Neiman Marcus 2013 Annual Report Download - page 69

Table of Contents
Plan. All future and current employees who were not already enrolled in the ESP were automatically enrolled in the RSP. “Rule of 65” employees, as
described above, were given a choice to either continue participation in the Pension Plan and the ESP or freeze what was earned under those plans through
December 31, 2007 and participate in 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 matches 100% of the first 3% and 50% of the next 3% of pay that is
contributed to the RSP. All employee contributions to the RSP are fully vested upon contribution. Company matching contributions vest after two years of
service. The Company matched 100% of the first 2% and 25% of the next 4% of pay that was contributed to the ESP. All employee contributions to the ESP
were fully vested upon contribution. Company matching contributions vested after three years of service. Effective August 1, 2010, benefits and accruals
under the ESP were frozen for the remaining “Rule of 65” active employees and such participants were moved into the RSP. Messrs. Koryl and Schulman
became eligible to participate in the RSP one year after their respective hire dates.
Supplemental Retirement Plan and Key Employee Deferred Compensation Plan. U.S. tax laws limit the amount of benefits that we can provide
under our tax-qualified plans. We maintain our Supplemental Executive Retirement Plan (referred to as the SERP Plan) and our Key Employee Deferred
Compensation Plan (referred to as the KEDC Plan), which are unfunded, non-qualified arrangements intended to provide the named executive officers and
certain other key employees with additional benefits, including the benefits that they would have received under the RSP if the tax law limitations did not
apply and if certain other components of compensation could be included in calculation of benefits under our tax-qualified plans. 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 participate in the SERP Plan. Similar to the Pension Plan, effective December 31, 2007, eligibility and benefit accruals under
the SERP Plan were frozen for all participants not meeting the “Rule of 65” and such participants were moved into our Defined Contribution Supplemental
Executive Retirement Plan (DC SERP). Effective August 1, 2010, all benefits and accruals under the SERP Plan for “Rule of 65” employees were frozen and
such participants were moved into the DC SERP. SERP Plan related benefits are more fully described under “Pension Benefits.”
Participation in the KEDC Plan is limited to employees whose base salary is in excess of $300,000 and who meet other stated criteria. Amounts in
excess of those benefits provided under the 401(k) plans are credited to the account balances of each KEDC Plan participant. KEDC Plan benefits are more
fully described under “Non-qualified Deferred Compensation.”
As a result of the Acquisition, all amounts held by participants in the DC SERP and the KEDC were paid to participants effective October 25, 2013.
Matching Gift Program. All employees, including the named executive officers, may participate in our matching gift program. Under the program,
we will match charitable contributions by employees up to a maximum of $2,000 per qualifying organization on a two-for-one basis in each calendar year.
For any contribution made to a qualifying organization in which the employee has an active involvement (as evidenced by service on the organization’s
governing body or in one of its working committees), the basis of our matching contribution may, upon application by the employee, be increased to a level
greater than two-for-one.
Perquisites. We provide perquisites and other personal benefits that we believe are reasonable and consistent with the nature of individual
responsibilities to provide a competitive level of total compensation to our executives. We believe the level of perquisites is within an acceptable range of
what is offered by a group of industry related companies. The Compensation Committee believes that these benefits are aligned with the Company’s desire to
attract and retain highly skilled management talent for the benefit of all stockholders. The value of these benefits to the named executive officers is set forth
in the Summary Compensation Table under the column “All Other Compensation” and details about each benefit are set forth in a table following the
Summary Compensation Table.
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Employment Agreements. To support the continuity of senior leadership, we have employment agreements with Ms. Katz and Messrs. Skinner and
Gold which provide, among other things, for payments to the executive following a termination of employment by the executive for “good reason” or a
termination of the executive’s employment by us without “cause.” The triggering events constituting “good reason” and “cause” were negotiated to provide
protection to us for certain terminations of employment that could cause harm to us as well as to provide protection to the executive. The employment
agreements also provide for certain payments to the executives upon death or “disability.” For a detailed description of the terms of the employment
agreements, see “Employment and Other Compensation Agreements.”
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