Neiman Marcus 2010 Annual Report Download - page 151

Company, such that the total number of shares of Common Stock of the Company granted to the Participant hereunder as a Non-
Qualified Stock Option is shares (the "Option").
3. Grant Date. The Grant Date of the Performance Option hereby granted is (Date). The Grant Date of the Fair Value
Option shall remain (Date).
4. Exercise Price.
(a) The Exercise Price of each share of Common Stock underlying the portion of the Option that is a Fair Value Option
is $ .
(b) The Exercise Price of each share of Common Stock underlying the portion of the Option that is a Performance
Option shall be an increasing amount starting with $1,000 on the Grant Date and increasing at a 10.00% compound rate on each
anniversary of the Grant Date of such Performance Option until the earlier to occur of (i) the exercise of the Option, (ii) the fourth
anniversary of the Grant Date of such Performance Option, or (iii) the occurrence of a Change of Control of the Company; provided,
however, that the Exercise Price shall cease to increase as provided herein on a portion of the outstanding Performance Option
following the sale by the Majority Stockholder of shares of Common Stock as follows: the pro rata portion of the Performance Option
held by a Participant with respect to which the Exercise Price shall cease to increase shall be the portion of the Performance Option
that bears the same ratio to the total Performance Option held by a Participant as the total number of shares of Common Stock sold by
the Majority Stockholder bears to the total number of shares of Common Stock owned by the Majority Stockholder immediately prior
to such sale.
5. Vesting Date.
(a) The Fair Value Option shall become exercisable as follows: 20% of the shares underlying such Fair Value Option
shall vest and become exercisable on the first anniversary of the Grant Date of such Fair Value Option and the remaining portion of
the Fair Value Option shall vest and become exercisable in forty-eight (48) equal monthly installments over the forty-eight (48)
months following the first anniversary of the Grant Date of such Fair Value Option, beginning on the one-month anniversary of such
first anniversary, until 100% of the Fair Value Option is fully vested and exercisable thereafter, provided that the Participant is still
employed by the Company on each such anniversary.
(b) The Performance Option shall become exercisable as follows: 25% of the shares underlying such Performance
Option shall vest and become exercisable on the first anniversary of the Grant Date of such Performance Option and the remaining
portion of the Performance Option shall vest and become exercisable in thirty-six (36) equal monthly installments over the thirty-six
(36) months following the first anniversary of the Grant Date of such Performance Option, beginning on the one-month anniversary of
such first anniversary, until 100% of the Performance Option is fully vested and exercisable thereafter, provided that the Participant is
still employed by the Company on each such anniversary.
6. Expiration Date. With respect to the Option or any portion thereof which has not become exercisable, the Option
shall expire on the date the Participant's Employment is terminated for any reason, and with respect to the Option or any portion
thereof which has become exercisable, the Option shall expire (i) 90 days after the Participant's termination of Employment for
reasons other than Retirement, Cause, death or Disability; (ii) one year after termination of the Participant's Employment by reason of
Retirement, death or Disability; (iii) as of the commencement of business on
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