EXHIBIT
10.9


 


THE NEIMAN MARCUS GROUP, INC.


 


DEFERRED
COMPENSATON PLAN


FOR NON-EMPLOYEE
DIRECTORS


 


 


Effective
January 17, 1997


As Amended and
Restated June 8, 1998


 

















 


THE NEIMAN MARCUS
GROUP, INC.


DEFERRED
COMPENSATION PLAN


FOR NON-EMPLOYEE
DIRECTORS


 


Table of Contents


 


	
  ARTICLE I

  	
   

  
	
  Introduction

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  Definitions

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  Participation

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  Elective
  Deferrals

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  Non-Elective
  Deferrals

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  Administration

  	
   

  
	
  ARTICLE 7

  	
   

  
	
  Amendment and Termination

  	
   

  
	
  ARTICLE 8

  	
   

  
	
  Miscellaneous

  	
   

  



 


ii

















 


THE NEIMAN MARCUS GROUP, INC.


 


DEFERRED COMPENSATION PLAN


 


FOR NON-EMPLOYEE DIRECTORS


 


ARTICLE I


 


Introduction


 


1.1.  Adoption, amendment and restatement.  The Company adopted the Plan effective
January 17, 1997 to provide a means by which members of the Board who are
not employees of the Company may elect to defer receipt of designated amounts
of Compensation earned in that capacity. 
The Plan has been amended and restated effective June 8, 1998, to
provide for non-elective deferred compensation as set forth in Article 5.


 


1.2.  Status of Plan.  The Plan is intended neither to be a qualified plan within the
meaning of 401(a) of the Internal Revenue Code of 1986, as amended (the
“Code”), nor to constitute a “pension benefit plan” or a “welfare benefit plan”
subject to the requirements of the Employee Retirement Income Security Act of
1974. The Plan shall be administered and interpreted to the extent possible in
a manner consistent with that intent.


 


ARTICLE 2


 


Definitions


 


Whenever used herein, the
following terms have the meanings set forth below, unless a different meaning
is clearly required by the context:


 


2.1.                              “Account”
means, for each Participant, the account maintained for his or her benefit
under Section 4.2 or 5.1.


 


2.2.                              “Board”
means the Board of Directors of the Company.


 


2.3.                              “Committee”
means the Compensation Committee of the Board.


 


2.4.                              “Common
Stock” means the Common Stock, $.01 par value, of the Company.


 


2.5.                              “Company”
means The Neiman Marcus Group, Inc., a Delaware corporation, and any successor
to all or substantially all of the Company’s assets or business which assumes
the obligations of the Company.


 


2.6.                              “Compensation”
means the amount of retainer payable for service on the Board, plus any fees
payable for attendance at or participation in a meeting, for service as Chair
or Vice Chair of the Board, or for service on or as a chair of any committee of
the Board, determined without reduction for any elective deferrals under
Article 4.  Notwithstanding the
foregoing, Compensation does not include any Common Stock equivalent units
which may be credited pursuant to Section 5.1, which amounts are not
subject to the elective deferral provisions of Section 4.1.


 


1

















 


2.7.                              “Effective
Date” means January 17, 1997.


 


2.8.                              “Market
Price” means, as of any date, the mean of the highest and lowest sales prices
of the Common Stock on such date (or, if no trading shall have occurred on such
date, on the next previous date on which trading shall have occurred), as
reported on the New York Stock Exchange Composite Tape.


 


2.9.                              “Non-Employee
Director” means a member of the Board who is not an officer or employee of the
Company or Harcourt General, Inc. or any of the subsidiaries of either the
Company or Harcourt General, Inc.


 


2.10.                        “Participant”
means any Non-Employee Director who participates in the Plan as set forth in
Article 3.


 


2.11.                        “Plan”
means The Neiman Marcus Group, Inc. Deferred Compensation Plan for Non-Employee
Directors as set forth herein and all subsequent amendments hereto.


 


2.12.                        “Plan
Year” means the calendar year.


 


2.13.                        “Unforeseen
Emergency” means a severe financial hardship to a Participant resulting from
illness or accident of the Participant or of a dependent (as defined in 152(a)
of the Code) of the Participant, loss of property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant.


 


ARTICLE 3


 


Participation


 


3.1.                              Commencement
of participation. Each Non-Employee Director shall become a Participant in this
Plan upon the later of (a) the Effective Date or (b) the day on which he or she
becomes a Non-Employee Director.


 


3.2.                              Continuation
of participation. An individual who has become a Participant in the Plan shall
continue to be a Participant so long as he or she remains a Non-Employee
Director, and so long thereafter as any amount is payable to him or her in
accordance with Article 4 or 5.


 


2

















 


ARTICLE 4


 


Elective Deferrals


 


4.1.                              Elective
deferrals.  An individual who is a
Non-Employee Director on January 17, 1997 may elect, by filing a written
election with the Committee prior to February 14, 1997, to defer all or a
specified portion of his or her Compensation for services to be performed on or
after such deferral election.  An
individual who is a Non-Employee Director on the first day of any fiscal year
of the Company after the Effective Date may elect to defer all or a specified
portion of his or her Compensation for services to be performed on or after
such date by filing a written election with the Committee before such
date.  An individual who has been
nominated or elected to serve as a Non-Employee Director, and who was not a
Non-Employee Director immediately prior to such nomination or election, may
elect before or within thirty (30) days after becoming a Non-Employee Director
to defer all or a specified portion of his or her Compensation for services to
be performed after such deferral election.


 


Each deferral election
under this Section 4.1 shall be made on a form approved or prescribed by
the Committee and shall also specify the time and form of distribution of the
amounts deferred and the investment equivalent alternative described in
Section 4.3 to be applied to such amounts.


 


An election to defer
Compensation and to specify the time and form of distribution may be revoked or
modified, effective for amounts earned on and after the first day of any fiscal
year of the Company, by an election filed before that date, but may not
otherwise be revoked or modified except as provided in Section 8.8 in the
event of an Unforeseen Emergency.


 


4.2.                              Accounts.  The Committee shall maintain a bookkeeping
account (the “Account”) for each Participant reflecting elective deferrals made
for the Participant’s benefit under Section 4.1, and the value of such
elective deferrals determined in accordance with Section 4.3, together
with any adjustments hereunder. 
Elective deferrals shall be credited to the Account as of the day such
amounts become payable to the Participant. 
As of each February 15th, the Committee shall provide the Participant
with a statement of his or her Account as of the end of the preceding Plan
Year.


 


4.3.                              Investment
equivalent alternatives.  When a
Participant elects to make elective deferrals in accordance with
Section 4.1, he or she shall also elect whether the value of such elective
deferrals shall be determined under the cash-based option or the stock-based
option described below.


 


(a)                                  Cash-based
option:


 


Under the cash-based
option, elective deferrals shall accrue interest, to be compounded at the end
of each fiscal quarter of the Company, at a rate equal to the average of the
top rates paid by major New York banks on primary new issues of three-month
negotiable certificates of deposit (usually on amounts of $1,000,000 or more)
as quoted in the Wall Street Journal on the last business day of the fiscal
quarter.


 


3

















 


(b)                                 Stock-based
option:


 


Under the stock-based
option, elective deferrals will be converted hypothetically into Common Stock
equivalent units. The number of such units shall be determined by dividing the
amount of elective deferrals in each fiscal quarter by the average of the
Market Prices of the Common Stock during the last five (5) trading days of such
fiscal quarter.  Units will be
calculated to the nearest thousandth. 
On each dividend payment date, if any, for the Common Stock dividend
equivalents in the form of additional units representing Common Stock will be
credited to the Participant’s Account equal to (i) the per-share cash dividend
divided by the Market Price of Common Stock on the dividend payment date,
multiplied by (ii) the number of such units reflected in such Account on the
day before the dividend payment date. 
At the end of the period of deferral elected by the Participant, the
Common Stock equivalent units will be valued for payment by multiplying the
applicable number of units by the average of the Market Prices of Common Stock
during the last ten (10) trading days before the date on which the value of the
elective deferrals is to be paid or begin to be paid.  If the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities through merger, consolidation, sale of all or substantially all the
property of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Common Stock or other securities, appropriate
adjustments will be made by the Company in the number of Common Stock
equivalent units credited to a Participant’s Account.


 


4.4.                              Time
of payment. When a Participant elects to make elective deferrals in accordance
with Section 4.1, the Participant shall also elect whether the value of
the elective deferrals shall be paid, or begin to be paid, (a) at a specified
date at least twenty-four months in the future (which date shall be the last
day of a fiscal quarter) or (b) upon termination of his or her service as a
member of the Board.  If alternative (a)
under this Section 4.4 is elected, payment will be made or will commence
on the date specified.  If alternative
(b) under this Section 4.4 is elected, payment will be made or will
commence at the end of the fiscal quarter in which the Participant’s service as
a member of the Board terminates. The foregoing election shall be made on a
form approved or prescribed by the Committee.


 


Payment of a
Participant’s Account shall be made in accordance with the Participant’s
elections under this Section 4.4 and Section 4.5.  Each Participant’s Account shall be reduced
by the amount of any payment made to or on behalf of the Participant (including
interest paid with respect to such payment) as of the date such payment is
made.


 


4

















 


4.5.                              Form
of payment.  When a Participant elects
to make elective deferrals in accordance with Section 4.1, the Participant
shall also elect whether the value of such elective deferrals shall be paid in
(a) a lump sum, or (b) a specified number of annual installments (not to exceed
10).  Each installment (other than the
first) shall accrue interest from the date of the first installment to the date
on which such installment is paid, compounded quarterly at a rate equal to the
average of the top rates paid by major New York banks on primary new issues of
three-month negotiable certificates of deposit (usually on amounts of
$1,000,000 or more) as quoted in the Wall Street Journal on the last business
day of the fiscal quarter. The foregoing election shall be made on a form
approved or prescribed by the Committee.


 


4.6.                              Death
prior to payment. In the event that a Participant dies prior to complete
distribution of his or her Account, the balance of his or her Account shall be
paid in a single lump sum to the beneficiary or beneficiaries designated by the
Participant. If no such beneficiary has been designated or if no designated
beneficiary survives the Participant, the balance of such Account shall be paid
to the Participant’s estate. Payment of such amount shall be made within sixty
(60) days from the date of receipt by the office of the Secretary of the Company
of notice of the Participant’s death. 
Such designation or designations of beneficiary must be in writing,
dated and signed by the Participant, and no such designation shall require
Company consent. No beneficiary designation shall be deemed effective unless
the same is on file in the office of the Secretary of the Company prior to the
death of the Participant. The Company may rely in all cases on the genuineness,
accuracy and date of any such beneficiary designation and shall be fully
protected in making payment in accordance therewith. Any beneficiary
designation filed in the office of the Secretary of the Company prior to the
death of the Participant shall be deemed to have revoked all earlier
designations, and no beneficiary designation filed after the date of a
Participant’s death shall be deemed effective.


 


ARTICLE 5


 


Non-Elective Deferrals


 


5.1                                 Crediting
of Common Stock equivalent units.  It is
contemplated that Board compensation after the Effective Date may, in the
Board’s sole discretion, include credits to the Accounts of Participants
consisting of Common Stock equivalent units, and that the value thereof shall
be determined under the stock-based option described in
Section 4.3(b).  For this purpose, for
each Participant who has not elected to defer Compensation pursuant to
Section 4.1, an Account shall be established.  Any amounts so credited shall remain in each Participant’s
Account until termination of his or her service as a member of the Board, and
payment from such Account will be made or will commence at the end of the
fiscal quarter in which the Participant’s service as a member of the Board
terminates.


 


5.2                                 Method
of payment.  At the Participant’s
election, made prior to October 1, 1998, on a form approved or prescribed
by the Committee, the value of any amount so credited shall be paid in a lump
sum or in annual installments (not to exceed 10), and if the latter,
installments (other than the first) shall accrue interest as described in
Section 4.5.  In the event that a
Participant dies prior to complete distribution of any amounts credited to his
or her Account pursuant to Section 5.1, the balance of such amounts shall
be paid in the manner prescribed and to the persons specified in
Section 4.6.


 


5

















 


5.3                                 Modification
of form or time of payment.  Each
election under Section 5.2 as to form of payment may be modified,
effective for any amounts credited under Section 5.1 for service on or
after the first day of any fiscal year of the Company, by an election filed
before such date.  Moreover, a majority
of the disinterested members of the Committee may, at their discretion, at the
request or with the consent of a Participant, change the form (or, in the case of
elective deferrals, the time) of payment elected by such Participant with
respect to amounts previously credited to his or her Account pursuant to
Article 4 or this Article 5, provided that (a) the revised form of
payment be one of the forms permitted by Sections 4.5 and 5.2, and (b) no such
change shall be effective unless made at least 24 months prior to the date such
amounts would otherwise have been paid.


 


ARTICLE 6


 


Administration


 


6. 1.                           Plan
administration and interpretation. The Plan shall be administered by the
Committee which may appoint persons to assist in the administration of the
Plan. The Committee shall have complete control and authority to determine the
rights and benefits and all claims, demands and actions arising out of the
provisions of the Plan of any Participant or other person having or claiming to
have any interest under the Plan. The Committee shall have the exclusive power
to interpret the Plan and to decide all matters under the Plan. Such
interpretation and decision shall be final, conclusive and binding on all Participants
and any person claiming under or through any Participant, in the absence of
clear and convincing evidence that the Committee acted arbitrarily and
capriciously. Any individual serving on the Committee who is a Participant will
not vote or act on any matter relating solely to himself or herself. When
making a determination or calculation, the Committee shall be entitled to rely
on information furnished by a Participant or the Company.


 


6.2.                              Powers,
duties, procedures, etc.  The Committee
shall have such powers and duties, may adopt such rules and tables, may act in
accordance with such procedures, may appoint such officers or agents, and may
delegate such powers and duties as it deems necessary or advisable for the
administration of the Plan.


 


6.3.                              Information.
To enable the Committee to perform its functions, the Company shall supply full
and timely information to the Committee on all matters relating to the service
of Participants as members of the Board and such other pertinent facts as the
Committee may require.


 


6

















 


ARTICLE 7


 


Amendment and Termination


 


7.1.                              Amendments.  The Board shall have the right to amend the
Plan from time to time, subject to Section 7.3, by an instrument in
writing approved by the Board and executed on the Company’s behalf by a duly
authorized officer.


 


7.2.                              Termination
of Plan. The Plan is strictly a voluntary undertaking on the part of the
Company and shall not be deemed to constitute a contract between the Company
and any Participant or a consideration for, or an inducement or condition of,
the performance of services by any Participant as a member of the Board. The
Board reserves the right to terminate the Plan at any time, subject to
Section 7.3, by an instrument in writing approved by the Board and
executed on the Company’s behalf by a duly authorized officer.  Upon termination of the Plan, no further
benefits shall accrue on behalf of any individual then a Participant, nor shall
any individual not a Participant as of the date of termination be eligible to
become a Participant thereafter.


 


7.3.                              Existing
rights.  No amendment or termination of
the Plan shall reduce:


 


(a)                                  any
benefits payable to (or in respect of) a Participant who has ceased to be a
member of the Board, or


 


(b)                                 any
benefits to which a current Board member would have been entitled, currently or
in the future, in the event his or her service as a Board member had terminated
on the date of such amendment or termination.


 


ARTICLE 8


 


Miscellaneous


 


8.1.                              No
funding.  Nothing in the Plan will be
construed to create a trust or to obligate the Company or any other person to
segregate a fund, purchase an insurance contract, or in any other way currently
to fund the future payment of any benefits hereunder, nor will anything herein
be construed to give any Participant or any other person rights to any specific
assets of the Company or of any other person. The Plan constitutes a mere
promise by the Company to make benefit payments in the future, and is intended
to be unfunded for tax purposes. Any benefits which become payable hereunder
shall be paid from the general assets of the Company, and the rights of any
Participant or of his or her estate or beneficiary shall be those of an
unsecured general creditor.


 


8.2.                              Grantor
trust.  The Company in its sole
discretion may establish a trust (a “grantor trust”) of which it is treated as
the owner under Subpart E of Subchapter J, Chapter 1 of the Code to provide for
the payment of benefits hereunder, subject to the claims of the Company’s
general creditors in the event of insolvency, and subject to such other terms
and conditions as the Company may deem necessary or advisable to ensure that
benefits are not includable, by reason of the trust, in the income of trust
beneficiaries prior to their actual distribution.


 


7

















 


8.3.                              Nonassignability.  None of the benefits, payments, proceeds or
claims of any Participant shall be subject to any claim of any creditor and, in
particular, the same shall not be subject to attachment or garnishment or other
legal process by any creditor of the Participant or his or her beneficiary, nor
shall any Participant or beneficiary have any right to alienate, anticipate,
commute, pledge, sell, transfer, encumber or assign any of the benefits or
payments or proceeds which he or she may expect to receive, contingently or
otherwise, under the Plan.


 


8.4.                              Limitation
of Participants’ rights.  Participation
in the Plan shall not give any Participant the right to be retained as a member
of the Board or any right or interest in the Plan other than as herein
provided.


 


8.5.                              Participants
bound.  Any action with respect to the
Plan taken by the Committee, the Board or the Company or any action authorized
by or taken at the direction of the Committee, the Board or the Company shall
be conclusive upon all Participants entitled to benefits under the Plan.


 


8.6.                              Receipt
and release.  Any payment to any
Participant in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Company, the Board
and the Committee under the Plan, and the Committee may require such
Participant, as a condition precedent to such payment, to execute a receipt and
release to such effect.  If any
Participant is determined by the Committee to be incompetent by reason of
physical or mental disability to give a valid receipt and release, the
Committee may cause the payment or payments becoming due to such person to be
made to another person for his or her benefit without responsibility on the
part of the Committee, the Board or the Company to follow the application of
such funds.


 


8.7.                              Notices.  All notices and elections to be delivered
hereunder to the Committee, the Board or the Company shall be delivered to the
attention of the Secretary of the Company.


 


8.8.                              Unforeseen
Emergency.  A Participant who has an
Unforeseen Emergency may, with the consent of a majority of the disinterested
members of the Committee, receive a distribution of that portion of his or her
Account which the Committee determines is necessary to satisfy the emergency
need, including any amounts necessary to pay any federal, state or local income
taxes reasonably anticipated to result from the distribution, but only to the
extent such need is not covered by insurance and cannot reasonably be relieved
by the liquidation of the Participant’s assets (to the extent that such
liquidation would not in itself cause a severe financial hardship) or by
cessation of elective deferrals under the Plan.  A Participant who has an Unforeseen Emergency may also cease or
reduce future deferrals under the Plan with the consent of a majority of the
disinterested members of the Committee. 
A Participant requesting a distribution, or a cessation or reduction of
future deferrals, on account of an Unforeseen Emergency shall apply in writing
in a letter submitted to the Committee and shall provide such information as
the Committee may require.


 


8

















 


8.9                                 Governing
law.  The Plan shall be construed,
administered, and governed in all respects under and by the laws of the
Commonwealth of Massachusetts. If any provision shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.


 


8.10.                        Headings
and subheadings.  Headings and
subheadings in the Plan are inserted for convenience only and are not to be
considered in the construction of the provisions hereof.


 


IN WITNESS WHEREOF, The
Neiman Marcus Group, Inc. has caused the Plan to be amended and restated by its
duly authorized officer this 8th day of June, 1998.


 


 


	
   

  	
   

  	
  THE NEIMAN MARCUS
  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric P.
  Geller

  
	
   

  	
   

  	
  Eric
  P. Geller, Senior Vice President,

  
	
   

  	
   

  	
  General
  Counsel and Secretary

  



 


9