Neiman Marcus 2014 Annual Report Download - page 83

Table of Contents
Employment Agreement with Mr. Grimes
Effective June 15, 2015, we elected Donald T. Grimes as our Executive Vice President, Chief Operating Officer and Chief Financial Officer. In
connection with his election, we entered into an employment agreement with Mr. Grimes, effective as of June 15, 2015. Pursuant to the employment
agreement, Mr. Grimes’s annual base salary will be $725,000. Beginning in fiscal year 2016, Mr. Grimes will participate in our annual incentive bonus
program with a target bonus of 75% of his base salary, and a maximum bonus 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 (i) payable based on the achievement of performance objectives, as determined at
the discretion of the Parent Board and (ii) subject to Mr. Grimes’s continued employment through the date bonuses are paid, except as otherwise described
below. Mr. Grimes also received a signing bonus of $300,000 that is subject to prorated repayment if Mr. Grimes’s employment is terminated prior to the first
anniversary of his start date other than by us without ‘‘cause’’ (as defined in the employment agreement and summarized below), by Mr. Grimes for ‘‘good
reason’’ (as defined in the employment agreement and summarized below) or his total disability or his death. Mr. Grimes will be eligible to participate in our
relocation policies applicable to senior executives, subject to prorated repayment if Mr. Grimes’s employment is terminated for ‘‘cause,’’ or if Mr. Grimes
resigns his employment for any reason other than ‘‘good reason’’ or retirement, in each case, prior to the second anniversary of his start date. Additionally,
Mr. Grimes is entitled to receive reimbursement of up to $5,000 for financial and tax planning advice. Mr. Grimes’s employment agreement includes certain
restrictive covenants, including non-disparagement of us and our business, non-competition and non-solicitation of employees, customers and suppliers, in
each case, for 18 months following the termination of his employment for any reason, and to provisions regarding confidential information.
If Mr. Grimes’s employment is terminated by us for any reason other than for ‘‘cause,’’ his total disability or his death, or Mr. Grimes terminates his
employment for ‘‘good reason,’’ Mr. Grimes will be entitled to receive, subject to his execution and non-revocation of a waiver and release agreement, (i) an
amount equal to 150% of his base salary, payable over an 18 month period in accordance with our regular payroll practices, (ii) a pro-rated bonus for the year
of termination, (iii) any earned and unpaid bonus for the year prior to the year of termination, and (iv) if Mr. Grimes is eligible for, and elects to receive,
COBRA, we will pay Mr. Grimes a monthly amount equal to the monthly COBRA insurance premium for a period of 18 months.
For purposes of Mr. Grimes’s employment agreement, ‘‘cause’’ generally means any of the following: (i) the commission of any acts of fraud,
dishonesty, disloyalty to the Company or its affiliates, or moral turpitude; (ii) conduct that is materially detrimental to the Company, monetarily or otherwise,
or reflects unfavorably on the Company or Mr. Grimes; (iii) acts of Mr. Grimes in material violation of his obligations under the employment agreement or at
law; (iv) Mr. Grimes’s failure to comply with or enforce the Company’s policies concerning equal employment opportunity; (v) Mr. Grimes’s
insubordination, failure to perform any duties reasonably assigned to him by the Company or failure to comply with or enforce other personnel policies of the
Company or its affiliates; (vi) Mr. Grimes’s failure to devote his full working time and best efforts to the performance of his responsibilities to the Company
or its affiliates; (vii) any act of material misconduct or gross negligence by Mr. Grimes in the performance of his duties relating to his employment; or (viii)
Mr. Grimes’s indictment for or entry of a plea agreement or consent decree or similar arrangement with respect to, a felony, other serious criminal offense, or
any violation of federal or state securities laws; provided, that with respect to items (iii), (v) and (vi), Mr. Grimes has been provided prior written notice of the
failure and afforded a reasonable opportunity to correct same.
For purposes of Mr. Grimes’s employment agreement, ‘‘good reason’’ is generally defined as any of the following without his consent: (i) a material
diminution in Mr. Grimes’s base compensation (other than pursuant to action of the Company or its affiliates reducing the base compensation of all senior
executives by substantially equal amounts or substantially equal percentages as the reduction of Mr. Grimes’s base compensation); (ii) a material diminution
in Mr. Grimes’s authority or duties; or (iii) a material change in the primary geographic location at which Mr. Grimes must perform services.
Employment Agreement with Mr. Gold
In connection with the Acquisition, we entered into a new employment agreement with James J. Gold, President, Specialty Retail, which became
effective on October 25, 2013. The employment agreement is for a four-year term with automatic extensions of one year unless either party provides three
months’ written notice of non-renewal. The agreement provides that Mr. Gold’s annual base salary will not be less than $770,000, unless the reduction is
pursuant to a reduction of the annual salaries of all senior executives by substantially equal amounts or percentages. The agreement also provides that Mr.
Gold will participate in the Company’s annual incentive bonus program with a minimum bonus of 25% of his base salary if threshold performance targets are
achieved, a target bonus of 75% of his base salary and a maximum bonus of 150% of his base salary. The actual incentive bonus under the agreement will be
determined according to the terms of the annual incentive bonus
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