Neiman Marcus 2006 Annual Report Download - page 74

The Retirement Plan is a funded, tax-qualified pension plan. Most non-union employees over age 21 who have completed
one year of service with 1,000 or more hours participate in the Retirement Plan, which pays benefits upon retirement or termination of
employment. The Retirement Plan is a "career-accumulation" plan, under which a participant earns each year a retirement annuity
equal to 1 percent of his or her compensation for the year up to the Social Security wage base and 1.5 percent of his or her
compensation for the year in excess of such wage base. Benefits under the Retirement Plan become fully vested after five years of
service with us.
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 ($160,000 as of July 28, 2007) are eligible to
participate. At normal retirement age (age 65), a participant with 25 or more years of service is entitled to payments under the SERP
sufficient to bring his or her combined annual benefit from the Retirement Plan and SERP, computed as a straight life annuity, up to
50 percent of the participant's highest consecutive 60 month average of annual pensionable earnings, less 60 percent of his or her
estimated annual primary Social Security benefit. If the participant has fewer than 25 years of service, the combined benefit is
proportionately reduced. Benefits under the SERP become fully vested after five years of service with us. The SERP is designed to
comply with the requirements of Section 409A of the Internal Revenue Code.
NONQUALIFIED DEFERRED COMPENSATION
Name
Executive
Contributions
in Last Fiscal Year
($)
Registrant
Contributions in
Last Fiscal Year
($)
Aggregate Earnings
in Last Fiscal Year
($)
Aggregate
Withdrawals /
Distributions
($)
Aggregate Balance
at Last Fiscal Year-End
($)
Burton M. Tansky — — — — —
Karen W. Katz 223,678 37,986 24,101 — 360,631
James E. Skinner 58,283 22,392 7,082 — 109,067
Brendan L. Hoffman 14,949 6,625 1,993 — 32,794
James J. Gold — — — — —
The amounts reported in the Nonqualified Deferred Compensation Table represent deferrals and Company matching
contributions credited pursuant to KEDC Plan. The amounts reported as Executive Contributions in Last Fiscal Year are also included
as Salary and Non-Equity Incentive Plan Compensation in the Summary Compensation Table on page 65.
The KEDC Plan allows eligible employees to elect to defer up to 15% of base pay and up to 15% of annual performance
bonus each year. Eligible employees generally are those employees who have completed one year of service with the Company, have
annual base pay of at least $300,000 and are otherwise designated as eligible by the Company's employee benefits committee. The
Company also credits a matching contribution each pay period equal to (A) the sum of (i) 100% of the sum of the employee's KEDC
Plan deferrals and the maximum Employee Savings Plan deferral that the employee could have made under such plan for such pay
period, to the extent that such sum does not exceed 2% of the employee's compensation for such pay period, and (ii) 25% of the sum
of the employee's KEDC Plan deferrals and the maximum Employee Savings Plan deferral that the employee could have made under
such plan for such pay period, to the extent that such sum does not exceed the next 4% of the employee's compensation for such pay
period, minus (B) the maximum possible match the employee could have received under the Employee Savings Plan for such pay
period. Such amounts are credited to a bookkeeping account for the employee and are fully vested. Accounts are credited monthly
with interest at an annual rate equal to the prime interest rate published in The Wall Street Journal on the last business day of the
preceding calendar quarter plus two percentage points. Amounts credited to an employee's account become payable to the employee
upon termination of employment, death, unforeseeable emergency or change of control of the Company. In the event of termination
of employment, payment is made in a lump sum in the calendar quarter following the calendar quarter in which the termination occurs
although if the employee is eligible for retirement upon such termination, payment may be deferred until the following year or made in
installments over a period of up to ten years, depending upon the distribution form previously elected by the employee. There is no
separate funding for the amounts payable under the KEDC Plan, rather the Company makes payment from its general assets. The
KEDC Plan is designed to comply with the requirements of Section 409A of the Internal Revenue Code.
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