Neiman Marcus 2013 Annual Report Download - page 80

Table of Contents
times in the case of non-renewal by us) the sum of her base salary and target bonus, at the level in effect as of the employment termination date (collectively
the “Severance Payment”). 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 retires from the Company, she will be entitled to receive, subject to her execution of a waiver and release agreement, a lump sum equal to
one times the sum of her base salary and target bonus, at the level in effect as of the employment termination date (the “Retirement Payment”).
Ms. Katz will be required to repay the Severance Payment or Retirement Payment, as applicable, 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.
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, 1) any
unpaid salary through the date of termination and any bonus payable for the preceding fiscal year that has otherwise not already been paid, 2) any accrued
but unused vacation days, 3) any reimbursement for business travel and other expenses to which she is entitled, and 4) 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 us and our business. The non-competition agreement generally
prohibits Ms. Katz during employment and for a period of two years after termination from becoming a director, officer, employee or consultant for any
competing business that owns or operates a luxury specialty retail store. The agreement also requires that she disclose and assign to us any trademarks or
inventions developed by her which relate to her employment by us or to our business.
Employment Agreements with Mr. Skinner and Mr. Gold
In connection with the Acquisition, we entered into new employment agreements with James E. Skinner, Executive Vice President, Chief Operating
Officer, and Chief Financial Officer, and James J. Gold, President, Specialty Retail, each of which became effective on October 25, 2013. Each of the
employment agreements is for a four-year term with automatic extensions of one year unless either party provides three months’ written notice of non-
renewal. Mr. Skinner’s annual base salary will not be less than $720,000 and Mr. Gold’s annual base salary will not be less than $770,000, in each case,
unless the reduction is pursuant to a reduction of the annual salaries of all senior executives by substantially equal amounts or percentages. Each executive
will participate in the Company’s annual incentive bonus program with a target bonus of 75% of his base salary and a maximum of 150% of his base salary.
The actual incentive bonus will be determined according to the terms of the annual incentive bonus program and will be payable based on the achievement
of performance objectives, as determined at the discretion of the board of directors of the Company. Additionally, each executive is entitled to receive
reimbursement of up to $5,000 for financial and tax planning advice.
If we terminate either executive’s employment without “cause” or if either executive resigns for “good reason” or following the non-renewal of his
employment by us, such terminated executive will be entitled to receive, subject to his execution and non-revocation of a waiver and release agreement, (i)
an amount of annual incentive pay equal to a prorated portion of his target bonus amount for the year in which the employment termination date occurs, and
(ii) a lump sum equal to (A) 18 times (or 12 times in the case of non-renewal by us) the monthly COBRA premium applicable to the executive, and (B) 1.5
times (or one times in the case of non-renewal by us) the sum of his base salary and target bonus, at the level in effect as of the employment termination date.
The agreements also contain obligations regarding non-competition and non-solicitation of employees for 18 months following the termination of
the executive’s employment for any reason, confidential information and non-disparagement of us and our business. The agreements also require that each
executive disclose and assign to us any trademarks or inventions developed by the executive that relate to his employment by us or to our business.
If either executive’s employment terminates before the end of the term due to his death or “disability,” we will pay him or his estate, as applicable,
accrued obligations and an amount of annual incentive pay equal to a prorated portion of his target bonus amount for the year in which the employment
termination date occurs.
78