Document:

Exhibit 10.25

 

FORM OF

AMENDED AND RESTATED

STOCK OPTION GRANT AGREEMENT

(Non-Qualified Stock Option)

 

This Amended and Restated Stock Option Grant Agreement (the “Agreement”) is made effective as of this (Date) between Neiman Marcus, Inc. (the “Company”) and (Name) (the “Participant”).

 

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

 

WHEREAS, the Plan provides for the grant to Participants in the Plan of Non-Qualified Stock Options to purchase shares of Common Stock of the Company;

 

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

 

WHEREAS, the Stock Option Grant Agreement with respect to the Original Option was amended effective (Date);

 

WHEREAS, the Fair Market Value of the shares of Common Stock subject to the Original Option is less than the Exercise Price of the Original Option immediately prior to the effectiveness of this Agreement;

 

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

 

WHEREAS, the Company has approved the modification of the Expiration Date of the Original Option with respect to both the Performance Option and the Fair Value Option; and

 

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

 

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

 

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

 

2.             Grant of Options.  Pursuant to, and subject to, the terms and conditions set forth herein and in the Plan, the Company hereby restates the prior 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 Participant a new Performance Option with respect to              shares of Common Stock of the

 

 

Company, such that the total number of shares of Common Stock of the Company granted to the Participant hereunder as a Non-Qualified Stock Option is            shares (the “Option”).

 

3.             Grant Date.  The Grant Date of the Performance Option hereby granted is (Date).  The Grant Date of the Fair Value Option shall remain (Date).

 

4.             Exercise Price.

 

(a)           The Exercise Price of each share of Common Stock underlying the portion of the Option that is a Fair Value Option is $            .

 

(b)           The Exercise Price of each share of Common Stock underlying the portion of the Option that is a Performance Option shall be an increasing amount starting with $1,000 on the Grant Date and increasing at a 10.00% compound rate on each anniversary of the Grant Date of such Performance Option until the earlier to occur of (i) the exercise of the Option, (ii) the fourth anniversary of the Grant Date of such Performance Option, or (iii) the occurrence of a Change of Control of the Company; provided, however, that the Exercise Price shall cease to increase as provided herein on a portion of the outstanding Performance Option following the sale by the Majority Stockholder of shares of Common Stock as follows:  the pro rata portion of the Performance Option held by a Participant with respect to which the Exercise Price shall cease to increase shall be the portion of the Performance Option that bears the same ratio to the total Performance Option held by a Participant as the total number of shares of Common Stock sold by the Majority Stockholder bears to the total number of shares of Common Stock owned by the Majority Stockholder immediately prior to such sale.

 

5.             Vesting Date.

 

(a)           The Fair Value Option shall become exercisable as follows:  20% of the shares underlying such Fair Value Option shall vest and become exercisable on the first anniversary of the Grant Date of such Fair Value Option and the remaining portion of the Fair Value Option shall vest and become exercisable in forty-eight (48) equal monthly installments over the forty-eight (48) months following the first anniversary of the Grant Date of such Fair Value Option, beginning on the one-month anniversary of such first anniversary, until 100% of the Fair Value Option is fully vested and exercisable thereafter, provided that the Participant is still employed by the Company on each such anniversary.

 

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

 

6.             Expiration Date.  With respect to the Option or any portion thereof which has not become exercisable, the Option shall expire on the date the Participant’s Employment is terminated for any reason, and with respect to the Option or any portion thereof which has become exercisable, the Option shall expire (i) 90 days after the Participant’s termination of Employment for reasons other than Retirement, Cause, death or Disability; (ii) one year after termination of the Participant’s Employment by reason of Retirement, death or Disability; (iii) as of the commencement of business on

 

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the date the Participant’s Employment is, or is deemed to have been, terminated for Cause; or (iv) on (Date), if the Option has not previously expired for any of the reasons specified above in this Section 6.

 

7.             Certain Rights on a Change of Control.  If (a) a Change of Control occurs, (b) the surviving corporation following such Change of Control is an entity for whose stock there is no Public Market, (c) the surviving corporation assumes the Participant’s outstanding Options in connection with such Change of Control and such Options convert into options to purchase common stock or other equity interests of the surviving corporation (the “Assumed Options”) and (d) the Participant thereafter experiences a Qualifying Termination at any time prior to the occurrence of an Initial Public Offering of the surviving corporation, the Participant will be entitled to sell to the Company or such surviving corporation, within ninety (90) days of such Qualifying Termination, all or any portion of the Assumed Options that the Participant had not exercised at the time of such sale and elects to sell to the Company or such surviving corporation (the “Eligible Assumed Options”), and the Company or such surviving corporation will be obligated to purchase from the Participant, in full satisfaction of the Participant’s rights with respect to such Eligible Assumed Options, all such Eligible Assumed Options, for a price equal to the aggregate 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 interests underlying such Eligible Assumed Options, minus the aggregate exercise price of such Eligible Assumed Options that such Participant would have been required to pay in order to exercise such Eligible Assumed Options.

 

8.             Construction of Agreement.  Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this section, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. No waiver of any provision or violation of this Agreement by the Company shall be implied by the Company’s forbearance or 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 extent possible 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 any party under this Agreement, shall impair any such right, power or remedy of such party nor shall it be construed to be a waiver of, or acquiescence in, any such breach or default, or any similar breach or default thereafter occurring nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party or any provisions or conditions of this Agreement, shall be in writing and shall be effective only to the extent specifically set forth in such writing.

 

10.           Limitation on Transfer.  The Option shall be exercisable only by the Participant or the Participant’s Permitted Transferee(s), as determined in accordance with the terms of the Plan (including without limitation the requirement that the Participant obtain the prior written approval by the Board of any proposed Transfer to a Permitted Transferee during the lifetime of the Participant). Each Permitted Transferee shall be subject to all the restrictions, obligations, and responsibilities as apply to the Participant under the Plan and this Agreement and shall be entitled to all the rights of the Participant under the Plan, provided that in respect of any Permitted Transferee which is a trust or

 

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custodianship, the Option shall become exercisable and/or expire based on the employment and termination of employment of the Participant. All shares of Common Stock obtained pursuant to the Option granted 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 documents referred to herein or delivered pursuant hereto which form a part hereof contain 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 than those expressly set forth herein and in the Plan. This Agreement, including without limitation the Plan, supersedes all prior agreements and understandings between the parties with respect to its subject matter.

 

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

 

13.           Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to the provisions governing conflict of laws.

 

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

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer and said Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement, the Plan and the Management Stockholders’ Agreement as of the day and year first written above.

 

	
 
    	
 
    	
NEIMAN   MARCUS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Nelson   A. Bangs, Senior Vice President and
    
	
 
    	
 
    	
General   Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
PARTICIPANT
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

4Exhibit 10.32

 

	
 
    	
June 7,   2010
    

 

Mrs. Marita O’Dea Glodt

 

This letter will acknowledge, with thanks, your willingness to defer your scheduled date of retirement from August 1, 2010 (the “Previous Retirement Date”) until June 30, 2011 (the “New Retirement Date”).  For purposes of this letter, the period from your Previous Retirement Date through the New Retirement Date shall be referred to as the “Extension Period.”

 

If you defer your retirement and remain actively employed in your current position as Chief Human Resource Officer of The Neiman Marcus Group, Inc. and Neiman Marcus, Inc. (collectively, the “Company”) and performing your normal duties and responsibilities until the New Retirement Date, the Company is pleased to offer you the following incentives:

 

(1)           The Company will pay you a retention bonus (the “Retention Bonus”) in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00), less applicable withholdings.  The Retention Bonus shall be paid to you within ten (10) days of the New Retirement Date if you satisfy the criteria stated above.  You will not be required to have retired in order to receive the payment.  You shall be responsible for any income or other taxes that may be imposed on the Retention Bonus if and when it is paid.

 

(2)           The Company agrees to amend your current Stock Option Grant Agreement, as well as any new stock option agreements that may be granted to you prior to the New Retirement Date, to provide for the following: 

 

a.     an extension of the period after your “Retirement” or other termination of Employment other than for “Cause,” as such terms are defined in the Neiman Marcus Inc. Management Equity Incentive Plan or successor plan (the “MEIP”), during which you are permitted to exercise the stock option grants currently issued (or to be issued) to you for an additional two (2) years beyond the term otherwise provided in the stock option grant agreement with respect to such Retirement or termination, but not beyond the latest date upon which the option would have expired by its original terms under any circumstances.

 

b.     your ability (or your Permitted Transferee’s ability, if applicable) to employ “net physical settlement” as described in the MEIP to exercise the stock option grants currently issued (or to be issued) to you through the 2-year extension period described in paragraph 2a above.

 

The parties agree that the amendments described in paragraphs 2a and 2b above shall be executed no more than ten (10) days after your actual date of retirement, provided that it occurs after the Extension Period has expired.

 

In addition, if you defer your retirement and remain actively employed in your current position as Chief Human Resource Officer of the Company and performing your normal duties and responsibilities but die during the Extension Period while so employed prior to the New Retirement Date, the Company will provide the following incentive:

 

A pro rata portion of the Retention Bonus will be paid to your estate within forty-five (45) days of the date of your death with the amount to be paid to be equal to the Retention Bonus multiplied by a fraction, the numerator of which is the number of days in the Extension Period ending with the date of your death and the denominator of which is 327.  Your estate shall be responsible for any income or other taxes that may be imposed on the Retention Bonus if and when it is paid.

 

 

If your employment with the Company terminates for any reason other than your death prior to the New Retirement Date, the Company will not be obligated to pay any amount of the Retention Bonus or make any of the amendments to your stock options described herein.

 

The terms of your employment during the Extension Period shall remain unchanged, including but not limited to your base salary, your Confidentiality, Non-Competition and Termination Benefits Agreement and your eligibility for the following:  annual performance reviews, merit increases, annual incentive bonuses, equity awards, Company benefits and vacation.  In addition, and as you know, your employment with the Company during the Extension Period shall continue to be on an “at will” basis.  This means that you will not have a contract or agreement limiting in any way the grounds for your termination.  This also means that you will be free to resign at any time for any reason and, similarly, the Company will be free to terminate your employment at any time for any reason.  Furthermore, you will continue to be required to comply with all Company policies and will remain subject to disciplinary action for violations of such policies, up to and including termination of employment.

 

Notwithstanding the above, the Company realizes that you will be in your Dallas office less often during the Extension Period, due to your desire to spend more time at your home in Houston, Texas, and thus acknowledges that you will be expected to be in its Dallas offices no more than three days of every week during the Extension Period, subject to any vacation or other authorized absences you elect to take, or Company business travel to other locations.

 

Please review this letter, sign it with your original signature in the space provided below and return it to me.

 

We are delighted that you have decided to defer your retirement and remain with the Company. I will look forward to your continuing and significant contributions on the Company’s behalf.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
/s/   Burton M. Tansky
    	
 
    
	
President &   CEO
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AGREED   TO AND ACCEPTED this 8th day of June, 2010.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/  Marita   O’Dea Glodt

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