EXHIBIT 10.10
CONFIDENTIALITY, NON-COMPETITION AND TERMINATION
BENEFITS AGREEMENT
This Confidentiality, Non-Competition and
Termination Benefits Agreement (“Agreement”) is entered
into effective as of May 3, 2004 between James J. Gold
(“Executive”) and Bergdorf Goodman, Inc., a New York
corporation (“Bergdorf’) and a wholly-owned subsidiary
of The Neiman Marcus Group, Inc., a Delaware corporation
(“NMG”). All capitalized terms used but not defined
herein shall have the meanings assigned to them in Appendix A,
which is attached hereto and incorporated fully herein by
reference.
WHEREAS, Executive has been promoted to the
position of President and Chief Executive Officer of Bergdorf, and
Executive understands and agrees that his employment in such
position shall be on an “at will” basis, and that
either Executive or Bergdorf may terminate Executive’s
employment at any time, with or without notice, and for any
reason;
WHEREAS, in connection with the restructuring of
the compensation and benefits provided to senior executives of NMG
and its Affiliates, including Executive, the Board of Directors of
NMG has determined that stock option and restricted stock awards
should be combined with appropriate post-employment and other
restrictions designed to protect the legitimate business interests
of NMG and its Affiliates, including Bergdorf;
WHEREAS, effective as of this date and as a
consequence of his promotion, (i) NMG and Executive l1ave entered
into separate stock option and purchase restricted stock agreements
(the “Incentive Agreements”) that set forth the rights
and obligations of NMG and Executive with respect to such awards,
and (ii) NMG has granted to Executive an ownership interest in NMG
in the form of NMG stock; ;’
WHEREAS, by virtue of his new position and
responsibilities, Executive has and will have unique access to and
knowledge of Bergdorf’s trade secrets and other confidential
and proprietary business information;
WHEREAS, Executive’s association with
Bergdorf to the exclusion of its competitors will enhance
Bergdorf’s goodwill and Executive’s earning capacity;
and
WHEREAS, Bergdorf and Executive mutually desire
to protect Bergdorf’s goodwill created by Executive’s
association with Bergdorf and Bergdorf’s trade secrets and
other confidential and proprietary business information, and in
recognition of the possible interruption of Executive’s
earnings after the end of his Bergdorf employment;
NOW, THEREFORE, in consideration of the
Incentive. Agreements and the promises and undertakings of the
parties set out herein, and intending to be legally bound,
Executive and Bergdorf agree as follows:
1. (a) While Executive is employed
at-will by Bergdorf, if Bergdorf terminates Executive’s
employment for any reason other than for “Cause,” his
“Total Disability,” or his death, subject to paragraphs
l(c) and l(d) below, Bergdorf shall provide Executive with benefits
(“Termination Benefits”) consisting of:
(1) an amount equivalent to 1.5
times his then-current annual base salary, less required
withholding, which amount would be paid over an 18-month period
(hereinafter, the “Salary Continuance Period”) in
regular, bi-weekly installments following such termination;
and
(2) if, at the time of his
termination, Executive participates in a group medical insurance
plan offered by Bergdorf and Executive is eligible for and elects
to receive continued coverage under such plan in accordance with
the Consolidated I Omnibus Budget Reconciliation Act of 1985
(“COBRA”) or any successor law, Bergdorf will reimburse
Executive during the Salary Continuance Period or, if shorter, the
period of such actual COBRA continuation coverage, for the total
amount of the monthly COBRA medical insurance premiums actually
paid by Executive for such continued medical insurance
benefits.
For the purposes of determining whether or not
Bergdorf has terminated Executive’s employment under this
paragraph l(a), any material, adverse change in the terms and
conditions of his employment, including but not limited to a
relocation of Executive’s place of business 50 miles or more
from the current location, which change causes Executive to resign
his employment with Bergdorf, will be deemed a termination by
Bergdorf. A transfer of employment between Bergdorf and NMG
or any Affiliate of NMG shall not be considered as a termination of
employment for purposes of this Agreement.
(b) Bergdorf shall require any
successor or assignee (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all
the business and/or assets of Bergdorf, by agreement in writing in
form and substance reasonably satisfactory to Executive, expressly,
absolutely, and unconditionally to assume and agree to
‘perform this Agreement in the same manner and to the same
extent that Bergdorf would be required to perform it if no such
succession or assignment had taken place. If Bergdorf fails to
obtain such agreement by the effective time of any such succession
or assignment, such failure shall be considered a material, adverse
change in the terms and conditions of Executive’s employment
and will be deemed a termination by Bergdorf for purposes of
paragraph l(a) of this Agreement if such failure causes Executive
to resign his employment with Bergdorf; provided that the
Termination Benefits to which Executive would be entitled after
such resignation pursuant to paragraph l(a) of this Agreement shall
be the sole remedy of Executive for any failure by Bergdorf to
obtain such agreement. As used in this Agreement,
“Bergdorf’ shall include any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all the business and/or assets
of Bergdorf that executes and delivers the agreement provided for
in this paragraph 1 (b) or that otherwise becomes obligated under
this Agreement by operation of law.
It is the expectation of the parties
that any successor or assignee (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to an or
substantially all the business and/or assets of NMG, if such assets
continue to include a controlling interest in the stock of Bergdorf
as of the time of such succession or assignment, shall by agreement
in writing, in form and substance reasonably satisfactory to
Executive, expressly, absolutely, and unconditionally agree to
cause Bergdorf to honor and agree to perform this Agreement
following such succession or assignment. If such agreement has not
been executed and delivered by the effective time of any such
succession or assignment, such failure shall be considered a
material, adverse change in the terms and conditions of
Executive’s employment and will be deemed a termination by
Bergdorf for purposes of paragraph l(a) of this Agreement if such
failure causes Executive to resign his employment with Bergdorf;
provided that the Termination Benefits to which Executive would be
entitled after such resignation pursuant to paragraph l(a) of this
Agreement shall be the sole remedy of Executive if no such
agreement has been executed and delivered as of the effective time
of such succession or assignment. As used in this Agreement,
“NMG” shall include any successor or assignee (whether
direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all the business and/or assets
of NMG that executes and delivers the agreement provided for in
this paragraph or that otherwise becomes obligated under II this
Agreement by operation of law.
(c) If, in the reasonable judgment
of Bergdorf, Executive engages in any of the Restricted Activities
described in paragraph 3 of this Agreement, Bergdorf s obligation
to provide the Termination Benefits shall end as of the date
Bergdorf so notifies Executive in writing.
(d) If Executive is arrested or
indicted for any felony, other serious criminal offense, or any
violation of federal or state securities laws, or has any civil
enforcement action brought against him by any regulatory agency,
for actions or omissions related to his employment with Bergdorf,
or if Bergdorf reasonably believes in its sole judgment that
Executive has committed any act or omission that would have
entitled Bergdorf to terminate his employment for Cause, whether
such act or omission was committed during his employment with
Bergdorf or during the Salary Continuance Period, Bergdorf may
suspend any payments remaining pursuant to paragraph l(a) of this
Agreement until the final resolution of such criminal or civil
proceedings or until Bergdorf has made a final determination in its
sole judgment as to whether Executive committed such an act or
omission. If Executive is found guilty or enters into a plea
agreement, consent decree or similar arrangement with respect to
any such criminal or civil proceedings, or if Bergdorf determines
in its sole judgment that Executive has committed such an act or
omission, (1) Bergdorf’s obligation to provide the
Termination Benefits shall immediately end, and (2) Executive shall
repay to Bergdorf any amounts paid to him pursuant to paragraph 1
(a) of this Agreement within 30 days after a written request to do
so by Bergdorf. If any such criminal or civil proceedings do not
result in 11 finding of guilt or the entry of a plea agreement or
consent decree or similar arrangement, or Bergdorf determines in
its sole judgment that Executive has not committed such an act or
omission, Bergdorf shall pay to Executive any payments pursuant to
paragraph l(a) of this Agreement that it has suspended, with
interest on such suspended payments at its cost of funds, and shall
make any remaining payments due thereunder.
2. Executive acknowledges and agrees that (a)
Bergdorf is engaged in a highly competitive business; (b) Bergdorf
has expended considerable time and resources to develop goodwill
with its customers, vendors, and others, and to create, protect,
and exploit Confidential Information; (c) Bergdorf must continue to
prevent the dilution of its goodwill and unauthorized use or
disclosure of its Confidential Information to avoid irreparable
harm to its legitimate business interests; (d) in the specialty
retail business, his participation in or direction of
Bergdorf’s day-today operations and strategic planning are an
integral part of Bergdorf’s continued success and goodwill; (
e) given his position and responsibilities, he necessarily will be
creating Confidential Information that belongs to Bergdorf and
enhances Bergdorf s goodwill, and in carrying out his
responsibilities he in turn will be relying on Bergdorf’s
goodwill and the disclosure by Bergdorf to him of Confidential
I
