Neiman Marcus 2007 Annual Report Download - page 60

Table of Contents
Indirect Compensation
Indirect compensation is comprised of the following elements:
• Health and welfare benefits
• Retirement benefits
• Life insurance
• Deferred compensation programs
• Certain perquisites
• Health and Welfare Benefits
Executive officers participate under the same plans as all other employees for medical, dental, vision, disability, and life
insurance. These benefits are intended to be competitive with benefits offered in the retail industry. In addition, the executive
officers, including the named executive officers, participate in an executive life insurance program and a medical reimbursement
program. These benefits are included with the perquisites described below.
• Retirement Plan
Prior to 2008, most non-union employees over age 21 who had completed one year of service with 1,000 or more hours
participated in The Neiman Marcus Group, Inc. Retirement Plan (referred to as the Retirement Plan), which paid benefits upon
retirement or termination of employment. Effective as of December 31, 2007, eligibility and benefit accruals under the Retirement
Plan were frozen for all participants except for those "Rule of 65" employees who elected to continue participation in the Retirement
Plan. "Rule of 65" employees included only those active employees who had completed at least 10 years of service and whose
combined years of service and age equaled at least 65 as of December 31, 2007. The Retirement Plan is a "career-accumulation" plan,
under which a participant earns each year a retirement annuity equal to one 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. A participant becomes
fully vested after five years of service with us. Mr. Tansky and Ms. Katz were Rule of 65 employees, as of December 31, 2007, and
elected to continue participation in the Retirement Plan. For Messrs. Skinner, Hoffman, and Gold, benefits and accruals under the
Retirement Plan were frozen effective as of December 31, 2007.
• Savings Plan (401(k) Plan)
Effective January 1, 2008, a new enhanced 401(k) plan, The Neiman Marcus Group, Inc. Retirement Savings Plan (referred
to as the RSP), was offered to all employees, including the named executive officers, as the primary retirement plan. Benefits and
accruals under The Neiman Marcus Group, Inc. Employee Savings Plan (referred to as the ESP) were frozen as well as benefits and
accruals under the Retirement Plan and all future and current employees who were not already enrolled in the ESP and the Retirement
Plan were automatically enrolled in the RSP. "Rule of 65" employees, as described above, were given a choice to either continue
participation in the Retirement Plan and the ESP or freeze what was earned under those plans through December 31, 2007 and
participate in the RSP. Mr. Tansky and Ms. Katz were "Rule of 65" employees and elected to remain in the Retirement Plan and the
ESP. Messrs. Skinner, Hoffman, and Gold were not eligible to continue participating in the ESP and amounts in their Retirement Plan
were frozen and the balances in their ESP were transferred to the RSP. The RSP is a tax-qualified defined contribution 401(k) plan
that allows participants to contribute up to the limit prescribed by the Internal Revenue Service on a pre-tax basis. The Company will
match 100% of the first 3% and 50% of the next 3% of pay that is contributed to the RSP after the first year of employment. All
employee contributions to the RSP are fully vested upon contribution. Company matching contributions vest after two years of
service.
For those who remain eligible, the ESP is a retirement savings plan that allows participants to contribute up to the limit
prescribed by the Internal Revenue Service on a pre-tax basis (provided, however, that highly compensated employees are limited to
6% of eligible compensation). The Company will match 100% of the first 2% and 25% of the next 4% of pay that is contributed to the
ESP after the first year of employment. All employee contributions to the ESP are fully vested upon contribution. Company
matching contributions vest after three years of service.
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