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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended July 29, 1995
Commission File Number 1-9659
THE NEIMAN MARCUS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-4119509
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
27 Boylston Street, Chestnut Hill, Massachusetts 02167
(Address of principal executive offices) (Zip Code)
Registrant's telephone number and area code: 617-232-0760
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each Exchange
on which Registered
Common Stock, $.01 par value New York
Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of the voting stock held by
non-affiliates of the registrant as of October 20, 1995 was
$309,254,138.
There were 38,008,693 shares of Common Stock outstanding as
of October 20, 1995.
_______________________________
Documents Incorporated by Reference
Portions of the Registrant's 1995 Annual Report to
Shareholders are incorporated by reference in Parts I, II and IV
of this Report.
ii
THE NEIMAN MARCUS GROUP, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED JULY 29, 1995
TABLE OF CONTENTS
PART I Page
No.
Item 1. Business 1
Item 2. Properties 3
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of
Security Holders 4
PART II
Item 5. Market for the Registrant's Common
Equity and Related Stockholder Matters 4
Item 6. Selected Financial Data 5
Item 7. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 5
Item 8. Financial Statements and Supplementary Data 5
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 5
PART III
Item 10.
Directors and Executive Officers
of the Registrant 5
Item 11.
Executive Compensation 10
Item 12.
Security Ownership of Certain Beneficial
Owners and Management 25
Item 13.
Certain Relationships and Related Transactions 28
PART IV
Item 14.
Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 28
Signatures 30
PART I
Item 1. BUSINESS
General
The Neiman Marcus Group, Inc. (together with its operating
divisions and subsidiaries, the "Company") is a Delaware
corporation which commenced operations in August 1987. Harcourt
General, Inc. ("Harcourt General"), a Delaware corporation based
in Chestnut Hill, Massachusetts, owns approximately 65% of the
fully converted equity of the Company; two of its directors and
nearly all of its officers and corporate staff employees occupy
similar positions with the Company. For more information about
the relationship between the Company and Harcourt General, see
Note 1 to the Summary Compensation Table (in Item 11) and Item 12
below, and Notes 5 and 6 to the Consolidated Financial Statements
which are incorporated herein by reference. Harcourt General is
a public company subject to the reporting requirements of the
Securities Exchange Act of 1934. For further information about
Harcourt General, reference may be made to the reports filed by
Harcourt General from time to time with the Securities and
Exchange Commission.
During fiscal 1995, the Company disposed of its Contempo
Casuals subsidiary. For additional information on this
transaction, reference is made to "Discontinued Operations"
below, and to Note 2 to the Consolidated Financial Statements
which are incorporated herein by reference.
Description of Operations
Neiman Marcus Stores
Neiman Marcus Stores, based in Dallas, Texas, is a high
fashion, specialty retailer which offers high quality women's and
men's apparel, fashion accessories, precious jewelry, decorative
home accessories, fine china, crystal and silver, and epicurean
products. A relatively small portion of Neiman Marcus Stores'
customers accounts for a significant percentage of its retail
sales.
The Company operates 28 Neiman Marcus Stores, located in
Arizona (Scottsdale); California (five stores: Beverly Hills,
Newport Beach, Palo Alto, San Diego and San Francisco); Colorado
(Denver); the District of Columbia; Florida (two stores: Fort
Lauderdale and Bal Harbour); Georgia (Atlanta); Illinois (three
stores: Chicago, Northbrook and Oak Brook); Missouri (St. Louis);
Massachusetts (Boston); Minnesota (Minneapolis); Michigan (Troy);
Nevada (Las Vegas); New Jersey (Short Hills - opened August
1995); New York (Westchester); Texas (six stores: three in
Dallas, one in Fort Worth and two in Houston); and Virginia
(McLean). The average size of these stores is 141,000 gross
square feet, and the stores range in size from 90,000 gross
square feet to 269,000 gross square feet. The Company plans to
open new Neiman Marcus Stores in King of Prussia, Pennsylvania
and Paramus, New Jersey in 1996, and in Honolulu, Hawaii in 1999.
Bergdorf Goodman
Bergdorf Goodman is a high fashion, exclusive retailer of
high quality women's and men's apparel, fashion accessories,
precious jewelry, decorative home accessories, fine china,
crystal and silver. It operates two leased stores at Fifth
Avenue and 58th Street in New York City. The original store,
consisting of 250,000 gross square feet, is dedicated to women's
apparel and accessories, home furnishings and gifts. Bergdorf
Goodman Men, which opened in August 1990, consists of 66,000
gross square feet and is dedicated to men's apparel and
accessories. A relatively small portion of Bergdorf Goodman's
customers accounts for a significant percentage of its retail
sales. In addition, Bergdorf Goodman has an important direct
marketing business which is operated by NM Direct.
NM Direct
NM Direct operates a state-of-the-art direct marketing
business which distributes its own catalogues as well as those of
Neiman Marcus and Horchow. NM Direct offers a wide array of
apparel, home furnishings and gift items to its domestic and
international mail order customers. 84 NM Direct catalogues were
mailed during fiscal 1995, with an approximate average
circulation of 1.2 million households per catalogue.
Competition
The Company's specialty store operations compete with
numerous specialty retail stores and department stores for both
customers and merchandise. The Company believes that the
principal competitive factors for specialty store operations are
customer service, quality of merchandise, merchandise assortment,
store ambience and price. The Company's direct marketing
operations compete with numerous other retail and direct
marketing operations for both customers and merchandise. The
Company believes that the principal competitive factors for its
direct marketing operations are customer service, price,
merchandise quality and assortment and catalogue presentation.
Employees
At July 29, 1995, Neiman Marcus Stores had approximately
10,100 employees, of whom approximately 2,700 were part-time,
Bergdorf Goodman had approximately 1,200 employees, of whom
approximately 35 were part-time, and NM Direct had approximately
1,100 employees, of whom approximately 600 were part-time. None
of the employees of Neiman Marcus Stores or NM Direct are subject
to collective bargaining agreements. Approximately 12% of the Bergdorf
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Goodman employees are subject to collective bargaining agreements.
The Company believes that its relations with its employees are
generally good.
Capital Expenditures; Seasonality; Liquidity
For information on capital expenditures, seasonality,
liquidity and other financial information, reference is made to
the "Management's Discussion and Analysis" section on pages 25
through 27 of the Annual Report to Stockholders for the fiscal
year ended July 29, 1995 (the "1995 Annual Report"), which is
incorporated herein by reference.
Discontinued Operations
On June 30, 1995, the Company sold its Contempo Casuals
subsidiary to The Wet Seal, Inc. ("Wet Seal") for approximately
$1.0 million of Wet Seal common stock and $100,000 in cash.
While a subsidiary of the Company, Contempo Casuals operated a
chain of retail stores which sold moderately priced fashion
apparel and accessories primarily for young women between the
ages of 15 and 21. For additional information on this
transaction, reference is made to Note 2 of the Notes to the
Consolidated Financial Statements on page 33 of the 1995 Annual
Report, which is incorporated herein by reference.
Item 2. PROPERTIES
The Company's corporate headquarters are located at Harcourt
General's leased facility in Chestnut Hill, Massachusetts. The
operating headquarters for Neiman Marcus Stores, Bergdorf Goodman
and NM Direct are located in Dallas, New York City, and Irving,
Texas, respectively.
At July 29, 1995, the square footage used in the Company's
operations was approximately as follows:
-----------------------------------------------
Owned
Subject to
Owned Ground Lease Leased Total
-----------------------------------------------
Stores 348,000 1,630,000 2,402,000 4,380,000
Distribution Centers
and Office 585,000 94,000 765,000 1,444,000
Facilities
- -----------------------------------------------------------------
Leases for Neiman Marcus Stores, including renewal options,
range from 30 to 99 years. The lease on the Bergdorf Goodman
main store expires in 2050, and the lease on the Bergdorf
Goodman Men's store expires in 2010, with two 10-year
3
renewal options. Leases are generally at fixed rentals, except that
certain leases provide for additional rentals based on sales in
excess of predetermined levels. The Company also owns approximately
50 acres of land in Irving, Texas where its NM Direct operations are
located. For further information on the Company's properties,
see "Operating Leases" in Note 10 of the Notes to the
Consolidated Financial Statements on pages 36 and 37 of the 1995
Annual Report, which is incorporated herein by reference.
NM Direct and Bergdorf Goodman's direct marketing operations
are located at the Company's 585,000 square foot facility in
Irving, Texas. The Company plans to open a 464,000 square foot
distribution center for Neiman Marcus Stores in Longview, Texas
in 1996 to replace certain of its existing distribution centers.
Item 3. LEGAL PROCEEDINGS
The Company is involved in various suits and claims in the
ordinary course of business. The Company does not believe that
the disposition of any such suits or claims will have a material
adverse effect upon the continuing operations or financial
condition of the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The following information contained in the 1995 Annual
Report is incorporated herein by reference:
(i) "Stock Information" and "Shares Outstanding" on page 41
of the 1995 Annual Report; and
(ii) "Dividends" in Note 12 of the Notes to the Consolidated
Financial Statements on page 38 of the 1995 Annual
Report. The Company eliminated the quarterly dividend
payable on its Common Stock following the dividend
which was paid on January 31, 1995.
4
Item 6. SELECTED FINANCIAL DATA
The response to this Item is contained in the 1995 Annual
Report under the caption "Selected Financial Data" on page 40 and
is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The response to this Item is contained in the 1995 Annual
Report under the caption "Management's Discussion and Analysis"
on pages 25 through 27 and is incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and supplementary data
referred to in Item 14 are incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
A. Directors
Below are the name, age, and principal occupations for the
last five years of each director of the Company.
Class I Directors - Terms expire at 1998 Annual Meeting
Richard A. Smith - 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 November 26, 1991; Director of
Harcourt General, GC Companies, Inc., Liberty Mutual Insurance
5
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,
Group Vice President of the Company.
Robert J. Tarr, Jr. - 51 Director since 1987
President, Chief Executive Officer (since November 26,
1991) and Chief Operating Officer of the Company and of
Harcourt General; Director of Harcourt General and GC
Companies, Inc.
Class II Directors - Terms expire at 1996 Annual Meeting
Walter J. Salmon - 64 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 - 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.
Class III Directors - Terms expire at 1997 Annual Meeting
Gary L. Countryman - 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 those companies
through March 1992; Director of Liberty Financial Companies,
Inc. (Chairman), Director of Boston Edison Company,
Bank of Boston Corporation and its principal
subsidiary, The First National Bank of Boston.
Jean Head Sisco - 70 Director since 1987
Partner in Sisco Associates, international management
consultants; Director of Textron, Inc., Sante Fe
Pacific Gold Corp., Washington Mutual Investors Fund,
Chiquita Brands International, Inc., The American Funds
Tax-Exempt Series I and K-Tron International, Inc.
6
B. Executive Officers Who Are Not Directors
Below are the name, age and principal occupations for the
last five years of each executive officer of the Company who is
not also a director of the Company. All such persons have been
elected to serve until the next annual election of officers and
their successors are elected or until their earlier resignation
or removal.
John R. Cook - 54
Senior Vice President and Chief Financial Officer of
the Company and of Harcourt General since September
1992; Senior Vice President - Finance and
Administration and Chief Financial Officer of NACCO
Industries, Inc. prior thereto.
Stephen C. Elkin - 52
Chairman and Chief Executive Officer of Bergdorf
Goodman since May 1994; President and Chief Operating
Officer of Bergdorf Goodman from December 1990 to May
1994; Vice Chairman and Chief Operating Officer of
Bergdorf Goodman prior thereto.
Peter Farwell - 52
Vice President - Corporate Relations of the Company and
of Harcourt General.
Bernie Feiwus - 47
President and Chief Executive Officer of NM Direct
since October 1991; Executive Vice President of Neiman
Marcus - Horchow Mail Order Division from March 1991 to
October 1991; Senior Vice President - Sales Promotion
Director of Neiman Marcus prior thereto.
Eric P. Geller - 48
Senior Vice President and General Counsel of the
Company and of Harcourt General since May 1992;
Secretary of the Company since January 1992 and of
Harcourt General since December 1991; Vice President,
Associate General Counsel and Assistant Secretary of
the Company and of Harcourt General prior thereto.
Paul F. Gibbons - 44
Vice President and Treasurer of the Company and of
Harcourt General since August 1992; Vice President and
Treasurer of GC Companies, Inc. since March 1994; Vice
President - Taxation of the Company and of Harcourt
General prior to August 1992.
7
Gerald T. Hughes - 38
Vice President - Human Resources of the Company and of
Harcourt General since June 1994; Associate General Counsel
of the Company and of Harcourt General with responsibility
for labor and employment matters from August 1992 to June 1994;
Labor Counsel of the Company and of Harcourt General prior thereto.
Dawn Mello - 64
President of Bergdorf Goodman since May 1994 and from
1983 to 1989; Executive Vice President and Creative
Director Worldwide of Guccio Gucci SpA from October
1989 to May 1994.
Michael F. Panutich - 47
Vice President - General Auditor of the Company and of
Harcourt General since June 1993; Vice President -
Accounting of the Company and of Harcourt General prior
thereto.
Stephen C. Richards - 40
Vice President and Controller of the Company and of
Harcourt General since June 1993; Vice President and
Controller of GC Companies, Inc. since January 1994;
Partner, Deloitte & Touche prior to June 1993.
Gerald A. Sampson - 54
President and Chief Operating Officer of Neiman Marcus
Stores since April 1993; Chairman of May Company
California, a division of May Department Stores
Company, from 1991 to January 1993; Chairman of
Kaufmann's, a division of May Department Stores
Company, prior thereto.
Craig B. Sawin - 39
Vice President - Planning and Analysis of the Company
and of Harcourt General.
Robert A. Smith - 36
Group Vice President of the Company since January 1992
and of Harcourt General since December 1991; Vice
President - Corporate Development of the Company from
March 1989 to January 1992; Vice President - Corporate
Development of Harcourt General from December 1988 to
December 1991; Director of Harcourt General. Mr. Smith
is the son of Richard A. Smith, the Chairman of the
Company.
8
Burton M. Tansky - 57
Chairman and Chief Executive Officer of Neiman Marcus
Stores since May 1994; Chairman and Chief Executive
Officer of Bergdorf Goodman from February 1992 to May
1994; Vice Chairman of Bergdorf Goodman from February
1991 to February 1992; President of Saks Fifth Avenue
prior thereto.
C. 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.
9
Item 11. EXECUTIVE COMPENSATION
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.
Annual Compensation
Long-Term Compensation
(2)
-------------------------
Awards
-------------------------
Other Restricted All Other
Name and Fiscal Salary Bonus Annual Stock Awards Options Compensation
Principal Year ($) ($) (3) Compensation ($) (5) (#) ($) (6)
Position ($) (4)
-----------------------------------------------------------------------------------------------
R. J. Tarr, 1995 -- -- -- -- -- --
Jr. (1)
President and 1994 -- -- -- -- -- --
Chief
Executive 1993 -- -- -- -- -- --
Officer
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
Neiman Marcus 1993 $500,000 $150,000 -- -- 10,000 $ 3,701
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
Bergdorf
Goodman 1993 $355,000 $84,313 -- -- 10,000 $ 7,283
D. Mello (8) 1995 $325,000 $50,000 -- -- 15,000 $ 2,418
President of
Bergdorf 1994 $50,416 $28,438 -- -- -- $ 612
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 NM 1993 $245,000 $87,500 -- -- 5,000 $ 4,679
Direct
-----------------------------------------------------------------------------------------------
(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
10
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 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.
11
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 1993.
(6) 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 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 $50,000
for fiscal 1995.
12
Option Grants in Last Fiscal Year(1)
The following table provides information regarding options granted under the
Company's 1987 Stock Incentive Plan during the fiscal year ended July 29, 1995 to the
executive officers named in the Summary Compensation Table.
Individual Grants
---------------------------------------
Potential
% of Realized Value
Number of Total at Assumed
Securities Options Annual Rates of
Underlying Granted to Exercise Stock Price
Options Employees or Base Appreciation
Granted in Fiscal Price Expiration for Option Term (2)
Name (#) (3) Year ($/Sh) Date 5% ($) 10% ($)
---------------------------------------------------------------------------------------------
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 $229,100
----------------------------------------------------------------------------------------------
(1) No stock appreciation rights were granted to any named
executive officer during fiscal 1995.
(2) These potential realizable values are based on assumed rates of
appreciation required by applicable regulations of the
Securities and Exchange Commission.
(3) All option grants are non-qualified stock options having a term
of 10 years and one day. They become exercisable at the rate
of 20% on each of the first five anniversary dates of the
grant.
(4) None of the executive officers of Harcourt General who are also
officers of the Company, including Mr. Tarr, participate in the
Company's 1987 Stock Incentive Plan.
(5) Mr. Sampson received a grant of 5,000 shares of restricted
stock in fiscal 1995. See Note 5 to the Summary Compensation
Table.
13
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table provides information regarding the number and value of stock
options held at July 29, 1995 by the executive officers named in the Summary
Compensation Table. None of the named executive officers exercised any stock options
or stock appreciation rights during fiscal 1995.
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
July 29, 1995(#) July 29, 1995 ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable (1)
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
(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 October 20, 1995 was $18.75.
(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.
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
14
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.
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 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
15
estimated benefits apply to an employee 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 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)
---------------------------------------------------------------------------------------
Average
Pensionable
Earnings Total Years of Service
---------------------------------------------------------------------------------------
25
5 10 15 20 or more
$ 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
___________________________
(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.
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.
--------------------------------------------------------------
Pensionable Earnings Years of Service
for Year Ended at July at
Name July 29, 1995 29, 1995 Age 65
--------------------------------------------------------------
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
___________________________
16
(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.
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. 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.
17
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; provided, however, that such payments shall cease on
November 1, 1996.
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
18
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.
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 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 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 Form 10-K,
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
19
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.
20
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.
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.
21
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.
Depending on the individual executive officer, 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.
22
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 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 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
23
Stock Performance Graph
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.
Stock Performance Graph
Comparison of Five-Year Cumulative Total Return
The Neiman Marcus Group, Inc., S&P 500 Index, and Peer Index
----------------------------------------------------------------
The Neiman Marcus S&P 500 Old Peer New Peer
Group Inc Index Index Index
----------------------------------------------------------------
04-Aug-90 100 100 100 100
03-Aug-91 102.87 119.63 156.07 151.08
01-Aug-92 86.07 135.83 110.6 95
31-Jul-93 93.66 147.4 106.35 94.3
30-Jul-94 99.76 154.38 119 145.43
29-Jul-95 101.3 193.59 123.83 139.04
----------------------------------------------------------------
24
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of October 20, 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 6% Cumulative Convertible Preferred Stock, $1.00 par
value (the "Preferred Stock"), of the Company.
- ------------------------------------------------------------------
Number Percent
Name and Address of Shares of Common
of Beneficial Owner Owned(1) Stock
- ------------------------------------------------------------------
Harcourt General, Inc.(2) 21,440,960 56.5%
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) 23,284 *
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) 189,489 *
_____________________
* Less than 1%.
25
(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 voting power and fully converted equity 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 October 20, 1995 was $18.75 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 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.
26
(4) Includes 40,600 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of October 20, 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 October 20, 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 October 20, 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 October 20, 1995. Also includes 3,500 shares
of restricted stock over which Ms. Mello has voting but not dispositive power.
(8) Includes 16,711 shares of Common Stock which are subject to outstanding
options exercisable within 60 days of October 20, 1995. Also 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 115,310 shares of Common Stock which are subject to outstanding options
exercisable within 60 days of October 20, 1995. Also includes 31,400 shares of
restricted stock over which individuals in the group have voting but not dispositive
power.
27
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Principal Stockholder - Intercompany Services
Agreement
See Note 1 to the Summary Compensation Table in Item 11
above.
Transactions with Directors
See "Compensation Committee Interlocks and Insider
Participation" in Item 11 above.
Transactions with Officers
In November 1994, Mr. Sampson received a loan from the
Company in the principal 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.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
14(a)(1) Financial Statements
The documents listed below are incorporated by
reference to the Company's 1995 Annual Report to Shareholders and
are incorporated by reference into Item 8 hereof:
Consolidated Balance Sheets at July 29, 1995 and
July 30, 1994.
Consolidated Statements of Operations for the fiscal
years ended July 29, 1995, July 30, 1994 and July
31, 1993.
Consolidated Statements of Cash Flows for the fiscal
years ended July 29, 1995, July 30, 1994 and July
31, 1993.
28
Consolidated Statements of Common Shareholders'
Equity for the fiscal years ended July 29, 1995,
July 30, 1994 and July 31, 1993.
Notes to Consolidated Financial Statements.
Independent Auditors' Report.
14(a)(2) Consolidated Financial Statement Schedules
The documents and schedules listed below are filed as part of
this Form 10-K:
Page in
Form 10-K
Independent Auditors' Report on Consolidated Financial
Statement Schedules F-1
Schedule II -
Valuation and Qualifying Accounts and Reserves F-2
All other schedules for which provision is made in the
applicable regulations of the Securities and Exchange Commission
have been omitted because the information is disclosed in the
Consolidated Financial Statements or because such schedules are
not required or are not applicable.
14(a)(3) Exhibits
The exhibits filed as part of this Annual Report are listed
in the Exhibit Index immediately preceding the exhibits. The
Registrant has identified with an asterisk in the Exhibit Index
each management contract and compensation plan filed as an
exhibit to this Form 10-K in response to Item 14(c) of Form 10-K.
14(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
quarter ended July 29, 1995.
29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
THE NEIMAN MARCUS GROUP, INC.
BY: /s/Robert J. Tarr, Jr.
Robert J. Tarr, Jr.
President,
Chief Executive Officer
and
Chief Operating Officer
Dated: October 24, 1995
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the following
capacities and on the dates indicated.
Signature Title Date
Principal Executive
Officer:
/s/Robert J. Tarr, Jr. President,
Robert J. Tarr, Jr. Chief Executive October 24, 1995
Officer, Chief
Operating Officer
and Director
Principal Financial
Officer:
/s/John R. Cook Senior Vice October 24, 1995
John R. Cook President and
Chief Financial
Officer
Principal Accounting
Officer:
/s/Stephen C. Richards Vice President October 24, 1995
Stephen C. Richards and Controller
30
Directors Date
/s/Richard A. Smith October 24, 1995
Richard A. Smith
- ----------------------
Gary L. Countryman
/s/Matina S. Horner October 18, 1995
Matina S. Horner
/s/Walter J. Salmon October 19, 1995
Walter J. Salmon
/s/Jean Head Sisco October 15, 1995
Jean Head Sisco
31
EXHIBIT INDEX Page No.
3.1(a) Restated Certificate of Incorporation of the Company,
incorporated herein by reference to the Company's
Annual Report on Form 10-K for the twenty-six week
period ended August 1, 1987.
3.1(b) Certificate of Designation and Terms of 9-1/4%
Cumulative Redeemable Preferred Stock, incorporated
herein by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended August 3, 1991.
3.2 By-Laws of the Company, as amended, incorporated herein
by reference to the Company's Annual Report on Form 10-
K for the fiscal year ended August 1, 1992.
*10.1 Intercompany Services Agreement, dated as of July 24,
1987, between Harcourt General and the Company,
incorporated herein by reference to the Company's
Annual Report on Form 10-K for the twenty-six week
period ended August 1, 1987.
*10.2 1987 Stock Incentive Plan, incorporated herein by
reference to the Company's Annual Report on Form 10-K
for the twenty-six week period ended August 1, 1987.
*10.3 Key Executive Stock Purchase Loan Plan, as amended,
incorporated herein by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended
July 30, 1994.
*10.4 Supplemental Executive Retirement Plan, incorporated
herein by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended July 30, 1988.
*10.5 Employment Agreement between the Company and Burton
M. Tansky dated May 1, 1994, incorporated herein by
reference to the Company's Annual Report on Form 10-K
for the fiscal year ended July 30, 1994.
10.6
Stock Purchase Agreement between the Company and
Harcourt General, dated October 14, 1991 and effective
as of August 2, 1991, incorporated herein by reference
to the Company's Annual Report on Form 10-K for the
fiscal year ended August 3, 1991.
*10.7 Description of the Company's Executive Life Insurance
Plan, incorporated herein by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended
August 1, 1992.
*10.8 Supplementary Executive Medical Plan, incorporated
herein by reference to the Company's Annual Report
on Form 10-K for the fiscal year ended July 31, 1993.
*10.9 Termination Agreement between Bergdorf Goodman, Inc.
and Stephen C. Elkin, effective September 1993,
incorporated herein by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended
July 31, 1993.
*10.10 Termination Agreement between Bergdorf Goodman, Inc.
and Dawn Mello, effective May 1994, incorporated herein
by reference to the Company's Annual Report on Form
10-K for the fiscal year ended July 30, 1994.
*10.11 Key Employee Deferred Compensation Plan, as amended,
incorporated herein by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended
July 30, 1994.
*10.12 Deferred Compensation Agreement between the Company
and Gary L. Countryman, dated August 27, 1987,
incorporated herein by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended
July 30, 1994.
*10.13 Change of Control Agreement between the Company and
Bernie Feiwus, effective October 1995.
11.1 Computation of Weighted Average Number of Shares
Outstanding Used in Determining Primary and
Fully-Diluted Earnings Per Share.
2
13.1 1995 Annual Report to Stockholders (which is not deemed
to be filed except to the extent that portions thereof
are expressly incorporated by reference in this Annual
Report on Form 10-K).
21.1 Subsidiaries of the Company.
23.1 Consent of Deloitte & Touche LLP.
27.1 Financial Data Schedule.
99.1 Dividend Reinvestment and Common Stock Purchase Plan,
incorporated herein by reference to the Company's
Registration Statement on Form S-3 dated September 17,
1990 (File No. 33-36419).
________________
*Exhibits filed pursuant to Item 14(c) of Form 10-K.
3
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of The Neiman Marcus Group, Inc. and Subsidiaries
We have audited the consolidated financial statements of The Neiman Marcus
Group, Inc. and subsidiaries as of July 29, 1995 and July 30, l994, and for
each of the three years in the period ended July 29, 1995, and have issued our
report thereon dated September 8, l995; such financial statements and report
are included in your l995 Annual Report to Stockholders and are incorporated
herein by reference. Our audits also included the financial statement
schedule of The Neiman Marcus Group, Inc. and subsidiaries, listed in Item 14.
This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/S/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 8, l995
F-1
SCHEDULE II
THE NEIMAN MARCUS GROUP, INC.
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED JULY 29, 1995, JULY 30, 1994 AND JULY 31, 1995
(in thousands)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- --------------------------------------------------------------------------------------------------
Balance at Charges to Charged to Balance at
Beginning Costs and Other Deductions End of
Description of Period Expenses Accounts Describe (A) Period
YEAR ENDED JULY 29, 1995
Allowance for doubtful accounts
(deducted from accounts receivable) $13,700 $27,025 $0 ($34,625)(B) $6,100
YEAR ENDED JULY 30, 1994
Allowance for doubtful accounts
(deducted from accounts receivable) $9,500 $24,716 $0 ($20,516) $13,700
YEAR ENDED JULY 31, 1993
Allowance for doubtful accounts
(deducted from accounts receivable) $3,592 $21,794 $0 ($15,886) $9,500
- -------------------------------------------------------------------------------------------------
(A) Write-off of uncollectible accounts, net of recoveries.
(B) Includes $10.3 million relating to the securitization of the Company's
credit card receivables.
F-2