Document:

Exhibit

PRIVATE AND CONFIDENTIAL
February 12, 2018
Dear Ms. Katz:
Neiman Marcus Group, Inc. (“us”, “we” or the “Company”), is pleased that you have accepted our offer to remain on the Company’s Board of Directors (the “Board”) as a member of the Board (a “Director”).  This letter sets out the main terms of your continued service on the Board from and after the date hereof, and is a contract for services and not a contract of employment.
		
	1.
	APPOINTMENT, RESIGNATION AND REMOVAL

		
	1.1
	You shall serve on the Board in accordance with, and subject to, the Certificate of Incorporation of the Company (as amended from time to time, the “Charter”), the By-Laws of the Company (as amended from time to time, the “By-Laws”) and the Stockholders Agreement, dated as of October 25, 2013, by and among the Company, Ares Corporate Opportunities Fund III, L.P., Ares Corporate Opportunities Fund IV, L.P., CPP Investment Board (USRE) Inc., ACOF Mariposa Holdings LLC and the other Securityholders (as defined therein) party thereto (as amended from time to time, the “Stockholders Agreement”).  

		
	1.2
	You may resign as a Director at any time by providing written notice thereof in accordance with the By-Laws. In addition, you may be removed at any time in accordance with the Charter, the By-Laws and the Stockholders Agreement.

		
	1.3
	The Company may request that you serve as a director on the board of directors or other governing body of any of the Company’s subsidiaries, and your appointment, resignation or removal from any such board of directors or other governing body shall be subject to the certificate of incorporation and by-laws (or other similar governing documents) of such subsidiary and the Stockholders Agreement.

		
	2.
	ROLE AND DUTIES

		
	2.1
	For so long as you are a Director, you shall provide those services as (a) are required of a director under the General Corporation Law of the State of Delaware and all other applicable state and federal laws and regulations, (b) are customarily associated with and are incident to the position of a director and (c) the Company may, from time to time, reasonably request, consistent with your position as a Director.

		
	2.2
	Without limiting the foregoing, for so long as you are a Director, you shall (a) meet with the Company upon the Company’s request, at dates and times mutually agreeable to you and the Company, to discuss any matters that involve or may involve issues of which you have knowledge, and (b) cooperate with the Company in the planning, review and execution of any such matter. The Company anticipates that you will participate in (i) at least four to five in person Board meetings per year at the Company’s headquarters, or other locations 

as determined by the Company and (ii) monthly conference calls to discuss financial and operational results with, and provide advice to, the Company, as may be reasonably requested by the Company.
		
	2.3
	Unless you are otherwise specifically authorized by the Board, you shall not enter into any legal or other commitment or contract on behalf of the Company, nor shall you hold yourself out as having any authority to bind or to speak on behalf of the Company.

		
	2.4
	For so long as you are a Director, you shall provide the Company with prior written notice before joining the board of directors, board of managers or other similar governing body of any entity.

		
	3.
	FEES AND EXPENSES; INDEMNIFICATION

		
	3.1
	For so long as you are a Director, the Company shall pay, or cause to be paid, to you an annual fee of $50,000, which shall be payable in equal installments quarterly in arrears.  If the Board requests your services as the chair of the Board or one of the committees of the Board, you may be paid an additional mutually agreed upon fee.  Such fee(s) shall be prorated for the actual number of days you serve as a Director (or Chair) in any quarter. 

		
	3.2
	In addition, the Company may from time to time grant you options to purchase common stock of the Company in accordance with, and subject to, one or more option award agreements.

		
	3.3
	For so long as you are a Director, you shall be eligible to participate in either the Company’s medical and executive medical plans as in effect from time to time, or, if such participation is not permissible under applicable law or commercially practicable, under separate arrangements that provide you with comparable benefits.

		
	3.4
	The Company shall reimburse you, or cause to be reimbursed to you, all reasonable and properly documented out-of-pocket expenses that you incur in performing your duties in accordance with the Company’s procedure and other guidance in respect of expense claims. 

		
	3.5
	Upon your resignation or removal as a Director, you shall only be entitled to (a) a pro rata portion of your annual fee as set forth in Section 3.1 and (b) reimbursement of any expenses, in accordance with Section 3.4, that are properly incurred before the date of such resignation or removal.  

		
	3.6
	All amounts payable hereunder will be paid after deduction or withholding of all taxes and other amounts that are required by law, as determined by the Company.

		
	3.7
	With respect to your service as a director, you will be entitled to indemnification to the maximum extent permitted by applicable state law, and as otherwise provided under the Company’s by-laws or other organizational documents, and coverage under any director and officer liability insurance policy maintained by the Company, in each case, on a basis that is no less favorable than that available to any other director of the Company.

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	4.
	OUTSIDE INTERESTS  

You represent and warrant that you are not subject to (a) any restrictions that prevent you from serving as a Director or (b) any commitments that give rise to a conflict of interest with respect to, or otherwise conflict with, any of your duties as a Director.  You agree that (i) you hold a position of trust and confidence with the Company, (ii) have fiduciary duties as a Director to the Company that are subject to the standards imposed by the statutes, court decisions and other applicable law of the State of Delaware, (iii) you have been appointed as a Director in reliance on your agreements and representations in this letter and (iv) if, at any time, you become aware of any facts or circumstances that would cause any of your representations and warranties in the first sentence of this Section 4 to be untrue if made as of such time, you will promptly disclose such facts or circumstances in writing to the Board.
		
	5.
	CONFIDENTIALITY

All information acquired from or on behalf of the Company or any of its affiliates, or otherwise in connection with your service as a Director, is confidential and you shall not directly or indirectly release, communicate, disclose or use such information for any reason other than, during your service as a Director, in the interests of the Company and its subsidiaries.  This restriction shall not apply to any information that (a) is or may become generally available to the public, other than as a result of your breach of the terms of this letter, or (b) is required to be disclosed by applicable law; provided that you shall, to the extent legally permissible, give the Company written notice of such requirement prior to any such disclosure to enable Company to seek a protective order or otherwise prevent such disclosure.  You shall hold and retain such information (in whatever form you may receive it) under appropriately secure conditions.
		
	6.
	ADDRESS FOR NOTICE AND PERSONAL CONTACT DETAILS

You shall advise the Company’s General Counsel promptly of any change in your address or other personal contact details.
		
	7.
	RETURN OF PROPERTY

All files, documents, records, papers, electronic mail transmissions and other materials (collectively, “Materials”) furnished to you by or on behalf of the Company or any of its affiliates are the sole and exclusive property of the Company or such affiliate.  Upon your resignation or removal as a Director, or at any time upon the Company’s request, you shall promptly return to the Company all such Materials and all other property belonging to the Company or any of its affiliates that may be in your possession or under your control, and you shall not retain any copies thereof.
		
	8.
	RESTRICTIVE COVENANTS

You agree to be bound by the confidentiality, nondisparagement, non-competition, non-solicitation and intellectual property covenants contained in Sections 8, 9 and 10 of the Employment Agreement between you and The Neiman Marcus Group, LLC, dated October 25, 2013. Provided, however, for such purposes, any reference to your employment or the end of your employment in such sections 

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of the Employment Agreement shall also include your services or the end of your services as a Director.  For the avoidance of doubt, you shall not engage in any Restricted Activities (as defined in the Employment Agreement) for a period of two years following your resignation or removal as a Director.
		
	9.
	SEVERABILITY; COUNTERPARTS; AMENDMENTS; SECTION 409A

		
	9.1
	If at any time any of the provisions of this letter shall be held invalid or unenforceable, or are prohibited by the laws of the jurisdiction where they are to be performed or enforced, by reason of being vague or unreasonable as to duration or geographic scope or scope of the activities restricted, or for any other reason, such provisions shall be considered divisible and shall become and be immediately amended to include only such restrictions and to such extent as shall be deemed to be reasonable and enforceable by the court or other body having jurisdiction over this letter, and you and the Company agree that the provisions of this letter, as so amended, shall be valid and binding as though any invalid or unenforceable provisions had not been included.

		
	9.2
	This letter may be signed in counterparts (including (without limitation) by facsimile or electronic transmission). 

		
	9.3
	No amendment or modification of this letter shall be effective unless it is in writing and signed by you and the Company (or either such party’s authorized representative).  The failure of either party to require the performance of any term or obligation of this letter, or the waiver by either party of any breach of this letter, shall not prevent any subsequent enforcement of such term or obligation and shall not be deemed a waiver of any subsequent breach.

		
	9.4
	Notwithstanding any provision of this letter to the contrary, this letter is intended to comply with the requirements of Section 409A of the Code and the regulations and Treasury guidance thereunder (collectively, “Section 409A”).  Accordingly, all provisions herein, or incorporated by reference, shall be construed and interpreted to comply with Section 409A.  Further, for purposes of the limitation on nonqualified deferred compensation under Section 409A, each payment of compensation under this letter shall be treated as a separate payment of compensation.

		
	10.
	GOVERNING LAW AND JURISDICTION

		
	10.1
	This letter and any dispute or claim arising out of or in connection with it or its subject matter or formation (including without limitation non-contractual disputes or claims and the legal relationships between the parties hereto) shall be governed by the laws of the State of Delaware without regard to the principles of conflict of laws that would cause the application of laws of any jurisdiction other than those of the State of Delaware.  

		
	10.2
	Any legal actions or proceedings against either party arising out of this letter or any dispute or claim arising out of or in connection with it or its subject matter or formation (including without limitation non-contractual disputes or claims and the legal relationships between 

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the parties hereto) will be brought in any state or federal court of appropriate jurisdiction sitting in Dallas County, Texas.  Each party submits to and accepts the exclusive jurisdiction of such courts for the purpose of legal actions or proceedings and waives any objection (including without limitation any objection based on inconvenient forum) to this choice of venue for any dispute or claim that arises out of or in connection with this letter or its subject matter or formation (including without limitation non-contractual disputes or claims and the legal relationships between the parties hereto).  Each party agrees that the exclusive choice of forum set forth in this Section 10.2 does not prohibit the enforcement of any judgment obtained in that forum or any other appropriate forum.

[Remainder of Page Left Intentionally Blank]

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Please indicate your acceptance of these terms by signing and returning the attached copy of this letter to the Chief Executive Officer.

Yours sincerely,

 
For and on behalf of the Company

/s/ Geoffroy van Raemdonck         
Name: Geoffroy van Raemdonck
Title: Chief Executive Officer

I confirm and agree to the terms of my appointment as a Director of the Company as set out in this letter.

/s/ Karen Katz                                
Karen KatzExhibit

EXHIBIT 10.8

Award Number: ____
NEIMAN MARCUS GROUP, INC.
Amended & Restated
Time-Vested 
Non-Qualified Stock Option Agreement 
Pursuant to the 
Neiman Marcus Group, Inc. 
Management Equity Incentive Plan
AMENDED AND RESTATED AGREEMENT (“Agreement”), dated as of [●] between Neiman Marcus Group, Inc., a Delaware corporation (the “Company”), and Karen Katz (the “Participant”).
Preliminary Statement
This Agreement amends and restates the Time-Vested Option Non-Qualified Stock Option Agreement pursuant to the Neiman Marcus Group, Inc. Management Equity Incentive Plan, dated November 5, 2013 (the “Previous Agreement”), in its entirety.  The Committee granted a non-qualified stock option (the “Option”) as of November 5, 2013 (the “Grant Date”), pursuant to the Neiman Marcus Group, Inc. Management Equity Incentive Plan (the “Plan”),  to purchase 25,099 shares of Class A Common Stock, $0.001 par value per share of the Company (the “Class A Common Stock”), and Class B Common Stock, par value $0.001 per share, of the Company (the “Class B Common Stock,” and, together with the Class A Common Stock, the “Common Stock”), set forth below to the Participant, as an Eligible Employee.  The Participant has consented to the forfeiture of 16,733 shares of Common Stock underlying the Option for a remaining grant of 8,366 shares of Class A Common Stock and Class B Common Stock underlying the Option.  Except as otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan.  By signing and returning this Agreement, the Participant acknowledges having received and read a copy of the Plan and agrees to comply with it, this Agreement and all applicable laws and regulations.   
Accordingly, the parties hereto agree as follows:
1.Tax Matters.  No part of the Option is intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
2.    Common Stock Subject to Option;  Unit Exercise Price.  
(a)    Subject to the Plan and the terms and conditions set forth herein and therein, the Option entitles the Participant to purchase from the Company, upon exercise thereof, 8,366 shares of Class A Common Stock and 8,366 shares of Class B Common Stock, provided that any exercise of the Option shall be with respect to an equal number of shares of Class A Common Stock and Class B Common Stock concurrently. The exercise price under the 

Katz Amended & Restated Time-Vested Option

Option is $500 for each unit (a “Unit”) consisting of one share of Class A Common Stock and one share of Class B Common Stock, subject to increase as provided in this Section 2 and adjustment as provided in Section 4.2 of the Plan (the “Unit Exercise Price”).
(b)    If the Company declares or pays an extraordinary dividend or distribution (whether in cash, securities or other property) to the holders of Class A Common Stock, the Unit Exercise Price shall be increased immediately prior to the earlier of the declaration or payment of such dividend or distribution by an amount equal to 50% of the value of the dividend or distribution declared or paid, as the case may be, with respect to one share of Class A Common Stock prior to such exercise price being decreased or otherwise adjusted in accordance with Section 4.2(b) of the Plan at the time of such extraordinary dividend or distribution; provided, that the total amount of all increases in the Unit Exercise Price made pursuant to this Section 2(b) may not exceed $500. Notwithstanding the foregoing, if the extraordinary dividend or distribution is declared or paid, as the case may be, following the sale (in a single transaction or a series of related transactions) of (i) at least 95% of the assets of the Company and its Subsidiaries, taken as a whole (determined by fair market value), and (ii) all business lines of the Company and its Subsidiaries, the Unit Exercise Price shall not be increased pursuant to this Section 2(b).    
(c)    Notwithstanding any other provisions in the Plan or this Agreement, the Committee may, in its sole discretion, declare that, during any periods determined by the Committee (a “Restricted Exercise Period”), the Unit Exercise Price will be $1,000, subject to adjustment as provided in Section 4.2 of the Plan; provided, no Restricted Exercise Period may end on or after the business day immediately prior to the Expiration Date.  In the event of the Participant’s Termination during a Restricted Exercise Period by reason of death, Disability, involuntary termination without Cause, or by the Participant for Good Reason, the Participant may exercise that portion of the Option that is vested and exercisable on the later of (i) the expiration of the applicable post-Termination exercise period (as provided in Section 9.2 of the Plan), and (ii) the day immediately following the termination of such Restricted Exercise Period.
3.    Vesting.  The Options are fully vested as of the date of this Agreement.
4.    Exercise.  
(a)    Exercise Requirements.  To the extent that the Option has become vested and exercisable with respect to a number of shares of Common Stock, the Option may thereafter be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration of the Option in accordance with the Plan, provided that the Participant must exercise the Option with respect to an equal number of shares of Class A Common Stock and Class B Common Stock subject to the Option concurrently.  Notwithstanding the foregoing, the Participant may not exercise the Option unless the offering of shares of Common Stock issuable upon such exercise (i) is then registered under the Securities Act, or, if such offering is not then so registered, the Company has determined that such offering is exempt from the registration requirements of the Securities Act and (ii) complies with all other applicable laws and regulations; provided that, if the Option cannot be exercised by reason of this Section 4(a), 

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Katz Amended & Restated Time-Vested Option

then, to the extent the circumstances preventing the exercise of the Option can reasonably be remedied, the Company shall use commercially reasonable efforts to remedy such circumstances, which method of remediation shall be determined by the Company in its sole discretion.
(b)    Post-Termination Exercise.  Following Participant’s Termination of Employment (as defined in the Plan but without giving effect to the second sentence of the definition thereof for all purposes hereunder), subject to Section 5 below, any then outstanding portion of the Option shall remain outstanding and shall be exercisable until the later of (A) three years from the Retirement Date (as defined in the Retirement Agreement and General Release of Claims between the Participant and The Neiman Group, LLC dated January 4, 2018) and (B) 180 days following the date of Termination of Directorship.  If prior to the expiration of the periods set forth in clauses (A) and (B) above, as applicable, no Initial Public Offering or Acquisition Event in which stockholders are entitled to receive all cash or marketable securities has occurred, the Participant may exercise such vested portion of the Option by means of a Cashless Exercise.  “Cashless Exercise” means an election by the Participant to exercise the vested portion of the Option by having the Company withhold, from fully vested Units otherwise issuable to Participant upon such exercise, a number of whole Units having a Fair Market Value, as of the date of exercise, equal to (A) an amount equal to the applicable aggregate Unit Exercise Price relating to the vested portion of the Option, or (B) an amount necessary to satisfy any required federal, state, local or other non-U.S. withholding obligations using the minimum statutory withholding rates for federal, state, local or non-U.S. tax purposes, including payroll taxes, in all cases under clause (A) or (B), to the extent not prohibited under any debt or financing agreements of the Company or any of its subsidiaries (“Company Agreements”).
(c)    Contingent Exercise.  In connection with a Drag-Along Sale, a Tag-Along Sale or a Piggyback Registration (as such terms are defined in the Stockholders Agreement) (in each case a “Sale”), the Company shall deliver a notice informing the Participant of such Sale (a “Sale Notice”) prior to the date of consummation of the Sale.  During the period from the date on which the Sale Notice is delivered to the date specified in the Sale Notice, the Participant shall have the right to exercise any then vested Options in accordance with the Plan, contingent upon and subject to the consummation of the Sale, and, if the Sale does not take place within a specified period after delivery of the Sale Notice for any reason whatsoever, the exercise pursuant thereto shall be null and void.
5.    Option Term.  The term of the Option shall be until the tenth anniversary of the Grant Date, after which time it shall expire (the “Expiration Date”).  Notwithstanding anything herein to the contrary, upon the Expiration Date, the Option (whether vested or not) shall be immediately forfeited, canceled and terminated for no consideration and no longer shall be exercisable.  The Option is subject to termination prior to the Expiration Date to the extent provided in this Agreement.
6.    Detrimental Activity.  The provisions in the Plan regarding Detrimental Activity shall apply to the Option; provided, that notwithstanding anything contained in Section 

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Katz Amended & Restated Time-Vested Option

6.3(c)(i) of the Plan to the contrary, such provision shall apply only if the Detrimental Activity occurs during the Participant’s employment or service or the two year period following the date of Termination.  The restrictions regarding Detrimental Activity are necessary for the protection of the business and goodwill of the Company and are considered by the Participant to be reasonable for such purposes.
7.    Termination and Change in Control.  Except as expressly provided herein, the provisions in the Plan regarding Termination and Change in Control shall apply to the Option.
8.    Restriction on Transfer of Option.  Unless otherwise determined by the Committee in accordance with the Plan, (a) no part of the Option shall be Transferable other than by will or by the laws of descent and distribution and (b) during the lifetime of the Participant, the Option may be exercised only by the Participant or the Participant’s guardian or legal representative.  Any attempt to Transfer the Option other than in accordance with the Plan shall be void.
9.    Company’s Right to Repurchase; Other Restrictions.
(a)    Company’s Right to Repurchase.  In the event of the Participant’s Termination for any reason, the Company shall have the right (the “Repurchase Right”), but not the obligation, to repurchase (or to cause one or more of its designees to repurchase) from the Participant (or her transferee) (1) any or all of the shares of Common Stock acquired upon the exercise of the Option and still held at the time of such repurchase by the Participant (or her transferee) or (2) any vested but unexercised portion of the Option, at the price determined in the manner set forth below (the “Repurchase Price”), during each period set forth below (each, a “Repurchase Period”) and to the extent set forth below:
(i)    Termination for Cause and Detrimental Activity.  In the event of Termination by the Company for Cause or the discovery that the Participant engaged in Detrimental Activity during the period of employment or service or the two-year period following Termination, the Company may exercise the Repurchase Right with respect to all Units previously acquired pursuant to the exercise of the Option.  The Repurchase Period under this Section 9(a)(i) shall be 180 days from the date of Termination (or, if later, 180 days from the date of discovery by the Company that the Participant engaged in Detrimental Activity).  The Repurchase Price under this Section 9(a)(i) shall be, with respect to each Unit, the lesser of (A) the Unit Exercise Price and (B) the Fair Market Value of a Unit on the date of Termination.
(ii)    Other Termination.  In the event of Termination for any reason other than (x) Termination by the Company for Cause or (y) the discovery by the Company that the Participant engaged in Detrimental Activity during the period of employment or service or the two-year period following Termination:
(A)    The Company may exercise the Repurchase Right with respect to all Units acquired pursuant to the exercise of the Option.  The Repurchase 

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Katz Amended & Restated Time-Vested Option

Period under this Section 9(a)(ii)(A) shall be the later of (i) 180 days from the date of Termination and (ii) if the Participant exercises any Option prior to or following Termination, 30 days from the date of such exercise.  The Repurchase Price under this Section 9(a)(ii)(A) shall be, with respect to each Unit, the Fair Market Value of a Unit on the date the repurchase is exercised.
(B)    The Company may exercise the Repurchase Right with respect to the vested but unexercised portion of the Option.  The Repurchase Period under this Section 9(a)(ii)(B) shall be 180 days from the date of Termination but not prior to the third anniversary of the Retirement Date.  The Repurchase Price under this Section 9(a)(ii)(B) shall be the product of (1) the excess (if any) of the Fair Market Value of a Unit on the date the repurchase is exercised over the Unit Exercise Price multiplied by (2) the number of Units covered by the Option being repurchased.  For the avoidance of doubt, upon such repurchase such Option shall no longer be exercisable for any Units or shares of Common Stock.
(iii)    Method of Repurchase. To exercise any Repurchase Right, the Company (or one or more of its designees) shall deliver a written notice to the Participant (or her transferee) setting forth the securities to be repurchased and the applicable Repurchase Price thereof, and the date on which such repurchase is to be consummated, which date shall be not less than 15 days or more than 30 days after the date of such notice.  On the date of consummation of the repurchase, the Company (or its designee) will pay the Participant (or her transferee) the applicable Repurchase Price in cash or, in the Company’s discretion and to the extent not prohibited by law, by cancellation of undisputed indebtedness of the Participant to the Company.  The Company may exercise its Repurchase Rights upon one or more occasions at any time during the Repurchase Periods set forth above.
(iv)    Extension of Repurchase Period. Notwithstanding the foregoing and Section 13.1(d) of the Plan, the Repurchase Period and the date on which any repurchase is to be consummated only may be extended by the Company at any time when repurchase by the Company (or its designee) (A) is prohibited pursuant to applicable law or (B) is prohibited under any Company Agreement.
(v)    Effect of Registration. Notwithstanding the foregoing, the Company shall cease to have rights of repurchase pursuant to this Section 9(a) on and after a Registration Date.
(b)    Placing Shares in Escrow. Prior to an Initial Public Offering, to ensure that the shares of Common Stock issuable upon exercise of the Option are not transferred in contravention of the terms of the Plan and this Agreement, and to ensure compliance with other provisions of the Plan and this Agreement, the Company may deposit any certificates evidencing such shares with an escrow agent designated by the Company to be held on terms consistent with the Plan, this Agreement and the Stockholders Agreement.

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Katz Amended & Restated Time-Vested Option

10.    Securities Representations.  Prior to registration of the offering of the Common Stock subject to the Option pursuant to the Securities Act and all other applicable securities laws, upon each exercise thereof, the Participant shall be deemed to make the representations, warranties and covenants set forth below, and any issuances of Common Stock by the Company shall be made in reliance upon the express representations and warranties of the Participant.  The Company may also condition any such exercise on the Participant making any other representations, warranties and covenants, requested by the Company for compliance with applicable laws. The Company is relying on the Participant’s representations, warranties and covenants set forth in this Section 10.
(a)    The Participant is acquiring and will hold the Units for investment for her account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or other applicable securities laws.
(b)    The Participant has been advised that offerings of the Units or shares of Common Stock have not been registered under the Securities Act or other applicable securities laws, and that the Units must be held indefinitely, unless the resales thereof are subsequently registered under the applicable securities laws or the Participant obtains an opinion of counsel (in the form and substance satisfactory to the Company and its counsel) that registration is not required.  The Company is under no obligation to register offerings of the Units or shares of Common Stock.
(c)    The Participant is an “Accredited Investor” as such term is defined under Rule 501(a) of Regulation D promulgated under the Securities Act.  The Participant has such knowledge and experience in financial and business matters that the Participant is capable of evaluating the merits and risks of investment in the Company and of making an informed investment decision.  The Participant, or the Participant’s professional advisor, has the capacity to protect the Participant’s concerns in connection with the investment in the shares of Common Stock, and the Participant is able to bear the economic risk, including the complete loss, of an investment in the shares of Common Stock.  
(d)    The Participant will not sell, transfer or otherwise dispose of the Units or shares of Common Stock in violation of the Plan, this Agreement, the Securities Act (or the rules and regulations promulgated thereunder) or any other applicable laws.  
(e)    The Participant has been furnished with, and has had access to, such information as she considers necessary or appropriate for deciding whether to exercise the Option, and the Participant has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions hereof.
(f)    The Participant is aware that any investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss.  The Participant is able, without impairing her financial condition, to hold the Units for an indefinite period and to suffer a complete loss of her investment.

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Katz Amended & Restated Time-Vested Option

11.    No Rights as Stockholder.  The Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by the Option unless and until the Participant has become the holder of record of such shares, and no adjustments shall be made for dividends (whether in cash, in kind or other property), distributions or other rights in respect of any such shares, except as otherwise specifically provided for in the Plan.
12.    Provisions of Plan Control.  This Agreement is subject to all the terms, conditions and provisions of the Plan, including the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time.  The Plan is incorporated herein by reference.  
13.    Notices.  All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party to which the notice, demand or request is being made:
(a)    unless otherwise specified by the Company in a notice delivered by the Company in accordance with this Section 13, any notice required to be delivered to the Company shall be properly delivered if delivered to:
Neiman Marcus Group, Inc. 
c/o Ares Management LLC 
2000 Avenue of the Stars, 12th Floor 
Los Angeles, CA 90067 
Attention:    Dennis Gies 
Telephone:     (310) 201-4100 
Facsimile:    (310) 201-4170
Neiman Marcus Group, Inc.
1618 Main Street
Dallas, TX 75201
Attention: General Counsel
Telephone: (214) 743-7610
Facsimile: (214) 743-7611
with a copy (which shall not constitute notice) to: 
 
Proskauer Rose LLP 
2049 Century Park East, Suite 3200 
Los Angeles, CA 90067 
Attention:    Jonathan Benloulou, Esq. 
Telephone:    (310) 284-5698 
Facsimile:    (310) 557-2193
(b)    if to the Participant, to the address on file with the Employer.

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Katz Amended & Restated Time-Vested Option

Any notice, demand or request, if made in accordance with this Section 13 shall be deemed to have been duly given:  (i) when delivered in person; (ii) three days after being sent by United States mail; or (iii) on the first business day following the date of deposit if delivered by a nationally recognized overnight delivery service.
14.    No Right to Directorship, Consultancy or Employment.  This Agreement is not an agreement of directorship, consultancy or employment.  None of this Agreement, the Plan or the grant of the Option hereunder shall (a) guarantee that the Company or any other person or entity will employ or retain the services of the Participant for any specific time period or (b) modify or limit in any respect the Company’s or any other person’s or entity’s right to terminate or modify the Participant’s employment, services or compensation.
15.    Stockholders Agreement.  As a condition to the receipt of shares of Common Stock when the Option is exercised, the Participant shall execute and deliver a Joinder Agreement or such other documentation as required by the Committee.  The Participant acknowledges receipt of a copy of the Stockholders Agreement as in effect on the date hereof.
16.    Lock-Up Period. The Option shall be subject to the lock-up provisions of Section 14.18 of the Plan except that any Lock-Up Period to which the Participant may be subject in connection with the Option shall not be longer or more restrictive than the lock-up period that applies to Ares or CPPIB.
17.    Dispute Resolution.  All controversies and claims arising out of or relating to this Agreement, or the breach hereof, shall be settled by the dispute resolution provisions in any employment agreement, or similar agreement, between the Company and the Participant or, if none, the Employer’s mandatory dispute resolution procedures as may be in effect from time to time with respect to matters arising out of or relating to Participant’s employment with the Employer.
18.    Severability of Provisions.  If any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Agreement shall be construed and enforced as if such provisions had not been included.
19.    Governing Law.  All matters arising out of or relating to this Agreement and the transactions contemplated hereby, including its validity, interpretation, construction, performance and enforcement, shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to its principles of conflict of laws that would require the application of the laws of another jurisdiction.
20.    Section 409A.  The Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent; provided, that the Company does not guarantee to the Participant any particular tax treatment of the Option.  The Company shall not be liable to the Participant for any additional tax, interest or penalties that may be imposed on the Participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.  For 

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Katz Amended & Restated Time-Vested Option

purposes of determining the Fair Market Value of the shares of Common Stock underlying the Options, any appraisal of a nationally recognized independent valuation firm shall be determined in a manner generally consistent with prior valuations relating to Stock Options with respect to minority discounts and discounts for lack of marketability or liquidity, to the extent permitted by the applicable requirements of Section 409A of the Code.  
21.    Interpretation.  Wherever any words are used in this Agreement in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply.  As used herein, (i) “or” shall mean “and/or” and (ii) “including” or “include” shall mean “including, without limitation.”
22.    No Strict Construction.  This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
23.    Other Shares.      Notwithstanding anything in this Agreement or the Plan to the contrary, none of the shares of Common Stock owned from time to time by a Participant that were not acquired in connection with the grant of an Award to such Participant shall be subject to any of the terms, conditions or provisions of this Agreement or the Plan.
24.    Confidentiality.  The Participant hereby agrees to hold all confidential and proprietary information of the Company and its Affiliates received in connection with the grant of the Option, including any plan summaries or risk factors, in the strictest confidence. The Participant shall not, directly or indirectly, disclose or divulge any such confidential or proprietary information to any Person other than the Participant’s legal counsel and financial advisors, or an officer, director or employee of, or legal counsel for, the Company or its Affiliates, to the extent necessary for the proper performance of his or her responsibilities, unless authorized to do so by the Company or compelled to do so by law or valid legal process; provided that nothing in this Agreement shall prohibit the Participant from reporting or disclosing information under the terms of the Company’s Reporting Suspected Violations of Law Policy or such similar policy as the Company may have in effect from time to time.
[Remainder of Page Left Intentionally Blank]

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Katz Amended & Restated Time-Vested Option

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
NEIMAN MARCUS GROUP, INC.
By:     
Name:   
Title:    

 
Karen Katz

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Katz Amended & Restated Time-Vested Option

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