<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
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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) or
Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / 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.:
3) Filing Party:
4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
[NEIMAN MARCUS LOGO] The Neiman Marcus Group, Inc.
27 Boylston Street
P.O. Box 9187
Chestnut Hill, MA 02167
(617) 232-0760
December 11, 1995
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 19, 1996
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 19, 1996, AT THE
COMPANY'S CORPORATE HEADQUARTERS, 27 BOYLSTON STREET (ROUTE 9), CHESTNUT HILL,
MASSACHUSETTS, for the following purposes:
1. To elect two Class II 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 on 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
[NEIMAN MARCUS 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 19, 1996
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 19, 1996, 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 11, 1995.
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 6, 1995 as the record date for
determining the stockholders having the right to vote at the Annual Meeting. At
the close of business on December 6, 1995 there were 38,002,131 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 67% 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
<PAGE> 4
appointed for the meeting and will be counted in determining that a quorum is
present. Votes are counted using written ballots.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table sets forth information, as of December 6, 1995, 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.
<CAPTION>
NAME OF NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES OWNED(1) COMMON STOCK
---------------- --------------- ------------
<S> <C> <C>
Harcourt General, Inc.(2).................... 22,272,360 58.6%
27 Boylston Street
Chestnut Hill, MA 02167
Gabelli Funds, Inc.(3)....................... 5,391,800 14.2%
One Corporate Center
Rye, NY 10580
Burton M. Tansky(4).......................... 50,600 *
Gerald A. Sampson(5)......................... 25,000 *
Stephen Elkin(6)............................. 74,029 *
Dawn Mello(7)................................ 6,500 *
Bernie Feiwus(8)............................. 6,573 *
Gary L. Countryman........................... -- --
Matina S. Horner............................. -- --
Walter J. Salmon............................. 8,942 *
Jean Head Sisco.............................. 1,134 *
Richard A. Smith(9).......................... -- --
Robert J. Tarr, Jr.(9)....................... -- --
All current executive officers and directors
as a group (20 persons)(10)................ 172,778 *
<FN>
- - ---------------
* 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 67% of the voting power and fully converted equity of the
Company. Each share of Preferred Stock currently 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 6, 1995 was $21.375 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 Class B Stock and
Harcourt General Common Stock beneficially owned by or for the benefit of
</TABLE>
2
<PAGE> 5
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 a Schedule 13G dated July 10, 1995
filed with the Securities and Exchange Commission by the Gabelli Funds,
Inc. and its affiliates (collectively, the "Gabelli Affiliates"). The
Gabelli Affiliates have sole voting power with respect to 5,115,900 shares
and sole dispositive power with respect to all of the shares shown in the
table.
(4) Includes 40,600 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of December 6, 1995. Also includes
10,000 shares of restricted stock over which Mr. Tansky has voting but not
dispositive power.
(5) Includes 4,000 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of December 6, 1995. Also includes 4,000
shares of restricted stock over which Mr. Sampson has voting but not
dispositive power.
(6) Includes 50,999 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of December 6, 1995. Also includes 8,500
shares of restricted stock over which Mr. Elkin has voting but not
dispositive power.
(7) Includes 3,000 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of December 6, 1995. Also includes 3,500
shares of restricted stock over which Ms. Mello has voting but not
dispositive power.
(8) Includes 5,400 shares of restricted stock over which Mr. Feiwus has voting
but not dispositive power.
(9) 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.
(10) Excludes the beneficial ownership of securities of the Company which may be
deemed to be attributed to Messrs. Smith and Tarr (see Notes 2 and 9
above). Includes 98,599 shares of Common Stock which are subject to
outstanding options exercisable within 60 days of December 6, 1995. Also
includes 31,400 shares of restricted stock over which individuals in the
group have voting but not dispositive power.
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 II 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 67% OF THE VOTING POWER OF THE COMPANY,
FOR THE ELECTION OF THE NOMINEES SET FORTH BELOW.
NOMINEES FOR TERMS EXPIRING IN 1999 (CLASS II DIRECTORS)
WALTER J. SALMON, age 65, Director since 1987
Stanley Roth, Sr. Professor of Retailing and Senior Associate Dean,
External Relations, Graduate School of Business Administration, Harvard
University; Director of Hannaford Bros. Co., The Quaker Oats Company, Circuit
City Stores, Inc., Luby's Cafeterias, Inc. and Harrah's Entertainment, Inc.
MATINA S. HORNER, PH.D., age 56, 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.
DIRECTORS WHOSE TERMS EXPIRE IN 1997 (CLASS III DIRECTORS)
GARY L. COUNTRYMAN, age 56, 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; Chairman of Liberty Financial Companies, Inc.; Director of
Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance Company, Liberty
Financial Companies, Inc., Boston Edison Company and Bank of Boston Corporation
and its principal subsidiary, The First National Bank of Boston.
JEAN HEAD SISCO, age 70, Director since 1987
Partner in Sisco Associates, international management consultants; Director
of Textron, Inc., Santa Fe Pacific Gold Corp., Washington Mutual Investors Fund,
Chiquita Brands International, Inc., The American Funds Tax-Exempt Series I and
K-Tron International, Inc.
4
<PAGE> 7
DIRECTORS WHOSE TERMS EXPIRE IN 1998 (CLASS I DIRECTORS)
RICHARD A. SMITH, age 71, Director since 1987
Chairman of the Board of the Company and of Harcourt General; Chairman of
the Board, President (until November 1, 1995) 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, Liberty Financial Companies, Inc., 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 52, 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.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended July 29, 1995, the Board of Directors held
four meetings. During fiscal 1995, 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. 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 1995, 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 once during fiscal 1995. 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 once during fiscal 1995, 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 once during fiscal 1995. Mr. Countryman is the
Chairman of the Nominating Committee.
5
<PAGE> 8
The functions of the Nominating Committee are to nominate directors, make
recommendations concerning the structure and membership of the various
committees of the Board of Directors, consider questions of management,
organization and succession and to act on such other matters as from time to
time may be requested by the Board of Directors. 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 1997 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 1995, 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 $2,756 in
fiscal 1995) incurred in attending meetings and carrying out their duties as
directors. They also receive a fee of $500 (the Chairmen receive $1,000) for
each committee meeting attended. If a director is unable to attend a meeting in
person but participates by telephone, he or she receives one-half of the fee
that would otherwise be payable.
Mr. Countryman receives his director fees on a deferred basis. The Company
maintains an account to record the accrual of Mr. Countryman's deferred fees,
which accrues interest at a rate equal to that paid on 90-day certificates of
deposit issued by The First National Bank of Boston from time to time.
SECTION 16 REPORTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who own more than 10%
of the Company's Common Stock to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. The Company believes that all filing requirements
applicable to its insiders were complied with during fiscal 1995.
6
<PAGE> 9
EXECUTIVE COMPENSATION
<TABLE>
SUMMARY COMPENSATION TABLE(1)
The following table provides information on the compensation provided by
the Company during fiscal 1995, 1994 and 1993 to the Company's Chief Executive
Officer and the five most highly paid executive officers of the Company during
fiscal 1995.
<CAPTION>
LONG-TERM
COMPENSATION(2)
---------------------
AWARDS
---------------------
RESTRICTED
ANNUAL COMPENSATION OTHER ANNUAL STOCK ALL OTHER
NAME AND FISCAL ------------------------ COMPENSATION AWARDS OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(3) ($)(4) ($)(5) (#) ($)(6)
------------------ ------ --------- ----------- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
R. J. Tarr, Jr.(1)......... 1995 -- -- -- -- -- --
President and Chief 1994 -- -- -- -- -- --
Executive Officer 1993 -- -- -- -- -- --
B. Tansky.................. 1995 $600,000 $230,640 $160,339 -- 25,000 $14,560
Chairman and Chief 1994 $543,750 $122,640 -- -- 21,500 $10,647
Executive Officer of 1993 $500,000 $150,000 -- -- 10,000 $ 3,701
Neiman Marcus Stores
G. Sampson(7).............. 1995 $450,000 $150,480 -- $71,875 -- $12,687
President and Chief 1994 $431,250 $172,500 -- -- 10,000 $ 6,421
Operating Officer of 1993 $147,115 -- -- -- -- $ 1,724
Neiman Marcus Stores
S. Elkin................... 1995 $450,000 $ 22,500 -- -- 20,000 $15,812
Chairman and Chief 1994 $391.875 $ 65,262 -- -- 10,000 $ 9,650
Executive Officer of 1993 $355,000 $ 84,313 -- -- 10,000 $ 7,283
Bergdorf Goodman
D. Mello(8)................ 1995 $325,000 $ 50,000 -- -- 15,000 $ 2,418
President of 1994 $ 50,416 $ 28,438 -- -- -- $ 612
Bergdorf Goodman 1993 -- -- -- -- -- --
B. Feiwus.................. 1995 $300,000 -- -- -- 10,000 $ 7,314
President and Chief 1994 $275,000 $ 88,000 -- -- 7,500 $ 5,883
Executive Officer of 1993 $245,000 $ 87,500 -- -- 5,000 $ 4,679
NM Direct
<FN>
- - ---------------
(1) Under the terms of an Intercompany Services Agreement, 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 1995, 1994
and 1993, the Company paid or accrued approximately $6.5 million, $6.9
million and $7.2 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. Of the amounts paid by the Company to Harcourt General under the
Intercompany Services Agreement for fiscal 1995, 1994 and 1993,
approximately $2.4 million, $2.3 million and $2.1 million, respectively,
were attributable to Mr. Tarr's services. These amounts
</TABLE>
7
<PAGE> 10
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.
(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) No disclosure regarding items included in this category is required unless
the amount in any year exceeds the lesser of $50,000 or 10% of the annual
salary and bonus for the named executive officer. Of the $160,339 reported
with respect to Mr. Tansky in this column for fiscal 1995, $140,236 is
attributable to relocation-related reimbursements paid by the Company in
fiscal 1995 in connection with his new position as Chairman and Chief
Executive Officer of Neiman Marcus Stores (Mr. Tansky previously was
Chairman and Chief Executive Officer of Bergdorf Goodman).
(5) 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. Holders of restricted stock
are 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 1995, the named executive officers' restricted stock
holdings and market values (based on the New York Stock Exchange closing
price of $15.375 for the Company's Common Stock at fiscal year end) were as
follows: Mr. Sampson -- 5,000 shares ($76,875); Mr. Elkin -- 2,000 shares
($30,750) and Mr. Feiwus -- 800 shares ($12,300). The restricted shares held
by Mr. Sampson were granted in fiscal 1995 and the restricted shares held by
Messrs. Elkin and Feiwus were granted in fiscal 1992.
(6) The items accounted for in this column include the cost to the Company of
(a) matching contributions under the Company's Key Employee Deferred
Compensation Plan or the Employee Savings Plan (401(k) Plan) and (b) group
life insurance premiums. For fiscal 1995, such amounts for each of the named
executive officers were, respectively, as follows: Mr. Tansky -- $10,840 and
$3,720; Mr. Sampson -- $9,339 and $3,348; Mr. Elkin -- $7,341 and $8,471;
Ms. Mello -- $0 and $2,418; and Mr. Feiwus -- $2,625 and $4,689.
(7) Mr. Sampson's employment with the Company commenced in April 1993.
(8) Ms. Mello rejoined the Company in May 1994. As a condition of employment,
Ms. Mello was guaranteed a minimum bonus of $50,000 for fiscal 1995.
8
<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
The following table provides information regarding options granted under
the Company's 1987 Stock Incentive Plan during the fiscal year ended July 29,
1995 to the executive officers named in the Summary Compensation Table.
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE
NUMBER OF % OF VALUE AT ASSUMED
SECURITIES TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS EXERCISE PRICE APPRECIATION
OPTIONS GRANTED TO OR BASE FOR OPTION TERM(2)
GRANTED EMPLOYEES PRICE EXPIRATION ---------------------
NAME (#)(3) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- -------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
R. Tarr, Jr.(4).......... -- -- -- -- -- --
B. Tansky................ 25,000 10.96% $14.375 9/20/04 $226,009 $572,751
G. Sampson(5)............ -- -- -- -- -- --
S. Elkin................. 20,000 8.77% $14.375 9/20/04 $180,807 $458,201
D. Mello................. 15,000 6.58% $14.375 9/20/04 $135,605 $343,651
B. Feiwus................ 10,000 4.39% $14.375 9/20/04 $ 90,404 $229,100
<FN>
- - ---------------
(1) No stock appreciation rights were granted to any named executive officer
during fiscal 1995.
(2) These potential realizable values are based on assumed rates of appreciation
required by applicable regulations of the Securities and Exchange
Commission.
(3) All option grants are non-qualified stock options having a term of 10 years
and one day. They become exercisable at the rate of 20% on each of the first
five anniversary dates of the grant.
(4) None of the executive officers of Harcourt General who are also officers of
the Company, including Mr. Tarr, participate in the Company's 1987 Stock
Incentive Plan.
(5) Mr. Sampson received a grant of 5,000 shares of restricted stock in fiscal
1995. See Note 5 to the Summary Compensation Table.
</TABLE>
9
<PAGE> 12
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
The following table provides information regarding the number and value of
stock options held at July 29, 1995 by the executive officers named in the
Summary Compensation Table. None of the named executive officers exercised any
stock options or stock appreciation rights during fiscal 1995.
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT JULY 29, 1995
JULY 29, 1995(#) ($)
----------------------- ---------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE(1)
---- -------------- ----------------
<S> <C> <C>
R. Tarr, Jr.(2).................................... -- --
B. Tansky.......................................... 29,300/57,200 $45,388/$77,175
G. Sampson......................................... 2,000/ 8,000 $ 1,750/$ 7,000
S. Elkin........................................... 40,799/36,200 $32,850/$51,650
D. Mello........................................... 0/15,000 $ 0/$15,000
B. Feiwus.......................................... 11,711/19,500 $12,063/$26,375
<FN>
- - ---------------
(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 ($15.375) 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 6, 1995 was $21.375.
(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.
</TABLE>
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 over age 21 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. 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, non-qualified 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 ($100,000 as of July 29, 1995) 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 annual pensionable earnings, less 60% of his or her estimated
annual primary Social Security benefit. If the participant has fewer than 25
years of service, the combined benefit is proportionately reduced. In
10
<PAGE> 13
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.
<TABLE>
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 1995 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)
<CAPTION>
TOTAL YEARS OF SERVICE
AVERAGE -----------------------------------------------------
PENSIONABLE 25
EARNINGS 5 10 15 20 OR MORE
- - -------- - -- -- -- -------
<S> <C> <C> <C> <C> <C>
$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
<FN>
- - ---------------
(1) The amounts actually payable will be lower than the amounts shown above,
since the above amounts will be reduced by 60% of the participant's
estimated primary Social Security benefit.
</TABLE>
<TABLE>
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 29, 1995 and years of service creditable at age 65. Credited service may
not exceed 25 years for purpose of calculating retirement benefits under any of
the Company's retirement plans.
<CAPTION>
PENSIONABLE
EARNINGS
FOR YEAR YEARS OF SERVICE
ENDED ------------------------
JULY 29, AT AT
NAME 1995 JULY 29, 1995 AGE 65
---- --- ------------- -------
<S> <C> <C> <C>
R. Tarr, Jr.(1)....................................... -- -- --
B. Tansky............................................. $600,000 -- (2) 20(2)
G. Sampson............................................ 450,000 -- (3) 20(3)
S. Elkin.............................................. 450,000 17 25
D. Mello.............................................. 325,000 14 15
B. Feiwus............................................. 300,000 15.5 25
<FN>
- - ---------------
(1) Mr. Tarr does not participate in the Company's Retirement Plan or SERP.
(2) 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 under the SERP will be calculated
in the normal manner. Mr. Tansky is 57 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 under the
SERP will be calculated in the normal manner. Mr. Sampson is 54 years old.
</TABLE>
11
<PAGE> 14
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 an employment agreement which provides for Mr. Tansky's employment as
Chairman and Chief Executive Officer of Neiman Marcus Stores through January 31,
1997. In the event Mr. Tansky is terminated without cause within 24 months of a
change of control of the Company, 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.
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 between Ms. Mello and Bergdorf Goodman, effective
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, Ms. Mello 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 and ending 12
months following such termination. In the event of a change of control of either
Bergdorf Goodman or the Company, and in the event that prior to November 1, 1996
Ms. Mello resigns because she is not permitted to continue in a position
comparable in duties and responsibilities to that which she held before such
change of control, Ms. Mello will be entitled to receive such payments until
November 1, 1996.
12
<PAGE> 15
BERNIE FEIWUS
Pursuant to an agreement between Mr. Feiwus and NM Direct, effective
October 1995, Mr. Feiwus is entitled to receive severance payments in the event
his employment with NM Direct is terminated in certain situations. If the
Company terminates Mr. Feiwus' employment without cause within 24 months of a
change of control of the Company or of NM Direct, or if within 24 months after
such a change of control Mr. Feiwus resigns his employment 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, he will receive an amount equal
to one and one-half of his then-current annual base salary, which amount will be
paid 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 and ending 18 months following such termination.
TRANSACTIONS WITH MANAGEMENT
In November 1994, Mr. Sampson received a loan from the Company in the
amount of $221,258 under its Key Executive Stock Purchase Loan Plan (the "Loan
Plan") to purchase 15,000 shares of the Company's Common Stock in the open
market. The loan is secured by a pledge of the purchased shares and bears
interest at an annual rate of 5%, payable quarterly. 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 1995 or subsequent thereto.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, Richard A. Smith, Chairman of the Board of Directors of
the Company, served on the Boards of Directors of Liberty Mutual Insurance
Company, Liberty Mutual Fire Insurance Company (collectively, "Liberty Mutual")
and Liberty Financial Companies, Inc. 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 and Chairman of Liberty
Financial Companies, Inc. 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 1995, the Company paid to Liberty Mutual an
aggregate of $2.0 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, Feiwus, and Ms. Mello, all of whom
are named executive officers in the Summary Compensation Table. The
13
<PAGE> 16
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 reviews those recommendations and
then approves them or makes such modifications as it deems appropriate.
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. companies, the Committee does not limit its comparison
information for compensation to the companies included in the peer groups
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, contractual obligations of the Company,
guidelines established by the Chief Executive Officer with respect to
salary increases for the entire Company and the subjective judgment of the
Committee.
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 reviews those recommendations and then approves them or makes
such modifications as it deems appropriate.
14
<PAGE> 17
For fiscal 1995, 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 1996.
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.
The bonuses actually awarded to the executive officers for fiscal 1995
were determined by an assessment of all of these factors, as well as
certain subjective factors. The Company guaranteed Ms. Mello a minimum
bonus of $50,000 for fiscal 1995 as a condition of employment.
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 will, in all probability, be reduced at the discretion of
the 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. Factors such as the
performance of a business unit or units for which the executive officer is
responsible and achievement of individual performance goals are considered
in the decision to award a bonus. 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 restricted stock which vests over a five year
period and 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 1995 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 67% 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.
15
<PAGE> 18
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 1995, the Company paid or accrued approximately
$6.5 million to Harcourt General for all of its services under the Intercompany
Services Agreement, of which approximately $2.4 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 THE INTERNAL REVENUE CODE
The Internal Revenue Code (the "Code") generally disallows 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 1996. Under
transition provisions of the Code, 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 the Code
to determine what actions should be taken by the Company in order to preserve
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
16
<PAGE> 19
STOCK PERFORMANCE GRAPH
<TABLE>
The graph below compares the cumulative total shareholder return on the
Company's Common Stock against the cumulative total return during the five
fiscal years ended July 29, 1995 of: (i) the Standard & Poor's 500 Index, (ii) a
new peer group index, consisting of two companies in the specialty retail
business, Nordstrom, Inc. and Tiffany & Co., and (iii) a peer group index
previously used by the Company, consisting of Nordstrom, Tiffany and The
Limited, Inc. The new peer group index was determined in view of the Company's
disposition of Contempo Casuals in fiscal 1995. The graph assumes a $100
investment in the Company's Common Stock and in each index at August 4, 1990 and
that all dividends were reinvested. The common stocks of the companies in the
peer group indices 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.
<CAPTION>
The Neiman
Measurement Period Marcus Group,
(Fiscal Year Covered) Inc. S&P 500 Index Old Peer Index New Peer Index
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
04-AUG-90 $100.00 $100.00 $100.00 $100.00
03-AUG-91 102.87 119.63 156.07 151.08
01-AUG-92 86.07 135.83 110.60 95.00
31-JUL-93 93.66 147.40 106.35 94.30
30-JUL-94 99.76 154.38 119.00 145.43
29-JUL-95 101.30 193.59 123.83 139.04
</TABLE>
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 August 3, 1996.
17
<PAGE> 20
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 $722,000 on account of professional services
rendered by Deloitte & Touche LLP for the fiscal year ended July 29, 1995.
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 67% 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 AUGUST 3, 1996.
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 6,431,543 shares, representing approximately 15.4%
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 84.6% of the shares voted. At the
1994 and 1993 Annual Meetings, a proposal identical to the stockholder proposal
was defeated by votes of 89.6% and 84.4%, respectively, of the shares voted. The
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
18
<PAGE> 21
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 67% OF THE VOTING POWER OF
THE COMPANY, AGAINST THIS STOCKHOLDER PROPOSAL.
THE BOARD OF DIRECTORS RECOMMENDS THAT 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
1997 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 1997, they must be received by the Company at its principal executive
offices by August 15, 1996. Any nominations for the Board of Directors must be
received no later than October 21, 1996. 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] BANKERS TRUST COMPANY
OF CALIFORNIA, N. A.
200 SOUTH GRAND AVENUE, LOS ANGELES, CALIFORNIA 90071
MAILING ADDRESS:
BUNKER HILL FINANCE STATION
P.O. BOX 712039
LOS ANGELES, CALIFORNIA 90071
December 11, 1995
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. to be held on Friday,
January 19, 1996.
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 the 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
WACHOVIA
______________________________________________________________________________
Wachovia Corporate Services, Inc.
Trust Services Division
301 North Main Street
Winston-Salem, North Corolina 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 11, 1995
As a participant in The Neiman Marcus Group, Inc. Savings and
Investment Plan, which owns 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 19,
1996.
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, Inc. 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> 24
COMMON STOCK COMMON STOCK
THE NEIMAN MARCUS GROUP, INC.
P ANNUAL MEETING OF STOCKHOLDERS, JANUARY 19, 1996
R
O Richard A. Smith, Robert J. Tarr, Jr. and Eric P. Geller, and each of
X them a majority of those present and acting to have all the powers
Y hereunder, with several powers of substitution, are hereby authorized to
represent and vote at shares of Common Stock of the undersigned 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 19, 1996, 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 11, 1995, and a copy of the
Annual Report for the year ended July 29, 1995.
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 II DIRECTORS
NOMINEES: Walter J. Salmon, Matina S. Horner, Ph.D.
(SEE REVERSE SIDE TO CAST VOTE) -----------
SEE REVERSE
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE SIDE
-----------
<PAGE> 25
Please mark
/X/ 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 / / / / 2. Approval of the appointment of Deloitte &
Directors (See Touche LLP as independent auditors of the
reverse). Company for the current fiscal year.
FOR AGAINST ABSTAIN
/ / / / / / / /
- - ---------------------------------------
For both nominees except as noted above
- - --------------------------------------------------------------------------------
--------------------------------------------------
The Board of Directors
recommends a vote AGAINST
Proposal 3.
--------------------------------------------------
FOR AGAINST ABSTAIN
3. Approval of stockholder / / / / / /
proposal retating 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
CONFIDENTIAL VOTING INSTRUCTIONS
TO: BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
AS TRUSTEE UNDER
BROADWAY STORES, INC.
401(k) SAVINGS AND INVESTMENT PLAN
WITH RESPECT TO THE ANNUAL MEETING OF STOCKHOLDERS OF
THE NEIMAN MARCUS GROUP, INC. -- JANUARY 19, 1996
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 19, 1996, 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 11, 1995, and a copy of the Annual Report for
the year ended July 29, 1995.
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 II DIRECTORS
NOMINEES: Walter J. Salmon, Matina S. Horner, Ph.D.
(SEE REVERSE SIDE TO CAST VOTE) -----------
SEE REVERSE
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE SIDE
-----------
<PAGE> 27
Please mark
/X/ 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 / / / / 2. Approval of the appointment of Deloitte &
Directors (See Touche LLP as independent auditors of the
reverse). Company for the current fiscal year.
FOR AGAINST ABSTAIN
/ / / / / / / /
- - ---------------------------------------
For both nominees except as noted above
- - --------------------------------------------------------------------------------
--------------------------------------------------
The Board of Directors
recommends a vote AGAINST
Proposal 3.
--------------------------------------------------
FOR AGAINST ABSTAIN
3. Approval of stockholder / / / / / /
proposal retating 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> 28
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 19, 1996
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 19, 1996 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 11, 1995, and a copy of the Annual Report for
the year ended July 29, 1995.
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 II DIRECTORS
NOMINEES: Walter J. Salmon, Matina S. Horner, Ph.D.
(SEE REVERSE SIDE TO CAST VOTE) -----------
SEE REVERSE
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE SIDE
-----------
<PAGE> 29
Please mark
/X/ 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 / / / / 2. Approval of the appointment of Deloitte &
Directors (See Touche LLP as independent auditors of the
reverse). Company for the current fiscal year.
FOR AGAINST ABSTAIN
/ / / / / / / /
- - ---------------------------------------
For both nominees except as noted above
- - --------------------------------------------------------------------------------
--------------------------------------------------
The Board of Directors
recommends a vote AGAINST
Proposal 3.
--------------------------------------------------
FOR AGAINST ABSTAIN
3. Approval of stockholder / / / / / /
proposal retating 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
--------------- ----------
