Neiman Marcus 2006 Annual Report Download - page 79
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Cash Incentive Plan
Following the consummation of the Transactions, the Neiman Marcus, Inc. Cash Incentive Plan (referred to as the Cash
Incentive Plan) was adopted to aid in the retention of certain key executives, including the named executive officers. The Cash
Incentive Plan provides for the creation of a $14 million cash bonus pool to be shared by the participants based on the number of stock
options that were granted to each such participant relative to other participants in the Cash Incentive Plan pursuant to the Management
Incentive Plan. Each participant in the Cash Incentive Plan will be entitled to a cash bonus upon the earlier to occur of a change of
control or an initial public offering, provided that the internal rate of return to certain of our investors is positive. If the internal rate of
return to certain of our investors is not positive, no amounts will be paid under the Cash Incentive Pool.
Based on the foregoing, each of the named executive officers would be entitled to receive the following percentages of the
remaining cash bonus pool on July 28, 2007, assuming there was a change in control or an initial public offering on that date, and the
rate of return to the Sponsors was positive:
Name Percentage
Burton M. Tansky 22.00%
Karen W. Katz 13.75%
James E. Skinner 6.88%
Brendan L. Hoffman 6.88%
James J. Gold 6.88%
All required federal, state, or local government tax will be withheld from all payments made to participants under the Cash
Incentive Plan. No payments have been made or are currently anticipated under the Cash Incentive Plan.
Potential Payments Upon Termination or Change-in-Control
The tables below show certain potential payments that would have been made to a named executive officer if the named
executive officer's employment had terminated on July 28, 2007 under various scenarios, including a change-in-control. Because the
payments to be made to a named executive officer depend on several factors, the actual amounts to be paid out upon a named
executive officer's termination of employment can only be determined at the time of an executive's separation from the Company.
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