Neiman Marcus 2004 Annual Report Download - page 61

the Agreements, each of the Named Executive Officers will be entitled to a cash severance payment equal to two times (three times for Mr. Tansky) his or her
annual base salary and target bonus (or actual bonus for the year of termination under certain circumstances) as well as the continuation of certain benefits
upon both (a) a change in control and (b) the termination of such Named Executive Officer's employment without cause within two years following a change
in control (or prior to a change in control if done in anticipation of such change in control at the request of, or upon the initiative of, the buyer in such
transaction (an "Anticipatory Termination")), or by the Named Executive Officer for good reason within two years following a change in control. In addition,
in the event the foregoing conditions are met, the Agreements provide for (i) a pro-rata annual bonus (at target levels) for the year of termination,
(ii) outplacement benefits, (iii) accelerated vesting of benefits and enhanced years of service (two or three years) for purposes of eligibility and benefit accrual
under our retirement plans, including our Supplemental Executive Retirement Plan, (iv) accelerated vesting of any outstanding equity awards held by the
Named Executive Officer that are not otherwise accelerated pursuant to the terms under which such awards were granted, (v) continuing coverage under our
group health and life insurance plans for two years (three years for Mr. Tansky) and certain retiree medical coverage benefits and (vi) in the event of an
Anticipatory Termination, an amount equal to the base salary from the date of termination through the date of the change in control transaction and any bonus
for the most recently completed fiscal year if not previously paid due to the Anticipatory Termination). The Agreements further provide for the Named
Executive Officer to be made whole for any parachute excise taxes that may be payable by such Named Executive Officer, except for under certain
circumstances in which the Agreements specify that the benefits payable to the Named Executive Officer will be reduced to eliminate such excise taxes. As an
additional condition to a Named Executive Officer's receipt of the payments pursuant to the Agreements, such executive must execute a general release in our
favor and agree to be bound by certain restrictive covenants.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Walter J. Salmon, Matina S. Horner, Paula Stern, and John R. Cook served as members of our Compensation Committee during fiscal year 2005. All are
qualified as independent directors and none of them were considered employees during fiscal year 2005. John R. Cook served as our Senior Vice President
and Chief Financial Officer from September 1992 to July 2001. During fiscal year 2005, no executive officer served on the compensation committee (or
equivalent), or the board of directors, of another entity whose executive officer(s) served on our Compensation Committee or Board.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") administers our executive compensation program. The role of the Committee is to oversee our
compensation plans and policies, annually review and approve all compensation decisions regarding our executive officers, and administer the incentive
compensation plans, including reviewing and approving stock option grants to our CEO and other executive officers. The Committee's charter reflects these
various responsibilities, and the Committee and the Board periodically review and revise the charter. The Committee's membership is determined by the
Board, upon recommendation of the Nominating and Corporate Governance Committee, and is composed entirely of independent directors, as defined under
standards established by the SEC and the corporate governance and other listing standards of the NYSE in effect from time to time. The Committee meets at
scheduled times during the year and also takes action by written consent. During fiscal year 2005, the Committee engaged the services of an outside
consulting firm to assist them in administering the compensation program. Walter J. Salmon chaired the Committee and Matina S. Horner, Paula Stern, and
John R. Cook served as members during fiscal year 2005.
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