:

 

(a)  Stock Split or Stock Dividend.  Subject to any
required action by the stockholders of the Company, in the event of a stock
split (including a reverse stock split) or stock dividend (but only on the
shares of Common Stock) the only effect of which is to increase (or decrease)
on a pro rata basis the number of shares of Common Stock owned by each
stockholder, the Board shall proportionally adjust the Exercise Price and
number of shares of Common Stock subject to an Option to reflect the stock
split or stock dividend; provided that the aggregate exercise price of an
Option is not less than the aggregate Exercise Price before the stock split or
stock dividend.

 

10.                                 Section 4.13(b) of
the Plan is hereby deleted in its entirety, with such paragraph reserved for
future use.

 

11.                                 Section 4.13(c) of
the Plan is hereby amended and restated in its entirety as follows:

 

(c) 
Substitution, Assumption or Cash-out.  In
the event of a corporate transaction (as defined in Treas. Reg. §
1.424-1(a)(3)), the Board shall either provide for the substitution or
assumption of the Options in accordance with Treas. Reg. § 1.409A-1(b)(5)(v)(D),
and/or, if appropriate, cancel, effective immediately prior to such corporate
transaction, any outstanding Option (whether or not exercisable or vested) and
in full consideration of such cancellation pay to the Participant an amount in
cash, with respect to each underlying share of Common Stock, equal to the
excess of (1) the value, as determined by the Board in its discretion, of
securities and/or property (including cash) received by such holders of shares
of Common Stock as a result of such corporate transaction over (2) the
Exercise Price.

 

12.                                 Section 4.13(d) of
the Plan is hereby amended and restated in its entirety as follows:

 

(d)  Extraordinary Dividends.  In the event the Company
declares and pays an extraordinary cash dividend, (i) with respect to
unvested Options then outstanding on the date such extraordinary cash dividend
is paid, the Company shall pay to the Participant a cash bonus equal to the
amount that he would have received pursuant to such dividend payment if 

 

4

 

he owned the
Shares underlying his then outstanding unvested Options within 30 days of the
date such unvested Options vest, and (ii) with respect to Options which
become vested on or prior to the date such extraordinary cash dividend is paid,
whether or not such Options have been exercised, the Company shall pay to the
Participant a cash bonus equal to the amount that he would have received
pursuant to such dividend payment if he owned the Shares underlying such vested
Options granted to him within 30 days of the date such extraordinary cash
dividend is paid; provided, however, that Options which have expired pursuant
to Section 4.5 of the Plan or the terms of the Stock Option Grant
Agreement shall not be taken into consideration for purposes of this Section 4.13(d).  Notwithstanding the previous sentence, this Section 4.13(d) shall
cease to be effective immediately following the earlier to occur of a Change in
Control or an Initial Public Offering. 
In the event it is determined that such payments do not comply with Section 409A
or adversely effect the Options, the Company and the Option holder shall use
their reasonable efforts and take reasonable actions necessary to bring such
payments into compliance with Section 409A to the extent reasonably
practicable.

 

13.                                 Section 4.13(e) of
the Plan is hereby amended and restated in its entirety as follows:

 

(e)  Other Changes.  In the
event of any change in the capitalization of the Company or a corporate change
other than those specifically referred to in Sections 4.13(a) or (c) hereof,
the Board shall make such adjustments in the number and kind of shares or securities
subject to Options outstanding on the date on which such change occurs and in
the per-share Exercise Price of each such Option as the Board may consider
appropriate in its discretion to prevent dilution or enlargement of rights;
provided that no adjustment shall be made to the extent such adjustment would
be a modification or extension of the Option under Treas. Reg. § 1.409A-1(b)(5)(v) which
causes the Option to constitute a deferral of compensation under Treas. Reg. §
1.409A-1(b)(5)(i).

 

14.                                 Section 4.13(g) of
the Plan is hereby deleted in its entirety, with such paragraph reserved for
future use.

 

15.                                 The
Plan is hereby amended by the addition of the following as Section 5.9:

 

5.9  Code Section 409A.  It
is the intent of the Company that any Option granted under this Plan not be
subject to the tax imposed by Code Section 409A, and the Plan shall be
administered and construed to the fullest extent possible to reflect and
implement such intent.

 

5

 

16.                                 Except
as otherwise specifically set forth herein, all other terms and conditions of
the Plan shall remain in full force and effect.

 

IN WITNESS
WHEREOF, the Company has caused this Amendment to be executed on its behalf by
its duly authorized officer on this the 10th day
of November, 2008.

 

 

	
   

  	
   

  	
   

  	
    NEIMAN
  MARCUS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Nelson
  A. Bangs

  
	
   

  	
   

  	
   

  	
    Nelson
  A. Bangs

  
	
   

  	
   

  	
   

  	
    Senior
  Vice President

  

 

6EXHIBIT 10.20

 

AMENDMENT TO THE

STOCK OPTION GRANT AGREEMENT

 

This Amendment
to the Stock Option Grant Agreement (the “Amendment”) is made effective as of January 1,
2009, by and between Neiman Marcus, Inc., a Delaware corporation (formerly
known as Newton Acquisition, Inc.) (the “Company”) and Burton M. Tansky
(the “Participant”).

 

W I T N E S S E T H:

 

WHEREAS, the
Company and the Participant entered into a Stock Option Grant Agreement (the “Agreement”)
effective as of November 29, 2005, pursuant to the terms of the Newton
Acquisition, Inc. Management Equity Incentive Plan (the “Plan”); and

 

WHEREAS, the Company has amended the Plan for compliance with Internal
Revenue Code Section 409A and the Treasury Regulations thereunder; and

 

WHEREAS, the
Company and the Participant now desire to amend the Agreement for compliance
with Internal Revenue Code Section 409A and the Treasury Regulations
thereunder;

 

NOW,
THEREFORE, in consideration of the premises, the parties do hereby agree as
follows:

 

1.             The last sentence of Paragraph 8 of
the Agreement is hereby amended and restated in its entirety as follows:

 

It is intended
that the Option be exempt from Code Section 409A, and this Agreement shall
be administered and construed to the fullest extent possible to reflect and
implement such intent.

 

2.             By execution of this Amendment the
Participant hereby consents to the amendment of the Plan attached hereto as Exhibit A.

 

3.             Except as otherwise specifically
set forth herein, all other terms and conditions of the Agreement shall remain
in full force and effect.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed on this the 10th day
of December, 2008.

 

	
   

  	
   

  	
    NEIMAN
  MARCUS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Nelson
  A. Bangs

  
	
   

  	
  Its:

  	
    Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/  Burton
  M. Tanksy

  

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]