<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT /X/
FILED BY A PARTY OTHER THAN THE REGISTRANT / /
CHECK THE APPROPRIATE BOX:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
THE NEIMAN MARCUS GROUP, INC.
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ERIC P. GELLER, ESQ., SENIOR VICE PRESIDENT
THE NEIMAN MARCUS GROUP, INC., 27 BOYLSTON STREET, CHESTNUT HILL, MA 02167
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:*
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
*/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[LOGO] The Neiman Marcus Group, Inc.
27 Boylston Street
P.O. Box 9187
Chestnut Hill, MA 02167
(617) 232-0760
December 12, 1994
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 20, 1995
The Annual Meeting of Stockholders of The Neiman Marcus Group, Inc. will be
held at 10:00 a.m., Eastern Standard Time, on Friday, January 20, 1995, AT THE
COMPANY'S CORPORATE HEADQUARTERS, 27 BOYLSTON STREET (ROUTE 9), CHESTNUT HILL,
MASSACHUSETTS, for the following purposes:
1. To elect two Class I directors in accordance with the By-Laws of
the Company.
2. To consider and act on a proposal to ratify the appointment by the
Board of Directors of Deloitte & Touche LLP as the Company's independent
auditors for the current fiscal year.
3. To consider and act upon a proposal submitted by a stockholder of
the Company concerning the election of all directors annually.
4. To transact such other business as may properly come before the
meeting and any adjournments of the meeting.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
ERIC P. GELLER
Secretary
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED STAMPED ENVELOPE.
<PAGE> 3
[LOGO] The Neiman Marcus Group, Inc.
27 Boylston Street
P.O. Box 9187
Chestnut Hill, MA 02167
(617) 232-0760
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 20, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Neiman Marcus Group, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held at 10:00
a.m. on Friday, January 20, 1995, AT THE COMPANY'S CORPORATE HEADQUARTERS, 27
BOYLSTON STREET (ROUTE 9), CHESTNUT HILL, MASSACHUSETTS, and at any adjournments
thereof. All shares will be voted in accordance with the instructions contained
in the proxy, but if the proxies which are signed and returned do not specify a
vote on any proposal, the proxies will be voted FOR the election of the nominees
for director named herein, FOR the ratification of the appointment by the Board
of Directors of Deloitte & Touche LLP as the Company's independent auditors for
the current fiscal year and AGAINST the proposal submitted by a stockholder
concerning the election of all directors annually. Any proxy may be revoked by a
stockholder at any time before it is exercised by providing written notice of
revocation to the Secretary of the Company (at the address set forth above), by
executing a proxy bearing a later date, or by voting in person at the Annual
Meeting. The mailing of this proxy statement and accompanying form of proxy is
expected to commence on or about December 12, 1994.
In addition to solicitations of proxies by mail, the Company's officers,
directors or employees may solicit proxies by telephone or personal
communication. All costs of soliciting proxies, including reimbursement of fees
of certain brokers, fiduciaries and nominees in obtaining voting instructions
from beneficial owners, will be borne by the Company.
Although stock transfer books will remain open, the Board of Directors has
fixed the close of business on December 5, 1994 as the record date for
determining the stockholders having the right to vote at the Annual Meeting. At
the close of business on December 5, 1994 there were 37,958,545 shares of Common
Stock and 1,000,000 shares of 6% Cumulative Convertible Preferred Stock (the
"Preferred Stock") outstanding and entitled to vote at the meeting. At the
meeting, each share of Common Stock is entitled to one vote and each share of
Preferred Stock is entitled to 10.07 votes as prescribed by a formula contained
in the Company's Restated Certificate of Incorporation. All of the issued and
outstanding shares of Preferred Stock are held by Harcourt General, Inc.
("Harcourt General"). AS OF THE DATE OF THIS PROXY STATEMENT, THE SHARES OF
COMMON STOCK AND PREFERRED STOCK OWNED BY HARCOURT GENERAL REPRESENT
APPROXIMATELY 65% OF THE VOTING POWER OF THE COMPANY.
Shares of Common Stock and Preferred Stock represented in person or by
proxy at the Annual Meeting (including abstentions and broker non-votes) will be
tabulated by the inspectors of election appointed for the meeting and will be
counted in determining that a quorum is present. Votes are counted using written
ballots.
<PAGE> 4
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of December 5, 1994, with
respect to the beneficial ownership of the Common Stock of the Company by (i)
each person known to the Company to own beneficially more than 5% of the
outstanding shares of Common Stock; (ii) each executive officer named in the
Summary Compensation Table; (iii) each director of the Company; and (iv) all
directors and current executive officers of the Company as a group. Harcourt
General beneficially owns all of the outstanding shares of the Preferred Stock
of the Company.
<TABLE>
<CAPTION>
PERCENT
NUMBER OF OF
NAME OF SHARES COMMON
BENEFICIAL OWNER OWNED(1) STOCK
-------------------------------------------------- --------- ----
<S> <C> <C>
Harcourt General, Inc.(2)......................... 21,440,960 56.5%
27 Boylston Street
Chestnut Hill, MA 02167
Gabelli Funds, Inc.(3)............................ 5,009,100 13.2%
655 Third Avenue
New York, NY 10017
FMR Corp.(4)...................................... 3,000,000 7.9%
88 Devonshire Street
Boston, MA 02109
Burton M. Tansky(5)............................... 29,300 *
Gerald A. Sampson(6).............................. 18,000 *
Stephen C. Elkin(7)(8)............................ 57,759 *
Bernie Feiwus(8)(9)............................... 14,156 *
Terry Lundgren(10)................................ -- *
Gary L. Countryman................................ -- *
Matina S. Horner.................................. -- *
Walter J. Salmon.................................. 8,942 *
Jean Head Sisco................................... 1,126 *
Richard A. Smith(2)(11)........................... -- *
Robert J. Tarr, Jr.(11)........................... -- *
All current executive officers and directors as a
group (17 persons)(12).......................... 129,283 *
</TABLE>
- ---------------
* Less than 1%.
(1) Unless otherwise indicated in the following footnotes, each stockholder
referred to above has sole voting and investment power with respect to the
shares listed.
(2) Harcourt General's holdings of Common Stock and Preferred Stock comprise
approximately 65% of the fully converted equity and voting power of the
Company. Each share of Preferred Stock is convertible into 8.99 shares of
Common Stock at a price of $41.70 per share of Common Stock. The closing
price of the Common Stock on the New York Stock Exchange on December 5,
1994 was $13.625 per share.
Richard A. Smith, Chairman of the Board of Directors of the Company and of
Harcourt General, his sister, Nancy L. Marks, and certain members of their
families may be regarded as controlling persons of Harcourt General, and
therefore of the Company. The shares of Harcourt General
2
<PAGE> 5
Class B Stock and Harcourt General Common Stock beneficially owned by or
for the benefit of the Smith family constitute approximately 28% of the
aggregate number of outstanding equity securities of Harcourt General. Each
share of Harcourt General voting stock entitles the holder thereof to one
vote on all matters submitted to Harcourt General's stockholders, except
that each share of Harcourt General Class B Stock (virtually all of which
is owned by the Smith family) entitles the holder thereof to ten votes on
the election of directors at any Harcourt General stockholders' meeting
under certain circumstances. Accordingly, as to any elections in which the
Harcourt General Class B Stock would carry ten votes per share at a
Harcourt General stockholders' meeting, the Smith family would have
approximately 80% of the combined voting power of the Harcourt General
voting securities.
Under the definition of "beneficial ownership" in Rule 13d-3 of the Rules
and Regulations promulgated under the Securities Exchange Act of 1934, as
amended, the Smith family and the members of Harcourt General's Board of
Directors may be deemed to be the beneficial owners of the securities of
the Company beneficially owned by Harcourt General in that they may be
deemed to share with Harcourt General the power to direct the voting and/or
disposition of such securities. However, this information should not be
deemed to constitute an admission that any such person or group of persons
is the beneficial owner of such securities.
(3) The information reported is based on an amendment to Schedule 13D, dated
November 8, 1994, filed with the Securities and Exchange Commission by the
Gabelli Funds, Inc. The amendment states that the Gabelli Funds have sole
voting power with respect to 4,743,700 shares and sole dispositive power
with respect to all of the shares shown in the table.
(4) The information reported is based on information provided to the Company by
FMR Corp., an affiliate of Fidelity Management & Research Company, in
October 1994. FMR Corp. has no voting power but has sole dispositive power
with respect to all of the shares shown in the table.
(5) Represents 29,300 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of December 5, 1994.
(6) Includes 2,000 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of December 5, 1994.
(7) Includes 42,305 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of December 5, 1994.
(8) Includes shares of restricted stock over which the individual has voting
but not dispositive power. For the number of shares of restricted stock
owned, see Note 4 to the Summary Compensation Table.
(9) Includes 11,711 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of December 5, 1994.
(10) Mr. Lundgren was the Chairman and Chief Executive Officer of Neiman Marcus
Stores until his resignation in April 1994.
(11) The members of the Board of Directors of Harcourt General, including
Messrs. Smith and Tarr, may be deemed to be the beneficial owners of the
securities of the Company owned by Harcourt General. However, this
information should not be deemed to be an admission that any such person or
group is the beneficial owner of such securities.
(12) Excludes the beneficial ownership of securities of the Company which may be
deemed to be attributed to Messrs. Smith and Tarr (see Note 11 above).
Includes 85,316 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of December 5, 1994.
3
<PAGE> 6
1. ELECTION OF DIRECTORS
The Company has a classified Board of Directors consisting of three
classes, each of which has two members. At each Annual Meeting, a class of
directors is elected for a full term of three years to succeed those whose terms
are expiring.
Two Class I directors are to be elected for a three year term at the Annual
Meeting. The persons named in the accompanying proxy will vote each proxy for
the election of the nominees listed below, unless directed otherwise. Each of
the nominees is currently a member of the Board of Directors. The Company has no
reason to believe that the listed nominees will become unavailable for election,
but if for any reason that should be the case, the proxies may be voted for
substitute nominees. In electing directors, holders of the Common Stock and
Preferred Stock vote together as a single class. A plurality of the votes cast
at the Annual Meeting is required to elect the directors. Proxies withholding
authority to vote for a nominee will be treated as votes cast. Broker non-votes
will not be treated as votes cast and, therefore, will not be counted in
calculating a plurality. HARCOURT GENERAL WILL BE VOTING ITS SECURITIES,
REPRESENTING APPROXIMATELY 65% OF THE VOTING POWER OF THE COMPANY, FOR THE
ELECTION OF THE NOMINEES SET FORTH BELOW.
NOMINEES FOR TERMS EXPIRING IN 1998 (CLASS I DIRECTORS)
RICHARD A. SMITH, age 70, Director since 1987
Chairman of the Board of the Company and of Harcourt General; Chairman of
the Board, President and Chief Executive Officer of GC Companies, Inc. since
December 1993; Chief Executive Officer of the Company and of Harcourt General
until December 1991; Director of Harcourt General, GC Companies, Inc., Liberty
Mutual Insurance Company, Liberty Mutual Fire Insurance Company, Bank of Boston
Corporation and its principal subsidiary, The First National Bank of Boston. Mr.
Smith is the father of Robert A. Smith, who is Group Vice President of the
Company.
ROBERT J. TARR, JR., age 51, Director since 1987
President, Chief Executive Officer (since December 1991) and Chief
Operating Officer of the Company and of Harcourt General; Director of Harcourt
General and GC Companies, Inc.
DIRECTORS WHOSE TERMS EXPIRE IN 1996 (CLASS II DIRECTORS)
WALTER J. SALMON, age 64, Director since 1987
Stanley Roth, Sr. Professor of Retailing, Graduate School of Business
Administration, Harvard University; Director of Hannaford Bros. Co., The Quaker
Oats Company, Circuit City Stores, Inc., Luby's Cafeterias, Inc., Promus
Companies, Incorporated and Telxon Corporation.
MATINA S. HORNER, PH.D., age 55, Director since 1993
Executive Vice President of the Teachers Insurance and Annuity
Association-College Retirement Equities Fund (TIAA-CREF) and President Emerita
of Radcliffe College since 1989; President of Radcliffe College for 17 years
prior thereto; Director of Boston Edison Company.
4
<PAGE> 7
DIRECTORS WHOSE TERMS EXPIRE IN 1997 (CLASS III DIRECTORS)
GARY L. COUNTRYMAN, age 55, Director since 1987
Chairman (since April 1991) and Chief Executive Officer of Liberty Mutual
Insurance Company and Liberty Mutual Fire Insurance Company; President of
Liberty Mutual Insurance Company and Liberty Mutual Fire Insurance Company
through March 1992; Director of Boston Edison Company and Bank of Boston
Corporation and its principal subsidiary, The First National Bank of Boston.
JEAN HEAD SISCO, age 69, Director since 1987
Partner in Sisco Associates, international management consultants; Director
of Textron, Inc., Santa Fe Pacific Corporation, Santa Fe Pacific Gold Corp.,
Washington Mutual Investors Fund, Chiquita Brands International, Inc., The
American Funds Tax-Exempt Series I, K-Tron International, Inc. and McArthur/Glen
Realty Corp.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended July 30, 1994, the Board of Directors held
seven meetings. During fiscal 1994, each director of the Company attended at
least 75% of the aggregate number of Board meetings and meetings held by
committees of which he or she is a member, other than Mr. Countryman who
attended 73% of such meetings. The Board of Directors has designated five
principal standing committees. Set forth below are descriptions of the functions
of such committees and the names of their current members.
Audit Committee. The members of the Audit Committee, which met three times
during fiscal 1994, are Mrs. Sisco (Chairman), Messrs. Countryman and Salmon and
Dr. Horner. The functions of the Audit Committee include the review of the scope
of the services of the Company's independent auditors and the responsibilities
of the Company's internal audit department and a continuing review of the
Company's internal procedures and controls. The Audit Committee annually reviews
the Company's audited financial statements, considers the qualifications and
fees of the independent auditors of the Company and makes recommendations to the
Board of Directors as to the selection of the auditors and the scope of their
audit services.
Special Review Committee. The members of the Special Review Committee are
Messrs. Salmon (Chairman) and Countryman, Mrs. Sisco and Dr. Horner. The Special
Review Committee met six times during fiscal 1994. A continuing function of the
Special Review Committee is to give consideration to those matters requiring the
approval of an "Independent Committee" under the terms of the Intercompany
Services Agreement between the Company and Harcourt General, including the
consideration of the fees charged to the Company by Harcourt General pursuant to
the Intercompany Services Agreement. For information regarding the Intercompany
Services Agreement, see Note 1 to the Summary Compensation Table.
Compensation Committee. The members of the Compensation Committee, which
met three times during fiscal 1994, are Messrs. Countryman (Chairman) and
Salmon, Mrs. Sisco and Dr. Horner. The functions of the Compensation Committee
are to review or determine salaries, benefits and other compensation for
officers and key employees of the Company and its subsidiaries and to administer
the Company's stock incentive plans.
Nominating Committee. All of the directors of the Company serve on the
Nominating Committee, which met three times during fiscal 1994. The functions of
the Nominating Committee are to nominate directors and make recommendations
concerning the structure and membership of the various
5
<PAGE> 8
committees of the Board of Directors, consult on questions of management,
organization and succession and provide the Board of Directors with such
guidance on these matters as the Board of Directors may seek from time to time.
In carrying out its responsibilities to nominate directors, the Nominating
Committee will consider candidates recommended by the Board of Directors and by
stockholders of the Company. All suggestions for candidates by stockholders must
be made in writing and sent to the Company c/o Secretary, P.O. Box 9187,
Chestnut Hill, Massachusetts 02167 (see "Deadline for Submission of 1996
Stockholder Proposals and Nominations"). Such writing must set forth (i) the
name and address of the stockholder who intends to make the nomination and of
each person to be nominated, (ii) a representation that the stockholder is a
holder of record of the Company's stock entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to nominate the person
named, (iii) a description of all arrangements or understandings between the
stockholder and each nominee and any other person pursuant to which the
nomination is to be made by the stockholder, (iv) the consent of each proposed
nominee to serve as a director of the Company if so elected and (v) such other
information regarding each proposed nominee as would be required to be included
in a proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission.
Executive Committee. The members of the Executive Committee, which did not
act during fiscal 1994, are Messrs. Smith (Chairman), Countryman and Tarr. The
By-Laws confer upon the Executive Committee the authority to manage the affairs
of the Company in the intervals between meetings of the Board of Directors,
except that the Committee may not effect certain fundamental corporate actions
such as (a) declaring a dividend, (b) amending the Restated Certificate of
Incorporation or the By-Laws, (c) adopting an agreement of merger or
consolidation or (d) imposing a lien on substantially all the assets of the
Company. In practice, the Executive Committee meets infrequently and does not
act except on matters which must be dealt with prior to the next scheduled Board
of Directors meeting and which are not sufficiently important to require action
by the full Board of Directors.
DIRECTORS' COMPENSATION
Directors who are not affiliated with the Company or Harcourt General each
receive an annual retainer of $20,000 and a fee of $1,500 per Board of Directors
meeting attended, plus travel and incidental expenses (an aggregate of $4,134 in
fiscal 1994) incurred in attending meetings and carrying out their duties as
directors. They also receive a fee of $500 (the Chairmen receive $1,000) for
each committee meeting attended. If a director is unable to attend a meeting in
person but participates by telephone, he or she receives one-half of the fee
that would otherwise be payable.
Mr. Countryman receives his fees on a deferred basis. The Company maintains
an account to record the accrual of Mr. Countryman's deferred fees and interest,
which accrues at a rate equal to that paid on 90-day certificates of deposit
issued by The First National Bank of Boston from time to time.
SECTION 16 REPORTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who own more than 10%
of the Company's Common Stock to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. The Company believes that all filing requirements
applicable to its insiders were complied with during fiscal 1994.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE(1)
The following table provides information on the compensation provided by
the Company during fiscal 1994, 1993 and 1992 to the Company's Chief Executive
Officer and the five most highly paid executive officers of the Company during
fiscal 1994.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION(2)
---------------------------
AWARDS
--------------------------- ALL
RESTRICTED SECURITIES OTHER
ANNUAL COMPENSATION STOCK UNDERLYING COMPEN-
NAME AND FISCAL ------------------------- AWARD(S) OPTIONS SATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(3) ($)(4) (#) ($)(5)
- -------------------------------------- ------ --------- ----------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
R. Tarr, Jr.(1)....................... 1994 -- -- -- -- --
President and Chief 1993 -- -- -- -- --
Executive Officer 1992 -- -- -- -- --
B. Tansky(6).......................... 1994 $543,750 $ 122,640 -- 21,500 $10,647
Chairman and Chief Executive 1993 500,000 150,000 -- 10,000 3,701
Officer of Neiman Marcus Stores....... 1992 450,000 -- -- 15,000 147,227
G. Sampson(7)......................... 1994 $431,250 $ 172,500 -- 10,000 $ 6,421
President and Chief Operating 1993 147,115 -- -- -- 1,724
Officer of Neiman Marcus Stores 1992 -- -- -- -- --
S. Elkin.............................. 1994 $391,875 $ 65,262 -- 10,000 $ 9,650
Chairman and Chief Executive 1993 355,000 84,313 -- 10,000 7,283
Officer of Bergdorf Goodman........... 1992 340,000 -- $ 58,125 -- 22,700
B. Feiwus............................. 1994 $275,000 $ 88,000 -- 7,500 $ 5,883
President and Chief Executive 1993 245,000 87,500 -- 5,000 4,679
Officer of NM Direct 1992 216,664 77,000 $ 23,250 -- 11,043
T. Lundgren(8)........................ 1994 $427,693 -- -- 25,000 $ 6,579
Former Chairman and Chief Executive 1993 550,000 $ 247,500 -- 15,000 3,701
Officer of Neiman Marcus Stores 1992 465,000 83,700 $ 87,188 -- 7,227
</TABLE>
- ---------------
(1) Under the Intercompany Services Agreement between the Company and Harcourt
General, Harcourt General provides certain management, accounting,
financial, legal, tax, personnel and other corporate services to the
Company, including the services of certain senior officers of Harcourt
General who are also senior officers of the Company, in consideration of a
fee based on Harcourt General's direct and indirect costs of providing the
corporate services. The level of services and fees are subject to the
approval of the Special Review Committee of the Board of Directors of the
Company. During fiscal 1994, 1993 and 1992, the Company paid or accrued
approximately $6.9 million, $7.2 million and $6.4 million, respectively, to
Harcourt General for all of its services under the Intercompany Services
Agreement. With the exception of Mr. Tarr, the senior officers of Harcourt
General, who derive all of their compensation directly from Harcourt
General, are not included in this table. Mr. Tarr is also the President and
Chief Executive Officer of Harcourt General. All of Mr. Tarr's cash and
non-cash compensation is paid by Harcourt General pursuant to Mr. Tarr's
employment agreement with Harcourt General effective November 26, 1991. Of
the amounts paid by the Company to Harcourt General under the Intercompany
Services Agreement for fiscal 1994, 1993, and 1992, approximately $2.3
million, $2.1 million and $1.7 million, respectively, were attributable to
Mr. Tarr's services. These amounts include costs related to Mr. Tarr's base
compensation, bonuses, benefits and amounts necessary to fund his
retirement benefits, all of which are direct obligations of Harcourt
General.
7
<PAGE> 10
(2) The Company does not have a long-term compensation program that includes
long-term incentive payouts. No stock appreciation rights were granted to
any of the named executive officers during the years reported in the table.
(3) Bonus payments are reported with respect to the year in which the related
services were performed.
(4) Calculated by multiplying the closing price of the Company's Common Stock
on the New York Stock Exchange on the date of grant by the number of shares
awarded. Twenty percent of an award of restricted Common Stock are freed
from the restrictions on transfer each year, commencing one year after the
date of grant, provided that the recipient continues to be employed by the
Company on the anniversary date of the grant. Dividends are paid to the
holders of restricted stock, who are also entitled to vote their restricted
shares. In the event of termination of employment for any reason, other
than death or permanent disability, restricted shares are forfeited by the
holders and revert to the Company. At the end of fiscal 1994, the named
executive officers' restricted stock holdings and market values (based on
the New York Stock Exchange closing price of $15.25 for the Company's
Common Stock at fiscal year end) were as follows: Mr. Elkin -- 3,000 shares
($45,750) and Mr. Feiwus -- 1,200 shares ($18,300). The closing price of
the Company's Common Stock on the New York Stock Exchange on December 5,
1994 was $13.625. All such restricted shares were granted to the executive
officers in fiscal 1992. Mr. Lundgren forfeited his 4,500 shares of
restricted stock upon his resignation from the Company in April 1994.
(5) The items accounted for in this column include the cost to the Company of
matching contributions under (a) the Company's Key Employee Deferred
Compensation Plan or the Savings and Investment Plan (401(k) Plan) and (b)
group life insurance premiums. For fiscal 1994, such amounts for each of
the named executive officers were, respectively, as follows: Mr. Tansky --
$4,875 and $5,772; Mr. Sampson -- $2,110 and $4,311; Mr. Elkin -- $3,550
and $6,100; Mr. Feiwus -- $2,310 and $3,573 and Mr. Lundgren -- $2,250 and
$4,329. See Note 6 below for information regarding additional compensation
of Mr. Tansky reported in this column.
(6) Mr. Tansky received a $140,000 bonus in fiscal 1992 pursuant to his
employment agreement with the Company, which is included under "All Other
Compensation." Prior to becoming the Chairman and Chief Executive Officer
of Neiman Marcus Stores in May 1994, Mr. Tansky was the Chairman and Chief
Executive Officer of Bergdorf Goodman. Pursuant to his employment
agreement, Mr. Tansky's fiscal 1994 bonus was determined based on the
performance of Bergdorf Goodman during fiscal 1994.
(7) Mr. Sampson's employment with the Company commenced on April 1, 1993.
(8) Mr. Lundgren resigned from the Company effective April 12, 1994.
8
<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR(1)
The following table provides information regarding options granted under
the Company's 1987 Stock Incentive Plan during the fiscal year ended July 30,
1994 to the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF % OF VALUE AT ASSUMED
SECURITIES TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS EXERCISE PRICE APPRECIATION
OPTIONS GRANTED TO OR BASE FOR OPTION TERM(2)
GRANTED EMPLOYEES PRICE EXPIRATION ---------------------
NAME (#)(3) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ----------------------- --------- -------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
R. Tarr, Jr.(4)...... -- -- -- -- -- --
B. Tansky............ 21,500 10.04% $14.50 09/18/03 $185,114 $479,423
G. Sampson........... 10,000 4.67% $14.50 09/18/03 $ 86,099 $222,987
S. Elkin............. 10,000 4.67% $14.50 09/18/03 $ 86,099 $222,987
B. Feiwus............ 7,500 3.50% $14.50 09/18/03 $ 64,575 $167,240
T. Lundgren.......... 25,000(5) 11.68% $14.50 --(5) --(5) --(5)
</TABLE>
- ---------------
(1) No stock appreciation rights were granted to any named executive officer
during fiscal 1994.
(2) These potential realizable values are based on assumed rates of appreciation
required by applicable regulations of the Securities and Exchange
Commission.
(3) All option grants are non-qualified stock options having a term of 10 years
and one day. They become exercisable at the rate of 20% on each of the
first five anniversary dates of the grant.
(4) None of the executive officers of Harcourt General who are also officers of
the Company, including Mr. Tarr, participate in the Company's 1987 Stock
Incentive Plan.
(5) All of these options terminated upon Mr. Lundgren's resignation from the
Company effective April 12, 1994.
9
<PAGE> 12
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table provides information regarding stock options exercised
during fiscal 1994 and the number and value of stock options held at July 30,
1994 by the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
JULY 30, 1994(#) JULY 30, 1994($)
---------------- ----------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
- ------------------------- --------------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C>
R. Tarr, Jr.(2)........ -- -- -- --
B. Tansky.............. -- -- 17,000/ $ 23,750/
44,500 66,125
G. Sampson............. -- -- 0/ $ 0/
10,000 7,500
S. Elkin............... -- -- 35,516/ $ 21,708/
23,900 41,750
B. Feiwus.............. -- -- 8,311/ $ 6,063/
12,900 20,500
T. Lundgren(3)......... --(3) $54,000(3) --(3) --(3)
</TABLE>
- ---------------
(1) The value of unexercised in-the-money options is calculated by multiplying
the number of underlying shares by the difference between the closing price
of the Company's Common Stock on the New York Stock Exchange at fiscal year
end ($15.25) and the option exercise price for those shares. These values
have not been realized. The closing price of the Company's Common Stock on
the New York Stock Exchange on December 5, 1994 was $13.625.
(2) None of the executive officers of Harcourt General who are also officers of
the Company, including Mr. Tarr, participate in the Company's 1987 Stock
Incentive Plan.
(3) Mr. Lundgren resigned from the Company effective April 12, 1994. The Company
paid Mr. Lundgren $54,000 with respect to vested options held by him to
purchase an aggregate of 22,750 shares of Common Stock of the Company at
various exercise prices. The $54,000 payment was calculated based on the
difference between the closing price of the Company's Common Stock on the
New York Stock Exchange on the date Mr. Lundgren elected to receive this
payment ($17.125 on February 25, 1994) and the option exercise prices. All
unexercisable options held by Mr. Lundgren terminated upon his resignation
from the Company.
10
<PAGE> 13
PENSION PLANS
The Company maintains a funded, qualified pension plan known as The Neiman
Marcus Group, Inc. Retirement Plan (the "Retirement Plan"). Most non-union
employees who have completed one year of service with 1,000 or more hours
participate in the Retirement Plan, which pays benefits upon retirement or
termination of employment by reason of disability. The Retirement Plan is a
"career-average" plan, under which a participant earns each year a retirement
annuity equal to 1% of his or her compensation for the year up to the Social
Security wage base and 1.5% of his or her compensation for the year in excess of
such wage base. Benefits under the Retirement Plan become fully vested after
five years of service with the Company.
The Company also maintains a Supplemental Executive Retirement Plan (the
"SERP"). The SERP is an unfunded, nonqualified plan under which benefits are
paid from the Company's general assets to supplement Retirement Plan benefits
and Social Security. Executive, administrative and professional employees (other
than those employed as salespersons) with an annual base salary at least equal
to a self-adjusting minimum ($99,000 as of December 31, 1993) are eligible to
participate. At normal retirement age (age 65), a participant with 25 or more
years of service is entitled to payments under the SERP sufficient to bring his
or her combined annual benefit from the Retirement Plan and SERP, computed as a
straight life annuity, up to 50% of the participant's highest consecutive 60
month average of pensionable earnings, less 60% of his or her estimated primary
Social Security benefit. If the participant has fewer than 25 years of service,
the combined benefit is proportionately reduced. In computing the combined
benefit, "pensionable earnings" means base salary, including any salary which
may have been deferred. Benefits under the SERP become fully vested after five
years of service with the Company.
The following table shows the estimated annual pension benefits payable to
employees in various compensation and years of service categories. The estimated
benefits apply to an employee retiring at age 65 in 1994 who elects to receive
his or her benefit in the form of a straight life annuity. These benefits
include amounts attributable to both the Retirement Plan and the SERP and are in
addition to any retirement benefits that might be received from Social Security.
ESTIMATED ANNUAL RETIREMENT BENEFITS
UNDER RETIREMENT PLAN AND SERP(1)
<TABLE>
<CAPTION>
TOTAL YEARS OF SERVICE
AVERAGE -------------------------------------------------------
PENSIONABLE 25
EARNINGS 5 10 15 20 OR MORE
- -------- ------- -------- -------- -------- --------
<C> <C> <C> <C> <C> <C>
$200,000 .................................... $20,000 $ 40,000 $ 60,000 $ 80,000 $100,000
300,000 .................................... 30,000 60,000 90,000 120,000 150,000
400,000 .................................... 40,000 80,000 120,000 160,000 200,000
500,000 .................................... 50,000 100,000 150,000 200,000 250,000
600,000 .................................... 60,000 120,000 180,000 240,000 300,000
700,000 .................................... 70,000 140,000 210,000 280,000 350,000
</TABLE>
- ---------------
(1) The amounts actually payable will be somewhat lower than the amounts shown
above, since the above amounts will be reduced by 60% of the participant's
estimated primary Social Security benefit.
11
<PAGE> 14
The following table shows the pensionable earnings and credited years of
service for the executive officers named in the Summary Compensation Table as of
July 30, 1994 and years of service creditable at age 65. Credited service may
not exceed 25 years for the purpose of calculating retirement benefits under any
of the Company's retirement plans.
<TABLE>
<CAPTION>
PENSIONABLE YEARS OF SERVICE
EARNINGS ------------------
FOR YEAR AT
ENDED JULY AT
JULY 30, 30, AGE
NAME 1994 1994 65
- ------------------------------------------------------ -------- ---- ---
<S> <C> <C> <C>
R. Tarr, Jr.(1)....................................... -- -- --
B. Tansky............................................. $543,750 -- (2) 20(2)
G. Sampson............................................ 431,250 -- (3) 20(3)
S. Elkin.............................................. 391,875 16 25
B. Feiwus............................................. 275,000 14.5 25
T. Lundgren(4)........................................ 427,693 -- (4) -- (4)
</TABLE>
- ---------------
(1) Mr. Tarr does not participate in the Company's Retirement Plan or SERP.
(2) Mr. Tansky became eligible to participate in the Retirement Plan and the
SERP on January 1, 1992. Under Mr. Tansky's employment agreement with the
Company, for purposes of determining his retirement benefits under the
SERP, Mr. Tansky will be credited with 5/3 times his years of service with
the Company provided he remains continuously employed by the Company until
his 65th birthday; otherwise, Mr. Tansky's accrued service at age 65 under
the SERP will be calculated in the normal manner. Mr. Tansky is 56 years
old.
(3) For purposes of determining Mr. Sampson's retirement benefits under the
SERP, Mr. Sampson will be credited with 20/13 times his years of service
with the Company provided he remains continuously employed by the Company
until his 65th birthday; otherwise, Mr. Sampson's accrued service at age 65
under the SERP will be calculated in the normal manner. Mr. Sampson is 53
years old.
(4) Mr. Lundgren resigned from the Company effective April 12, 1994.
EMPLOYMENT AND SEVERANCE AGREEMENTS
BURTON TANSKY
In connection with Mr. Tansky's appointment as Chairman and Chief Executive
Officer of Neiman Marcus Stores in May 1994, the Company and Mr. Tansky entered
into a new employment agreement which provides for Mr. Tansky's employment as
Chairman and Chief Executive Officer of Neiman Marcus Stores through January 31,
1997. Pursuant to the agreement, Mr. Tansky will receive an initial annual base
salary of $600,000, subject to adjustment by the Compensation Committee. In the
event Mr. Tansky is terminated without cause within 24 months of a change of
control of Neiman Marcus, or if within 24 months of such a change of control Mr.
Tansky resigns because he is not permitted to continue in a position comparable
in duties and responsibilities to that which he held prior to the change of
control, Mr. Tansky will be entitled to receive his then-current base
compensation through July 31, 1998, which amount will be reduced by any amounts
earned by him between August 1, 1997 and July 31, 1998 from other employment. If
the Company terminates Mr. Tansky's employment during the term of the employment
agreement for any reason other than for cause or other than because of his total
disability or death, Mr. Tansky will continue to receive his base compensation
and benefits until January 31, 1997 or for 18 months following termination,
whichever is greater. If the Company determines not to extend Mr. Tansky's
employment beyond January 31, 1997, the Company will pay to Mr. Tansky his
then-current base compensation through July 31, 1998, which amount will be
reduced by any amounts earned by him between August 1, 1997 and July 31, 1998
from other employment.
12
<PAGE> 15
GERALD A. SAMPSON
Pursuant to an agreement between Mr. Sampson and the Company, effective
April 1, 1993, Mr. Sampson is entitled to receive severance payments in the
event the Company terminates his employment other than for cause or other than
due to his total disability or death prior to March 31, 1995. In such event, he
will receive an amount equal to his then-current base salary, which amount will
be paid to him in 12 monthly installments following such termination but will be
reduced by any amounts received by him from other employment during the payment
period.
STEPHEN C. ELKIN
Pursuant to an agreement between Mr. Elkin and Bergdorf Goodman, effective
September 1993, Mr. Elkin is entitled to receive severance payments in the event
his employment with Bergdorf Goodman is terminated in certain situations. If the
Company terminates Mr. Elkin's employment other than for cause or other than due
to his total disability or death, he will receive an amount equal to one and one
half times his then-current base salary, which amount will be paid to him in 18
monthly installments following such termination but will be reduced by any
amounts received by him from other employment during the period beginning six
months following his termination and ending at the end of the 18 month period.
Mr. Elkin will also be entitled to receive such payments in the event his
employment is terminated without cause within 24 months of a change of control
of either Bergdorf Goodman or the Company, or in the event he resigns within 24
months of a change of control because he is not permitted to continue in a
position comparable in duties and responsibilities to that which he held before
the change of control.
DAWN MELLO
Pursuant to an agreement effective May 1994 between Bergdorf Goodman and
Ms. Mello, the President of Bergdorf Goodman since May 1994, Ms. Mello is
entitled to receive severance payments in the event her employment with Bergdorf
Goodman is terminated in certain situations. If the Company terminates Ms.
Mello's employment other than for cause or other than due to her total
disability or death, she will receive an amount equal to her then-current annual
salary, which amount will be paid in 12 monthly installments following such
termination but will be reduced by any amounts received by her from other
employment during the period beginning six months following such termination.
Ms. Mello will also be entitled to receive such payments in the event her
employment is terminated without cause before November 1, 1996 and within 24
months of a change of control of either Bergdorf Goodman or the Company, or in
the event she resigns before November 1, 1996 and within 24 months of a change
of control because she is not permitted to continue in a position comparable in
duties and responsibilities to that which she held before the change of control.
TRANSACTIONS WITH MANAGEMENT
In November 1994, Mr. Sampson received a loan in the amount of $221,258
from the Company under its Key Executive Stock Purchase Loan Plan (the "Loan
Plan") to purchase 15,000 shares of the Company's Common Stock. The loan is
secured by a pledge of the purchased shares and bears interest at an annual rate
of 5%. Pursuant to the terms of the Loan Plan, the loan will become due and
payable seven months after Mr. Sampson's employment with the Company terminates.
No other officer of the Company had an outstanding loan under the Loan Plan in
excess of $60,000 during fiscal 1994 or subsequent thereto.
In July 1994, the Company made an interest free bridge loan in the amount
of $240,000 to Mr. Tansky to assist him in purchasing a new home in the Dallas
area in connection with his new position
13
<PAGE> 16
as Chairman and Chief Executive Officer of Neiman Marcus Stores. Mr. Tansky
repaid the loan in August 1994.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1994, Richard A. Smith, Chairman of the Board of Directors of
the Company, served on the Boards of Directors of Liberty Mutual Insurance
Company and Liberty Mutual Fire Insurance Company (collectively, "Liberty
Mutual"). Gary L. Countryman, a director of the Company and the Chairman of the
Company's Compensation Committee, is the Chairman and Chief Executive Officer of
Liberty Mutual. Liberty Mutual underwrites most of the Company's insurance
policies. These insurance policies contain terms which, in the judgment of
management, are no less favorable than could be obtained from other insurance
companies. During fiscal 1994, the Company paid to Liberty Mutual an aggregate
of $3.3 million in premiums and administrative fees.
------------------------
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT
OF 1934, EACH AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS
PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION AND STOCK PERFORMANCE GRAPH SHALL NOT BE DEEMED
TO BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS, NOR SHALL SUCH SECTIONS
OF THIS REPORT BE DEEMED TO BE INCORPORATED INTO ANY FUTURE FILINGS MADE BY THE
COMPANY UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of Gary L. Countryman (Chairman),
Matina S. Horner, Walter J. Salmon and Jean Head Sisco. The members of the
Compensation Committee are all independent directors.
The principal responsibility of the Committee is to review the performance
of, and determine the compensation for, the executive officers of the Company
who are not also executive officers of Harcourt General. The individuals in this
group include Messrs. Tansky, Sampson, Elkin and Feiwus, all of whom are named
executive officers in the Summary Compensation Table, as well as Dawn Mello,
President of Bergdorf Goodman, and Robert Kelleher, President and Chief
Operating Officer of Contempo Casuals. The compensation of Harcourt General's
executive officers, most of whom are also executive officers of the Company, is
determined by Harcourt General's Compensation Committee.
Compensation Policies
The principal objectives of the Company's executive compensation program
are to reward competitively its executive officers in order to attract and
retain excellent management and to provide incentives that will most sharply
focus the attention of those individuals on the goal of increasing the
profitability of the Company and its operating divisions over both the short and
long terms.
Early in each fiscal year, the Committee considers the recommendations of
the Chief Executive Officer, which are supported by data generated by the
Company's Human Resources Department, for each component of compensation of the
Company's executive officers. The Committee approves those recommendations with
such modifications as it deems appropriate.
14
<PAGE> 17
The principal components of the Company's compensation program are:
Base Salary:
This is determined with reference both to salary survey information
from recognized compensation consulting firms and to each executive
officer's level of responsibility, experience and performance. The salary
survey data is used to establish benchmark amounts for both base salary and
total cash compensation for each executive position. Comparisons are made
to a range of retail companies or to divisions within such companies, with
the principal selection criteria for comparisons being similar revenues to
the division within the Company. While there are no hard and fast rules
which bind the Committee, the Company generally sets its salary and total
cash compensation benchmarks (assuming that maximum bonuses are achieved)
for executive officers at the 75th percentile of the comparison group of
companies in order to compete for and retain the best management talent
available. Because the Company competes for executive talent with a broad
range of U.S. retail companies, the Committee does not limit its comparison
information for compensation purposes to the three companies included in
the peer group in the Stock Performance Graph.
The Committee reviews in detail the base salary levels for each of the
principal executive officers of the Company. While the Committee uses the
benchmarks as a reference point, a particular individual's base salary may
vary from the benchmark depending upon his or her salary history,
experience, individual performance and contractual obligations of the
Company.
Annual Incentive Plan:
The determination of annual bonuses is based principally on the
achievement of performance objectives by the operating division for which
the executive is responsible and the individual executive's own
performance. For some executive officers, a small component of their bonus
eligibility depends on the Company's overall performance.
Shortly after the beginning of each fiscal year, the Compensation
Committee considers the recommendations of the Chief Executive Officer for
the Company's and each division's performance goals for the current year,
the executive officers who should participate in the annual incentive plan
for that year, and the maximum bonus values attainable by them. The
Committee approves those recommendations with such modifications as it
deems appropriate.
In addition, each of the Company's executive officers prepares and
reaches agreement with the Chief Executive Officer on individual
performance goals which must be achieved in addition to the performance
targets in order for an executive to receive his or her full bonus.
Individual performance goals typically include achievement of specific
tasks.
For fiscal 1994, the plan provided for maximum bonuses ranging from
35% to 45% of base salary. Eligibility for the divisional performance
component of the bonus was determined based on a weighting of several
factors, the most important of which was operating earnings before
corporate expenses. Other factors included return on net assets and working
capital as a percentage of sales. Similar factors will be used by the
Committee in determining bonuses for fiscal 1995. The bonuses actually
awarded to the executive officers for fiscal 1994 were determined by an
assessment of all of these factors, as well as certain subjective factors.
Absent extraordinary circumstances, if the financial performance
targets are exceeded, bonus awards are not increased over the maximum bonus
values established by the Committee. If the performance targets are not
met, bonus awards are generally reduced at the discretion of the
15
<PAGE> 18
Committee. If the Company and/or the relevant division falls sufficiently
short of its performance targets, there is a presumption that bonuses would
not be paid absent special circumstances. For example, no bonuses were
awarded to executives at Contempo Casuals for fiscal 1994. If corporate
and/or division performance targets are met, but an individual falls short
of his or her performance goals, the individual's bonus could be reduced or
eliminated in the discretion of the Committee.
The bonus program is intended to put substantial amounts of total cash
compensation at risk with the intent of focusing the attention of the
executives on achieving both the Company's and their division's performance
goals and their individual goals, thereby contributing to profitability and
building shareholder value.
Stock Incentives:
The Committee's purpose in awarding equity based incentives,
principally in the form of stock options which vest over a five year period
and terminate ten years from the date of grant, is to achieve as much as
possible an identity of interest between the executives and the long term
interest of the stockholders. The principal factors considered in
determining which executive officers (including the named executive
officers) were awarded equity based compensation in the 1994 fiscal year,
and in determining the types and amounts of such awards, were salary
levels, equity awards granted to executives at competing retail companies,
special circumstances such as promotions as well as the performance,
experience and level of responsibility of each executive.
Compensation of the Chief Executive Officer
Mr. Tarr is also the Chief Executive Officer of Harcourt General, which
owns approximately 65% of the fully converted equity of the Company. All of Mr.
Tarr's cash and non-cash compensation is paid directly by Harcourt General to
Mr. Tarr pursuant to an employment agreement between Mr. Tarr and Harcourt
General which was approved by the Harcourt General Compensation Committee and
became effective in November, 1991. Mr. Tarr receives no compensation directly
from the Company. However, pursuant to the Intercompany Services Agreement
between the Company and Harcourt General, Harcourt General provides certain
management and other corporate services to the Company, including Mr. Tarr's
services as Chief Executive Officer. During fiscal 1994, the Company paid or
accrued approximately $6.9 million to Harcourt General for all of its services
under the Intercompany Services Agreement, of which approximately $2.3 million
was attributable to Mr. Tarr's services. While the Special Review Committee of
the Company reviews each year the appropriateness of the charges by Harcourt
General to the Company under the Intercompany Services Agreement, neither this
Committee nor the Special Review Committee plays any role in determining the
compensation that Mr. Tarr, or any other executive officer of Harcourt General,
receives from Harcourt General.
Compliance with Internal Revenue Code Section 162(m)
Amendments to Section 162(m) of the Internal Revenue Code which were
enacted in 1993 generally disallow a tax deduction to public companies for
compensation in excess of $1 million per year paid to each of the executive
officers named in the Summary Compensation Table. The Company does not
anticipate that any of its executive officers will receive cash compensation in
excess of this deductibility limit in fiscal 1995. Under transition provisions
in the regulations under Section 162(m), compensation resulting from awards
under the Company's 1987 Stock Incentive Plan is not subject to the
deductibility limit at this time. The Committee will continue to monitor the
requirements of Section 162(m) and to determine what actions should be taken by
the Company in order to preserve
16
<PAGE> 19
the tax deduction for executive compensation to the maximum extent, consistent
with the Company's continuing goals of providing the executives of the Company
with appropriate incentives and rewards for their performance.
COMPENSATION COMMITTEE
Gary L. Countryman, Chairman
Matina S. Horner
Walter J. Salmon
Jean Head Sisco
STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Company's Common Stock against the cumulative total return of the Standard &
Poor's 500 Stock Index and a Peer Index during the five fiscal years ended July
30, 1994. The graph assumes a $100 investment in the Company's Common Stock and
in each index at July 29, 1989 and that all dividends were reinvested.
The Company's Peer Index is made up of three companies in the specialty
retail industry: The Limited, Inc., Nordstrom, Inc. and Tiffany & Co. The common
stocks of the companies in the Peer Index have been weighted annually to reflect
relative stock market capitalization. The comparisons provided in this graph are
not intended to be indicative of possible future performance of the Company's
Common Stock.
<TABLE>
<CAPTION>
The Neiman
Measurement Period Marcus Group, S&P 500
(Fiscal Year Covered) Inc. Index Peer Index
--------------------- ------------- ------- ----------
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 82.14 103.16 96.27
1991 84.50 123.39 157.06
1992 70.70 140.09 113.58
1993 76.93 152.00 107.63
1994 81.94 159.18 119.00
</TABLE>
17
<PAGE> 20
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Although Delaware law does not require that the selection by the Board of
Directors of the Company's auditors be approved each year by the stockholders,
the Board of Directors believes it is appropriate to submit its selection to the
stockholders for their approval and to abide by the result of the stockholders'
vote. The Board of Directors recommends that the stockholders ratify the
appointment of Deloitte & Touche LLP as independent auditors to audit the
financial statements of the Company for the fiscal year ending July 29, 1995.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if they wish, and will be
available to respond to appropriate questions from stockholders. The Company
paid, or accrued, approximately $636,300 on account of professional services
rendered by Deloitte & Touche LLP for the fiscal year ended July 30, 1994.
Deloitte & Touche LLP also serves as the independent auditors for Harcourt
General.
Approval of the proposal to ratify the selection of Deloitte & Touche LLP
as the Company's independent auditors for the current fiscal year requires a
favorable vote of a majority of the votes cast at the Annual Meeting, with the
holders of Common Stock and Preferred Stock voting as a single class.
Abstentions will be treated as votes cast. Broker non-votes will be treated as
present but not voting. On this proposal, abstentions will have the same effect
as votes against the proposal and broker non-votes will have no effect. HARCOURT
GENERAL WILL BE VOTING ITS SECURITIES, REPRESENTING APPROXIMATELY 65% OF THE
VOTING POWER OF THE COMPANY, FOR THE SELECTION OF DELOITTE & TOUCHE LLP.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL
TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING JULY 29, 1995.
3. STOCKHOLDER PROPOSAL
Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue, NW, Suite
215, Washington, D.C. 20037, the record owner of 150 shares of the Company's
Common Stock, has submitted for consideration at the Annual Meeting the proposal
set forth below. Following the proposal is the stockholder's statement in
support thereof, in the form received by the Company, and the statement of the
Company's Board of Directors in opposition thereto.
"RESOLVED: That the shareholders of Neiman Marcus recommend that the Board
of Directors take the necessary steps to start the election of directors
ANNUALLY, instead of the stagger system which it now has."
"REASONS: The great majority of New York Stock Exchange listed corporations
elect all their directors each year.
"This insures that ALL directors will be more accountable to ALL
shareholders each year and to a certain extent prevents the self-perpetuation of
the Board.
"Last year the owners of 4,389,972 shares, representing about 10.4% of
shares voting, voted FOR this proposal.
"If you AGREE, please mark your proxy FOR this resolution."
Statement of the Board of Directors in Opposition
A classified board was included in the Company's charter when the Company
was created in 1987. At last year's Annual Meeting, a proposal identical to the
stockholder proposal was defeated by a vote of 89.6% of the shares voted. At the
1993 and 1992 Annual Meetings, a proposal identical to the stockholder proposal
was defeated by votes of 84.4% and 85.4%, respectively, of the shares voted. The
18
<PAGE> 21
Board of Directors continues to believe that the retention of a classified Board
of Directors is in the best interests of the Company and its stockholders. The
Board of Directors believes that by providing that directors will serve
three-year terms rather than one-year terms, the likelihood of continuity and
stability in the composition of the Board of Directors and in the policies
formulated by the Board of Directors will be enhanced. This continuity and
stability assures that experienced directors familiar with the Company and its
businesses will be on the Board of Directors at all times.
Approval of the stockholder proposal would require an amendment to the
provision of the Restated Certificate of Incorporation which provides for a
classified Board of Directors. The Restated Certificate of Incorporation
provides that any such amendment requires the affirmative vote of not less than
66 2/3% of the combined voting power of the outstanding Common Stock and
Preferred Stock, voting together as one class. Abstentions will be treated as
votes cast. Broker non-votes will be treated as present but not voting. On this
proposal, both abstentions and broker non-votes will have the same effect as a
vote against the proposal. HARCOURT GENERAL WILL BE VOTING ITS SECURITIES,
REPRESENTING APPROXIMATELY 65% OF THE VOTING POWER OF THE COMPANY, AGAINST THIS
STOCKHOLDER PROPOSAL.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE AGAINST THE
PROPOSAL TO ELECT ALL DIRECTORS ANNUALLY.
4. OTHER MATTERS
The Board of Directors knows of no other matters which are likely to be
brought before the meeting. If any other matters should be properly brought
before the meeting, it is the intention of the persons named in the enclosed
proxy to vote, or otherwise act, in accordance with their judgment on such
matters.
DEADLINE FOR SUBMISSION OF
1996 STOCKHOLDER PROPOSALS AND NOMINATIONS
In order for stockholder proposals to be considered by the Company for
inclusion in the proxy material for the Annual Meeting of Stockholders to be
held in 1996, they must be received by the Company at its principal executive
offices by August 15, 1995. Any nominations for the Board of Directors must be
received no later than October 21, 1995. See "Meetings and Committees of the
Board of Directors and its Committees - Nominating Committee."
By Order of the Board of Directors
ERIC P. GELLER
Secretary
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, ALL STOCKHOLDERS ARE URGED TO
PROMPTLY COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
19
<PAGE> 22
- ----------------------------------------------------------------------- [LOGO]
Employee Benefit Trust Services
301 North Main Street
Winston-Salem, NC 27150-3099
TO: Participants in The Neiman Marcus Group, Inc.
Savings and Investment Plan
FROM: Wachovia Bank of North Carolina, N.A.
Trustee of the Savings and Investment Plan
DATE: December 12, 1994
As a participant in The Neiman Marcus Group, Inc. Savings and
Investment Plan, which owns shares of The Neiman Marcus Group, Inc., you are
entitled to instruct the Trustee on how to vote the shares of The Neiman Marcus
Group, Inc. Common Stock in your account on matters scheduled to come before the
Annual Meeting of Stockholders of The Neiman Marcus Group, Inc. to be held on
Friday, January 20, 1995.
A proxy statement, voting instruction card and return envelope are
enclosed. Please complete, date and sign the voting instruction card and mail
it promptly in the return envelope to exercise your right to direct the Trustee
with respect to shares of The Neiman Marcus Group allocated to your account.
If you own shares of The Neiman Marcus Group, Inc. outside of the
Savings and Investment Plan, you will receive similar materials for those
shares in a separate mailing. Please return both cards in their separate
return envelopes if you wish to fully participate in the matters being
submitted to the stockholders of The Neiman Marcus Group, Inc.
Enclosures
<PAGE> 23
CONFIDENTIAL VOTING INSTRUCTIONS
TO: WACHOVIA BANK OF NORTH CAROLINA, N.A.
AS TRUSTEE UNDER
THE NEIMAN MARCUS GROUP, INC.
SAVINGS AND INVESTMENT PLAN
WITH RESPECT TO THE ANNUAL MEETING OF STOCKHOLDERS OF
THE NEIMAN MARCUS GROUP, INC. -- JANUARY 20, 1995
I hereby instruct the Trustee to vote (in person or by proxy) all
shares of Common Stock of The Neiman Marcus Group, Inc. which are credited to
my account under the above-referenced Plan at the Annual Meeting of
Stockholders of The Neiman Marcus Group, Inc. to be held at the corporate
headquarters of The Neiman Marcus Group, Inc., 27 Boylston Street, Chestnut
Hill, Massachusetts on Friday, January 20, 1995 at 10:00 a.m. and at any
adjournments thereof. The undersigned hereby revokes any instruction
previously given and acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement dated December 12, 1994 and a copy of the Annual Report for the
year ended July 30, 1994.
THE SHARES REPRESENTED BY THIS INSTRUCTION CARD WILL BE VOTED BY THE
TRUSTEE AS DIRECTED BY THE UNDERSIGNED. THE BOARD OF DIRECTORS OF THE NEIMAN
MARCUS GROUP, INC. RECOMMENDS A VOTE FOR THE NOMINEES SET FORTH BELOW, FOR
PROPOSAL 2 AND AGAINST PROPOSAL 3. IF THIS INSTRUCTION CARD IS SIGNED AND
RETURNED AND DOES NOT SPECIFY A VOTE ON ANY PROPOSAL, THE INSTRUCTION CARD WILL
BE SO VOTED.
ELECTION OF CLASS I DIRECTORS
NOMINEES: RICHARD A. SMITH, ROBERT J. TARR, JR.
(SEE REVERSE SIDE TO CAST VOTE)
-----------
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE SEE REVERSE
SIDE
-----------
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THIS INSTRUCTION CARD IS SOLICITED BY THE PLAN TRUSTEE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
FOR WITHHELD
1. Election of
Directors (see / / / /
reverse).
/ / ___________________________________
For both nominees except as noted above
2. Approval of the appointment of Deloitte &
Touche LLP as independent auditors of the
Company for the current fiscal year.
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 3.
FOR AGAINST ABSTAIN
3. Approval of stockholder proposal
relating to the election of / / / / / /
directors annually.
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT / / THE MEETING / /
For joint accounts, each owner should Signature: _________________ Date: ____
sign. Executors, Administrators,
Trustees, etc., should give full title. Signature: _________________ Date: ____
<PAGE> 24
[LOGO] BANKERS TRUST COMPANY
OF CALIFORNIA, N. A.
300 SOUTH GRAND AVENUE, LOS ANGELES, CALIFORNIA 90071
MAILING ADDRESS:
BUNKER HILL FINANCE STATION
P.O. BOX 712039
LOS ANGELES, CALIFORNIA 90071
December 12, 1994
TO: Participants in the Broadway Stores, Inc. 401(k) Savings and Investment
Plan
FROM: Bankers Trust Company
Trustee of the 401(k) Savings and Investment Plan
As a participant in the Broadway Stores, Inc. 401(k) Savings and Investment
Plan (formerly known as the Carter Hawley Hale Stores, Inc. Savings and
Investment Plan), which owns shares of The Neiman Marcus Group, Inc., you are
entitled to instruct the Trustee on how to vote the shares of The Neiman Marcus
Group, Inc, in your account, on the matters scheduled to come before the Annual
Meeting of Stockholders of The Neiman Marcus Group, Inc. The meeting will be
held on Friday, January 20, 1995.
A proxy statement, voting instruction card and return envelope are enclosed. If
you wish to exercise your right to vote, please complete, date and sign the
voting instruction card and mail promptly in the return envelope.
If you own shares of The Neiman Marcus Group, Inc. outside of the 401(k)
Savings and Investment Plan, you will receive similar materials for those
shares in a separate mailing. Please return both cards in their separate return
envelopes if you wish to fully participate in the matters being submitted to the
stockholders of The Neiman Marcus Group, Inc.
Enclosures
<PAGE> 25
CONFIDENTIAL VOTING INSTRUCTIONS
TO: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
AS TRUSTEE UNDER
CARTER HAWLEY HALE
401(K) SAVINGS AND INVESTMENT PLAN
WITH RESPECT TO THE ANNUAL MEETING OF STOCKHOLDERS OF
THE NEIMAN MARCUS GROUP, INC. -- JANUARY 20, 1995
I hereby instruct the Trustee to vote (in person or by proxy) all
shares of Common Stock of The Neiman Marcus Group, Inc. which are credited to
my account under the above-referenced Plan at the Annual Meeting of
Stockholders of The Neiman Marcus Group, Inc. to be held at the corporate
headquarters of The Neiman Marcus Group, Inc., 27 Boylston Street, Chestnut
Hill, Massachusetts on Friday, January 20, 1995 at 10:00 a.m. and at any
adjournments thereof. The undersigned hereby revokes any instruction
previously given and acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement dated December 12, 1994 and a copy of the Annual Report for the
year ended July 30, 1994.
THE SHARES REPRESENTED BY THIS INSTRUCTION CARD WILL BE VOTED BY THE
TRUSTEE AS DIRECTED BY THE UNDERSIGNED. THE BOARD OF DIRECTORS OF THE NEIMAN
MARCUS GROUP, INC. RECOMMENDS A VOTE FOR THE NOMINEES SET FORTH BELOW, FOR
PROPOSAL 2 AND AGAINST PROPOSAL 3. IF THIS INSTRUCTION CARD IS SIGNED AND
RETURNED AND DOES NOT SPECIFY A VOTE ON ANY PROPOSAL, THE INSTRUCTION CARD WILL
BE SO VOTED.
ELECTION OF CLASS I DIRECTORS
NOMINEES: RICHARD A. SMITH, ROBERT J. TARR, JR.
(SEE REVERSE SIDE TO CAST VOTE)
-----------
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE SEE REVERSE
SIDE
-----------
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THIS INSTRUCTION CARD IS SOLICITED BY THE PLAN TRUSTEE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
FOR WITHHELD
1. Election of
Directors (see / / / /
reverse).
/ / ___________________________________
For both nominees except as noted above
2. Approval of the appointment of Deloitte &
Touche LLP as independent auditors of the
Company for the current fiscal year.
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 3.
FOR AGAINST ABSTAIN
3. Approval of stockholder proposal
relating to the election of / / / / / /
directors annually.
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT / / THE MEETING / /
For joint accounts, each owner should Signature: _________________ Date: ____
sign. Executors, Administrators,
Trustees, etc., should give full title. Signature: _________________ Date: ____
<PAGE> 26
COMMON STOCK COMMON STOCK
P THE NEIMAN MARCUS GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS, JANUARY 20, 1995
R
O Richard A. Smith, Robert J. Tarr, Jr. and Eric P. Geller, and each of
them (a majority of those present and acting to have all the powers
X hereunder), with several powers of substitution, are hereby authorized to
represent and vote all shares of Common Stock of the undersigned at the
Y Annual Meeting of Stockholders of The Neiman Marcus Group, Inc. to be held
at the corporate headquarters of The Neiman Marcus Group, Inc., 27
Boylston Street, Chestnut Hill, Massachusetts on Friday, January 20, 1995
at 10:00 a.m. and at any adjournments thereof. The undersigned hereby
revokes any Proxy previously given and acknowledges receipt of the Notice
of Annual Meeting and Proxy Statement, dated December 12, 1994 and a copy
of the Annual Report for the year ended July 30, 1994.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS
DIRECTED BY THE UNDERSIGNED. THE BOARD OF DIRECTORS OF THE NEIMAN
MARCUS GROUP, INC. RECOMMENDS A VOTE FOR THE NOMINEES SET FORTH BELOW,
FOR PROPOSAL 2 AND AGAINST PROPOSAL 3. IF THIS PROXY IS SIGNED AND
RETURNED AND DOES NOT SPECIFY A VOTE ON ANY PROPOSAL, THE PROXY
WILL BE SO VOTED.
ELECTION OF CLASS I DIRECTORS
NOMINEES: RICHARD A. SMITH, ROBERT J. TARR, JR.
(SEE REVERSE SIDE TO CAST VOTE)
-----------
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE SEE REVERSE
SIDE
-----------
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
FOR WITHHELD
1. Election of
Directors (see / / / /
reverse).
/ / ___________________________________
For both nominees except as noted above
2. Approval of the appointment of Deloitte &
Touche LLP as independent auditors of the
Company for the current fiscal year.
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 3.
FOR AGAINST ABSTAIN
3. Approval of stockholder proposal
relating to the election of / / / / / /
directors annually.
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT / / THE MEETING / /
For joint accounts, each owner should Signature: _________________ Date: ____
sign. Executors, Administrators,
Trustees, etc., should give full title. Signature: _________________ Date: ____
