Neiman Marcus 2005 Annual Report Download - page 72

in connection with the provision of services pursuant to the agreement. The management services agreement also provides that
affiliates of the Sponsors may receive fees in connection with certain subsequent financing and acquisition or disposition transactions.
The management services agreement includes customary exculpation and indemnification provisions in favor of the Sponsors and
their affiliates.
Certain Charter and Bylaws Provisions
Our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions limiting
directors' obligations in respect of corporate opportunities. In addition, our amended and restated certificate of incorporation provide
that Section 203 of the Delaware General Corporation Law will not apply to the Company. Section 203 restricts "business
combinations" between a corporation and "interested stockholders," generally defined as stockholders owning 15% or more of the
voting stock of a corporation.
Loan to Mr. Tansky
In fiscal 2006, Mr. Tansky had an outstanding loan balance under our former Key Executive Stock Purchase Loan Plan (the
"Loan Plan") in the amount of $369,253. The loan was used to exercise stock options and discharge tax liabilities, as provided in the
Loan Plan. The loan bore interest at the annual rate of five percent, payable quarterly. Under the terms of the Loan Plan, loans
became due and payable seven months following cessation of employment with us. Effective July 30, 2002, the Loan Plan was
terminated and we have not made any other loans to any executive officer or director under the Loan Plan, nor has the loan to Mr.
Tansky been modified in any material way. The loan to Mr. Tansky was fully paid at closing of the Transactions. No other executive
officer, director or five percent security holder was indebted to us since the beginning of our 2006 fiscal year. See "Employment
Contracts and Termination of Employment and Change-in-Control Arrangements" for a description of the Employment Agreement
with Mr. Tansky.
Management Stockholders' Agreement
Subject to the Management Stockholders' Agreement, certain members of management, including Burton M. Tansky, Karen
W. Katz, James E. Skinner, Brendan L. Hoffman, and James J. Gold, along with 21 other members of management, elected to invest
in the Company by contributing cash or equity interests in NMG, or a combination of both, to the Company prior to the merger and
receiving equity interests in the Company in exchange therefor immediately after completion of the merger pursuant to rollover
agreements with NMG and the Company entered into prior to the effectiveness of the merger. The aggregate amount of this
investment was approximately $25.6 million. The Management Stockholders' Agreement creates certain rights and restrictions on
these equity interests, including transfer restrictions and tag-along, drag-along, put call and restriction rights in certain circumstances.
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