Neiman Marcus 2012 Annual Report Download - page 62

Table of Contents
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. Skinner and Gold, 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 the RSP effective December
31, 2010.
Savings Plans. Effective January 1, 2008, a new enhanced 401(k) plan, 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.
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, nonqualified 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” beginning on page 67.
Participation in the KEDC Plan is limited to employees whose base salary is in excess of $300,000 and 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 “Nonqualified Deferred Compensation” beginning on page 68.
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 in order 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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