EXHIBIT 10.12
TERMINATION AND CHANGE OF CONTROL AGREEMENT
1. This Termination and Change of Control Agreement ("Agreement") is entered
into as of April 27 , 2000 between Ronald Frasch ("Mr. Frasch" or the
"Executive") and The Neiman Marcus Group, Inc. ("NMG").
2. Mr. Frasch is employed "at-will" as Chief Executive Officer of Bergdorf
Goodman, Inc., and Mr. Frasch or NMG may terminate Mr. Frasch's employment at
any time, with or without notice, for any reason. Notwithstanding this at-will
employment, NMG wishes to provide some protection to Mr. Frasch if the
Executive's employment ends under certain circumstances.
3. a. While Mr. Frasch is employed at-will, if NMG terminates Mr.
Frasch's employment other than "for cause" or other than due to "total
disability" or death, NMG agrees to provide Mr. Frasch with a termination
package consisting of (a) an amount equivalent to 1.5 times his then-
current annual base salary, less required withholding, which amount would
be paid over an18-month period in regular, bi-weekly installments
following such termination; and (b) continuation of the medical and
dental insurance coverage in which he participates at the time of such
termination (or as such coverage may be changed from time-to-time for
employees generally) for 18 months or until he starts full-time
employment, whichever is sooner. Mr. Frasch will be responsible for
paying his portion of monthly premiums for the medical and dental
insurance coverage at the same rate paid by active employees, and Mr.
Frasch authorizes NMG to deduct such amounts from the payments it makes
to him. For the purposes of determining whether or not NMG has
terminated the Executive's employment, any material, adverse change in
the terms and conditions of his employment, which change causes the
Executive to resign his employment, will be deemed a termination.
b. If Mr. Frasch's services are terminated by a successor to NMG other
than "for cause" or other than due to "total disability" or death within
two years of a change of control of NMG, as a change of control is
defined in Appendix A, or if the Executive resigns his employment within
two years of such a change of control because he is not permitted to
continue in a position comparable in duties and responsibilities to that
which he held before such a change of control, Mr. Frasch shall receive
the termination package set forth in paragraph 3.a.
4. For the purposes of determining Mr. Frasch's eligibility for the
termination package set forth in this Agreement:
a. "For cause" means, in NMG's reasonable judgment, a breach of duty
by Mr. Frasch in the course of his employment involving fraud, acts of
dishonesty (other than inadvertent acts or omissions), or moral
turpitude, repeated insubordination, failure to devote his full working
time and best efforts to the performance of his duties, or conviction of
a felony or other serious criminal offense. Provided that, with respect
to insubordination or devotion of his working time, Mr. Frasch has been
provided prior written notice of the problem and afforded a reasonable
opportunity to correct same.
b. "Total Disability" means that, in NMG's reasonable judgment, Mr.
Frasch is unable to perform his duties for (a) 80% or more of the normal
working days during six consecutive calendar months or (b) 50% or more
of the normal working days during twelve consecutive calendar months.
c. "Change of Control" has the meaning set forth in Appendix A.
5. Payment by NMG of the termination package set forth in paragraph 3
constitutes full satisfaction of NMG's obligations to Mr. Frasch, if any,
(including the right to any severance payments) which arise from or relate in
any way to the termination of Mr. Frasch's employment. However, nothing in
this Agreement is intended to limit any earned, vested benefits (other than any
entitlement to severance pay) that Mr. Frasch may have under the applicable
provisions of any benefit plan in which Mr. Frasch is participating at the time
of his termination of employment or resignation.
6. The unenforceability of any provision of this Agreement shall not affect
the enforceability of any other provision of this Agreement.
7. This Agreement contains the entire agreement between the parties and
supersedes all prior agreements and understandings, oral or written, with
respect to the termination of Mr. Frasch's at-will employment and the subject
matter of the Agreement. This Agreement may not be changed orally. It may be
changed only by written agreement signed by the party against whom any waiver,
change amendment, modification or discharge is sought.
8. The validity, performance and enforceability of this Agreement will be
determined and governed by the laws of the Commonwealth of Massachusetts
without regard to its conflict of laws principles.
The Neiman Marcus Group, Inc.
/s/ Ronald Frasch By /s/ Burton M. Tansky
Mr. Ronald Frasch
Appendix A
A Change of Control will occur for purposes of this Agreement:
(i) upon the consummation of any transaction or series of transactions
under which the Company is merged or consolidated with any other company, other
than a merger or consolidation which would result in the shareholders of the
Company immediately prior thereto continuing to own (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company, the acquiring entity or such surviving entity outstanding
immediately after such merger or consolidation in substantially the same
proportion such shareholders held the voting securities of the company
immediately prior to the merger or consolidation;
(ii) if any person or group (as used in section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (other than the Company,
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, or any company owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company) becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) of securities of the Company representing
more than 40% of (a) the shares of the Company's Class B Common Stock then
outstanding or (b) the total voting power (other than in the election of
directors) of all securities of the Company then outstanding; or
(iii) if, during any period of twenty-four consecutive months,
individuals who at the beginning of such period constitute the Board of
Directors, and any new director whose election or nomination for election by
the Company's shareholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason (other than death or disability)
to constitute at least a majority thereof; or
(iv) the complete liquidation of the Company or the sale or disposition
by the Company of all or substantially all of the Company's assets, other than
a liquidation of the Company into a wholly-owned subsidiary.
