Neiman Marcus 2011 Annual Report Download - page 148

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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 the date the
Participant’s Employment is, or is deemed to have been, terminated for Cause; or (iv) on December 15, 2017, if the Option has not previously expired for any
of the reasons specified above in this Section 6.
7. Certain Rights on a Change of Control. If (a) a Change of Control occurs, (b) the surviving corporation following such Change of Control
is an entity for whose stock there is no Public Market, (c) the surviving corporation assumes the Participant’s outstanding Options in connection with such
Change of Control and such Options convert into options to purchase common stock or other equity interests of the surviving corporation (the “Assumed
Options”) and (d) the Participant thereafter experiences a Qualifying Termination at any time prior to the occurrence of an Initial Public Offering of the
surviving corporation, the Participant will be entitled to sell to the Company or such surviving corporation, within ninety (90) days of such Qualifying
Termination, all or any portion of the Assumed Options that the Participant had not exercised at the time of such sale and elects to sell to the Company or such
surviving corporation (the “Eligible Assumed Options”), and the Company or such surviving corporation will be obligated to purchase from the Participant,
in full satisfaction of the Participant’s rights with respect to such Eligible Assumed Options, all such Eligible Assumed Options, for a price equal to the
aggregate fair market value, as determined in accordance with Treas. Reg. § 1.409A-1(b)(5)(iv), of the shares of common stock or other equity interests
underlying such Eligible Assumed Options, minus the aggregate exercise price of such Eligible Assumed Options that such Participant would have been
required to pay in order to exercise such Eligible Assumed Options.
8. Construction of Agreement. Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction and subject to this section, be ineffective to the extent of such invalidity, illegality or unenforceability, without
affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or
unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such
covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and
enforceable. No waiver of any provision or violation of this Agreement by the Company shall be implied by the Company’s forbearance or failure to take
action. It is intended that the Option be exempt from Code Section 409A, and this Agreement shall be administered and construed to the fullest extent possible
to reflect and implement such intent.
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