Neiman Marcus 2012 Annual Report Download - page 70

Table of Contents
PENSION BENEFITS
The following table sets forth certain information with respect to retirement payments and benefits under the Pension Plan and the SERP Plan for
each of our named executive officers.
Name Plan Name
Number of
Years
Credited
Service
(#)(1)
Present Value
of Accumulated
Benefit
($)(2)
Payments During
Last
Fiscal Year
($)
Karen W. Katz Pension Plan 25(3) 427,000 —
SERP Plan 26(3) 3,619,000 —
James E. Skinner Pension Plan 7(4) 166,000 —
SERP Plan 7(4) 535,000 —
James J. Gold Pension Plan 17(4) 177,000 —
SERP Plan 17(4) 508,000 —
John E. Koryl Pension Plan — — —
SERP Plan — — —
Joshua G. Schulman Pension Plan — — —
SERP Plan — — —
(1) Computed as of August 3, 2013, which is the same pension measurement date used for financial statement reporting purposes with respect to our
Consolidated Financial Statements and notes thereto.
(2) For purposes of calculating the amounts in this column, retirement age was assumed to be the normal retirement age of the later of age 65 or the fifth
anniversary of the individual’s date of hire, as defined in the Pension Plan. A description of the valuation method and all material assumptions applied
in quantifying the present value of accumulated benefit is set forth in Note 10 of the Notes to Consolidated Financial Statements beginning on page F-25.
(3) Pursuant to the terms of Ms. Katz’s employment agreement, she will be entitled to an additional one year of credit for each full year of service after she
has reached the 25-year maximum set forth in the SERP Plan with all service frozen as of December 31, 2010. In addition, if her employment is
terminated by us for any reason other than death, “disability” “cause” or for non-renewal of her employment term, or if she terminates her employment
with us for “good reason” and she has not yet reached 65, her SERP Plan benefit will not be reduced solely by reason of her failure to reach 65 as of the
termination date. Ms. Katz’s employment agreement also provides that the amount credited to her under the DC SERP shall not be less than the present
value of the additional benefits she would have accrued under the SERP Plan after December 31, 2010 had the SERP Plan remained in effect through the
end of her employment term. The value of Ms. Katz’s benefit with all service is $3,619,000. The value with 25 years of service under the SERP Plan is
$3,463,000, therefore, the value of the additional years of service in excess of her actual service is $156,000.
(4) Effective December 31, 2007, benefit accruals for Messrs. Skinner and Gold under the Pension Plan and the SERP Plan were frozen, as further
described below.
The Pension Plan is a funded, tax-qualified pension plan. Prior to 2008, most non-union employees over age 21 who had completed one year of
service with 1,000 or more hours were eligible to participate in the Pension Plan, which paid benefits upon retirement or termination of employment. Effective
as of December 31, 2007, eligibility and benefit accruals under the Pension Plan were frozen for all participants except for those “Rule of 65” employees who
elected to continue participating in the Pension Plan. The Pension 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. “Compensation” for this purpose generally includes salary, bonuses, commissions and overtime but not in excess of the limits
imposed upon annual compensation under the Code Section 401(a)(17) (the IRS Limit). The IRS limit for 2013 is $255,000, increased from $250,000 for
2012, and is adjusted annually for cost-of-living increases. Benefits under the Pension Plan become fully vested after five years of service with us. Effective
August 1, 2010, benefit accruals were frozen for the remaining “Rule of 65” employees and such participants were given the opportunity to participate in the
RSP.
The SERP Plan is an unfunded, nonqualified plan under which benefits are paid from our general assets to supplement Pension Plan benefits and
Social Security. Prior to 2008, executive, administrative and professional employees
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