Document:

EXHIBIT
10.9

 

THE NEIMAN MARCUS GROUP, INC.

 

DEFERRED
COMPENSATON PLAN

FOR NON-EMPLOYEE
DIRECTORS

 

 

Effective
January 17, 1997

As Amended and
Restated June 8, 1998

 

 

THE NEIMAN MARCUS
GROUP, INC.

DEFERRED
COMPENSATION PLAN

FOR NON-EMPLOYEE
DIRECTORS

 

Table of Contents

 

	
  ARTICLE I

  	
   

  
	
  Introduction

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  Definitions

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  Participation

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  Elective
  Deferrals

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  Non-Elective
  Deferrals

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  Administration

  	
   

  
	
  ARTICLE 7

  	
   

  
	
  Amendment and Termination

  	
   

  
	
  ARTICLE 8

  	
   

  
	
  Miscellaneous

  	
   

  

 

ii

 

THE NEIMAN MARCUS GROUP, INC.

 

DEFERRED COMPENSATION PLAN

 

FOR NON-EMPLOYEE DIRECTORS

 

ARTICLE I

 

Introduction

 

1.1.  Adoption, amendment and restatement.  The Company adopted the Plan effective
January 17, 1997 to provide a means by which members of the Board who are
not employees of the Company may elect to defer receipt of designated amounts
of Compensation earned in that capacity. 
The Plan has been amended and restated effective June 8, 1998, to
provide for non-elective deferred compensation as set forth in Article 5.

 

1.2.  Status of Plan.  The Plan is intended neither to be a qualified plan within the
meaning of 401(a) of the Internal Revenue Code of 1986, as amended (the
“Code”), nor to constitute a “pension benefit plan” or a “welfare benefit plan”
subject to the requirements of the Employee Retirement Income Security Act of
1974. The Plan shall be administered and interpreted to the extent possible in
a manner consistent with that intent.

 

ARTICLE 2

 

Definitions

 

Whenever used herein, the
following terms have the meanings set forth below, unless a different meaning
is clearly required by the context:

 

2.1.                              “Account”
means, for each Participant, the account maintained for his or her benefit
under Section 4.2 or 5.1.

 

2.2.                              “Board”
means the Board of Directors of the Company.

 

2.3.                              “Committee”
means the Compensation Committee of the Board.

 

2.4.                              “Common
Stock” means the Common Stock, $.01 par value, of the Company.

 

2.5.                              “Company”
means The Neiman Marcus Group, Inc., a Delaware corporation, and any successor
to all or substantially all of the Company’s assets or business which assumes
the obligations of the Company.

 

2.6.                              “Compensation”
means the amount of retainer payable for service on the Board, plus any fees
payable for attendance at or participation in a meeting, for service as Chair
or Vice Chair of the Board, or for service on or as a chair of any committee of
the Board, determined without reduction for any elective deferrals under
Article 4.  Notwithstanding the
foregoing, Compensation does not include any Common Stock equivalent units
which may be credited pursuant to Section 5.1, which amounts are not
subject to the elective deferral provisions of Section 4.1.

 

1

 

2.7.                              “Effective
Date” means January 17, 1997.

 

2.8.                              “Market
Price” means, as of any date, the mean of the highest and lowest sales prices
of the Common Stock on such date (or, if no trading shall have occurred on such
date, on the next previous date on which trading shall have occurred), as
reported on the New York Stock Exchange Composite Tape.

 

2.9.                              “Non-Employee
Director” means a member of the Board who is not an officer or employee of the
Company or Harcourt General, Inc. or any of the subsidiaries of either the
Company or Harcourt General, Inc.

 

2.10.                        “Participant”
means any Non-Employee Director who participates in the Plan as set forth in
Article 3.

 

2.11.                        “Plan”
means The Neiman Marcus Group, Inc. Deferred Compensation Plan for Non-Employee
Directors as set forth herein and all subsequent amendments hereto.

 

2.12.                        “Plan
Year” means the calendar year.

 

2.13.                        “Unforeseen
Emergency” means a severe financial hardship to a Participant resulting from
illness or accident of the Participant or of a dependent (as defined in 152(a)
of the Code) of the Participant, loss of property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant.

 

ARTICLE 3

 

Participation

 

3.1.                              Commencement
of participation. Each Non-Employee Director shall become a Participant in this
Plan upon the later of (a) the Effective Date or (b) the day on which he or she
becomes a Non-Employee Director.

 

3.2.                              Continuation
of participation. An individual who has become a Participant in the Plan shall
continue to be a Participant so long as he or she remains a Non-Employee
Director, and so long thereafter as any amount is payable to him or her in
accordance with Article 4 or 5.

 

2

 

ARTICLE 4

 

Elective Deferrals

 

4.1.                              Elective
deferrals.  An individual who is a
Non-Employee Director on January 17, 1997 may elect, by filing a written
election with the Committee prior to February 14, 1997, to defer all or a
specified portion of his or her Compensation for services to be performed on or
after such deferral election.  An
individual who is a Non-Employee Director on the first day of any fiscal year
of the Company after the Effective Date may elect to defer all or a specified
portion of his or her Compensation for services to be performed on or after
such date by filing a written election with the Committee before such
date.  An individual who has been
nominated or elected to serve as a Non-Employee Director, and who was not a
Non-Employee Director immediately prior to such nomination or election, may
elect before or within thirty (30) days after becoming a Non-Employee Director
to defer all or a specified portion of his or her Compensation for services to
be performed after such deferral election.

 

Each deferral election
under this Section 4.1 shall be made on a form approved or prescribed by
the Committee and shall also specify the time and form of distribution of the
amounts deferred and the investment equivalent alternative described in
Section 4.3 to be applied to such amounts.

 

An election to defer
Compensation and to specify the time and form of distribution may be revoked or
modified, effective for amounts earned on and after the first day of any fiscal
year of the Company, by an election filed before that date, but may not
otherwise be revoked or modified except as provided in Section 8.8 in the
event of an Unforeseen Emergency.

 

4.2.                              Accounts.  The Committee shall maintain a bookkeeping
account (the “Account”) for each Participant reflecting elective deferrals made
for the Participant’s benefit under Section 4.1, and the value of such
elective deferrals determined in accordance with Section 4.3, together
with any adjustments hereunder. 
Elective deferrals shall be credited to the Account as of the day such
amounts become payable to the Participant. 
As of each February 15th, the Committee shall provide the Participant
with a statement of his or her Account as of the end of the preceding Plan
Year.

 

4.3.                              Investment
equivalent alternatives.  When a
Participant elects to make elective deferrals in accordance with
Section 4.1, he or she shall also elect whether the value of such elective
deferrals shall be determined under the cash-based option or the stock-based
option described below.

 

(a)                                  Cash-based
option:

 

Under the cash-based
option, elective deferrals shall accrue interest, to be compounded at the end
of each fiscal quarter of the Company, at a rate equal to the average of the
top rates paid by major New York banks on primary new issues of three-month
negotiable certificates of deposit (usually on amounts of $1,000,000 or more)
as quoted in the Wall Street Journal on the last business day of the fiscal
quarter.

 

3

 

(b)                                 Stock-based
option:

 

Under the stock-based
option, elective deferrals will be converted hypothetically into Common Stock
equivalent units. The number of such units shall be determined by dividing the
amount of elective deferrals in each fiscal quarter by the average of the
Market Prices of the Common Stock during the last five (5) trading days of such
fiscal quarter.  Units will be
calculated to the nearest thousandth. 
On each dividend payment date, if any, for the Common Stock dividend
equivalents in the form of additional units representing Common Stock will be
credited to the Participant’s Account equal to (i) the per-share cash dividend
divided by the Market Price of Common Stock on the dividend payment date,
multiplied by (ii) the number of such units reflected in such Account on the
day before the dividend payment date. 
At the end of the period of deferral elected by the Participant, the
Common Stock equivalent units will be valued for payment by multiplying the
applicable number of units by the average of the Market Prices of Common Stock
during the last ten (10) trading days before the date on which the value of the
elective deferrals is to be paid or begin to be paid.  If the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities through merger, consolidation, sale of all or substantially all the
property of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Common Stock or other securities, appropriate
adjustments will be made by the Company in the number of Common Stock
equivalent units credited to a Participant’s Account.

 

4.4.                              Time
of payment. When a Participant elects to make elective deferrals in accordance
with Section 4.1, the Participant shall also elect whether the value of
the elective deferrals shall be paid, or begin to be paid, (a) at a specified
date at least twenty-four months in the future (which date shall be the last
day of a fiscal quarter) or (b) upon termination of his or her service as a
member of the Board.  If alternative (a)
under this Section 4.4 is elected, payment will be made or will commence
on the date specified.  If alternative
(b) under this Section 4.4 is elected, payment will be made or will
commence at the end of the fiscal quarter in which the Participant’s service as
a member of the Board terminates. The foregoing election shall be made on a
form approved or prescribed by the Committee.

 

Payment of a
Participant’s Account shall be made in accordance with the Participant’s
elections under this Section 4.4 and Section 4.5.  Each Participant’s Account shall be reduced
by the amount of any payment made to or on behalf of the Participant (including
interest paid with respect to such payment) as of the date such payment is
made.

 

4

 

4.5.                              Form
of payment.  When a Participant elects
to make elective deferrals in accordance with Section 4.1, the Participant
shall also elect whether the value of such elective deferrals shall be paid in
(a) a lump sum, or (b) a specified number of annual installments (not to exceed
10).  Each installment (other than the
first) shall accrue interest from the date of the first installment to the date
on which such installment is paid, compounded quarterly at a rate equal to the
average of the top rates paid by major New York banks on primary new issues of
three-month negotiable certificates of deposit (usually on amounts of
$1,000,000 or more) as quoted in the Wall Street Journal on the last business
day of the fiscal quarter. The foregoing election shall be made on a form
approved or prescribed by the Committee.

 

4.6.                              Death
prior to payment. In the event that a Participant dies prior to complete
distribution of his or her Account, the balance of his or her Account shall be
paid in a single lump sum to the beneficiary or beneficiaries designated by the
Participant. If no such beneficiary has been designated or if no designated
beneficiary survives the Participant, the balance of such Account shall be paid
to the Participant’s estate. Payment of such amount shall be made within sixty
(60) days from the date of receipt by the office of the Secretary of the Company
of notice of the Participant’s death. 
Such designation or designations of beneficiary must be in writing,
dated and signed by the Participant, and no such designation shall require
Company consent. No beneficiary designation shall be deemed effective unless
the same is on file in the office of the Secretary of the Company prior to the
death of the Participant. The Company may rely in all cases on the genuineness,
accuracy and date of any such beneficiary designation and shall be fully
protected in making payment in accordance therewith. Any beneficiary
designation filed in the office of the Secretary of the Company prior to the
death of the Participant shall be deemed to have revoked all earlier
designations, and no beneficiary designation filed after the date of a
Participant’s death shall be deemed effective.

 

ARTICLE 5

 

Non-Elective Deferrals

 

5.1                                 Crediting
of Common Stock equivalent units.  It is
contemplated that Board compensation after the Effective Date may, in the
Board’s sole discretion, include credits to the Accounts of Participants
consisting of Common Stock equivalent units, and that the value thereof shall
be determined under the stock-based option described in
Section 4.3(b).  For this purpose, for
each Participant who has not elected to defer Compensation pursuant to
Section 4.1, an Account shall be established.  Any amounts so credited shall remain in each Participant’s
Account until termination of his or her service as a member of the Board, and
payment from such Account will be made or will commence at the end of the
fiscal quarter in which the Participant’s service as a member of the Board
terminates.

 

5.2                                 Method
of payment.  At the Participant’s
election, made prior to October 1, 1998, on a form approved or prescribed
by the Committee, the value of any amount so credited shall be paid in a lump
sum or in annual installments (not to exceed 10), and if the latter,
installments (other than the first) shall accrue interest as described in
Section 4.5.  In the event that a
Participant dies prior to complete distribution of any amounts credited to his
or her Account pursuant to Section 5.1, the balance of such amounts shall
be paid in the manner prescribed and to the persons specified in
Section 4.6.

 

5

 

5.3                                 Modification
of form or time of payment.  Each
election under Section 5.2 as to form of payment may be modified,
effective for any amounts credited under Section 5.1 for service on or
after the first day of any fiscal year of the Company, by an election filed
before such date.  Moreover, a majority
of the disinterested members of the Committee may, at their discretion, at the
request or with the consent of a Participant, change the form (or, in the case of
elective deferrals, the time) of payment elected by such Participant with
respect to amounts previously credited to his or her Account pursuant to
Article 4 or this Article 5, provided that (a) the revised form of
payment be one of the forms permitted by Sections 4.5 and 5.2, and (b) no such
change shall be effective unless made at least 24 months prior to the date such
amounts would otherwise have been paid.

 

ARTICLE 6

 

Administration

 

6. 1.                           Plan
administration and interpretation. The Plan shall be administered by the
Committee which may appoint persons to assist in the administration of the
Plan. The Committee shall have complete control and authority to determine the
rights and benefits and all claims, demands and actions arising out of the
provisions of the Plan of any Participant or other person having or claiming to
have any interest under the Plan. The Committee shall have the exclusive power
to interpret the Plan and to decide all matters under the Plan. Such
interpretation and decision shall be final, conclusive and binding on all Participants
and any person claiming under or through any Participant, in the absence of
clear and convincing evidence that the Committee acted arbitrarily and
capriciously. Any individual serving on the Committee who is a Participant will
not vote or act on any matter relating solely to himself or herself. When
making a determination or calculation, the Committee shall be entitled to rely
on information furnished by a Participant or the Company.

 

6.2.                              Powers,
duties, procedures, etc.  The Committee
shall have such powers and duties, may adopt such rules and tables, may act in
accordance with such procedures, may appoint such officers or agents, and may
delegate such powers and duties as it deems necessary or advisable for the
administration of the Plan.

 

6.3.                              Information.
To enable the Committee to perform its functions, the Company shall supply full
and timely information to the Committee on all matters relating to the service
of Participants as members of the Board and such other pertinent facts as the
Committee may require.

 

6

 

ARTICLE 7

 

Amendment and Termination

 

7.1.                              Amendments.  The Board shall have the right to amend the
Plan from time to time, subject to Section 7.3, by an instrument in
writing approved by the Board and executed on the Company’s behalf by a duly
authorized officer.

 

7.2.                              Termination
of Plan. The Plan is strictly a voluntary undertaking on the part of the
Company and shall not be deemed to constitute a contract between the Company
and any Participant or a consideration for, or an inducement or condition of,
the performance of services by any Participant as a member of the Board. The
Board reserves the right to terminate the Plan at any time, subject to
Section 7.3, by an instrument in writing approved by the Board and
executed on the Company’s behalf by a duly authorized officer.  Upon termination of the Plan, no further
benefits shall accrue on behalf of any individual then a Participant, nor shall
any individual not a Participant as of the date of termination be eligible to
become a Participant thereafter.

 

7.3.                              Existing
rights.  No amendment or termination of
the Plan shall reduce:

 

(a)                                  any
benefits payable to (or in respect of) a Participant who has ceased to be a
member of the Board, or

 

(b)                                 any
benefits to which a current Board member would have been entitled, currently or
in the future, in the event his or her service as a Board member had terminated
on the date of such amendment or termination.

 

ARTICLE 8

 

Miscellaneous

 

8.1.                              No
funding.  Nothing in the Plan will be
construed to create a trust or to obligate the Company or any other person to
segregate a fund, purchase an insurance contract, or in any other way currently
to fund the future payment of any benefits hereunder, nor will anything herein
be construed to give any Participant or any other person rights to any specific
assets of the Company or of any other person. The Plan constitutes a mere
promise by the Company to make benefit payments in the future, and is intended
to be unfunded for tax purposes. Any benefits which become payable hereunder
shall be paid from the general assets of the Company, and the rights of any
Participant or of his or her estate or beneficiary shall be those of an
unsecured general creditor.

 

8.2.                              Grantor
trust.  The Company in its sole
discretion may establish a trust (a “grantor trust”) of which it is treated as
the owner under Subpart E of Subchapter J, Chapter 1 of the Code to provide for
the payment of benefits hereunder, subject to the claims of the Company’s
general creditors in the event of insolvency, and subject to such other terms
and conditions as the Company may deem necessary or advisable to ensure that
benefits are not includable, by reason of the trust, in the income of trust
beneficiaries prior to their actual distribution.

 

7

 

8.3.                              Nonassignability.  None of the benefits, payments, proceeds or
claims of any Participant shall be subject to any claim of any creditor and, in
particular, the same shall not be subject to attachment or garnishment or other
legal process by any creditor of the Participant or his or her beneficiary, nor
shall any Participant or beneficiary have any right to alienate, anticipate,
commute, pledge, sell, transfer, encumber or assign any of the benefits or
payments or proceeds which he or she may expect to receive, contingently or
otherwise, under the Plan.

 

8.4.                              Limitation
of Participants’ rights.  Participation
in the Plan shall not give any Participant the right to be retained as a member
of the Board or any right or interest in the Plan other than as herein
provided.

 

8.5.                              Participants
bound.  Any action with respect to the
Plan taken by the Committee, the Board or the Company or any action authorized
by or taken at the direction of the Committee, the Board or the Company shall
be conclusive upon all Participants entitled to benefits under the Plan.

 

8.6.                              Receipt
and release.  Any payment to any
Participant in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Company, the Board
and the Committee under the Plan, and the Committee may require such
Participant, as a condition precedent to such payment, to execute a receipt and
release to such effect.  If any
Participant is determined by the Committee to be incompetent by reason of
physical or mental disability to give a valid receipt and release, the
Committee may cause the payment or payments becoming due to such person to be
made to another person for his or her benefit without responsibility on the
part of the Committee, the Board or the Company to follow the application of
such funds.

 

8.7.                              Notices.  All notices and elections to be delivered
hereunder to the Committee, the Board or the Company shall be delivered to the
attention of the Secretary of the Company.

 

8.8.                              Unforeseen
Emergency.  A Participant who has an
Unforeseen Emergency may, with the consent of a majority of the disinterested
members of the Committee, receive a distribution of that portion of his or her
Account which the Committee determines is necessary to satisfy the emergency
need, including any amounts necessary to pay any federal, state or local income
taxes reasonably anticipated to result from the distribution, but only to the
extent such need is not covered by insurance and cannot reasonably be relieved
by the liquidation of the Participant’s assets (to the extent that such
liquidation would not in itself cause a severe financial hardship) or by
cessation of elective deferrals under the Plan.  A Participant who has an Unforeseen Emergency may also cease or
reduce future deferrals under the Plan with the consent of a majority of the
disinterested members of the Committee. 
A Participant requesting a distribution, or a cessation or reduction of
future deferrals, on account of an Unforeseen Emergency shall apply in writing
in a letter submitted to the Committee and shall provide such information as
the Committee may require.

 

8

 

8.9                                 Governing
law.  The Plan shall be construed,
administered, and governed in all respects under and by the laws of the
Commonwealth of Massachusetts. If any provision shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.

 

8.10.                        Headings
and subheadings.  Headings and
subheadings in the Plan are inserted for convenience only and are not to be
considered in the construction of the provisions hereof.

 

IN WITNESS WHEREOF, The
Neiman Marcus Group, Inc. has caused the Plan to be amended and restated by its
duly authorized officer this 8th day of June, 1998.

 

 

	
   

  	
   

  	
  THE NEIMAN MARCUS
  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric P.
  Geller

  
	
   

  	
   

  	
  Eric
  P. Geller, Senior Vice President,

  
	
   

  	
   

  	
  General
  Counsel and Secretary

  

 

9EXHIBIT 10.10

 

CONFIDENTIALITY, NON-COMPETITION AND TERMINATION BENEFITS AGREEMENT

 

This Confidentiality, Non-Competition and Termination Benefits
Agreement (“Agreement”) is entered into effective as of May 3, 2004 between
James J. Gold (“Executive”) and Bergdorf Goodman, Inc., a New York corporation
(“Bergdorf’) and a wholly-owned subsidiary of The Neiman Marcus Group, Inc., a
Delaware corporation (“NMG”). All capitalized terms used but not defined herein
shall have the meanings assigned to them in Appendix A, which is attached
hereto and incorporated fully herein by reference.

 

WHEREAS, Executive has been promoted to the position of President and
Chief Executive Officer of Bergdorf, and Executive understands and agrees that
his employment in such position shall be on an “at will” basis, and that either
Executive or Bergdorf may terminate Executive’s employment at any time, with or
without notice, and for any reason;

 

WHEREAS, in connection with the restructuring of the compensation and
benefits provided to senior executives of NMG and its Affiliates, including
Executive, the Board of Directors of NMG has determined that stock option and
restricted stock awards should be combined with appropriate post-employment and
other restrictions designed to protect the legitimate business interests of NMG
and its Affiliates, including Bergdorf;

 

WHEREAS, effective as of this date and as a consequence of his
promotion, (i) NMG and Executive l1ave entered into separate stock option and
purchase restricted stock agreements (the “Incentive Agreements”) that set
forth the rights and obligations of NMG and Executive with respect to such
awards, and (ii) NMG has granted to Executive an ownership interest in NMG in
the form of NMG stock; ;’

 

WHEREAS, by virtue of his new position and responsibilities, Executive
has and will have unique access to and knowledge of Bergdorf’s trade secrets
and other confidential and proprietary business information;

 

WHEREAS, Executive’s association with Bergdorf to the exclusion of its
competitors will enhance Bergdorf’s goodwill and Executive’s earning capacity;
and

 

WHEREAS, Bergdorf and Executive mutually desire to protect Bergdorf’s
goodwill created by Executive’s association with Bergdorf and Bergdorf’s trade
secrets and other confidential and proprietary business information, and in
recognition of the possible interruption of Executive’s earnings after the end
of his Bergdorf employment;

 

NOW, THEREFORE, in consideration of the Incentive. Agreements and the
promises and undertakings of the parties set out herein, and intending to be
legally bound, Executive and Bergdorf agree as follows:

 

1. (a) While Executive is employed at-will by Bergdorf, if Bergdorf
terminates Executive’s employment for any reason other than for “Cause,” his
“Total Disability,” or his death, subject to paragraphs l(c) and l(d) below,
Bergdorf shall provide Executive with benefits (“Termination Benefits”)
consisting of:

 

 

(1) an amount equivalent to 1.5 times his then-current annual base
salary, less required withholding, which amount would be paid over an 18-month
period (hereinafter, the “Salary Continuance Period”) in regular, bi-weekly
installments following such termination; and

 

(2) if, at the time of his termination, Executive participates in a
group medical insurance plan offered by Bergdorf and Executive is eligible for
and elects to receive continued coverage under such plan in accordance with the
Consolidated I Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any
successor law, Bergdorf will reimburse Executive during the Salary Continuance
Period or, if shorter, the period of such actual COBRA continuation coverage,
for the total amount of the monthly COBRA medical insurance premiums actually
paid by Executive for such continued medical insurance benefits.

 

For the purposes of determining whether or not Bergdorf has terminated
Executive’s employment under this paragraph l(a), any material, adverse change
in the terms and conditions of his employment, including but not limited to a
relocation of Executive’s place of business 50 miles or more from the current
location, which change causes Executive to resign his employment with Bergdorf,
will be deemed a termination by Bergdorf. 
A transfer of employment between Bergdorf and NMG or any Affiliate of
NMG shall not be considered as a termination of employment for purposes of this
Agreement.

 

(b) Bergdorf shall require any successor or assignee (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all the business and/or assets of Bergdorf, by agreement in
writing in form and substance reasonably satisfactory to Executive, expressly,
absolutely, and unconditionally to assume and agree to ‘perform this Agreement
in the same manner and to the same extent that Bergdorf would be required to
perform it if no such succession or assignment had taken place. If Bergdorf
fails to obtain such agreement by the effective time of any such succession or
assignment, such failure shall be considered a material, adverse change in the
terms and conditions of Executive’s employment and will be deemed a termination
by Bergdorf for purposes of paragraph l(a) of this Agreement if such failure
causes Executive to resign his employment with Bergdorf; provided that the
Termination Benefits to which Executive would be entitled after such
resignation pursuant to paragraph l(a) of this Agreement shall be the sole
remedy of Executive for any failure by Bergdorf to obtain such agreement. As
used in this Agreement, “Bergdorf’ shall include any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all the business and/or assets of Bergdorf that
executes and delivers the agreement provided for in this paragraph 1 (b) or
that otherwise becomes obligated under this Agreement by operation of law.

 

It is the expectation of the parties that any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to an or substantially all the business and/or assets of NMG, if such assets
continue to include a controlling interest in the stock of Bergdorf as of the
time of such succession or assignment, shall by agreement in writing, in form
and substance reasonably satisfactory to Executive, expressly, absolutely, and
unconditionally agree to cause Bergdorf to honor and agree to perform this
Agreement following such succession or assignment. If such agreement has not
been executed and delivered by the effective time of any such succession or
assignment, such failure shall be considered a material, adverse change in the
terms and conditions of Executive’s employment and will be deemed a termination
by Bergdorf for purposes of paragraph l(a) of this Agreement if such failure
causes Executive to resign his employment with Bergdorf; provided that the
Termination Benefits to which Executive would be entitled after such
resignation pursuant to paragraph l(a) of this Agreement shall be the sole
remedy of Executive if no such agreement has been executed and delivered as of the
effective time of such succession or assignment. As used in this Agreement,
“NMG” shall include any successor or assignee (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all the
business and/or assets of NMG that executes and delivers the agreement provided
for in this paragraph or that otherwise becomes obligated under II this
Agreement by operation of law.

 

 

(c) If, in the reasonable judgment of Bergdorf, Executive engages in
any of the Restricted Activities described in paragraph 3 of this Agreement,
Bergdorf s obligation to provide the Termination Benefits shall end as of the
date Bergdorf so notifies Executive in writing.

 

(d) If Executive is arrested or indicted for any felony, other serious
criminal offense, or any violation of federal or state securities laws, or has
any civil enforcement action brought against him by any regulatory agency, for
actions or omissions related to his employment with Bergdorf, or if Bergdorf
reasonably believes in its sole judgment that Executive has committed any act
or omission that would have entitled Bergdorf to terminate his employment for
Cause, whether such act or omission was committed during his employment with
Bergdorf or during the Salary Continuance Period, Bergdorf may suspend any
payments remaining pursuant to paragraph l(a) of this Agreement until the final
resolution of such criminal or civil proceedings or until Bergdorf has made a
final determination in its sole judgment as to whether Executive committed such
an act or omission. If Executive is found guilty or enters into a plea
agreement, consent decree or similar arrangement with respect to any such
criminal or civil proceedings, or if Bergdorf determines in its sole judgment
that Executive has committed such an act or omission, (1) Bergdorf’s obligation
to provide the Termination Benefits shall immediately end, and (2) Executive
shall repay to Bergdorf any amounts paid to him pursuant to paragraph 1 (a) of
this Agreement within 30 days after a written request to do so by Bergdorf. If
any such criminal or civil proceedings do not result in 11 finding of guilt or
the entry of a plea agreement or consent decree or similar arrangement, or
Bergdorf determines in its sole judgment that Executive has not committed such
an act or omission, Bergdorf shall pay to Executive any payments pursuant to
paragraph l(a) of this Agreement that it has suspended, with interest on such
suspended payments at its cost of funds, and shall make any remaining payments
due thereunder.

 

2. Executive acknowledges and agrees that (a) Bergdorf is engaged in a
highly competitive business; (b) Bergdorf has expended considerable time and
resources to develop goodwill with its customers, vendors, and others, and to
create, protect, and exploit Confidential Information; (c) Bergdorf must
continue to prevent the dilution of its goodwill and unauthorized use or
disclosure of its Confidential Information to avoid irreparable harm to its
legitimate business interests; (d) in the specialty retail business, his
participation in or direction of Bergdorf’s day-today operations and strategic
planning are an integral part of Bergdorf’s continued success and goodwill; (
e) given his position and responsibilities, he necessarily will be creating Confidential
Information that belongs to Bergdorf and enhances Bergdorf s goodwill, and in
carrying out his responsibilities he in turn will be relying on Bergdorf’s
goodwill and the disclosure by Bergdorf to him of Confidential Information; (f)
he will have access to Confidential Information that could be used by any
Competitor of Bergdorf in a manner that would irreparably harm Bergdorf’s
competitive position in the marketplace and dilute its goodwill; and (g) he
necessarily would use or disclose Confidential Information if he were to engage
in competition with Bergdorf.  Bergdorf
acknowledges and agrees that Executive must have and continue to have
throughout his employment the benefits and use of its goodwill and Confidential
Information in order to properly carry out his responsibilities. Bergdorf
accordingly promises upon execution and delivery of this Agreement to provide
Executive immediate access to new and additional Confidential Information and
authorize him to engage in activities that will create new and additional
Confidential Information. Bergdorf and Executive thus acknowledge and agree
that I during Executive’s employment with Bergdorf and upon execution and
delivery of this Agreement he (a) has received, will receive, and will continue
to receive, Confidential Information that is unique, proprietary, and valuable
to Bergdorf, (b) has created, will create, and will continue to create,
Confidential Information that is unique, proprietary, and valuable to Bergdorf,
and (c) has benefited, will benefit, and will continue to benefit, including
without limitation by way of increased earnings and earning capacity, from the
goodwill Bergdorf has generated and from the Confidential Information.
Accordingly, Executive acknowledges and agrees that at all times during his
employment by Bergdorf and thereafter:

 

 

(a) all Confidential Information shall remain and be the sole and
exclusive property of Bergdorf;

 

(b) he will protect and safeguard all Confidential Information;

 

(c) he will hold all Confidential Information in strictest confidence
and not, directly or indirectly, disclose or divulge any Confidential
Information to any person other than an officer, director, or employee of
Bergdorf or NMG to the extent necessary for the proper performance of his responsibilities
unless authorized to do so by Bergdorf or compelled to do so by law or valid
legal process;

 

(d) if he believes he is compelled by law or valid legal process to
disclose or divulge any Confidential Information, he will notify Bergdorf in
writing sufficiently in advance of any such disclosure to allow Bergdorf. the
opportunity to defend, limit, or otherwise protect its interests against such
disclosure;

 

(e) at the end of his employment with Bergdorf for any reason or at the
request of Bergdorf at any time, he will return to Bergdorf all Confidential
Information and all copies thereof, in whatever tangible form or medium
including electronic; and

 

(f) absent the promises and representations of Executive in this
paragraph and paragraph 3 below, Bergdorf would require him immediately to
return any tangible Confidential Information in his possession, would not
provide Executive with new and additional Confidential Information, would not
authorize Executive to engage in activities that will create new and additional
Confidential Information and would not enter into this Agreement, and NMG would
not have entered into the Incentive Agreements.

 

3. In consideration of Bergdorf’s promises to provide Executive with
new and additional Confidential Information and to authorize him to engage in
activities that will create new and additional Confidential Information upon
execution and delivery of this Agreement, and the other promises and
undertakings of Bergdorf in this Agreement and NMG in the Incentive Agreements,
Executive agrees that, while he is employed by Bergdorf and for a period of
eighteen months following the end of that employment for any reason, he shall
not engage in any of the following activities (the “Restricted Activities”):

 

 

(a) He will not directly or indirectly disparage Bergdorf, NMG, or
their Affiliates, or any products, services, or operations of Bergdorf, NMG or
their Affiliates, or any of the former, current, or future officers, directors,
or employees of Bergdorf, NMG or their Affiliates;

 

(b) He will not, whether on his own behalf or on behalf of any other
individual, partnership, firm, corporation or business organization, either
directly or indirectly solicit, induce, persuade, or entice, or endeavor to
solicit, induce, persuade, or entice, any person who is then employed by or
otherwise engaged to perform services for Bergdorf, NMG, or their Affiliates to
leave that employment or cease performing those services;

 

(c) He will not, whether on his own behalf or on behalf of any other
individual, partnership, firm, corporation or business organization, either
directly or indirectly solicit, induce, persuade, or entice, or endeavor to
solicit, induce, persuade, or entice, any person who is then a customer,
supplier, or vendor of Bergdorf, NMG, or any of their Affiliates to cease being
a customer, supplier, or vendor of Bergdorf, NMG or their Affiliates or to
divert all or any part of such person’s or entity’s business from Bergdorf, NMG
or their Affiliates; and

 

(d) He will not associate directly or indirectly, as an employee,
officer, director, agent, partner, stockholder, owner, representative, or
consultant, with any Competitor unless (1) he has advised Bergdorf in writing
in advance of his desire to undertake, such activities and the specific nature
of such activities; (2) Bergdorf has received written assurances (that will be
designed, among other things, to protect Bergdorf’s, NMG’s and their
Affiliates’ goodwill, Confidential Information, and other important commercial
interests) from the Competitor and Executive that are, in Bergdorf’s sole
discretion, adequate to protect its interests; (3) Bergdorf, in its sole
discretion, has approved in writing such association; and (4) Executive and the
Competitor adhere to such assurances. Executive shall not be in violation of
this paragraph 3( d) solely as a result of his investment in stock or other
securities of a Competitor or any of its Affiliates listed on a national
securities exchange or actively traded in the over-the-counter market if he and
the members of his immediate family do not, directly or indirectly, hold more
than a total of one (1) percent of all such shares of stock or other securities
issued and outstanding. Executive acknowledges and agrees that engaging in the
Restricted Activities described in this subparagraph would result in the
inevitable disclosure or use of Confidential Information for the Competitor’s
benefit or to the detriment of Bergdorf.

 

Executive acknowledges and agrees that the restrictions contained in
this paragraph 3 are ancillary to an otherwise enforceable agreement, including
without limitation the mutual promises and undertakings set forth in paragraph
2 of this Agreement and in the Incentive Agreements; that the promises and
undertakings of Bergdorf set forth in paragraph 2 of this Agreement and those
of NMG in the Incentive Agreements, Executive’s position and responsibilities
with Bergdorf, and NMG granting to Executive ownership in NMG in the form of
NMG stock, give rise to Bergdorf’s interest in restricting Executive’s
post-employment activities; that such restrictions are designed to enforce
Executive’s promises and undertakings set forth in this paragraph 3 and his
common-law obligations and duties owed to Bergdorf; that the restrictions are
reasonable and necessary, are valid and enforceable under New York law, and do
not impose a greater restraint than necessary to protect Bergdorf’s goodwill,
Confidential Information, and other legitimate business interests; that he will
immediately notify Bergdorf in writing should he believe or be advised that the
restrictions are not valid or enforceable under New York law or the law of any
other state that he contends or is advised is applicable; that the mutual
promises and undertakings of Bergdorf and Executive under paragraphs 2 and 3 of
this Agreement are not contingent on the duration of Executive’s employment
with Bergdorf; and that absent the promises and representations made by
Executive in this paragraph 3 and paragraph 2 above, Bergdorf would require him
to return any Confidential Information in his possession, would not provide
Executive with new and additional Confidential Information, would not authorize
Executive to engage in activities that will create new and additional
Confidential Information, and would not enter into this Agreement, and NMG
would not have entered into the Incentive Agreements.

 

 

4. The Termination Benefits constitute all of Bergdorf’s obligations to
Executive with respect to the end of Executive’s employment with Bergdorf.
However, nothing in this Agreement is intended to limit any earned, vested
benefits (other than any entitlement to severance or separation pay, if any)
that Executive may have under the applicable provisions of any benefit plan of
Bergdorf in which Executive is participating at the time of his termination of
employment or resignation.

 

5. Executive acknowledges and agrees that Bergdorf would not have an
adequate remedy at law and would be irreparably harmed in the event that any of
the provisions of paragraphs 2 or 3 of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
Executive agrees that Bergdorf shall be entitled to equitable relief, including
preliminary and permanent injunctions and specific performance, in the event
Executive breaches or threatens to breach any of the provisions of such
paragraphs, without the necessity of posting any bond or proving special
damages or irreparable injury. Such remedies shall not be deemed to be the exclusive
remedies for a breach or threatened breach of this Agreement by Executive, but
shall be in addition to all other remedies available to Bergdorf at law or
equity. Executive acknowledges and agrees that Bergdorf shall be entitled to
recover its attorneys’ fees, expenses, and court ‘costs, in addition to any
other remedies to which it may be entitled, in the event he breaches this
Agreement. Executive acknowledges and agrees that no breach by Bergdorf of this
Agreement or failure to enforce or insist on its rights under this Agreement
shall constitute a waiver or abandonment of any such rights or defense to
enforcement of such rights.

 

6. If the provisions of paragraphs 2 or 3 of this Agreement are ever
deemed by a court to exceed the limitations permitted by applicable law,
Executive and Bergdorf agree that such provisions shall be, and are,
automatically reformed to the maximum limitations permitted by such law.

 

7. This Agreement contains the entire agreement between the parties and
supersedes all prior agreements and understandings, oral or written, with
respect to the ending of Executive’s at-will employment and the subject matter
of this Agreement. This Agreement may not be changed orally. It may be changed
only by written agreement signed by the party against whom any waiver, change,
amendment, modification or discharge is sought to be enforced. This Agreement
is to be construed as a whole, according to its fair meaning, and not strictly
for or against any of the parties. If any provision of this Agreement shall be
determined by a court to be invalid or unenforceable, the remaining provisions
of this Agreement shall not be affected thereby, shall remain in full force and
effect, and shall be enforceable to the fullest extent permitted by applicable
law.

 

 

8. The validity, performance and enforceability of this Agreement shall
be determined and governed by the laws of the State of New York, without regard
to its conflict of laws principles. 
Bergdorf and Executive agree that the exclusive forum for any action
concerning this Agreement shall be in a court of competent jurisdiction in New
York County, New York, with respect to a state court, or the United States
District Court for the Southern District of New York, with respect to a federal
court. EXECUTIVE HEREBY CONSENTS TO THE EXERCISE OF JURISDICTION OF A COURT IN
THE EXCLUSIVE FORUM AND WAIVES ANY RIGHT HE MAY HAVE TO CHALLENGE OR CONTEST
THE REMOVAL AT ANY TIME BY BERGDORF TO FEDERAL COURT OF ANY SUCH ACTION HE MAY
BRING AGAINST IT IN STATE COURT. EXECUTIVE AND BERGDORF FURTHER HEREBY MUTUALLY
WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY ACTION CONCERNING THIS AGREEMENT.

 

9. Executive’s promises and obligations under this Agreement shall
survive the end of his employment with Bergdorf, and such promises and
obligations shall inure to the benefit of any Affiliates, subsidiaries,
divisions, successors, or assigns of Bergdorf.

 

 

	
   

  	
   

  	
  BERGDORF GOODMAN,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
     /S/  James J. Gold

  	
   

  	
  By:

  	
  /s/ 
  Nelson A. Bangs

  	
   

  
	
   

  	
   

  	
  Nelson A. Bangs, Vice President

  	
   

  
						

 

 

APPENDIX A

 

Definitions

 

1. “Affiliate” means, with respect to any entity, any other
corporation, organization, association, partnership, sole proprietorship or
other type of entity, whether incorporated or unincorporated, directly or
indirectly controlling or controlled by or under direct or indirect common
control with such entity.

 

2. “Cause” means, in Bergdorf’s reasonable judgment, (i) a breach of
duty by Executive in the course of his employment involving fraud, acts of
dishonesty (other than inadvertent acts or omissions), disloyalty, or moral
turpitude; (ii) conduct that is materially detrimental to Bergdorf, monetarily
or otherwise, or reflects unfavorably on Bergdorf or Executive to such an
extent that Bergdorf’s best interests reasonably require the termination of
Executive’s employment; (iii) acts of Executive in violation of his obligations
under this Agreement or at law; (iv) Executive’s failure to comply with or
enforce Bergdorf’s policies concerning equal employment opportunity, including
engaging in sexually or otherwise harassing conduct; (v) Executive’s repeated
insubordination or failure to comply with or enforce other personnel policies
of Bergdorf or its Affiliates; (vi) Executive’s failure to devote his full
working time and best efforts to the performance of his responsibilities to
Bergdorf or its Affiliates; or (vii) Executive’s conviction of or entry of a
plea agreement or consent decree or similar arrangement with respect to, a
felony, other serious criminal offense, or any violation of federal or state
securities laws; provided, however, that with respect to items (v) and (vi),
Executive has been provided prior written notice of the failure and afforded a
reasonable opportunity to correct same.

 

3. “Competitor” means (i) each of Saks Incorporated, Nordstrom, Inc.,
Barneys New York, Inc., any Affiliate of any of them, and any other person or
entity that owns, operates or controls any of them or any of their Affiliates,
directly or indirectly; (ii) the successors to or assigns of the persons or
entities identified in (i); and (iii) any other person or entity (and any
Affiliate of such person or entity) that owns, operates or controls, directly
or indirectly, a luxury specialty retail store.

 

4. “Confidential Information” shall mean, without limitation, all
documents or information, in whatever form or medium, concerning or evidencing
sales; costs; pricing; strategies; forecasts and long range plans; financial
and tax information; personnel information; business, marketing and operational
projections, plans and opportunities; and customer, vendor, and supplier
information; but excludin1! any such information that is or becomes generally
available to the public other than as a result of any breach of this Agreement
or other unauthorized disclosure by Executive.

 

5. “Total Disability” means that, in Bergdorf’s reasonable judgment,
either (i) Executive has been unable to perform his duties because of a
physical or mental impairment for 80% or more of the normal working days during
six consecutive calendar months or 50% or more of the normal working days
during twelve consecutive calendar months, or (ii) Executive has become totally
and permanently incapable of performing the usual duties of his employment with
Bergdorf on account of a physical or mental impairment.

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