TERMINATION AND CHANGE OF CONTROL AGREEMENT
1. This Termination and Change of Control Agreement ("Agreement") is
entered into as of September 17, 1998 between Xxxxxx X. Xxxxxxx ("Xx.
Xxxxxxx") and The Neiman Marcus Group, Inc. ("NMG")
2. Xx. Xxxxxxx is employed "at-will" as Neiman Marcus Stores' President and
Chief Operating Officer, and Xx. Xxxxxxx or NMG may terminate Xx. Xxxxxxx'x
employment at any time, with or without notice, for any reason.
Notwithstanding this at-will employment, (a) Xx. Xxxxxxx agrees to provide NMG
with three months advance notice of his resignation when such resignation does
not follow a change of control of NMG, as a change of control is defined in
paragraph 4.c., and (b) NMG wishes to provide some protection to Xx. Xxxxxxx
if his employment is terminated or if he resigns under certain circumstances.
3. a. While Xx. Xxxxxxx is employed at-will, if NMG terminates Xx.
Xxxxxxx'x employment other than "for cause" or other than due to "total
disability" or death, NMG agrees to provide Xx. Xxxxxxx with a
termination package consisting of (a) an amount equivalent to one and
one-half times his then-current, annual base salary, less required
withholding, which amount would be paid in an 18 month period in
regular, monthly installments following such termination; and (b)
continuation of the medical and dental insurance coverage in which he
participates at the time of such termination (or as such coverage may be
changed from time-to-time for employees generally) for 18 months or
until he starts full-time employment, whichever is sooner. Xx. Xxxxxxx
will be responsible for paying his portion of monthly premiums for the
medical and dental insurance coverage at the same rate paid by active
employees, and Xx. Xxxxxxx authorizes NMG to deduct such amounts from
the payments it makes to him.
b. If Xx. Xxxxxxx'x services are terminated by a successor to NMG other
than "for cause" or other than due to "total disability" or death within
two years of a change of control of NMG, as a change of control is
defined in paragraph 4.c., or if the Executive resigns his employment
within two years of such a change of control because he is not permitted
to continue in a position comparable in duties and responsibilities to
that which he held before such a change of control, Xx. Xxxxxxx shall
receive the termination package set forth in paragraph 3.a.
c. Notwithstanding the payment obligations set forth in paragraphs 3.a.
and 3.b., if Xx. Xxxxxxx is engaged in employment (including contract
employment or self-employment) of any kind or if Xx. Xxxxxxx receives
severance pay of any kind during the period beginning six months after a
covered termination or resignation, NMG's payments to Xx. Xxxxxxx will
be reduced dollar-for-dollar by the amount Xx. Xxxxxxx earns through
such employment or receives as severance pay.
4. For the purposes of determining Xx. Xxxxxxx'x eligibility for the
termination package set forth in this Agreement:
a. "For cause" means, in NMG's reasonable judgment, a breach of duty by
Xx. Xxxxxxx in the course of his employment involving fraud, acts of
dishonesty, or moral turpitude, repeated insubordination, failure to
devote his full, working time and best efforts to the performance of his
duties, or conviction of a felony or other criminal offense.
b. "Total disability" means that, in NMG's reasonable judgment, Xx.
Xxxxxxx is unable to perform his duties for (i) 45 consecutive business
days or (ii) a total of 90 business days during any nine month period.
c. "Change of control" means (i) the sale of all or substantially all of
the stock or assets of Neiman Marcus Stores to an entity other than
Harcourt General, Inc. or an entity wholly owned or controlled by
Harcourt General, Inc; (ii) the sale of all or substantially all of the
stock or assets of NMG to an entity other than Harcourt General, Inc. or
an entity wholly owned or controlled by Harcourt General, Inc. or (iii)
any person, entity or group having greater voting power in the election
of NMG's directors than Harcourt General, Inc. or an entity wholly owned
or controlled by Harcourt General, Inc.
5. Payment by NMG of the termination package set forth in paragraph 3
constitutes full satisfaction of NMG's obligations to Xx. Xxxxxxx, if any,
(including the right to any severance payments) which arise from or relate in
any way to the termination of Xx. Xxxxxxx'x employment. However, nothing in
this Agreement is intended to limit any earned, vested benefits (other than
any entitlement to severance pay) that Xx. Xxxxxxx may have under the
applicable provisions of any benefit plan in which Xx. Xxxxxxx is
participating at the time of his termination of employment or resignation.
6. The unenforceability of any provision of this Agreement shall not affect
the enforceability of any other provision of this Agreement.
7. This Agreement contains the entire agreement between the parties and
supersedes all prior agreements and understandings, oral or written, with
respect to the termination of Xx. Xxxxxxx'x at-will employment and the subject
matter of the 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.
8. The validity, performance and enforceability of this Agreement will be
determined and governed by the laws of the Commonwealth of Massachusetts
without regard to its conflict of laws principles.
The Neiman Marcus Group, Inc.
s/Xxxxxx X. Xxxxxxx By: s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
