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Neiman Marcus, Inc.
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 09/21/2011
Filed Period 07/30/2011

Table of contents

  • Page 1
    Neiman Marcus, Inc. 10-K Annual report pursuant to section 13 and 15(d) Filed on 09/21/2011 Filed Period 07/30/2011

  • Page 2
    ... jurisdiction of incorporation or organization) 1618 Main Street Dallas, Texas (Address of principal executive offices) 20-3509435 (I.R.S. Employer Identification No.) 75201 (Zip code) Neiman Marcus, Inc. Registrant's telephone number, including area code: (214) 743-7600 Securities registered...

  • Page 3
    ...No x The aggregate market value of the registrant's voting and non-voting common equity held by non-affiliates of the registrant is zero. The registrant is a privately held corporation. As of September 15, 2011, the registrant had outstanding 1,014,915 shares of its common stock, par value $0.01 per...

  • Page 4
    ...Officers of the Registrant Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services Exhibits and Financial Statement Schedules...

  • Page 5
    ... Bergdorf Goodman stores. We also operate 30 off-price stores under the Neiman Marcus Last Call brand. Specialty Retail Stores accounted for 81.1% of our total revenues in fiscal year 2011, 81.5% in fiscal year 2010 and 82.1% in fiscal year 2009. • Neiman Marcus Stores. Neiman Marcus stores offer...

  • Page 6
    ... in New York City well known for its couture merchandise, opulent shopping environment and landmark Fifth Avenue locations. Like Neiman Marcus, Bergdorf Goodman features high-end apparel, fashion accessories, shoes, precious and designer jewelry, cosmetics, gift items and decorative home accessories...

  • Page 7
    ... and well-trained sales associates; in-store and online marketing programs designed to promote customer awareness of our offerings of the latest fashion trends; loyalty programs designed to cultivate long-term relationships with our customers; and a proprietary credit card program facilitating the...

  • Page 8
    ... Nevada, N.A. and HSBC Private Label Corporation (collectively referred to as HSBC). Pursuant to the agreement with HSBC, HSBC offers proprietary credit card accounts to our customers under both the "Neiman Marcus" and "Bergdorf Goodman" brand names. Our original program agreement with HSBC expired...

  • Page 9
    ...Gucci, Nancy Gonzalez, Tory Burch and Balenciaga. Men's Apparel and Shoes: Men's apparel and shoes include suits, dress shirts and ties, sport coats, jackets, trousers, casual wear and eveningwear as well as business and casual footwear. Bergdorf Goodman has a fully dedicated men's store in New York...

  • Page 10
    ... Specialty Retail Stores, we utilize a primary distribution facility in Longview, Texas, a regional distribution facility in Dayton, New Jersey and four regional service centers. We also operate two distribution facilities in the Dallas-Fort Worth area to support our Direct Marketing operation. Our...

  • Page 11
    ... Los Angeles area), Bellevue (suburban Seattle) and Walnut Creek, California (scheduled to open in March 2012); the renovation and expansion of our main Bergdorf Goodman store in New York City; and enhancements to merchandising and store systems. Currently, we project gross capital expenditures...

  • Page 12
    ... stores and direct marketing firms. We compete for customers principally on the basis of quality and fashion, customer service, value, assortment and presentation of merchandise, marketing and customer loyalty programs and, in the case of Neiman Marcus and Bergdorf Goodman, store ambiance. Retailers...

  • Page 13
    ... periods of deep discount pricing by our competitors could have a material adverse effect on our business. Risks Related to Our Structure and NMG's Indebtedness Because NMG accounts for substantially all of our operations, we are subject to all risks applicable to NMG. We are a holding company...

  • Page 14
    ... term loans are outstanding, if the aggregate amount outstanding under the Asset-Based Revolving Credit Facility exceeds the reported value of inventory as calculated under that facility, NMG will be required to eliminate such excess within a limited period of time. If the amount available...

  • Page 15
    ... 2028 Debentures and the credit agreements governing the Senior Secured Credit Facilities include covenants that, among other things, restrict NMG's ability to incur additional indebtedness; pay dividends on NMG's capital stock or redeem, repurchase or retire its capital stock or indebtedness; make...

  • Page 16
    ...and fashion, customer service, value, assortment and presentation of merchandise, marketing and customer loyalty programs and store ambiance. Our failure to successfully compete based on these and other factors may have a material adverse effect on our revenues and results of operations. A number of...

  • Page 17
    ... maintain and grow our position as a leading luxury retailer, we must make investments annually to support our business goals and objectives. We make capital investments in our new and existing stores, websites, and distribution and support facilities as well as information technology. We also incur...

  • Page 18
    ...may continue to change the terms of credit offered to our customers as well as HSBC may change certain policies and arrangements with credit card customers in ways that affect our relationships with these customers. Moreover, changes in credit card use, payment patterns, and default rates may result...

  • Page 19
    ... over consumer lending. Any regulation or change in the regulation of credit arrangements that would materially limit the availability of credit to our customer base could adversely affect our business. Changes in credit card use, payment patterns, and default rates may result from a variety of...

  • Page 20
    ... some technology-related business processes to third parties. These include credit card authorization and processing, insurance claims processing, payroll processing, record keeping for retirement and benefit plans and certain information technology functions. In addition, we review outsourcing...

  • Page 21
    ... Marcus Last Call Direct Marketing Dallas, Texas New York, New York Dallas, Texas Irving, Texas Properties that we use in our operations include Neiman Marcus stores, Bergdorf Goodman stores, Neiman Marcus Last Call stores and distribution, support and office facilities. As of September 15, 2011...

  • Page 22
    ... partial ground lease. Leased. Owned buildings on leased land. Owned. Mortgaged to secure our Senior Secured Credit Facilities and the 2028 Debentures. 2008 2009 2010 102,000 120,000 125,000 We currently plan to open a new store in Walnut Creek, California in 2012 (89,000 square feet planned). 18

  • Page 23
    ... stores: Bergdorf Goodman Stores Fiscal Year Operations Began Gross Store Sq. Feet Locations New York City (Main)(1) New York City (Men's)(1)* (1) * Leased. Mortgaged to secure our Senior Secured Credit Facilities and the 2028 Debentures. 1901 1991 250,000 66,000 Neiman Marcus Last Call Stores...

  • Page 24
    ... of Financial Condition and Results of Operations" in Item 7. July 30, 2011 July 31, 2010 Fiscal year ended August 1, 2009 August 2, 2008 (1) July 28, 2007 (in millions) OPERATING RESULTS Revenues Cost of goods sold including buying and occupancy costs (excluding depreciation) Selling, general and...

  • Page 25
    ... as Neiman Marcus stores and Bergdorf Goodman stores net sales divided by weighted average square footage. Weighted average square footage includes a percentage of year-end square footage for new stores equal to the percentage of the year during which they were open. Sales per square foot for...

  • Page 26
    ... Bergdorf Goodman brand names. We report our store operations as our Specialty Retail Stores segment and our direct-toconsumer operations as our Direct Marketing segment. The Company is a subsidiary of Newton Holding, LLC (Holding), which is controlled by investment funds affiliated with TPG Capital...

  • Page 27
    ... revenues reflecting a lower level of capital expenditures in recent years and lower amortization of short-lived intangible assets; offset by a decrease in income from our credit card operations by 0.5% of revenues primarily due to the amendment of terms in our amended and extended Program Agreement...

  • Page 28
    ... of net revenues for the periods indicated. July 30, 2011 Fiscal year ended July 31, 2010 August 1, 2009 Revenues Cost of goods sold including buying and occupancy costs (excluding depreciation) Selling, general and administrative expenses (excluding depreciation) Income from credit card program...

  • Page 29
    ... charges (2) Total OPERATING PROFIT MARGIN (LOSS) Specialty Retail Stores Direct Marketing Total CHANGE IN COMPARABLE REVENUES (3) Specialty Retail Stores Direct Marketing Total SALES PER SQUARE FOOT (4) Specialty Retail Stores STORE COUNT Neiman Marcus and Bergdorf Goodman full-line stores: Open...

  • Page 30
    ... per square foot are calculated as Neiman Marcus stores and Bergdorf Goodman stores net sales divided by weighted average square footage. Weighted average square footage includes a percentage of year-end square footage for new stores equal to the percentage of the year during which they were open...

  • Page 31
    ...the following factors: • • changes in the number of sales associates primarily due to new store openings and expansion of existing stores, including increased health care and related benefits expenses; changes in expenses incurred in connection with our advertising and marketing programs; and 27

  • Page 32
    ... • changes in expenses related to employee benefits due to general economic conditions such as rising health care costs. Income from credit card program. Pursuant to a long-term marketing and servicing alliance with HSBC, HSBC offers credit card and non-card payment plans bearing our brands and...

  • Page 33
    ...product margins generated by our Direct Marketing operation of approximately 0.6% primarily due to higher net markdowns in response to lower than anticipated customer demand, particularly during the second quarter of fiscal year 2011, and lower delivery and processing net revenues. Selling, general...

  • Page 34
    ... operating margin as a percentage of revenues for Direct Marketing was primarily the result of decreased product margins primarily due to higher net markdowns and lower delivery and processing net revenues; higher marketing and selling costs; and a lower level of income from our credit card program...

  • Page 35
    ...decrease of 0.1%. Changes in comparable revenues, by quarter and by reportable segment, were: Fourth Quarter Fiscal year 2010 Second Third Quarter Quarter First Quarter Fourth Quarter Fiscal year 2009 Second Third Quarter Quarter First Quarter Specialty Retail Stores Direct Marketing Total 4.9% 13...

  • Page 36
    ... Retail Stores and Direct Marketing operation of approximately 3.9% of revenues due to 1) lower net markdowns as a result of the closer alignment of on-hand inventories to customer demand in fiscal year 2010 and 2) increases in customer demand and higher levels of full-price sales; and lower buying...

  • Page 37
    ..., or 4.2% of Specialty Retail Stores revenues, for the prior fiscal year. The increase in operating margin as a percentage of revenues was primarily due to lower net markdowns, higher customer demand and higher levels of full-price sales; and favorable payroll and related benefits primarily due to...

  • Page 38
    ... of the goodwill impairment charges, our effective income tax rate was 39.5% for fiscal year 2009. During the fourth quarter of fiscal year 2010, the Internal Revenue Service (IRS) closed their examination of our fiscal year 2007 federal income tax return with no changes or assessments. With respect...

  • Page 39
    ...increases in retail prices and/or we are unable to pass such cost increases to our customers, our revenues, gross margins, and ultimately our earnings, could decrease. Foreign currency fluctuations could have a material adverse effect on our business, financial condition and results of operations in...

  • Page 40
    ... Revolving Credit Facility are influenced by a number of factors, including revenues, working capital levels, vendor terms, the level of capital expenditures, cash requirements related to financing instruments and debt service obligations, Pension Plan funding obligations and tax payment obligations...

  • Page 41
    ... period, and in any event, never less than 1.25%), subject to certain adjustments, in each case plus an applicable margin. In addition to extending the maturity of a portion of the existing term loans under the Senior Secured Term Loan Facility, the TLF Amendment changed the "applicable margin" used...

  • Page 42
    ... of $500.0 million in order to hedge the variability of our cash flows related to a portion of our floating rate indebtedness once the interest rate swap expired in December 2010. The interest rate cap agreements commenced in December 2010 and will expire in December 2012. Pursuant to the interest...

  • Page 43
    ... 30, 2011. These amounts represent the gross construction costs and exclude developer contributions of approximately $16.4 million, which we expect to receive pursuant to the terms of the construction contracts. In the normal course of our business, we issue purchase orders to vendors/suppliers for...

  • Page 44
    ... including relationships between the United States and the countries from which we source our merchandise; economic, political, social or other events resulting in the short- or long-term disruption in business at our stores, distribution centers or offices; Customer Considerations changes in...

  • Page 45
    ... and Supply Chain Considerations changes in our relationships with designers, vendors and other sources of merchandise, including adverse changes in their financial viability, cash flows or available sources of funds; delays in receipt of merchandise ordered due to work stoppages or other causes...

  • Page 46
    ... services and delivery and processing revenues related to merchandise sold. Revenues are recognized at the later of the point of sale or the delivery of goods to the customer. Revenues associated with gift cards are recognized at the time of redemption by the customer. Revenues exclude sales taxes...

  • Page 47
    ... of the acquired merchandise and are recognized at the time the goods are sold. The amounts of vendor allowances we receive fluctuate based on the level of markdowns taken and did not have a significant impact on the year-over-year change in gross margin during fiscal years 2011, 2010 or 2009. We...

  • Page 48
    ...fair value). The projected sales, gross margin and expense rate and capital expenditures assumptions are based on our annual business plan or other forecasted results. Discount rates reflect market-based estimates of the risks associated with the projected cash flows directly resulting from the use...

  • Page 49
    ... Plans are valued annually as of the end of each fiscal year. As of the third quarter of fiscal year 2010, benefits offered to all employees under our Pension Plan and SERP Plan have been frozen. Significant assumptions related to the calculation of our obligations include the discount rates used...

  • Page 50
    ... through F-41 at the end of this Annual Report on Form 10-K: Index Page Number Management's Report on Internal Control over Financial Reporting Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Cash...

  • Page 51
    ...c. Changes in Internal Control over Financial Reporting In the ordinary course of business, we routinely enhance our information systems by either upgrading our current systems or implementing new systems. No change occurred in our internal controls over financial reporting during the quarter ended...

  • Page 52
    ... Partner of TPG Capital, L.P, a leading global private equity investment firm, since 1993. He is currently a senior partner and member of the firm's Executive, Management and Investment Committees. Mr. Coslet also serves on the board of directors of Caesars Entertainment Corporation, Quintiles...

  • Page 53
    ... Retired Managing Director and Senior Advisor of Warburg Pincus LLC. Mr. Lapidus had been employed at Warburg Pincus since 1967. He presently serves as a director of Lennar Corporation and Knoll, Inc. He serves on the board of directors of a number of nonprofit organizations including New York...

  • Page 54
    ...in the areas of management, corporate strategy development, and finance. Susan C. Schnabel Managing Director of Credit Suisse, a leading international investment bank, in the Asset Management Division and Co-Head of DLJ Merchant Banking Partners, a private equity investment firm focused on leveraged...

  • Page 55
    ... created position of President and Chief Executive Officer of Specialty Retail in October 2010. His prior service includes President and Chief Executive Officer of Bergdorf Goodman from May 2004 to October 2010. Mr. Koryl joined us as President of Neiman Marcus Direct in June 2011. From August 2009...

  • Page 56
    ... as Senior Vice President, General Merchandise Manager, Fashion, Neiman Marcus Direct from 2001 until 2007. Mr. Barnes now serves as Executive Vice President, Chief Merchant, Neiman Marcus Direct. 55 Marita Glodt 62 Gerald A. Barnes 58 CORPORATE GOVERNANCE Code of Ethics The Board of Directors...

  • Page 57
    ... operating plans. Increase customer satisfaction, improve customer service, provide our customers with high-end luxury merchandise, and increase the amount of business our customers do with us. Align the interests of our executives with the financial and strategic objectives of our equity investors...

  • Page 58
    ... of the Acquisition in order to retain the senior management team and enable them to share in the growth of the Company along with our equity investors. The initial stock option grants were awarded at an exercise price equal to the fair market value of our common stock at the time of the grant. The...

  • Page 59
    ... the named executive officers. In the event of a change of control, or an initial public offering, as defined in the Cash Incentive Plan, and if the internal rate of return to the Sponsors is positive, each participant in the Cash Incentive Plan, subject generally to continued employment, will be...

  • Page 60
    ... our named executive officers to take undesirable risks relating to the business. For further information, see "Risk Assessment of Compensation Policies and Programs" above. Role of Management. As part of our annual planning process, the CEO and the Senior Vice President and Chief Human Resource...

  • Page 61
    ... Neiman Marcus Stores and two Bergdorf Goodman stores. Specialty Retail accounted for 81.1% of our total revenues in fiscal year 2011. Amounts actually earned by each of the named executive officers in fiscal years 2009, 2010, and 2011 are listed in the Summary Compensation Table on page 62. Annual...

  • Page 62
    ...the terms of her employment agreement payable thirty-days following the effective date of assuming the position of President and Chief Executive Officer. Corporate Performance Targets. At the end of the fiscal year, the Compensation Committee evaluates Company's performance against the financial and...

  • Page 63
    ... insurance. These benefits are intended to be competitive with benefits offered in the retail industry. 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...

  • Page 64
    ...and Chief Executive Officer, Mr. Skinner was promoted to the additional position of Chief Operating Officer, and Mr. Gold was promoted to President, Specialty Retail. In order to support the continuity of senior leadership, the Compensation Committee approved the entry into the employment agreements...

  • Page 65
    ... in the plans, including the named executive officers, except to the extent an executive is party to an individual agreement that provides otherwise. Consideration of Tax and Accounting Treatment of Compensation Internal Revenue Code §409A The American Jobs Creation Act of 2004 added a new Section...

  • Page 66
    ... Barnes Former President and Chief Executive Officer Neiman Marcus Direct Marita Glodt Former Senior Vice President and Chief Human Resource Officer Fiscal Year 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 Salary ($)(1) 512...

  • Page 67
    ...compensation plan match Group term life insurance Medical benefit (1) Financial counseling/tax preparation Long-term disability Car allowance New York travel reimbursement (2) Cost of living adjustment (3) Moving expenses (4) Gross-ups for New York travel (2) Gross ups for New York nonresident taxes...

  • Page 68
    63

  • Page 69
    ... to Texas in May 2010. Moving expenses for Mr. Gold includes the cost of relocation from New York to Dallas in connection with his promotion in fiscal year 2011 as well as a one-time payment to cover the loss of equity on the sale of his New York home. The amounts shown represent gross-up payments...

  • Page 70
    ...page F-31 of this Annual Report on Form 10-K. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END The following table sets forth certain information regarding the total number and aggregate value of stock options held by each of our named executive officers at July 30, 2011. Number of Securities Underlying...

  • Page 71

  • Page 72
    ... in the first quarter of fiscal year 2012. (5) (6) (7) The following table sets forth information concerning the exercise of stock options during fiscal year 2011 for each of the named executive officers. OPTION EXERCISES AND STOCK VESTED Option Awards Number of Shares Value Realized Acquired on...

  • Page 73
    ... The following table sets forth certain information with respect to retirement payments and benefits under the Retirement Plan and the SERP for each of our named executive officers. Number of Years Credited Service (#)(1) Present Value of Accumulated Benefit ($)(2) Payments During Last Fiscal Year...

  • Page 74
    ... paid from our general assets to supplement Retirement Plan benefits and Social Security. Prior to 2008, 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 were eligible to...

  • Page 75
    ... in the event the employee is terminated for cause. 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. Amounts credited to an employee's account become payable...

  • Page 76
    ...retirement as President and Chief Executive Officer, the Company entered into a director services agreement wherein he agreed to act as non-executive Chairman of the Board of Directors for a term beginning October 6, 2010 through December 31, 2011. He will be compensated in this new role at the rate...

  • Page 77
    ... of her new duties and the grant of a non-qualified stock option under the Company's Management Equity Incentive Plan with respect to 4,300 shares of common stock of the Company with an exercise price equal to the fair market value of the common stock at the time of grant. The stock option will...

  • Page 78
    .... Skinner and Mr. Gold On July 22, 2010, the Company entered into new employment agreements with James E. Skinner, Executive Vice President and Chief Financial Officer, and James J. Gold, President and Chief Executive Officer of Bergdorf Goodman, Inc., the terms of which became effective on October...

  • Page 79
    ... 2013 in order to receive payment. Potential Payments Upon Termination or Change-in-Control Mr. Tansky retired effective October 5, 2010. Under the terms of his employment agreement, he received $58,111 that represents a cash amount equal to the monthly COBRA premium applicable to him at the time of...

  • Page 80
    ... deferred compensation plan and defined contribution plan, and long-term disability payments of $20,000 per month for twelve months payable from the Company's long-term disability insurance provider. Represents a lump sum payment of the target bonus and two times base salary, two times target bonus...

  • Page 81
    ...contribution plan, and long-term disability payments of $20,000 per month for twelve months payable from the Company's long-term disability insurance provider. Represents 1.5 times Mr. Skinner's base salary payable over an eighteenth month period, a lump sum payment of target bonus, 1.5 times target...

  • Page 82
    ...payable from the Company's long-term disability insurance provider. Represents 1.5 times Mr. Gold's base salary payable over an eighteen month period, a lump sum payment of target bonus, 1.5 times target bonus, the portion of the salary payment that is exempt from 409A of the Code, a lump sum payout...

  • Page 83
    ... Executive Benefits and Payments Upon Separation Retirement ($)(1) Change in Control ($)(1)(5) NELSON A. BANGS Compensation: Severance Benefits & Perquisites: Retirement Plans Deferred Compensation Plan Cash Incentive Plan Payment Long-Term Disability Health and Welfare Benefits Life Insurance...

  • Page 84
    ... a discount at our stores at the same rate that is available to our employees. As an employee director, Ms. Katz receives no compensation for her service as a member of our Board of Directors. In connection with the Acquisition, affiliates of the Sponsors receive an annual management fee equal to...

  • Page 85
    ... Commerce Street Fort Worth, Texas 76102 TPG Funds (2) 301 Commerce Street Suite 3300 Fort Worth, Texas 76102 Affiliates of Warburg Pincus, LLC (3) 466 Lexington Avenue New York, NY 10017 David A. Barr (4) 466 Lexington Avenue New York, NY 10017 James Coulter (2) 345 California Street San Francisco...

  • Page 86
    ... San Francisco, CA 94104 John G. Danhakl 11111 Santa Monica Boulevard Los Angeles, CA 90025 Carrie Wheeler (7) 345 California Street Suite 3300 San Francisco, CA 94104 Susan C. Schnabel 2121 Avenue of the Stars Los Angeles, CA 90067 All current executive officers and directors as a group (21 persons...

  • Page 87
    ... TPG Funds, WP VIII and WP IX. The mailing address for each of Group Advisors, Advisors III and Messrs. Bonderman and Coulter is c/o TPG Capital, L.P., 301 Commerce Street, Fort Worth, TX 76102. (3) Includes the 1,000,000 shares owned by Newton Holding, LLC over which Warburg Pincus Private Equity...

  • Page 88
    ... comparable services or products and (d) the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. Related Person Transactions Newton Holding, LLC Limited Liability Company Operating Agreement The investment funds associated with or designated by...

  • Page 89
    ...the Delaware General Corporation Law will not apply to the Company. Section 203 restricts "business combinations" between a corporation and "interested stockholders," generally defined as stockholders owning 15% or more of the voting stock of a corporation. Management Stockholders' Agreement Subject...

  • Page 90
    ... scheduled meeting. Principal Accounting Fees and Services Audit Fees. The aggregate fees billed for the audits of the Company's annual financial statements for the fiscal years ended July 30, 2011 and July 31, 2010 and for the reviews of the financial statements included in our Quarterly Reports...

  • Page 91
    ... Agreement and Plan of Merger, dated May 1, 2005, among The Neiman Marcus Group, Inc., Newton Acquisition, Inc., and Newton Merger Sub, Inc., incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 2010. Purchase, Sale and Servicing Transfer...

  • Page 92
    ... the Company's Annual Report on Form 10-K for the fiscal year ended August 1, 2009. Second Amended and Restated Credit Agreement, dated as of May 17, 2011, among The Neiman Marcus Group, Inc., the Company, the other borrowers named therein, the subsidiaries of The Neiman Marcus Group, Inc. from time...

  • Page 93
    ...to the Company's Quarterly Report on Form 10-Q for the quarter ended January 29, 2011. Amendment No. Four to the Neiman Marcus, Inc. Management Equity Incentive Plan effective as of May 1, 2011. (1) Amended and Restated Stock Option Grant Agreement dated April 2, 2010 between Neiman Marcus, Inc. and...

  • Page 94
    ... ended January 29, 2011. Amended and Restated Credit Card Program Agreement, dated as of September 23, 2010, by and among The Neiman Marcus Group, Inc., Bergdorf Goodman, Inc., HSBC Bank Nevada, N.A. and HSB Card Services, Inc., incorporated herein by reference to the Company's Annual Report on Form...

  • Page 95
    ... Contribution Supplemental Executive Retirement Plan dated July 17, 2010, incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 2010. Computation of Ratio of Earnings to Fixed Charges. (1) The Neiman Marcus Group, Inc. Code of Ethics and...

  • Page 96
    ... The Neiman Marcus Group, Inc. Code of Ethics for Financial Professionals, incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 2010. Subsidiaries of the Company. (1) Consent of Ernst & Young LLP. (1) Certification of Chief Executive Officer...

  • Page 97
    ... STATEMENTS Page Management's Report on Internal Control over Financial Reporting Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Cash Flows Consolidated Statements of Shareholders' Equity Notes to...

  • Page 98
    ... policies and guidelines, which require employees to maintain a high level of ethical standards. In addition, the Audit Committee of the Board of Directors meets periodically with management, the internal auditors and the independent registered public accounting firm to review internal accounting...

  • Page 99
    ... balance sheets of Neiman Marcus, Inc. as of July 30, 2011 and July 31, 2010, and the related consolidated statements of operations, cash flows, and shareholders' equity for each of the three years in the period ended July 30, 2011. Our audits also included the financial statement schedule...

  • Page 100
    ...in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Neiman Marcus, Inc. as of July 30, 2011 and July 31, 2010, and the related consolidated statements of operations, cash flows, and shareholders' equity for each of the...

  • Page 101
    ... of Contents NEIMAN MARCUS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except shares) July 30, 2011 July 31, 2010 ASSETS Current assets: Cash and cash equivalents Merchandise inventories Deferred income taxes Other current assets Total current assets Property and equipment, net Customer lists...

  • Page 102
    Table of Contents NEIMAN MARCUS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS July 30, 2011 Fiscal year ended July 31, 2010 August 1, 2009 (in thousands) Revenues Cost of goods sold including buying and occupancy costs (excluding depreciation) Selling, general and administrative expenses (excluding ...

  • Page 103
    ... year Beginning balance Ending balance Supplemental Schedule of Cash Flow Information: Cash paid (received) during the year for: Interest Income taxes Non-cash activities: Adjustments to goodwill related to pre-acquisition tax contingencies See Notes to Consolidated Financial Statements. F-7 $ 31...

  • Page 104
    ...to earnings, net of tax of $10,287 Change in unfunded benefit obligations, net of tax of ($52,865) Other Total comprehensive loss BALANCE AT AUGUST 1, 2009 Stock based compensation expense Comprehensive loss: Net loss Adjustments for fluctuations in fair market value of financial instruments, net of...

  • Page 105
    ... FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The Company is a luxury retailer conducting integrated store and direct-to-consumer operations principally under the Neiman Marcus and Bergdorf Goodman brand names. We report our store operations...

  • Page 106
    ... of the acquired merchandise and are recognized at the time the goods are sold. The amounts of vendor allowances we receive fluctuate based on the level of markdowns taken and did not have a significant impact on the year-over-year change in gross margin during fiscal years 2011, 2010 or 2009. We...

  • Page 107
    ... our current revenue and profitability projections, market royalty rates decrease or the weighted average cost of capital increases. The assessment of the recoverability of the goodwill associated with our Neiman Marcus stores, Bergdorf Goodman stores and Direct Marketing reporting units involves...

  • Page 108
    ...fair value). The projected sales, gross margin and expense rate and capital expenditures assumptions are based on our annual business plan or other forecasted results. Discount rates reflect market-based estimates of the risks associated with the projected cash flows directly resulting from the use...

  • Page 109
    ... from vendors related to compensation programs were $60.3 million in fiscal year 2011, $61.1 million in fiscal year 2010 and $65.8 million in fiscal year 2009. We incur costs to advertise and promote the merchandise assortment offered by both Specialty Retail Stores and Direct Marketing. Advertising...

  • Page 110
    ... to make assumptions related to customer purchasing levels and redemption rates. At the time the qualifying sales giving rise to the loyalty program points are made, we defer the portion of the revenues on the qualifying sales transactions equal to the estimated retail value of the gift cards to be...

  • Page 111
    ... reportable operating segments, are as follows: Favorable Lease Commitments (in thousands) Customer Lists Tradenames Goodwill Specialty Retail Stores Balance at August 1, 2009 Amortization Balance at July 31, 2010 Amortization Balance at July 30, 2011 Direct Marketing Balance at August 1, 2009...

  • Page 112
    ...declines in the domestic and global financial markets during the first and second quarters of fiscal year 2009. Utilizing our then-current operating forecasts to estimate the fair values of our Neiman Marcus stores, Bergdorf Goodman stores and Direct Marketing operation, we determined certain of our...

  • Page 113
    ...term loans may be exchanged by NMG for any of NMG's existing senior subordinated notes, or the cash proceeds of any incremental term loans may be used to repurchase any of such notes and may be used for working capital and general corporate purposes. Borrowings under the Asset-Based Revolving Credit...

  • Page 114
    ... interest in personal property consisting of inventory and related accounts, cash, deposit accounts, all payments received by NMG or the subsidiary guarantors from credit card clearinghouses and processors or otherwise in respect of all credit card charges for sales of inventory by NMG and the...

  • Page 115
    ... period, and in any event, never less than 1.25%), subject to certain adjustments, in each case plus an applicable margin. In addition to extending the maturity of a portion of the existing term loans under the Senior Secured Term Loan Facility, the TLF Amendment changed the "applicable margin" used...

  • Page 116
    ... interest in personal property consisting of inventory and related accounts, cash, deposit accounts, all payments received by NMG or the subsidiary guarantors from credit card clearinghouses and processors or otherwise in respect of all credit card charges for sales of inventory by NMG and the...

  • Page 117
    ...$517.5 million at July 31, 2010 based on quoted market prices (Level 2). Maturities of Long-Term Debt. At July 30, 2011, annual maturities of long-term debt during the next five fiscal years and thereafter are as follows (in millions): 2012 2013 2014 2015 2016 Thereafter $ - - - - 500.0 2,181.7 The...

  • Page 118
    ...50%, NMG will pay interest at the lower LIBOR rate. In the event LIBOR is higher than 2.50%, NMG will pay interest at the capped rate of 2.50%. At each balance sheet date, the interest rate caps are recorded at estimated fair value. The changes in the fair value of the cap are expected to be highly...

  • Page 119
    ... using market-based observable inputs, including interest rate curves (Level 2). A summary of the recorded assets (liabilities) with respect to our derivative financial instruments included in our consolidated balance sheets is as follows: (in thousands) July 30, 2011 July 31, 2010 Interest rate...

  • Page 120
    ... 30, 2011 Fiscal year ended July 31, 2010 August 1, 2009 (in thousands) Income tax expense (benefit) at statutory rate State income taxes, net of federal income tax benefit Impairment of nondeductible goodwill Tax expense (benefit) related to tax settlements and other changes in tax liabilities...

  • Page 121
    ... supplemental executive retirement plan (SERP Plan) which provides certain employees additional pension benefits. Benefits under both plans are based on the employees' years of service and compensation over defined periods of employment. As of the third quarter of fiscal year 2010, benefits offered...

  • Page 122
    ... the market related value of plan assets. At July 30, 2011, the fair value of plan assets exceeded the market related value by $12.8 million. Benefit Obligations. Our obligations for the Pension Plan, SERP Plan and Postretirement Plan are valued annually as of the end of each fiscal year. Changes in...

  • Page 123
    ...to reduce volatility through diversification and enhance return to approximate the amounts and timing of the expected benefit payments. The asset allocation for our Pension Plan at the end of fiscal years 2011 and 2010 and the target allocation for fiscal year 2012, by asset category, are as follows...

  • Page 124
    ... as market participants, information from market sources integrating relative credit information, observed market movements, and sector news, all of which is applied to pricing applications and models. Pension Plan investments in hedge funds and limited partnership interests are classified as Level...

  • Page 125
    ... a summary of changes in the fair value of our Pension Plan's Level 3 investment assets for the fiscal years 2011 and 2010. Fiscal years (in thousands) 2011 2010 Balance, beginning of year Purchases Sales Realized gains Unrealized gains relating to investments still held Balance, end of year F-29...

  • Page 126
    ... long-term rate of return on assets held by our Pension Plan, the average rate of compensation increase by the Pension Plan and SERP Plan participants and the health care cost trend rate for the Postretirement Plan. We review these assumptions annually based upon currently available information. The...

  • Page 127
    ...: Discount rate Postretirement Plan: Discount rate Ultimate health care cost trend rate NOTE 10. STOCK-BASED COMPENSATION 5.30% 7.50% 5.00% 5.10% 8.00% (0.25)% $ (0.50)% (0.25)% $ (0.25)% $ 1.00% $ 17.8 N/A 2.9 0.5 3.1 $ $ $ $ $ 0.2 1.7 - - 0.1 The Company has approved equity-based management...

  • Page 128
    ... fiscal year 2011, $2.6 million in fiscal year 2010 and $5.3 million in fiscal year 2009. Grant Date Fair Value of Stock Options. All grants of stock options have an exercise price equaling or exceeding the fair market value of our common stock on the date of grant. Because we are privately held and...

  • Page 129
    ... Nevada, N.A. and HSBC Private Label Corporation (collectively referred to as HSBC). Pursuant to the agreement with HSBC, HSBC offers proprietary credit card accounts to our customers under both the "Neiman Marcus" and "Bergdorf Goodman" brand names. Our original program agreement with HSBC expired...

  • Page 130
    ...catalog operations under the Neiman Marcus, Bergdorf Goodman, Neiman Marcus Last Call and Horchow brand names. Both the Specialty Retail Stores and Direct Marketing segments derive their revenues from the sales of high-end fashion apparel, accessories, cosmetics and fragrances from leading designers...

  • Page 131
    ... tables set forth the information for our reportable segments: July 30, 2011 Fiscal year ended July 31, 2010 August 1, 2009 (in thousands) REVENUES Specialty Retail Stores Direct Marketing Total OPERATING EARNINGS (LOSS) Specialty Retail Stores Direct Marketing Corporate expenses Other expenses...

  • Page 132
    ... of Contents The following table presents our revenues by merchandise category as a percentage of net sales: July 30, 2011 Years Ended July 31, 2010 August 1, 2009 Women's Apparel Women's Shoes, Handbags and Accessories Men's Apparel and Shoes Designer and Precious Jewelry Cosmetics and Fragrances...

  • Page 133
    Table of Contents July 31, 2010 NonGuarantor Subsidiaries (in thousands) Company NMG Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents Merchandise inventories Other current assets Total current assets Property and equipment, net Goodwill Intangible assets, net Other ...

  • Page 134
    ... year ended July 30, 2011 NonGuarantor NMG Subsidiaries Eliminations (in thousands) Company Consolidated Revenues Cost of goods sold including buying and occupancy costs (excluding depreciation) Selling, general and administrative expenses (excluding depreciation) Income from credit card program...

  • Page 135
    ...year ended August 1, 2009 NonGuarantor NMG Subsidiaries Eliminations (in thousands) Company Consolidated Revenues Cost of goods sold including buying and occupancy costs (excluding depreciation) Selling, general and administrative expenses (excluding depreciation) Income from credit card program...

  • Page 136
    ...) Equity in (earnings) loss of subsidiaries Changes in operating assets and liabilities, net Net cash provided by operating activities CASH FLOWS-INVESTING ACTIVITIES Capital expenditures Net cash used for investing activities CASH FLOWS-FINANCING ACTIVITIES Borrowings under senior secured term loan...

  • Page 137
    ... 1,273.3 (1.8) (1) Gross profit includes revenues less cost of goods sold including buying and occupancy costs (excluding depreciation). (2) For fiscal year 2011, net earnings (loss) include a $70.4 million pretax charge related to a loss on debt extinguishment recorded in the fourth quarter. F-41

  • Page 138
    ... thereunto duly authorized. NEIMAN MARCUS, INC. By: /S/ NELSON A. BANGS Nelson A. Bangs Senior Vice President and General Counsel Dated: September 20, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the...

  • Page 139
    ...Charged to Charged to Costs and Other Expenses Accounts Column D Column E Balance at End of Period Description Deductions Reserve for estimated sales returns Year ended July 30, 2011 Year ended July 31, 2010 Year ended August 1, 2009 Reserves for self-insurance Year ended July 30, 2011 Year ended...

  • Page 140
    ..., dated as of July 11, 2006, among The Neiman Marcus Group, Inc., a Delaware corporation (the "Company"), The Bank of New York Trust Company, N.A., a national banking association, as successor trustee (the "Trustee"), and Neiman Marcus, Inc., a Delaware corporation, as guarantor (the "Guarantor...

  • Page 141
    ... the extent permitted by law) the benefits of diligence, presentment, demand for payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company or any other Person, protest, notice and all demands whatsoever...

  • Page 142
    ...Company's assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the 2028 Debentures are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned...

  • Page 143
    ...be, if at any time, payment, or any part thereof, of any ...the laws of the State of New York, without regard to conflicts of...sign multiple counterparts of this First Supplemental Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement...

  • Page 144
    ... duly executed, all as of the date and year first written above. THE NEIMAN MARCUS GROUP, INC. By: /s/ Nelson A. Bangs Name: Nelson A. Bangs Title: Senior Vice President NEIMAN MARCUS, INC. By: /s/ Nelson A. Bangs Name: Nelson A. Bangs Title: Senior Vice President THE BANK OF NEW YORK TRUST COMPANY...

  • Page 145
    ... as of August 14, 2006, between The Neiman Marcus Group, Inc., a Delaware corporation (the "Company"), and The Bank of New York Trust Company, N.A., a national banking association, as successor trustee (the "Trustee"). WITNESSETH WHEREAS, the Company and the Trustee previously have entered into an...

  • Page 146
    ...forms) if the Company were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by the Company's certified independent accountants...

  • Page 147
    ... the Solicitation Statement and the related Consent Form, each as it may be amended and supplemented from time to time. (c) For the purposes of this Section 3, "Consent Reversion Date" means 5:30 p.m., New York City time, on the Business Day following the Company's failure to pay the Consent Fee as...

  • Page 148
    ... WITNESS WHEREOF, the parties have caused this Second Supplemental Indenture to be duly executed, all as of the date and year first written above. THE NEIMAN MARCUS GROUP, INC. By: Nelson A. Bangs Title: Senior Vice President THE BANK OF NEW YORK TRUST COMPANY, N.A. By: John C. Stohlmann Title: Vice...

  • Page 149
    ... terms and conditions of the Plan shall remain in full force IN WITNESS WHEREOF, the Company has caused this Amendment to be executed on its behalf by its duly authorized officer on this the 1st day of May, 2011. NEIMAN MARCUS, INC. By: /s/ Nelson A. Bangs Senior Vice President and General Counsel

  • Page 150
    ..., the Fair Market Value of the shares of Common Stock subject to the Original Option is less than the Exercise Price of the Original Option immediately prior to the effectiveness of this Agreement; WHEREAS, pursuant to an exchange offer accepted by the Participant, the Company and the Participant...

  • Page 151
    ..., or (iii) the occurrence of a Change of Control of the Company; provided, however, that the Exercise Price shall cease to increase as provided herein on a portion of the outstanding Performance Option following the sale by the Majority Stockholder of shares of Common Stock as follows: the pro rata...

  • Page 152
    ... Change of Control and such Options convert into options to purchase common stock or other equity interests of the surviving corporation (the "Assumed Options") and (d) the Participant thereafter experiences a Qualifying Termination at any time prior to the occurrence of an Initial Public Offering...

  • Page 153
    ...hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement, the Plan and the Management Stockholders' Agreement as of the day and year first written above. NEIMAN MARCUS, INC. By: Nelson A. Bangs, Senior Vice President and General...

  • Page 154
    ... agreements that may be granted to you prior to the New Retirement Date, to provide for the following: a. an extension of the period after your "Retirement" or other termination of Employment other than for "Cause," as such terms are defined in the Neiman Marcus Inc. Management Equity Incentive Plan...

  • Page 155
    ...Texas, and thus acknowledges that you will be expected to be in its Dallas offices no more than three days of every week during the Extension Period, subject to any vacation or other authorized absences you elect to take, or Company business travel to other locations. Please review this letter, sign...

  • Page 156
    ...credit described above. The terms of your employment remain unchanged, including your base salary, your Confidentiality, Non-Competition and Termination Benefits Agreement and eligibility for the following: annual performance reviews, merit increases, annual incentive bonuses, equity awards, Company...

  • Page 157
    ...sign it with your original signature in the spaces provided below and return it to me. We are delighted that you have decided to remain with the Company and I look forward to working with you on this project. Sincerely, /s/ James E. Skinner, EVP & CFO AGREED TO AND ACCEPTED this 8th day of May, 2009...

  • Page 158
    ...NMG and Executive mutually desire to protect NMG's goodwill created by Executive's association with NMG and NMG's trade secrets and other confidential and proprietary business information, and in recognition of the possible interruption of Executive's earnings after the end of his/her NMG employment...

  • Page 159
    ...by Executive for such continued medical insurance benefits during such period. (b) NMG shall require any successor or assignee (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all the business and/or assets of NMG, by agreement in writing in form...

  • Page 160
    ...(c) he/she will hold all Confidential Information in strictest confidence and not, directly or indirectly, disclose or divulge any Confidential Information to any person other than an officer, director, or employee of NMG to the extent necessary for the proper performance of his/her responsibilities...

  • Page 161
    ... Affiliates to cease being a customer, supplier, or vendor of NMG or any of its Affiliates or to divert all or any part of such person's or entity's business from NMG or any of its Affiliates; and (d) He/She will not associate directly or indirectly, as an employee, officer, director, agent, partner...

  • Page 162
    ... this Agreement is intended to limit any earned, vested benefits (other than any entitlement to severance or separation pay, if any) that Executive may have under the applicable provisions of any benefit plan of NMG in which Executive is participating at the time of his termination of employment or...

  • Page 163
    ...of Executive). Any such payments which are due during the six-month period shall be accumulated and paid on the first day of the seventh month following the date of Executive's separation from service. THE NEIMAN MARCUS GROUP, INC. By: (Executive) 6 Nelson A. Bangs, Senior Vice President And General...

  • Page 164
    ..., at any time during Executive's employment with NMG or within 18 months following the end of Executive's employment with NMG, was a vendor of NMG and had an annual gross revenue of $100 million or more, and the Affiliates of such vendors. To the extent that any of the corporate names used in (i) or...

  • Page 165
    geographic location at which Executive must perform services; and (vi) any other action or inaction that constitutes a material breach by NMG of this Agreement. 6. "Noncompetition Area" means the following geographic areas: (i) any foreign country which NMG or its Affiliates engage in business of ...

  • Page 166
    ... of Directors of the Company or any committee appointed by the Board to administer the Plan pursuant to the terms of the Plan. (c) "Cause" shall mean, when used in connection with the termination of a Management Stockholder's Employment, unless otherwise provided in any stock option grant agreement...

  • Page 167
    ... by the Board; or ii. on which a Public Market for the Common Stock exists, (i) closing price on such day of a share of Common Stock as reported on the principal securities exchange on which shares of Common Stock are then listed or admitted to trading or (ii) if not so reported, the average of the...

  • Page 168
    ...price is reported or a trading price is reported by any member of NASD selected by the Board. In the event that the price of a share of Common Stock shall not be so reported or furnished, the Fair Market Value shall be determined by the Board in good faith to reflect the fair market value of a share...

  • Page 169
    ...is exercised at a per Share price equal to the Fair Market Value of a share of Common Stock determined as of the date such right is exercised. The Company (or its designated assignee) shall exercise such right by delivering to the Management Stockholder or Transferee, as applicable, a written notice...

  • Page 170
    date on which such payment is made (the "Delay Period"), calculated at an annual rate equal to the average annual prime rate charged during the Delay Period by a nationally recognized bank designated by the Board plus two (2) percentage points. In the event that the Company is not able to make ...

  • Page 171
    ... interest" as defined in Rule 16a-1 of the Exchange Act (including through the disposition of interests in Newton Holding, LLC) or a portion of the Shares of Common Stock representing Control of the Company, in either case to a good faith independent purchaser (a "Purchaser") (other than any other...

  • Page 172
    ... apply during the period from the Effective Date through the first anniversary of the Effective Date to any sale or transfer by a Majority Stockholder of its pecuniary interest in any shares of Common Stock for a price that is equal to or less than the Fair Market Value of such share of Common Stock...

  • Page 173
    ...Form S-4 or Form S-8 or any successor form, for an offering which includes shares of Common Stock held by the Majority Stockholder, then the Company shall give prompt written notice to the Management Stockholder or Transferee that such filing is expected to be made (but in no event less than 30 days...

  • Page 174
    ... recent address shown on records of the Company or its Affiliate; With a copy to: Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, NY 10006 Attention: Robert J. Raymond If to the Company: Newton Acquisition, Inc. 301 Commerce Street, Suite 3300 Fort Worth, TX 76102 Attention: General...

  • Page 175
    ... & Hamilton LLP One Liberty Plaza New York, NY 10006 Attention: Robert J. Raymond If to the Management Stockholder, to its most recent address shown on records of the Company or its Affiliate; With a copy to: Morgan, Lewis & Bockius LLP 101 Park Avenue New York, NY 10178 Attention: Gary Rothstein or...

  • Page 176
    ... TPG Advisors IV, Inc., its General Partner /s/ David A. Spuria David A. Spuria Vice President WARBURG PINCUS PRIVATE EQUITY VIII, L.P. By: By: By: Name: Title: Warburg Pincus Partners, LLC, its General Partner Warburg Pincus & Co., its Managing Member /s/ Kewsong Lee Kewsong Lee Managing Director...

  • Page 177
    ... Lee Kewsong Lee Managing Director WARBURG PINCUS GERMANY PRIVATE EQUITY VIII K.G. By: By: By: Name: Title: Warburg Pincus Partners, LLC, its General Partner Warburg Pincus & Co., its Managing Member /s/ Kewsong Lee Kewsong Lee Managing Director WARBURG PINCUS PRIVATE EQUITY IX, L.P. By: By...

  • Page 178
    SCHEDULE A MANAGEMENT STOCKHOLDERS By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: ...

  • Page 179
    By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: By: Name: A-2 /s/ Gregory G. Shields Gregory G. Shields /s/ Stacie Shirley Stacie Shirley /s/ James E. Skinner James E. Skinner /s/ Margaret E. Spaniolo Margaret E. Spaniolo /s/ Thomas P. Stangle Thomas P. Stangle /s/ ...

  • Page 180
    EXHIBIT 12.1 Neiman Marcus, Inc. Computation of Ratio of Earnings to Fixed Charges (Unaudited) July 30, 2011 July 31, 2010 Fiscal year ended August 1, 2009 August 2, 2008 July 28, 2007 (in thousands, except ratios) Fixed Charges: Interest on debt Amortization of debt discount and expense Interest ...

  • Page 181
    ...com, LLC BG Productions, Inc. NEMA Beverage Corporation NEMA Beverage Holding Corporation NEMA Beverage Parent Corporation NM Financial Services, Inc. NMG Media, Inc. NMGP, LLC NM Nevada Trust The Neiman Marcus Group, Inc. Worth Avenue Leasing Company New York New York Delaware Delaware Texas Texas...

  • Page 182
    ..., 2011, with respect to the consolidated financial statements and schedule of Neiman Marcus, Inc. and the effectiveness of internal control over financial reporting of Neiman Marcus, Inc. included in this Annual Report (Form 10-K) for the year ended July 30, 2011. /s/ ERNST & YOUNG LLP Dallas, Texas...

  • Page 183
    ...and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b) Date: September 20, 2011 /s/ KAREN W. KATZ Karen W. Katz President and Chief Executive...

  • Page 184
    ... information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b) Date: September 20, 2011 /s/ JAMES E. SKINNER James E. Skinner Executive Vice President, Chief Operating...

  • Page 185
    ... the Registrant's annual report on Form 10-K for the fiscal year ended July 30, 2011 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Neiman Marcus, Inc. (the Company) hereby certifies...