Neiman Marcus 2008 Annual Report Download - page 67

Table of Contents
(2) Nonqualified stock options granted on November 29, 2005 vest in four equal annual installments on October 6, 2006, October 6,
2007, October 6, 2008, and October 6, 2009, subject to earlier vesting. The options were granted at the initial exercise price of
$1,445.00 per share which will increase at a 10.00% compound rate on each anniversary of October 6, 2005 until the earlier to
occur of (i) the exercise of the option, (ii) October 6, 2010, or (iii) the occurrence of a change of control. On October 6, 2009,
the option price will increase to $2,115.62 per share. As of August 1, 2009, the exercise price was above the fair market value.
(3) Nonqualified stock options granted on November 29, 2005 at the exercise price of $1,445.00 per share which vests 20% on the
first anniversary of October 6, 2005 and thereafter in forty-eight equal monthly installments over the forty-eight months
following the first anniversary of October 6, 2005, beginning on the one-month anniversary of such first anniversary and
becoming fully vested on October 6, 2010, subject to earlier vesting in certain circumstances following a change in control. As
of August 1, 2009, the exercise price was above the fair market value.
(4) Nonqualified stock options granted on November 29, 2005 which vests 20% on the first anniversary of October 6, 2005 and
thereafter in forty-eight equal monthly installments over the forty-eight months following the first anniversary of October 6,
2005, beginning on the one-month anniversary of such first anniversary and becoming fully vested on October 6, 2010. The
options were granted at the initial exercise price of $1,445.00 per share which will increase at a 10.00% compound rate on each
anniversary of October 6, 2005 until the earlier to occur of (i) the exercise of the option, (ii) October 6, 2010, or (iii) the
occurrence of a change of control, or in the event the equity investors sell a portion of their investment, with respect to a portion
of the options bearing the same ratio as the portion of the equity investor's equity sold. On October 6, 2009, the option price
will increase to $2,115.62 per share. As of August 1, 2009, the exercise price was above the fair market value.
PENSION BENEFITS
The following table sets forth certain information with respect to retirement payments and benefits under the Retirement Plan
and the SERP for each of our named executive officers.
Name Plan Name
Number of Years
Credited Service
(#)(1)
Present Value
of Accumulated
Benefit
($)(2)
Payments During
Last
Fiscal Year
($)
Burton M. Tansky Retirement Plan 19 428,000 —
SERP 31(3) 7,898,000 —
Karen W. Katz Retirement Plan 24 258,000 —
SERP 24(4) 1,962,000 —
James E. Skinner Retirement Plan 7(5) 111,000 —
SERP 7(5) 351,000 —
James J. Gold Retirement Plan 17(5) 105,000 —
SERP 17(5) 288,000 —
Gerald A. Barnes Retirement Plan 26 323,000 —
SERP 25 696,000 —
Footnotes:
(1) Computed as of August 1, 2009, which is the same pension measurement date used for financial statement reporting purposes
with respect to our audited 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 Retirement 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 14 to the audited consolidated financial statements on page F-31 of this Annual Report on Form 10-K.
(3) The difference in years of service is a result of the provision in Mr. Tansky's employment agreement relating to the calculation
of his years of service under the SERP. Following his termination of employment with us, his years of service for purposes of
calculating his benefit under the SERP will be determined by multiplying his actual service for purposes of the SERP by 2,
subject to the 25-year maximum set forth in the SERP, and by then providing him with an additional credit for each year of
service to the Company following his attainment of age sixty-five (65) (disregarding the 25-year maximum set forth in the
SERP). The value of Mr. Tansky's actual years of service under the SERP is $4,493,000, so the value of the additional years of
service in excess of his actual service is $3,405,000. See the discussion of his employment agreement under "Employment and
Other Compensation Agreements" on page 65 of this section.
(4) Pursuant to the terms of Karen Katz's employment agreement, after she has reached the 25-year maximum set forth in the SERP,
she will be entitled to an additional one year of credit for each full year of service thereafter. In addition, if her
63