EXHIBIT 10.39
AMENDMENT NO. 1 TO THE NEIMAN
MARCUS GROUP, INC.
KEY EMPLOYEE DEFERRED
COMPENSATION PLAN
(Amended and Restated Effective
January 1, 2008)
Pursuant to the provisions of
Section 8.1 thereof, The Neiman Marcus Group, Inc. Key
Employee Deferred Compensation Plan (Amended and Restated Effective
January 1, 2008) (the “Plan”) is hereby amended
effective as of January 1, 2008 in the following respects
only:
FIRST : Section 2.4 of the Plan is hereby
amended by restatement in its entirety to read as
follows:
2.4
“ Bonus ” means
an annual cash bonus payable by an Employer to an employee,
including any portion of such a bonus that would have been payable
to the employee but for an election under Section 125 of the
Code, a deferral election under the Savings Plan or the Retirement
Savings Plan, or a deferral election under this Plan, provided,
however, that the term “Bonus” shall not include any
amount arising from, or paid under or in connection with a
long-term incentive program, or a stock appreciation right, stock
option, restricted stock or stock unit, or other equity-based
incentive award, plan or arrangement. A “
Performance Bonus ” means any Bonus that satisfies the
requirements to be performance-based compensation within the
meaning of Treasury Regulation Section 1.409A-1(e).
SECOND : Section 2.10 of the Plan is hereby
amended by restatement in its entirety to read as
follows:
2.10
“ Compensation ”
means Base Pay and any Performance Bonus payable by an Employer to
an employee.
THIRD : Section 2.26 of the Plan is hereby
amended by restatement in its entirety to read as
follows:
2.26
“ Separation from
Service ” means the termination of services provided by a
Participant to his or her Employer (as defined in (c) below),
whether voluntary or involuntary, as determined by the Committee in
accordance with Treasury Regulation Section 1.409A-1(h).
More specifically and as provided by such regulations, in
determining whether a Participant has experienced a Separation from
Service, the following provisions shall apply:
(a)
Except as otherwise provided in
subsection (b) below, a Separation from Service will occur
when such Participant has experienced a termination of employment
with the Employer. A Participant will be considered to have
experienced a termination of employment when the facts and
circumstances indicate that the Participant and his or her Employer
reasonably anticipate that either (A) no further services will
be performed for the Employer after a certain date, or
(B) that the level of bona fide services the Participant will
perform for the Employer after such date (whether as an employee or
as an independent contractor) will permanently decrease to no more
than 20% of the average level of bona fide services performed by
the Participant (whether as an employee or an independent
contractor) over the immediately preceding 36-month period (or the
full period of services to the Employer if the Participant has been
providing services to the Employer less than 36 months).
If a Participant is on military
leave, sick leave, or other bona fide leave of absence, the
employment relationship between the Participant and the Employer
will be treated as continuing, provided that the period of the
leave of absence does not exceed six months, or if longer, so long
as the Participant has a right to reemployment with the Employer
under an applicable statute or by contract. If the period of
a military leave, sick leave, or other bona fide leave of absence
exceeds six months and the Participant does not have a right to
reemployment under an applicable statute or by contract, the
employment relationship will be considered to be terminated for
purposes of this Plan as of the first day immediately following the
end of such six-month period. In applying the provisions of
this paragraph, a leave of absence will be considered a bona fide
leave of absence only if there is a reasonable expectation that the
Participant will return to perform services for the
Employer.
(b)
For a Participant who provides
services to an Employer as both an employee and an independent
contractor , a Separation from Service generally will not
occur until the Participant has ceased providing services for the
Employer as both an employee and an independent contractor.
Except as otherwise provided herein, in the case of an independent
contractor a Separation from Service will occur upon the expiration
of the contract (or in the case of more than one contract, all
contracts) under which services are performed for the Employer,
provided that the expiration of such contract or contracts is
determined by the Employer to constitute a good-faith and complete
termination of the contractual relationship between the Participant
and the Employer. If a Participant ceases providing services
for an Employer as an employee and begins providing services for
such Employer as an independent contractor, the Participant will
not be considered to have experienced a Separation from Service
until the Participant has ceased providing services for the
Employer in both capacities, as determined in accordance with the
applicable provisions set forth in subsections (a) and
(b) of this Section.
2
Notwithstanding the foregoing
provisions in this subsection, if a Participant provides
services for an Employer as both an employee and as a member of the
board of directors of an Employer, to the extent permitted by
Treasury Regulation Section 1.409A-1(h)(5), the services
provided by the Participant as a director will not be taken into
account in determining whether the Participant has experienced a
Separation from Service as an employee.
(c)
For purposes of this
Section only, “ Employer ”
means:
(i)
The entity for whom the Participant
performs services and with respect to which the legally binding
right to the payment of benefits under this Plan arises;
and
(ii)
All other entities with which the
entity described in (i) above would be aggregated and treated
as a single employer under Code
Section 414(b) (controlled group of corporations) and
Code Section 414(c)&nb
