Neiman Marcus 2010 Annual Report Download - page 77

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In addition to the foregoing, Mr. Tansky's director services agreement provides that, upon the occurrence of the earlier of a
change of control or an initial public offering, he 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 beginning on page 72 of this section).
Under the terms of Mr. Tansky's employment agreement, following retirement, he received a one-time lump sum payment
representing the monthly premium cost of certain medical benefits multiplied by 60 and enhanced benefits under the SERP. For
actual amounts received see Potential Payments Upon Termination or Change-in-Control beginning on page 73 of this section.
Employment Agreement with Ms. Katz
In connection with Mr. Tansky's retirement in October 2010, the Company entered into an employment agreement with
Ms. Katz wherein she succeeded Mr. Tansky as President and Chief Executive Officer. The employment agreement became effective
on October 6, 2010 and will extend until the fourth anniversary and thereafter be subject to automatic one-year renewals of the term if
neither party submits a notice of termination at least three months prior to the end of the then-current term. The agreement may be
terminated by either party on three months' notice, subject to severance obligations in the event of termination under certain
circumstances described herein. Pursuant to the agreement, her base salary will not be less than $1,050,000 unless the reduction is
pursuant to action taken by the Company reducing the annual salaries of all senior executives by substantially equal amounts or
percentages. The agreement also provided for an initial bonus of $50,000 payable upon the commencement of her new duties and the
grant of a non-qualified stock option under the Company's Management Equity Incentive Plan with respect to 4,300 shares of common
stock of the Company with an exercise price equal to the fair market value of the common stock at the time of grant. The stock option
will expire no later than the seventh anniversary of the grant date.
Ms. Katz's agreement also provides that she will participate in the Company's annual incentive bonus plan. The actual
amounts will be determined according to the terms of the annual incentive bonus program and will be payable at the discretion of the
Compensation Committee. However, Ms. Katz's agreement provides that her target bonus may not be reduced below 100% of her
base salary. In addition, the agreement provides that during the employment term before December 31, 2010, Ms. Katz shall continue
to accrue benefits under the SERP, provided that (i) the SERP shall not be amended or terminated in any way that adversely affects
her, and (ii) after she has reached the 25-year maximum set forth in the SERP, she shall be entitled to an additional one year of credit
for each full year of service thereafter. In addition, if (i) during the term, her employment is terminated by the Company for any
reason other than death, "disability," or "cause" (as defined in the employment agreement), (ii) during the term, she terminates her
employment for "good reason" (as defined in the employment agreement), or (iii) her employment terminates upon expiration of the
term following the provision by the Company of a notice of non-renewal, and, in any such case, on the date of such termination she
has not yet reached age 65, her SERP benefit shall not be reduced according to the terms of the SERP solely by reason of her failure to
reach age 65 as of the termination date. During the employment term following December 31, 2010, she will accrue benefits under
DC SERP provided that the amounts credited to her account as of the last day of her employment term shall not be less than the
present value of the additional benefits she would have accrued under the SERP had it remained in effect.
If we terminate Ms. Katz's employment without "cause" or if she resigns for "good reason" or following her receipt of a
notice of non-renewal from the Company relating to the employment term, she will receive (i) an amount of annual incentive pay
equal to a prorated portion of her target bonus amount for the year in which the employment termination date occurs, and (ii) a lump
sum equal to (A) 18 times the monthly COBRA premium applicable to Ms. Katz plus (B) two times the sum of her base salary and
target bonus, at the level in effect as of the employment termination date; provided, however, that Ms. Katz shall be required to repay
this payment if she violates certain restrictive covenants in her agreement or if she is found to have engaged in certain acts of
wrongdoing, all as further described in the agreement. Ms. Katz is also entitled to continuation of certain benefits for a two-year
period following a termination of her employment for any reason as set forth more fully in her employment agreement.
If Ms. Katz's employment terminates before the end of the term due to her death or "disability" we will pay her or her estate,
as applicable, (i) any unpaid salary through the date of termination and any bonus payable for the preceding fiscal year that has
otherwise not already been paid, (ii) any accrued but unused vacation days, (iii) any reimbursement for business travel and other
expenses to which she is entitled, and (iv) an amount of annual incentive pay equal to a prorated portion of her target bonus amount
for the year in which the employment termination date occurs.
Ms. Katz's agreement also contains obligations on her part regarding non-competition and non-solicitation of employees
following the termination of her employment for any reason, confidential information and non-disparagement of
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