Neiman Marcus 2008 Annual Report Download - page 251

(b) In addition to the terms and conditions of the Stockholders' Agreement, with respect to Newco Options for a total of
1,810.4095 Shares, as determined pursuant to Schedule I (the "Excess Options"), in the event that, on or before the first anniversary of
the Closing, your employment with NMG or any of its affiliates terminates as a result of NMG or its affiliates terminating your
employment for Cause (as such term is defined in your employment agreement with NMG, dated October 6, 2005 (your "Employment
Agreement")), your voluntary resignation other than for your retirement or for Good Reason (as such term is defined in your
Employment Agreement), Newco and its affiliates shall have the right, at any time until the earlier of (x) the fifth anniversary of the
Closing or (y) a Public Market (as such term is defined in the Stockholders' Agreement) exists for the Shares, to, at any time after
delivery of a notice to you or your estate:
i. Cancel each Excess Option in exchange for a cash payment for each Share underlying such Excess
Option being canceled equal to the difference between (1) the lesser of (A) Fair Market Value of the Share (as such term is defined in
the Stockholders' Agreement and subject to any right to seek an Outside Appraisal in accordance with the Stockholders' Agreement)
underlying such Excess Option and (B) $1,445 (whichever such amount applies, the "Excess Share Buyout Price") and (2) the per
Share exercise price of such Excess Option being canceled; or
ii. Purchase any or all Shares you hold as a result of the exercise of any or all of the Excess Options for
the Excess Buyout Price.
(c) If, after the Closing Date but prior to the existence of a Public Market, Newco or Newton Holding, LLC ("Newton
LLC") proposes to issue additional shares of common stock of Newco or membership interests of Newton LLC (in each case with the
exception of any issuance in connection with any merger, acquisition or similar corporate event or to employees pursuant to an
employee incentive plan), Newco or Newton LLC, as applicable, shall provide written notice (the "Issuance Notice") to you of such
anticipated issuance no later than ten (10) days prior to the anticipated issuance date. The Issuance Notice shall set forth the material
terms and conditions of the issuance, including the proposed purchase price for the new shares of common stock of Newco or
membership interests of Newton LLC. You shall have the right, upon receipt of the Issuance Notice, to purchase additional shares of
common stock of Newco up to your pro rata portion (based on the number of shares of common stock of Newco you own or subject to
vested stock options you hold immediately prior to such issuance), at the price and on the terms and conditions specified in the
Issuance Notice by delivering an irrevocable written notice to Newco no later than five (5) days before the anticipated issuance date,
setting out the number of new shares of common stock of Newco for which the right is exercised; provided that if the issuance is of
membership interests in Newton LLC, your pro rata portion shall be calculated as if the shares of common stock of Newco held by
you and all other holders of the shares of common stock of Newco (other than Newton LLC) were converted into membership
interests in Newton LLC and you held such membership interests together with all of the holders of membership interests in Newton
LLC on the date the notice was delivered. If you fail to exercise all or a portion of your preemptive rights, Newco or Newton LLC, as
applicable, shall be permitted to complete the proposed issuance without any further notice or action related to the rights provided in
this Section 7(d). In the event that Newton LLC proposes to issue new membership interests, Newton LLC and Newco may
determine, in their sole discretion, to permit
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