Neiman Marcus 2005 Annual Report Download - page 64

We also maintain a Supplemental Executive Retirement Plan (the "SERP"). The SERP is an unfunded, nonqualified plan
under which benefits are paid from our general assets to supplement Retirement Plan benefits and Social Security. Executive,
administrative and professional employees (other than those employed as salespersons) with an annual base salary at least equal to a
minimum established by the Company ($160,000 as of July 29, 2006) are eligible to participate. At normal retirement age (age 65), a
participant with 25 or more years of service is entitled to payments under the SERP sufficient to bring his or her combined annual
benefit from the Retirement Plan and SERP, computed as a straight life annuity, up to 50 percent of the participant's highest
consecutive 60 month average of annual pensionable earnings, less 60 percent of his or her estimated annual primary Social Security
benefit. If the participant has fewer than 25 years of service, the combined benefit is proportionately reduced. Benefits under the
SERP become fully vested after five years of service with us.
The following table, which includes benefits under the Retirement Plan and the SERP, shows the estimated annual pension
benefits payable to employees in various compensation and years of service categories. The estimated benefits apply to an employee
retiring at age 65 in 2006 who elects to receive his or her benefit in the form of a straight line annuity. The amounts actually payable
will be lower than the amounts shown below, since such amounts will be reduced by 60 percent of the participant's estimated primary
Social Security benefit.
Estimated Annual Retirement Benefits
Under the Retirement Plan and SERP
Total Years of Service
Final Average Pensionable Earnings 5 10 15 20 25
$ 400,000 $ 40,000 $ 80,000 $ 120,000 $ 160,000 $ 200,000
600,000 60,000 120,000 180,000 240,000 300,000
800,000 80,000 160,000 240,000 320,000 400,000
1,000,000 100,000 200,000 300,000 400,000 500,000
1,200,000 120,000 240,000 360,000 480,000 600,000
1,500,000 150,000 300,000 450,000 600,000 750,000
The following table shows the pensionable earnings and credited years of service for the Named Executive Officers as of
July 29, 2006, and years of service creditable at age 65.
Name
Pensionable
Earnings For
Year Ended
July 29, 2006(1)
Years of Service(2)
At July 29, At Age
2006 65
Burton M. Tansky $ 1,350,000 —(3) 25(3)
Karen M. Katz 760,000 21 37
James E. Skinner 530,000 5 17
Brendan L. Hoffman 460,000 8 35
James J. Gold 425,000 15 38
(1) In computing the combined benefit under the Retirement Plan and SERP, "pensionable earnings" means, with respect to the
Retirement Plan, base salary and any bonus and, with respect to the SERP, base salary only. The amounts shown above
include base salary only.
(2) The credited years of service set forth in the table reflect years of credited service under the Retirement Plan, which is a
"career average plan" with no limitation on years of credited service. However, credited service under the SERP may not
exceed 25 years.
(3) For purposes of determining Mr. Tansky's retirement benefits under the SERP, Mr. Tansky will be credited with two times
his years of service with the Company provided he does not compete with the Company for a period of three years following
his retirement and the Company does not terminate his employment other than for cause. Upon completion of the merger,
Mr. Tansky's SERP was amended such that he will continue to earn credit for each year of service, and will also be credited
with prior years of service in which he did not receive service credit for purposes of the SERP because of the 25-year cap.
Mr. Tansky had 28 years of credited service immediately following the Transactions (and will continue to accrue additional
years of service).
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