CHANGE OF CONTROL
AGREEMENT
1. This is a Change of Control Agreement between Xxxxxx Xxxxxx (the
Executive ) and NM Direct (also referred to as the Company ). For the
purposes of this Agreement, the Company includes The Neiman Marcus Group,
Inc.
2. Although the Executive is employed at-will by NM Direct, the
Company values the Executive s services and wishes to provide some protection
should the Executive s services be terminated under certain circumstances.
Therefore, in recognition of the Executive s value and in consideration of the
Executive s agreeing to remain employed at NM Direct, the Company is willing
to enter into this Change of Control Agreement.
3. a. If the Executive s services are terminated without cause
within 24 months following a change of control of NM Direct,
as a change of control is defined in paragraph 4.b., or if
within 24 months after a change of such control, the
Executive resigns his employment because he is not permitted
to continue in a position comparable in duties and
responsibilities to that which he held before a change of
control, the Executive will receive a termination package
consisting of an amount equivalent to one and one half times
his then-current, one year, base salary, which amount would
be paid in 18 regular, monthly installments following such
termination.
b. Notwithstanding the payment obligation set forth in 3.a.,
should the Executive be engaged in employment (including
contract employment or self-employment) of any kind, during
the period beginning 6 months after the covered termination
or resignation following a change of control, the salary
obligation will be reduced, dollar-for-dollar, by the amount
the Executive earns through such employment.
4. For purposes of this Agreement,
a. For cause means, that in the reasonable judgment of the
Company, the Executive:
(1) failed to devote this full time, loyalty, best
efforts, skills, knowledge and ability to the
performance of his duties;
(2) committed an act of malfeasance or failed to render
services exclusively to the Company; or
(3) engaged in conduct detrimental to the best interests
of the Company.
b. Change of control means: (i) the sale of all or
substantially all of the assets of NM Direct to an entity
other than Harcourt General, Inc. or an entity wholly owned,
or controlled by the Company or Harcourt General, Inc.; (ii)
the sale of all or substantially all of the assets of the
Company to an entity other than Harcourt General, Inc. or an
entity wholly owned or controlled by the Company or Harcourt
General, Inc.; or (iii) any person, entity or group having
greater voting power in the election of Company directors
than Harcourt General, Inc.
5. Payment of the amounts set forth in paragraph 3 constitutes full
satisfaction of all financial obligations of the Company to the Executive (if
any) which arise from or relate in any way to the Executive s separation from
employment, including the right to severance pay, attending a change of
control of the Company. However, nothing in this paragraph affects any
earned, vested rights that the Executive may have under the applicable
provisions of: (i) any life insurance policy or plan (group or otherwise)
maintained for the Executive by the Company or (ii) any other employee
benefit pension plan, as defined by Section 3 of ERISA, then in effect and in
which the Executive is participating under the terms of such plan.
6. The invalidity of all or any part or provision of any section of
this Change of Control Agreement will not render invalid the remainder of this
Agreement or the remainder of such sections or any other of its provisions.
7. This Change of Control Agreement contains the entire agreement and
supersedes all prior agreements and understandings, oral or written, between
the parties hereto with respect to the termination of the Executive s
employment due to a change of control. The Agreement may not be changed
orally. It may be changed only by written agreement signed by the party
against whom any waiver, charge, amendment, modification or discharge is
sought.
8. The Change of Control Agreement will be construed as to both
validity and performance and enforced in accordance with the laws of the
Commonwealth of Massachusetts, without giving effect to the principles of
conflicts of laws thereof.
NM DIRECT
By: /S/ XXXXXX X. XXXXX
XXXXXX XXXXXX
By: /S/ XXXXXX XXXXXX
