Neiman Marcus 2014 Annual Report Download - page 71

Table of Contents
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 participated in
our defined benefit pension plan (referred to as the Pension Plan), which paid benefits upon retirement or termination of employment. 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. A participant becomes fully vested after
five years of service with us. 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 participation in the Pension 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. Ms. Katz was a
“Rule of 65” employee as of December 31, 2007, and elected to continue participation in the Pension Plan. For Messrs. Gold and Skinner, benefits and
accruals under the Pension Plan were frozen effective as of December 31, 2007. Effective August 1, 2010, all benefits and accruals under the Pension Plan
were frozen and all remaining participants were moved into our Retirement Savings Plan (referred to as the RSP). Ms. Katz’s benefits and accruals under the
Pension Plan were moved into a new enhanced 401(k) plan, our RSP, effective December 31, 2010.
Savings Plans. Effective January 1, 2008, our RSP was established and offered to all employees, including the named executive officers, as the
primary retirement plan. Benefits and accruals under a previous 401(k) plan, our Employee Savings Plan (referred to as the ESP), were frozen as well as
benefits and accruals under the Pension 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. Mr. Grimes became eligible to
participate in the RSP on his hire date and the Company will begin matching his contributions on January 15, 2016.
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.”
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
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