Neiman Marcus 2008 Annual Report Download - page 69

Table of Contents
The amounts reported in the Nonqualified Deferred Compensation Table represent deferrals and Company matching
contributions credited pursuant to the KEDC Plan and Company contributions credited pursuant to The Neiman Marcus Group, Inc.
Defined Contribution Supplemental Executive Retirement Plan (referred to herein as the DC SERP).
The KEDC Plan allows eligible employees to elect to defer up to 15% of base pay and up to 15% of annual performance
bonus each year. Eligible employees generally are those employees who have completed one year of service with the Company, have
annual base pay of at least $300,000 and are otherwise designated as eligible by the Company's employee benefits committee;
provided, however, that effective January 1, 2008, only those persons who were eligible for the KEDC as of January 1, 2007 are
permitted to continue participating in the KEDC. No new participants will be added. The Company also credits a matching
contribution each pay period equal to (A) the sum of (i) 100% of the sum of the employee's KEDC Plan deferrals and the maximum
ESP or RSP, as applicable, deferral that the employee could have made under such plan for such pay period, to the extent that such
sum does not exceed 2% of the employee's compensation for such pay period, and (ii) 25% of the sum of the employee's KEDC Plan
deferrals and the maximum ESP or RSP, as applicable, deferral that the employee could have made under such plan for such pay
period, to the extent that such sum does not exceed the next 4% of the employee's compensation for such pay period, minus (B) the
maximum possible match the employee could have received under the ESP or RSP, as applicable, for such pay period. Such amounts
are credited to a bookkeeping account for the employee and are fully vested with respect to matching contributions made for calendar
years prior to 2008. Amounts attributable to matching contributions, plus interest thereon, for calendar years on and after 2008 are
subject to forfeiture in the event the employee is terminated for cause. Accounts are credited monthly with interest at an annual rate
equal to the prime interest rate published in The Wall Street Journal on the last business day of the preceding calendar quarter.
Amounts credited to an employee's account become payable to the employee upon separation from service, death, unforeseeable
emergency, or change of control of the Company. In the event of separation of service, payment is made in a lump sum in the
calendar quarter following the calendar quarter in which the separation occurs although if the employee is eligible for retirement upon
such separation, payment may be deferred until the following year or the nine subsequent years, and may be made in a lump sum or in
installments over a period of up to ten years, depending upon the distribution form elected by the employee. There is no separate
funding for the amounts payable under the KEDC Plan, rather the Company makes payment from its general assets. The KEDC Plan
is designed to comply with the requirements of Section 409A of the Internal Revenue Code.
The DC SERP is an unfunded, nonqualified deferred compensation plan under which benefits are paid from our general
assets to provide eligible employees with the opportunity to receive employer contributions on the portion of their eligible
compensation that exceeds the compensation limit imposed by Internal Revenue Code Section 401(a)(17) (the "IRS Limit"). The IRS
Limit for 2008 was $230,000 and for 2009 is $245,000. Eligible employees generally are those employees who have completed one
year of service with the Company, who have annual base pay of at least 80% of the IRS Limit (or were eligible to participate in the
SERP as of December 31, 2007 and ceased to be eligible to participate in the SERP as of January 1, 2008), and who are otherwise
designated as eligible by the Company's employee benefits committee. The Company will make transitional and non-transitional
credits to the accounts of eligible participants each pay period. Transitional credits apply only to participants who were eligible to
participate in the SERP as of December 31, 2007 but ceased participating in the SERP as of that date and became a participant in the
DC SERP on January 1, 2008. The amount of a transitional credit is the product of a participant's eligible compensation in excess of
the IRS Limit and an applicable percentage ranging from 0% to 6% depending upon the age of the participant. Non-transitional
credits apply to all eligible participants. The amount of a non-transitional credit is the product of a participant's eligible compensation
in excess of the IRS Limit and 10.5%. All transitional and non-transitional credits are credited to a bookkeeping account and vest
upon the earlier of (i) an eligible employee's attainment of five years of service, (ii) an eligible employee's attainment of age 65,
(iii) an eligible employee's death, (iv) an eligible employee's disability, or (v) a change of control (as defined in the DC SERP) while
in the employ of the Company. Notwithstanding the preceding, amounts credited to an account are subject to forfeiture in the event
the employee is terminated for cause. Accounts are credited monthly with interest at an annual rate equal to the prime interest rate
published in The Wall Street Journal on the last business day of the preceding calendar quarter. Vested amounts credited to an
employee's account become payable in the form of five annual installments beginning upon the later of the employee's separation from
service and age 55, or such later age as the employee may elect. Upon the employee's death or disability or upon a change of control
of the Company, vested amounts credited to an employee's account will be paid in a single lump sum. The DC SERP is designed to
comply with the requirements of Section 409A of the Internal Revenue Code.
Employment and Other Compensation Agreements
As discussed in "Compensation Discussion & Analysis," The Neiman Marcus Group, Inc. has entered into employment
agreements with Burton M. Tansky and Karen W. Katz. In addition, each of the named executive officers, except for Mr. Tansky, is a
party to a confidentiality, non-competition and termination benefits agreement, discussed below.
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