Neiman Marcus 2008 Annual Report Download - page 259

(d) "Change of Control" shall mean the occurrence of any of the following events after the Effective Time:
(i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the
assets of the Company on a consolidated basis to any Person or group of related persons for purposes of Section 13(d) of the Exchange
Act (a "Group"), together with any Affiliates thereof other than to a Majority Stockholder; (ii) the approval by the holders of the
outstanding voting power of the Company of any plan or proposal for the liquidation or dissolution of the Company; (iii) (A) any
Person or Group (other than the Majority Stockholder) shall become the beneficial owner (within the meaning of Section 13(d) of the
Exchange Act), directly or indirectly, of Common Stock representing more than 40% of the aggregate outstanding voting power of the
Company and such Person or Group actually has the power to vote such Common Stock in any such election and (B) the Majority
Stockholder beneficially owns (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, in the aggregate a
lesser percentage of the voting power of the Company than such other Person or Group; (iv) the replacement of a majority of the
Board over a two-year period from the directors who constituted the Board at the beginning of such period, and such replacement shall
not have been approved by a vote of at least a majority of the Board then still in office who either were members of such Board at the
beginning of such period or whose election as a member of such Board was previously so approved or who were nominated by, or
designees of, a Majority Stockholder; or (v) consummation of a merger or consolidation of the Company with another entity in which
holders of the Common Stock of the Company immediately prior to the consummation of the transaction hold, directly or indirectly,
immediately following the consummation of the transaction, less than 50% of the common equity interest in the surviving corporation
in such transaction and the Majority Stockholder does not hold a sufficient amount of voting power (or similar securities) to elect a
majority of the surviving entity's board of directors.
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur as a result of any event or
transaction to the extent that treating such event or transaction as a Change of Control would cause any tax to become due under
Section 409A of the Code.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Disability" shall mean, unless otherwise provided in any stock option grant agreement entered between
the Company and the Management Stockholder with respect to any Options that may be granted under the Plan, effective employment
agreement or other written agreement, a permanent disability as defined in the Company's or an Affiliate's disability plans, or as
defined from time to time by the Company, in its discretion.
(g) "Effective Time" shall have the meaning set forth in the Agreement and Plan of Merger by and among the
Company, Newton Acquisition Merger Sub, Inc. and The Neiman Marcus Group, Inc, dated as of May 1, 2005.
(h) "Employment" shall mean employment with the Company or any Affiliate and shall include the provision
of services as a director or consultant for the Company or any Affiliate. "Employee" and "Employed" shall have correlative meanings.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(j) "Fair Market Value" shall mean, as of any date:
i. prior to the existence of a Public Market (as defined in Section 6 below) for the Common Stock, the
value per share of Common Stock as determined in good faith by the Board; or
ii. on which a Public Market for the Common Stock exists, (i) closing price on such day of a share of
Common Stock as reported on the principal securities exchange on which shares of Common Stock are then listed or admitted to
trading or (ii) if not so reported, the average of the closing bid and ask prices on such day as reported on the National Association of
Securities Dealers Automated Quotation System or (iii) if not so reported, as furnished by any member of the National Association of
Securities Dealers, Inc. ("NASD") selected by the Board. The Fair Market Value of a share of Common Stock as of any such date on
which the applicable exchange or inter-dealer quotation system through which trading in the Common Stock regularly occurs is closed
shall be the Fair Market Value determined pursuant to the preceding sentence as of the immediately preceding date on which the