Neiman Marcus 2008 Annual Report Download - page 70

Table of Contents
Employment Agreement with Mr. Tansky
The employment agreement with Mr. Tansky, as amended, has an employment term of five years until October 2010, subject
to automatic one-year renewals of the term if neither party submits a notice of termination at least six months prior to the end of the
then-current term, and provides for a base salary of not less than $1,300,000 per year. Mr. Tansky's agreement also provides that he
will participate in the Company's annual bonus plan. Mr. Tansky's agreement provides that if bonus levels for a fiscal year are met,
the minimum bonus amount he will receive will be at least 50% of his base salary, if the target bonus goal for the fiscal year is met, he
will receive at least 85% of his base salary, and if the maximum target goal is met, he will receive at least 170% of his base salary.
The actual amounts will be determined according to the terms of the annual bonus program and will be payable at the discretion of the
Compensation Committee.
In addition to the foregoing, the agreement provides that upon the occurrence of the earlier of a change of control or an initial
public offering, Mr. Tansky will be entitled to a cash bonus equal to $3,080,911, which represents his portion of the cash incentive
pool pursuant to the Cash Incentive Plan (more fully described on page 68 of this section). The agreement also provides that at the
time of Mr. Tansky's termination of employment with the Company, his years of service for purposes of calculating his benefit under
the SERP shall be determined by multiplying his actual service for purposes of the SERP by 2, subject to the 25-year maximum set
forth in the SERP, and by then providing him with additional credit for each year of service by him to the Company following his
attainment of age sixty-five (65) (disregarding the 25-year maximum set forth in the SERP).
If (1) we terminate Mr. Tansky's employment without cause or if he resigns for good reason, or (2) Mr. Tansky resigns
without good reason during the 30 day period following the six month anniversary of a future change of control (referred to herein as a
change of control resignation), he will receive, subject to his execution of a mutual release and waiver of claims, a lump sum equal to
(A) 85% of base salary multiplied by a fraction, the numerator of which is the number of days during the fiscal year up to the
termination date and the denominator of which is 365, plus (B) 36 times the monthly COBRA premium applicable to Mr. Tansky plus
(C) if such termination is not a change of control resignation, an amount equal to three times the sum of (i) base salary and (ii) 85% of
base salary in effect on the termination date, or if such termination is a change of control resignation, an amount equal to two times the
sum of (i) base salary and (ii) 85% of base salary in effect on the termination date; provided, however, that Mr. Tansky shall be
required to repay this payment if he violates certain of the restrictive covenants or if he is found to have engaged in certain acts of
wrongdoing, all as further described in the agreement. In certain circumstances, Mr. Tansky will also be entitled to some or all of the
benefits under the Cash Incentive Plan.
If Mr. Tansky's employment terminates before the end of the term due to death or inability to perform (as defined in the
employment agreement), we will pay him or his estate, as applicable, 85% of base salary multiplied by a fraction, the numerator of
which is the number of days during the fiscal year up to the termination date and the denominator of which is 365.
Pursuant to the agreement and depending on the circumstances of the termination of Mr. Tansky's employment, he may also
be entitled to receive an amount equal to the monthly COBRA premium applicable at his termination date based upon the coverage in
effect under the group medical plan immediately prior to his termination date multiplied by thirty-six (36).
Also pursuant to the agreement, depending on the circumstances of the termination of Mr. Tansky's employment, he may be
entitled to up to three years of continuing coverage under our life insurance plan at the same benefit level as provided to him
immediately prior to his termination date and at the same cost as is generally provided to similarly situated active employees of the
Company.
Mr. Tansky's agreement provides that he is entitled to participate in any extraordinary dividend on certain of his options, if
then outstanding, that were granted prior to the acquisition and assumed by Parent.
Mr. Tansky's agreement also contains a tax gross-up provision whereby if, in the event of a change in control following the
existence of a public market for the Company's stock, he incurs any excise tax by reason of his receipt of any payment that constitutes
an excess parachute payment as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), he will
receive a gross-up payment in an amount that would place him in the same after-tax position that he would have been in if no excise
tax had applied. However, under certain conditions, rather than receive a gross-up payment, the payments payable to him will be
reduced so that no excise tax is imposed.
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