**EXHIBIT 10.42**

 

THE NEIMAN MARCUS GROUP, INC.

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

(Amended and Restated Effective January 1, 2009)

 

Table of Contents

 
| ** **                | ** **                                     | **PAGE** |
|---------------------------|------------------------------------------------|----------|
|                      |                                           |     |
| ARTICLE                   |                                           |
|                      |                                           |
| Purpose and  History      | 1                                              |
|                      |                                           |
| Article 1. -  DEFINITIONS | 2                                              |
| 1.1.                      | “Actuarial  Equivalent”              | 2        |
| 1.2.                      | “Affiliate”                          | 2        |
| 1.3.                      | “Basic Plan”                         | 2        |
| 1.4.                      | “Benefit  Starting Date”             | 2        |
| 1.5.                      | “Board of  Directors”                | 2        |
| 1.6.                      | “Code”                               | 2        |
| 1.7.                      | “Committee”                          | 3        |
| 1.8.                      | “Company”                            | 3        |
| 1.9.                      | “Compensation”                       | 3        |
| 1.10.                     | “Elected  Age”                       | 3        |
| 1.11.                     | “Eligible  Employee”                 | 4        |
| 1.12.                     | “ERISA”                              | 4        |
| 1.13.                     | “Grandfathered  Rule of 65 Employee” | 4        |
| 1.14.                     | “Minimum  Salary”                    | 4        |
| 1.15.                     | “Non-409A  Participant”              | 5        |
| 1.16.                     | “Normal  Form”                       | 5        |
| 1.17.                     | “Normal  Retirement Age”             | 5        |
| 1.18.                     | “Normal  Retirement Date”            | 5        |
| 1.19.                     | “Participant”                        | 5        |
| 1.20.                     | “Participating  Employer”            | 5        |
| 1.21.                     | “Plan”                               | 6        |
| 1.22.                     | “Plan Year”                          | 6        |
| 1.23.                     | “Post-2004  SERP Benefit”            | 6        |
| 1.24.                     | “Pre-2005  SERP Benefit”             | 6        |
| 1.25.                     | “Rule of 65  Employee”               | 6        |
| 1.26.                     | “Service”                            | 7        |
| 1.27.                     | “Social  Security Benefit”           | 7        |
| 1.28.                     | “Spouse”                             | 8        |
| 1.29.                     | “Termination  of Employment”         | 8        |
| 1.30.                     | “Total SERP Accrued  Benefit”        | 11       |

 

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| Article 2. –  PARTICIPATION              | 12                                                       |
|-----------------------------------------------|----------------------------------------------------------|
| 2.1.                                          | Continued  Participation                                 | 12 |
| 2.2.                                          | Duration of  Participation                               | 12 |
| 2.3.                                          | Reduction in  Participants                               | 12 |
| 2.4                                           | Participation  After December 31, 2007                   | 12 |
|                                          |                                                     |   |
| Article 3. –  SOURCE OF BENEFIT PAYMENTS | 14                                                       |
|                                          |                                                     |
| Article 4. -  RETIREMENT BENEFITS             | 15                                                       |
| 4.1.                                          | Normal or  Late Retirement Benefit                       | 15 |
| 4.2.                                          | Early  Retirement Benefit                                | 16 |
| 4.3.                                          | Vested  Termination Benefit                              | 18 |
| 4.4.                                          | Other  Termination of Employment; Death                  | 21 |
| 4.5                                           | Benefit  Starting Date                                   | 21 |
| 4.6.                                          | Optional  Forms of Benefits                              | 21 |
| 4.7.                                          | Forfeiture  of Benefits                                  | 23 |
| 4.8.                                          | Surviving  Spouse Benefit                                | 23 |
| 4.9.                                          | Accelerated  Payment                                     | 24 |
| 4.10.                                         | Reemployment  After Retirement                           | 24 |
| 4.11.                                         | Code Section  409A Transition and Grandfathered Benefits | 25 |
|                                          |                                                     |   |
| Article 5. -  COMMITTEE                       | 29                                                       |
| 5.1.                                          | Plan Administration  and Interpretation                  | 29 |
| 5.2.                                          | Powers,  Duties Procedures, etc.                         | 29 |
| 5.3.                                          | Information                                              | 30 |
| 5.4.                                          | Indemnification  of Committee                            | 30 |
|                                          |                                                     |   |
| Article 6. –  AMENDMENT AND TERMINATION  | 31                                                       |
| 6.1.                                          | Amendments                                               | 31 |
| 6.2.                                          | Termination  of Plan                                     | 31 |
|                                          |                                                     |   |
| Article 7. -  MISCELLANEOUS                   | 32                                                       |
| 7.1.                                          | Nonassignability                                         | 32 |
| 7.2.                                          | Limitation  on Participant’s Rights                 | 32 |
| 7.3.                                          | Participants  Bound                                      | 32 |
| 7.4.                                          | Receipt and  Release                                     | 32 |
| 7.5.                                          | No Guarantee  of Tax Consequences                        | 33 |
| 7.6.                                          | Governing  Law                                           | 33 |
| 7.7.                                          | Headings and  Subheadings                                | 33 |

 

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THE NEIMAN MARCUS GROUP, INC.

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

(Amended and Restated Effective January 1, 2009)

 

Purpose and History

 

The Companyoriginally adopted this Plan, effective August 7, 1987, for a select groupof management personnel in order to

 

(a)                                  attract,retain and motivate qualified management personnel;

 

(b)                                 facilitatethe retirement of management personnel; and

 

(c)                                  providesurvivor income for the spouses of management personnel.

 

The Companyhas previously made amendments to the Plan to make certain changes andclarifications.  The Company is herebyamending and restating the Plan to make changes intended to bring the Plan intocompliance with the requirements of and thereby avoid the tax imposed pursuantto Section 409A of the Code, and the Plan shall be interpreted andadministered in a manner consistent with such intent.

 

The Plan isintended to be “a plan which is unfunded and is maintained by an employerprimarily for the purpose of providing deferred compensation for a select groupof management or highly compensated employees” within the meaning of Sections201(2) and 301(a)(3) of ERISA, and shall be interpreted andadministered to the extent possible in a manner consistent with that intent.

 

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# Article 1.- DEFINITIONS

 

Wherever usedherein, the following terms have the meanings set forth below, unless adifferent meaning is clearly required by the context:

 

1.1.                              “Actuarial Equivalent” shallhave the meaning set forth in the Basic Plan; provided, however, that it isintended that “Actuarial Equivalent” be determined in a manner that does notcause a tax to be applicable to a Plan benefit under Code Section 409A andif application of said meaning set forth in the Basic Plan in a particularcircumstance would result in a tax being applicable to a Participant under CodeSection 409A, the Committee shall establish such other reasonableactuarial factors for such purpose as it shall determine to be appropriate toavoid such result.

 

1.2.                              “Affiliate” means anycorporation or organization that together with the Company is treated as asingle employer under Section 414(b) or (c) of the Code.

 

1.3.                              “Basic Plan” means The NeimanMarcus Group, Inc.  Retirement Planas amended from time to time.  Referenceto any Article or Section of the Basic Plan shall include referenceto any comparable or successor provisions of the Basic Plan as amended fromtime to time.

 

1.4.                              “Benefit Starting Date” shall bethe date as of which the Participant’s Post-2004 SERP Benefit shall commence inpayment and shall have the meaning set forth in Section 4.5.

 

1.5.                              “Board of Directors” means theBoard of Directors of the Company.

 

1.6.                              “Code”means the Internal Revenue Code of 1986, as amended from time to time.  Reference to any Section or subsectionof the Code includes reference to any comparable or succeeding provisions ofany legislation which amends, supplements or replaces such Section orsubsection.

 

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1.7.                              “Committee”means the Employee Benefits Committee appointed by the Board of Directors orits Executive Committee.

 

1.8.                              “Company” means The NeimanMarcus Group, Inc., a Delaware corporation, and any successor, including asuccessor by purchase of all or substantially all of its assets or businessthat expressly assumes the obligations of the Company under this Plan.

 

1.9.                              “Compensation” means, withrespect to any given period, the aggregate compensation, exclusive of anybonuses, paid to an Eligible Employee by one or more Participating Employersduring such period, whether before or after he or she becomes an “EligibleEmployee.”  “Compensation” shall bedetermined before any reduction under Section 125  or 401(k) of the Code or under anydeferred compensation plan or arrangement, but shall not otherwise include anyParticipating Employer contributions under retirement or other benefit plans orarrangements, or any expense reimbursements, imputed compensation, property,payments of compensation previously deferred, or incentive payments earnedthrough a wellness or similar program sponsored by a Participating Employer.

 

1.10.                        “Elected Age” means age 62;provided, however, that (i) prior to January 1, 2009 (or such earlierdate as the Committee may prescribe), a Participant who has not had aTermination of Employment prior to December 15, 2008 and who is notentitled to commence receiving his or her Post -2004 SERP Benefit prior to January 1,2009 shall be permitted to elect an age other than 62 that is not lower than 55and not greater than 65, in the time and manner prescribed by the Committee forsuch election and such election shall be irrevocable except as provided in (ii) below;and (ii) on or after January 1, 2009, a Participant shall bepermitted to change his or her Elected Age in such manner as the Committee mayprescribe provided that any such subsequent election does not take effect forat least 12 months after the date the election is made, such subsequentelection is made at least 12 months prior to the date the Participant will 

 

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attainhis or her Elected Age as currently in effect, and the subsequent electionresults in a new Elected Age that is at least five years later than the ElectedAge in effect at the time of the election, provided that a Participant shallnot be permitted to elect an age beyond age 65. All elections permitted pursuant to this Section shall be made in amanner that complies with the requirements applicable to making paymentelections under Code Section 409A.

 

1.11.                        “Eligible Employee” means eachemployee of a Participating Employer who, on any August 1:

 

(a)                                  is employed in an executive,administrative, or professional capacity as defined in Section 13(a)(1) ofthe Fair Labor Standards Act, as amended, and the regulations thereunder,

 

(b)                                 participates in the Basic Plan,

 

(c)                                  had a base salary on theimmediately preceding December 31 at least equal to the Minimum Salary,and

 

(d)                                 is not employed as asalesperson.

 

1.12.                        “ERISA” means the EmployeeRetirement Income Security Act of 1974, as from time to time amended.

 

1.13.                        “Grandfathered Rule of 65Employee” means a Rule of 65 Employee who either:  (i) expressly elected to remain eligibleto participate in the Basic Plan in accordance with an election made in 2007,or (ii) implicitly elected to remain eligible to participate in the BasicPlan by failing to make a timely election to the contrary and therebyacquiescing to such an election by default.

 

1.14.                        “Minimum Salary” means:

 

(a)                                  forDecember 31 of each of the years 1992 through 1995, the amount in effectunder Section 414(q)(1)(B) of the Code for the year following such December 31;and

 

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(b)                                 forDecember 31, 1996, $100,000; and

 

(c)                                  forDecember 31, 1997, and each December 31 thereafter, $160,000.

 

1.15.                        “Non-409A Participant” means a Participant who, onaccount of his or her cessation of employment with a Participating Employerbefore January 1, 2005 or other circumstances that resulted in his or herceasing to accrue a benefit under the Plan prior to such date, has a totalbenefit accrued pursuant to the Plan that was fully vested as of December 31,2004 and has not accrued any increase with respect to such benefit after December 31,2004 attributable to Compensation or Service after such date or that otherwisewould not be treated as an amount deferred before January 1, 2005 pursuantto Treasury Regulation Section 1.409A-6.

 

1.16.                        “Normal Form” means a form ofbenefit payable monthly to an individual during his or her lifetime, the firstpayment to be due on the date of the commencement of his or her benefits underthe Plan, and the last payment to be due for the calendar month in which his orher death occurs.

 

1.17.                        “Normal Retirement Age” meansthe later of (a) the date on which the Participant attains age 65 or (b) thefifth anniversary of the date he or she first performed an Hour of Serviceunder the Basic Plan.

 

1.18.                        “Normal Retirement Date” meansthe first day of the calendar month coinciding with or next following the dateon which the Participant attains his or her Normal Retirement Age.

 

1.19.                        “Participant” means anyindividual who participates in the Plan in accordance with Article 2.

 

1.20.                        “Participating Employer” meansthe Company and any Affiliate of the Company that is a Participating Employerin the Basic Plan.

 

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1.21.                        “Plan” means The Neiman MarcusGroup, Inc.  Supplemental ExecutiveRetirement Plan as set forth herein and in all subsequent amendments hereto.

 

1.22.                        “Plan Year” means the 52 or 53week period ending on the Saturday nearest to July 31 of each year.

 

1.23.                        “Post-2004 SERP Benefit” means amonthly benefit payable in the Normal Form equal to the monthly Total SERPBenefit payable in the Normal Form minus a monthly benefit derivedfrom the Pre-2005 SERP Benefit converted to an Actuarially Equivalent paymentin the Normal Form as determined in accordance with Section 4.1, 4.2or 4.3, as applicable.  The Post-2004SERP Benefit shall be subject to the limitations set forth in Section 4.11(d).

 

1.24.                        “Pre-2005 SERP Benefit” meansthe present value of the amount to which the Participant would have beenentitled under the Plan if he or she voluntarily terminated services withoutcause on December 31, 2004, and received a payment of the benefitsavailable from the Plan on the earliest possible date allowed under the Plan toreceive a payment of benefits following the termination of services, andreceived the benefits in the form with the maximum value, as determined inaccordance with Treasury Regulation Section 1.409A-6(a)(3)(i) in amanner that results in the largest possible amount permitted by such provision,increased as permitted in accordance with Treasury Regulation Section 1.409A-6(a)(3)(iv).  The Pre-2005 SERP Benefit is intended to beexempt from the application of Code Section 409A as an amount that wasdeferred prior to January 1, 2005 pursuant to Treasury Regulation Section 1.409A-6(a) andshall be determined in a manner consistent therewith.  The Pre-2005 SERP Benefit shall be subject tothe limitations set forth in Section 4.11(d).

 

1.25.                        “Rule of 65 Employee” meansan Eligible Employee as of December 31, 2007 who had at least ten years ofVesting Service under the Basic Plan as of December 31, 2007 and 

 

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whoseage as of December 31, 2007, when added to the number of his or her yearsof Vesting Service under the Basic Plan as of December 31, 2007, was equalto or in excess of 65.

 

1.26.                        “Service” means the periodmeasured in years equal to years of Vesting Service determined under the BasicPlan, subject to the following special rules:

 

(a)                                  Years of VestingService, if any, prior to August 2, 1987 shall be determined in accordancewith the rules of the Pension Plan for Employees of Carter Hawley HaleStores, Inc.  that applied on August 1,1987 to employees hired after June 30, 1980; and

 

(b)                                 A Participant shall becredited with a full year of Service for each partial year of Vesting Serviceinterrupted by a Period of Severance, provided that (i) the Participant iscredited with at least 1,000 Hours of Service during such partial year ofVesting Service, and (ii) no more than one year of Service shall becredited during any 12-month period.

 

1.27.                        “Social Security Benefit” means,in the case of each Participant, the estimated amount of the monthly primaryold age insurance benefit available to him or her at age 65 under the SocialSecurity Act as in effect on the earliest of his or her Normal Retirement Date,Termination of Employment or death.  Theamount shall be computed upon the assumption that the Participant has beencontinuously covered under said Act since the later of 1951 or his or her 21stbirthday, and that his or her remuneration for employment for the calendar yearpreceding the date of his or her Normal Retirement, Termination of Employmentor death, whichever is earliest, was equal to that portion of his or hercompensation for such year that would be subject to tax under Section 3101(a) ofthe Code without the dollar limitation of Code Section 3121(a)(1), and hisor her remuneration for each prior calendar year was equal to the assumedremuneration for the subsequent year divided by 1.06.  If a Participant has a Termination of

 

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Employmentfor any reason, or becomes Totally and Permanently Disabled, prior to his orher Normal Retirement Date, in determining his or her Social Security Benefit,earnings for the calendar year of such termination or disability and eachsubsequent calendar year prior to his or her Normal Retirement Date shall beassumed to be equal to that portion of his or her compensation for the calendaryear prior to the year of termination or disability that would be subject totax under Section 3101(a) of the Code without the dollar limitationof Code Section 3121(a)(1).

 

1.28.                        “Spouse” means a person of theopposite sex of the Participant who is the lawfully married husband or wife ofa Participant at the time of the Participant’s death or, if earlier, as of the firstday of the first month for which benefits are payable under the Plan.

 

1.29.                        “Termination of Employment”means a termination of services provided by a Participant to his or herEmployer (as defined below), whether voluntarily or involuntarily, as determinedby the Company in accordance with the rules for determining when a serviceprovider has incurred a separation from service under Treasury Regulation Section 1.409A-1(h).More specifically and as provided by such regulations, in determining whether aParticipant has incurred a Termination of Employment, the following provisionsshall apply:

 

(a)                                  Except as otherwiseprovided in this definition, a Termination of Employment will occur when theParticipant has experienced a termination of employment with the Employer. AParticipant will be considered to have experienced a termination of employmentwhen the facts and circumstances indicate that the Participant and his or herEmployer reasonably anticipate that either (i) no further services will beperformed for the Employer after a certain date, or (ii) that the level ofbona fide services the Participant will perform for the Employer after suchdate (whether as an employee or as an independent contractor) will permanentlydecrease to no more than 20 percent****of

 

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the average level of bona fide servicesperformed by the Participant (whether as an employee or an independentcontractor) over the immediately preceding 36-month period (or the full periodof services to the Employer if the Participant has been providing services tothe Employer less than 36 months).

 

If a Participant is on military leave, sickleave, or other bona fide leave of absence, the employment relationship betweenthe Participant and the Employer will be treated as continuing, provided thatthe period of the leave of absence does not exceed 6 months, or if longer, solong as the Participant has a right to reemployment with the Employer under anapplicable statute or by contract.  If the period of a military leave,sick leave, or other bona fide leave of absence exceeds 6 months and theParticipant does not have a right to reemployment under an applicable statuteor by contract, the employment relationship will be considered to be terminatedfor purposes of this Plan as of the first day immediately following the end ofsuch 6-month period.  In applying the provisions of this paragraph, aleave of absence will be considered a bona fide leave of absence only if thereis a reasonable expectation that the Participant will return to performservices for the Employer.

 

(b)                                 For a Participant whoprovides services to an Employer both as an employee and as an independentcontractor*,*a Termination ofEmployment generally will not occur until the Participant has ceased providingservices for the Employer  both as anemployee and as an independent contractor. Except as otherwise provided herein, in the case of an independent contractora Termination of Employment will occur upon the expiration of the contract (orin the case of more than one contract, all contracts) under which services areperformed for the Employer, provided that the expiration of such contract orcontracts is determined by the Company to constitute a good-faith and 

 

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complete termination of the contractualrelationship between the Participant and the Employer.  If a Participantceases providing services for an Employer as an employee and begins providingservices for such Employer as an independent contractor, the Participant willnot be considered to have experienced a Termination of Employment until theParticipant has ceased providing services for the Employer in both capacities,as determined in accordance with the applicable provisions set forth insubparagraphs (a) and (b) of this definition.

 

Notwithstanding the foregoing provisions inthis subparagraph, if a Participant provides services for an Employer as bothan employee and as a member of the board of directors of an Employer, to theextent permitted by Treasury Regulation Section 1.409A-1(h)(5), theservices provided by the Participant as a director will not be taken intoaccount in determining whether the Participant has experienced a Termination ofEmployment as an employee.

 

(c)                                  In addition,notwithstanding the provisions of this definition, where as part of a sale orother disposition of substantial assets by an Employer to an unrelated buyer, aParticipant would otherwise experience a Termination of Employment as defined above,the Employer and the buyer shall retain the discretion to specify, and mayspecify, that a Participant performing services for an Employer immediatelybefore the asset purchase transaction and providing services to the buyer afterand in connection with the asset purchase transaction shall not experience aTermination of Employment for purposes of this Plan and the Participant shallbe bound by same, provided that such transaction and the specification meet therequirements of Code Section 409A.

 

(d)                                 For purposes of thisdefinition, “Employer” means:

 

(i)                                     The Company; and

 

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(ii)                                  All other entities with which theCompany would be aggregated and treated as a single employer under Code Section 414(b) (controlledgroup of corporations) and Code Section 414(c) (group of trades orbusinesses under common control), as applicable.  To identify the group of entities describedin the preceding sentence, an ownership threshold of 50% shall be used as asubstitute for the 80% minimum ownership threshold that appears in, andotherwise must be used when applying, the applicable provisions of (A) CodeSection 1563 and the regulations thereunder for determining a controlledgroup of corporations under Code Section 414(b), and (B) TreasuryRegulation § 1.414(c)-2 for determining the trades or businesses that are undercommon control under Code Section 414(c).

 

1.30.                        “Total SERP Accrued Benefit”means the amount determined under the provisions of Section 4.1, Section 4.2or Section 4.3, as applicable to the Participant as of the date suchamount is being determined.

 

Unlessdefined herein, any capitalized word, phrase or term used in this Plan shallhave the meaning given to it in the Basic Plan.

 

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#  

# Article 2.  — PARTICIPATION

#  

2.1.                              Continued Participation.  Any individual who was a Participant in thePlan on December 31, 2008 will, subject to Sections 2.2, 2.3, and 2.4,continue to be a Participant under the Plan after such date.

 

2.2.                              Duration of Participation.  Subject to Section 2.3, an individualwho has become a Participant in the Plan shall continue to be a Participant aslong as he or she remains an employee of a Participating Employer or isentitled to a benefit under the Plan, even though his or her base salary afterbecoming a Participant later falls below the then applicable Minimum Salarylevel specified in Section 1.14.  AParticipant will cease to be a Participant when he or she is neither employedby a Participating Employer nor entitled to receive a benefit under the Plan.

 

2.3.                              Reduction in Participants.  Notwithstanding any other provision of thePlan to the contrary, the Committee may terminate the right of any Participantor Eligible Employee to participate in the Plan if the Committee deems suchaction to be necessary to preserve the status of the Plan as “a plan which isunfunded and is maintained by an employer primarily for the purpose ofproviding deferred compensation for a select group of management or highlycompensated employees” within the meaning of Sections 201(2) and 301(a)(3) ofERISA.  In the event a Participant’sparticipation is terminated under this Section 2.3, the Participant shallnot be entitled to any benefits under the Plan except to the extent suchbenefits would be protected under Section 6.2 if the Plan were thenterminated.

 

2.4                                 Participation After December 31,2007.  A Participant who is a Grandfathered Rule of65 Employee as of December 31, 2007 shall continue to be a Participant underthe Plan thereafter, subject to and in accordance with the terms of the Plan;provided, however, that if a Grandfathered Rule of 65 Employee has aTermination of Employment after December 31, 2007, 

 

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such employee shallnot be treated as a Grandfathered Rule of 65 Employee upon any laterreemployment by a Participating Employer. Any provision of the Plan to the contrary notwithstanding, no individualshall become an Eligible Employee on or after January 1, 2008 who was notan Eligible Employee on December 31, 2007 and, thus, there shall be no newParticipants in the Plan on and after such date, and a Participant who is not aGrandfathered Rule of 65 Employee shall remain a Participant in the Planafter December 31, 2007 as provided in Section 2.2 as long as he orshe is entitled to receive a benefit under the Plan, but no additional benefitshall accrue for any Participant who is not a Grandfathered Rule of 65Employee under the Plan after December 31, 2007, subject to the following:

 

(i)                                     the amount ofbenefit payable under the Plan after December 31, 2007 with respect to aParticipant who is an Eligible Employee as of such date but who is not aGrandfathered Rule of 65 Employee shall be determined as if suchParticipant had a Termination of Employment effective as of December 31,2007, provided, however, that any such Participant shall not be treated ashaving a Termination of Employment for purposes of determining whether he orshe has attained Normal Retirement Age until his or her actual Termination ofEmployment and benefit payments shall not commence to any such Participantuntil payments would otherwise commence to such Participant under the terms ofthe Plan; and

 

(ii)                                  a Participant who isnot a Grandfathered Rule of 65 Employee shall continue to be entitled tocredit for Service after December 31, 2007 for purposes of determiningwhether such Participant has attained the required years of Service to vest ina benefit or to commence receiving a benefit prior to Normal Retirement Date,but not for purposes of the calculation of the amount of such benefit.

 

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# Article 3.  — SOURCE OF BENEFIT PAYMENTS

 

Nothing inthis Plan will be construed to create a trust or to obligate the ParticipatingEmployers or any other person to segregate a fund, purchase an insurancecontract, or in any other way currently to fund the future payment of anybenefits hereunder, nor will anything herein be construed to give any employeeor any other person rights to any specific assets of the ParticipatingEmployers or of any other person.  Anybenefits which become payable hereunder shall be paid from the general assetsof the Participating Employers.

 

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# Article 4.  — RETIREMENT BENEFITS

 

4.1.                              Normal or Late RetirementBenefit.  The Total SERP Accrued Benefit of aParticipant who has a Termination of Employment on or after his or her NormalRetirement Date will be a monthly amount payable in the Normal Form equalto (a) minus (b), but not less than zero, where:

 

(a)                                  is 50% of theParticipant’s average monthly Compensation for the highest sixty consecutivemonths preceding Termination of Employment, less 60% of the Participant’s SocialSecurity Benefit, the result multiplied by a fraction the numerator of which isthe Participant’s years of Service (not in excess of 25) and the denominator ofwhich is 25; and

 

(b)                                 is a monthlyretirement benefit equal to the monthly amount payable to the Participant underthe Basic Plan calculated in the Normal Form as of the first day of themonth coinciding with or next following the Participant’s Termination ofEmployment.

 

The Post-2004 SERP Benefit of aParticipant who has a Termination of Employment on or after his or her NormalRetirement Date shall commence on the Participant’s Benefit Starting Date, andshall be a monthly benefit equal to the following:

 

(i)                                     the monthly TotalSERP Accrued Benefit payable in the Normal Form as determined above inthis Section 4.1 commencing on the first day of the month coinciding withor next following the Participant’s Termination of Employment, minus amonthly benefit derived from the Pre-2005 SERP Benefit as of the first day ofthe month coinciding with or next following the Participant’s Termination ofEmployment converted to an Actuarially Equivalent monthly benefit payable inthe Normal Form as if commencing on the same date; and

 

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(ii)                                  the amount in (i) shallthen be increased on an Actuarially Equivalent basis for the six-month periodby which the first day of the month coinciding with or next following theParticipant’s Termination of Employment precedes the Participant’s BenefitStarting Date.

 

4.2.                              Early Retirement Benefit.  The Total SERP Accrued Benefit of aParticipant who has a Termination of Employment on or after the date on whichhe or she has attained age 55 and completed at least 10 years of Service butprior to his or her Normal Retirement Date will be a monthly amount payable inthe Normal Form, equal to (a) minus (b), but not less than zero, where:

 

(a)                                  is the amount determined under Section 4.1(a) above,unreduced for early commencement if the Benefit Starting Date is on or afterthe Participant’s 62nd birthday, reduced by 1/600th for each month between theParticipant’s 60th and 62nd birthday by which the Benefit Starting Dateprecedes the month in which the Participant attains age 62, and reduced furtherby 1/240th for each month by which the Benefit Starting Date precedes the monthin which the Participant attains age 60; and

 

(b)                                 is a monthly retirement benefitequal to the monthly amount that would be payable to the Participant under theBasic Plan in the Normal Form if said benefit commenced as of theParticipant’s Benefit Starting Date (regardless of the actual date ofcommencement of the Participant’s Basic Plan benefit), or if the Participant isnot yet eligible to commence receiving a benefit under the Basic Plan as of theParticipant’s Benefit Starting Date, then the offset provided in this paragraph(b) shall be a monthly retirement benefit payable in the Normal Form asof the Participant’s Benefit Starting Date that is Actuarially Equivalent tothe Participant’s benefit under the Basic Plan as of the earliest date saidbenefit could commence in pay status under said plan payable in the 

 

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NormalForm; provided, however, that if the Participant’s Termination of Employmentoccurs on or after the date on which the Participant attains the later of age62 or his or her Elected Age (or less than six months prior to such date), thenthe offset provided in this paragraph (b) shall be determined as if thethree references to “the Participant’s Benefit Starting Date” in the precedingprovisions of this paragraph (b) were instead referring to “the first dayof the month coinciding with or next following the Participant’s Termination ofEmployment or, if later, the first day of the month coinciding with or nextfollowing the Participant’s attainment of the later of age 62 or his or herElected Age”.

 

The Post-2004 SERP Benefit of aParticipant who has a Termination of Employment on or after the date on whichhe or she has attained age 55 and completed at least 10 years of Service butprior to his or her Normal Retirement Date shall commence on the Participant’sBenefit Starting Date, and shall be a monthly benefit equal to the monthlyTotal SERP Accrued Benefit payable in the Normal Form as determined abovein this Section 4.2 commencing as of the Benefit Starting Date, minusa monthly benefit derived from the Pre-2005 SERP Benefit as of the BenefitStarting Date converted to an Actuarially Equivalent monthly benefit payable inthe Normal Form as if commencing on the same date; provided, however, thatif the Participant’s Termination of Employment occurs on or after the date onwhich the Participant attains the later of age 62 or his or her Elected Age (orless than six months prior to such date), then the Participant’s Post-2004 SERPBenefit shall still commence as of the Participant’s Benefit Starting Date butshall be equal to the following:

 

(i)                                     the monthly TotalSERP Accrued Benefit payable in the Normal Form as determined above inthis Section 4.2 commencing on the first day of the month coinciding withor next following the Participant’s Termination of Employment or, if later, thefirst day of the month coinciding with or next following the Participant’s

 

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attainment of the later of age 62 or his or her Elected Age, minusa monthly benefit derived from the Pre-2005 SERP Benefit as of the first day ofthe month coinciding with or next following the Participant’s Termination ofEmployment or, if later, the first day of the month coinciding with or nextfollowing the Participant’s attainment of the later of age 62 or his or herElected Age converted to an Actuarially Equivalent monthly benefit payable inthe Normal Form as if commencing on the same date; and

 

(ii)                                  the amount in (i) shallthen be increased on an Actuarially Equivalent basis for the period, not toexceed six months, by which the first day of the month coinciding with or nextfollowing the Participant’s Termination of Employment or, if later, the firstday of the month coinciding with or next following the Participant’s attainmentof the later of age 62 or his or her Elected Age precedes the Participant’sBenefit Starting Date.

 

4.3.                              Vested Termination Benefit.  The Total SERP Accrued Benefit of a Participantwho has a Termination of Employment after he or she has completed at least 5years of Service, but before he or she has satisfied the requirements for earlyor normal retirement under Sections 4.1 or 4.2 will be a monthly amount payablein the Normal Form, equal to (a) below (reduced by the applicable factorset forth in Section 4.2(a) above) minus (b) below, but not lessthan zero, where:

 

(a)                                  is 50% of theParticipant’s average monthly Compensation for the highest sixty consecutivemonths preceding the Termination of Employment, less 60% of the Participant’sSocial Security Benefit, the result multiplied by a fraction the numerator ofwhich is the Participant’s years of Service and the denominator of which is thegreater of 25 years or the number of years of Service the Participant wouldhave had if he or she

 

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continued employment with a Participating Employer without interruptionuntil his or her Normal Retirement Date; and

 

(b)                                 is a monthlyretirement benefit equal to the monthly amount that would be payable to theParticipant under the Basic Plan in the Normal Form if said benefitcommenced as of the Participant’s Benefit Starting Date (regardless of theactual date of commencement of the Participant’s Basic Plan benefit), or if theParticipant is not yet eligible to commence receiving a benefit under the BasicPlan as of the Participant’s Benefit Starting Date, then the offset provided inthis paragraph (b) shall be a monthly retirement benefit payable in theNormal Form as of the Participant’s Benefit Starting Date that isActuarially Equivalent to the Participant’s benefit under the Basic Plan as ofthe earliest date said benefit could commence in pay status under said planpayable in the Normal Form; provided, however, that if the Participant’sTermination of Employment occurs on or after the date on which the Participantattains the later of age 62 or his or her Elected Age (or less than six monthsprior to such date), then the offset provided in this paragraph (b) shallbe determined as if the three references to “the Participant’s Benefit StartingDate” in the preceding provisions of this paragraph (b) were insteadreferring to “the first day of the month coinciding with or next following theParticipant’s Termination of Employment or, if later, the first day of themonth coinciding with or next following the Participant’s attainment of thelater of age 62 or his or her Elected Age”.

 

The Post-2004 SERP Benefit of aParticipant who has a Termination of Employment after he or she has completedat least 5 years of Service, but before he or she has satisfied therequirements for early or normal retirement under Sections 4.1 or 4.2 shallcommence on the Participant’s Benefit Starting Date, and shall be a monthlybenefit equal to the monthly Total SERP Accrued Benefit payable in the Normal Form asdetermined above in this Section 4.3 commencing as of

 

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the Benefit Starting Date, minusa monthly benefit derived from the Pre-2005 SERP Benefit as of the BenefitStarting Date converted to an Actuarially Equivalent monthly benefit payable inthe Normal Form as if commencing on the same date; provided, however, thatif the Participant’s Termination of Employment occurs on or after the date onwhich the Participant attains the later of age 62 or his or her Elected Age (orless than six months prior to such date), then the Participant’s Post-2004 SERPBenefit shall still commence as of the Participant’s Benefit Starting Date butshall be equal to the following:

 

(i)                                     the monthly TotalSERP Accrued Benefit payable in the Normal Form as determined above inthis Section 4.3 commencing on the first day of the month coinciding withor next following the Participant’s Termination of Employment or, if later, thefirst day of the month coinciding with or next following the Participant’sattainment of the later of age 62 or his or her Elected Age, minus amonthly benefit derived from the Pre-2005 SERP Benefit as of the first day ofthe month coinciding with or next following the Participant’s Termination ofEmployment or, if later, the first day of the month coinciding with or nextfollowing the Participant’s attainment of the later of age 62 or his or herElected Age converted to an Actuarially Equivalent monthly benefit payable inthe Normal Form as if commencing on the same date; and

 

(ii)                                  the amount in (i) shallthen be increased on an Actuarially Equivalent basis for the period, not toexceed six months, by which the first day of the month coinciding with or nextfollowing the Participant’s Termination of Employment or, if later, the firstday of the month coinciding with or next following the Participant’s attainmentof the later of age 62 or his or her Elected Age precedes the Participant’sBenefit Starting Date.

 

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4.4.                              Other Termination of Employment;Death.  If a Participant has a Termination ofEmployment for any reason prior to the time he or she is eligible for aretirement or vested benefit under Section 4.1, 4.2 or 4.3, no benefitshall be payable under this Plan.  In theevent a Participant dies prior to the commencement of benefit paymentshereunder, then except as provided in Section 4.8 no benefits shall bepayable hereunder following the Participant’s death.  In the event a Participant dies after thecommencement of benefit payments hereunder, payments shall continue to be madefollowing his or her death only if the Participant has chosen an optional formof benefit under Section 4.6 and then only to the extent, if any, providedunder such optional form of benefit.

 

4.5                                 Benefit Starting Date.  A Participant’s Post-2004 SERP Benefit shallcommence on his or her Benefit Starting Date. A Participant’s Benefit Starting Date shall be the later of (a) thefirst day of the calendar month coinciding with or next following theParticipant’s attainment of his or her Elected Age, or (b) the date thatis six months later than the first day of the calendar month coinciding with ornext following the date of the Participant’s Termination of Employment.  Notwithstanding the preceding, with respectto a Participant whose Termination of Employment occurred prior to January 1,2009 but who has not commenced receiving his or her Post-2004 SERP Benefit asof January 1, 2009, his or her Benefit Starting Date for his or herPost-2004 SERP Benefit shall be the later of (a) January 1, 2009, (b) thefirst day of the calendar month coinciding with or next following theParticipant’s attainment of his or her Elected Age or (c) the date that issix months later than the first day of the calendar month coinciding with ornext following the date of the Participant’s Termination of Employment.

 

4.6.                              Optional Forms of Benefits.  In lieu of the benefit otherwise payable to aParticipant in the Normal Form, a Participant may elect to receive his or herPost-2004 SERP

 

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Benefit on his orher Benefit Starting Date in any of the following optional forms of ActuarialEquivalent value:

 

(i)                                     a 5-year or 10-year period certainand continuous form of annuity under which a reduced pension will be payablemonthly over 60 or 120 months (as elected by the Participant prior to theBenefit Starting Date) to the Participant during his or her lifetime, the firstpayment to be due on the Benefit Starting Date and the last payment to be dueon the first day of the calendar month in which the Participant’s death occurs,except that if the Participant’s death occurs during the 60-month or 120-monthperiod, whichever is applicable, following the Benefit Starting Date, suchadjusted pension will be payable monthly to the Participant’s beneficiary forthe remainder of the 60-month or 120-month period, or to the beneficiary’sestate if he or she should also die within the 60-month or 120-month period,whichever is applicable;

 

(ii)                                  an optional joint and survivor formunder which a reduced pension will be payable monthly to the Participant duringhis or her lifetime and following his or her death 50 percent, 66 2/3 percent,75 percent or 100 percent of such reduced pension (as elected by theParticipant prior to the Benefit Starting Date) will be payable monthly to theParticipant’s beneficiary (as designated by the Participant prior to theBenefit Starting Date) during the beneficiary’s remaining lifetime.  If the beneficiary dies after the Participant’sBenefit Starting Date and while the Participant is alive, the Participant willcontinue to receive during his or her remaining lifetime the same amount ofreduced pension as was payable to him or her during the joint lifetimes of theParticipant and his or her beneficiary, with

 

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the last payment to be due for the calendarmonth in which the Participant’s death occurs.

 

TheCommittee shall provide a method for election of such options.  The Participant shall be entitled to electone of the foregoing options (or to revoke any such election) within suchperiod prior to the Benefit Starting Date as the Committee may prescribe.  The election of one of the options providedfor in this Section 4.6 shall become effective as of the Benefit StartingDate, and may not be rescinded or modified thereafter.  Should the Participant’s Spouse or otherbeneficiary die prior to such Benefit Starting Date, the Participant’s electionwill be void and the Participant’s Post-2004 SERP Benefit will be paid to himor her as though he or she had made no election unless the Participant makes anew election prior to the Benefit Starting Date.  Notwithstanding the preceding, if a marriedParticipant desires to elect an optional form of benefit other than a 50%contingent annuity form protecting the Participant’s Spouse, such electionshall not be valid without the consent of such Spouse in such form as theCommittee shall prescribe.  If theParticipant fails to elect a form of benefit for his or her Post-2004 SERPBenefit on or before his or her Benefit Starting Date (or such earlier date asthe Committee may reasonably prescribe for administrative purposes), theParticipant shall be deemed to have elected the Normal Form and theconsent of the Spouse, if any, shall not be required.

 

4.7.                              Forfeiture of Benefits.  Notwithstanding any provision of this Plan tothe contrary, no benefits shall be payable under this Plan with respect to anyParticipant who confesses to, or is convicted of, any act of fraud, theft ordishonesty arising in the course of, or in connection with, his or heremployment with a Participating Employer. The Committee’s decision as to the applicability of this Section 4.7in any case shall be fixed and binding on all persons.

 

4.8.                              Surviving Spouse Benefit.  In the event a Participant dies aftercompleting at least 5 years of Service but prior to the Benefit Starting Datefor his or her Post-2004 SERP Benefit,

 

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and such Participantis survived by a Spouse, a monthly surviving spouse benefit shall be payable tosuch Spouse with respect to the Post-2004 SERP Benefit.  Such monthly surviving spouse benefit shallcommence as of the Benefit Starting Date determined using the date of theParticipant’s death as his or her Termination of Employment, if the Participantwas not already terminated, and the date on which the Participant would haveattained the Elected Age, if the Participant had not yet attained such age, hadthe Participant survived to such date (the “survivor benefit commencement date”),and shall end with the month in which the Spouse’s death occurs.  The monthly surviving spouse benefit shall bethe amount to which the Spouse would have been entitled with respect to theParticipant’s Post-2004 SERP Benefit if the Participant had a Termination ofEmployment on the date of his or her death (if not already so terminated), hadchosen to have benefit payments commence for his or her Post-2004 SERP Benefitin the 50% contingent annuity form described in Section 4.6 on thesurvivor benefit commencement date, and had survived to and died on the dayfollowing such commencement date.

 

4.9.                              Accelerated Payment.  Any other provision of the Plan to thecontrary notwithstanding, the Committee in its absolute discretion mayaccelerate all or any portion of the payment of the Participant’s Post-2004 SERPBenefit to the extent that such acceleration is a permitted exception underTreasury Regulation Section 1.409A-3(j)(4) (or other applicableguidance issued by the Internal Revenue Service) that does not subject theParticipant’s benefit under the Plan to the tax imposed by Code Section 409A.  The amount of any accelerated payment shallbe determined on an Actuarially Equivalent basis.

 

4.10.                        Reemployment After Retirement.  The payment of the Post-2004 SERP Benefit toa previously terminated Participant shall not cease as of the date of rehire ifthe Participant is reemployed by a Participating Employer nor shall the BenefitStarting Date for a Post-2004 SERP Benefit related to a prior Termination ofEmployment that has not yet commenced be

 

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changed if theParticipant is reemployed by a Participating Employer.  If a previously terminated Participant isreemployed by a Participating Employer after December 31, 2007, no newretirement benefit shall accrue under this Plan for such Participant on accountof service after such reemployment as provided in accordance with theprovisions of Article 2. If a previously terminated Participant, otherthan a Non-409A Participant, was reemployed by a Participating Employer priorto January 1, 2008 and accrues a benefit under this Plan on account ofsuch reemployment, the amount of any new Post-2004 SERP Benefit subsequentlypayable with respect to such subsequent employment shall be a separate benefitcomputed in accordance with this Article 4 on the basis of Service andCompensation to the time of such subsequent Termination of Employment, butshall be reduced by the Actuarial Equivalent of any payments previously madeunder the Plan and the Actuarial Equivalent of any future payments yet to bepaid on account of his or her prior Termination of Employment, including lumpsum payments or amounts applied to purchase annuity contracts.  In no event shall the aggregate benefits ofany rehired Participant be greater than the benefit he or she would havereceived if all his or her service had been one continuous period ofemployment.

 

4.11.                        Code Section 409ATransition and Grandfathered Benefits.  Any provision ofthis amended and restated Plan to the contrary notwithstanding:

 

(a)                                  Non-409AParticipants:  The amount and timingof the benefits payable under the Plan with respect to a Non-409A Participantshall be determined solely in accordance with the provisions of the Plan as ineffect as of December 31, 2004, without regard to any changes made to thePlan or to the Basic Plan after October 3, 2004; provided, however, thatthe term “Actuarial Equivalent” as applied with respect to the benefits payableto a Non-409A Participant shall have the meaning set forth in the Basic Plan asit may from time to time be amended but only to the extent that the applicationof

 

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any such amendment after October 3, 2004 would not result in a “materialmodification” of such benefits.  Suchbenefits are intended to remain exempt from the application of Code Section 409Aas amounts that were deferred prior to January 1, 2005 and shall beadministered in a manner consistent with such intent.

 

(b)                                 ParticipantsOther Than Non-409A Participants: The Pre-2005 SERP Benefit, if any, of a Participant (not including aNon-409A Participant) shall be paid at the time and in the manner providedpursuant to the provisions of the Plan as in effect as of December 31,2004, without regard to any changes made to the Plan or to the Basic Plan afterOctober 3, 2004 other than with respect to determining the amount of thePre-2005 SERP Benefit as provided herein; provided, however, that the term “ActuarialEquivalent” as applied with respect to the Pre-2005 SERP Benefit shall have themeaning set forth in the Basic Plan as it may from time to time be amended butonly to the extent that the application of any such amendment after October 3,2004 would not result in a “material modification” of the Pre-2005 SERPBenefit.  Such benefit is intended toremain exempt from the application of Code Section 409A as an amountdeferred prior to January 1, 2005 and shall be administered in a mannerconsistent with such intent.  ThePre-2005 SERP Benefit as set forth in Section 1.24 is determined inaccordance with applicable guidance under Code Section 409A as a presentvalue amount.  The monthly benefit thatbecomes payable from such Pre-2005 SERP Benefit present value shall bedetermined by converting it at the time it is to commence in payment to theNormal Form, subject to the limitations set forth below in subsection (d), andthen converting said monthly amount, as so determined in the Normal Form, tothe applicable form of payment, both to be determined on an Actuarially Equivalentbasis.

 

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(c)                                  ParticipantsWith Transition Benefit Commencement: A benefit being paid under this Plan to or with respect to aParticipant, other than a Non-409A Participant, that commenced in payment afterDecember 31, 2004 and prior to January 1, 2009 shall continue to bepaid after January 1, 2009 in accordance with the form of annuity beingpaid as of December 31, 2008; provided, however, that if such benefitcommenced prior to the payment of the Participant’s benefit under the BasicPlan because the Participant was not eligible for a payment under the BasicPlan prior to Normal Retirement Age, such monthly benefit payable under thisPlan shall be reduced as of the first day of the month coinciding with or nextfollowing the month in which the Participant reaches Normal Retirement Age bythe amount of the Participant’s Basic Plan benefit that would be payable as ofsuch date if the benefit commenced in payment as of the such date, with thereduction calculated as though each such benefit was payable in the NormalForm.  Such benefit shall not be dividedinto a Post-2004 SERP Benefit and Pre-2005 SERP Benefit but instead shall betreated for all purposes of this amended and restated Plan as a Post-2004 SERPBenefit.

 

(d)                                 Limitationon Plan Benefits.  Any provision ofthis Plan to the contrary notwithstanding, with respect to any Participant whois not a Non-409A Participant and whose benefit under this Plan has not yetcommenced in payment as of December 31, 2008:

 

(i)                                     the monthly amountof the Participant’s Pre-2005 SERP Benefit that would become payable asdetermined in the Normal Form as described above in paragraph (b) shallnot exceed, and shall be limited to: (x) a monthly benefit payable in theNormal Form equal to the Total SERP Accrued Benefit determined inaccordance with Section 4.1 if the Participant’s Termination of Employment

 

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occurs on orafter Normal Retirement Date, or (y) if the Participant’s Termination ofEmployment occurs prior to his or her Normal Retirement Date, a monthly benefitpayable in the Normal Form equal to the Total SERP Accrued Benefitdetermined in accordance with Section 4.2 or 4.3, as applicable to theParticipant, but with the amount provided in Section 4.2(b) or4.3(b), as applicable to the Participant, determined as of the Participant’sPre-2005 SERP Benefit commencement date rather than the Participant’s BenefitStarting Date or such other date as may be provided therein; and

 

(ii)                                  if the Participant’sBenefit Starting Date for his or her Post-2004 SERP Benefit is prior to theParticipant’s Pre-2005 SERP Benefit commencement date, the limit in clause (d)(i) aboveshall be further reduced by the monthly amount of a benefit payable in theNormal Form commencing as of the same date as the Pre-2005 SERP Benefitcommencement date that is Actuarially Equivalent to the Participant’s Post-2004SERP Benefit that has already commenced in payment, and

 

(iii)                               if the Participant’s BenefitStarting Date for his or her Post-2004 SERP Benefit is on or after theParticipant’s Pre-2005 SERP Benefit commencement date and the amount of theParticipant’s Pre-2005 SERP Benefit had to be reduced due to (d)(i) above,then the amount of the Participant’s Post-2004 SERP Benefit shall be zero.

 

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# Article 5.  - COMMITTEE

 

5.1.          PlanAdministration and Interpretation. The Committee shall have complete control over the administration of thePlan.  The Committee shall have completecontrol and authority to determine the rights and benefits and all claims,demands and actions arising out of the provisions of the Plan of anyParticipant, beneficiary, deceased Participant, or other person having orclaiming to have any interest under the Plan. All rules and decisions of the Committee shall be uniformly andconsistently applied to all Participants and other claimants in similarcircumstances.  When making adetermination or calculation, the Committee shall be entitled to rely oninformation furnished by a Participant, a beneficiary, the Participating Employers,the legal counsel of a Participating Employer or the Committee, or theActuary.  Subject to applicable laws andregulations, for all purposes of administration and interpretation of the Plan,the Committee shall consider the Plan as if it were maintained by a singleemployer for the benefit of all Participants by whomever employed.  The Committee shall be deemed to be the Planadministrator with responsibility for complying with any reporting anddisclosure requirements of ERISA.

 

5.2.          Powers,Duties Procedures, etc..  TheCommittee shall have such powers and duties, may adopt such rules andtables, may act in accordance with such procedures, may appoint such officersor agents, may delegate such powers and duties, may receive such reimbursementsand compensation, and shall follow such claims and appeal procedures withrespect to the Plan as are permitted or required under the terms of the BasicPlan, provided, however, that the Committee takes such action in a manner thatwould not cause tax to be owed under Code Section 409A.

 

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5.3.          Information.  To enable the Committee to perform itsfunctions, the Participating Employers shall supply full and timely informationto the Committee on all matters relating to the compensation of Participants,their employment, retirement, death, the cause for termination of employment,and such other pertinent facts as the Committee may require.

 

5.4.          Indemnificationof Committee.  The Company agrees toindemnify and to defend to the fullest extent permitted by law any officer oremployee of any Participating Employer who serves as a member of the Committee(including any such individual who formerly served as a member of theCommittee) against all liabilities, damages, costs and expenses (includingattorneys’ fees and amounts paid in settlement of any claims approved by theCompany) occasioned by any act or omission to act in connection with the Plan,if such act or omission is in good faith.

 

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# Article 6.— AMENDMENT AND TERMINATION

 

6.1.          Amendments.  The Company shall have the right to amendthis Plan from time to time by resolution of the Board of Directors or itsExecutive Committee and to amend or cancel any amendments.  Any such amendment shall be stated in aninstrument in writing, executed by the Company in the same manner as this Plan.

 

6.2.          Terminationof Plan.  This Plan is strictly avoluntary undertaking on the part of the Company and shall not be deemed to constitutea contract between the Company and any Eligible Employee (or any otheremployee) or a consideration for, or an inducement or condition of employmentfor, the performance of services by any Eligible Employee (or other employee).  The Company reserves the right to terminatethis Plan at any time and, in the event of such termination, to pay no benefitsto any Participant who has neither completed 5 years of Service nor attainedage 65.  No such termination shall resultin the reduction of (a) benefits that have commenced before the date oftermination, or (b) benefits accrued as of that date by any Participantwho has completed at least 5 years of Service or attained age 65 by that date;provided, however, that the Company reserves the right in its sole discretionto provide for accelerated payment of a Participant’s Post-2004 SERP Benefit bypayment in the form of an Actuarially Equivalent single lump sum to the extentthat such acceleration is permitted upon plan termination under TreasuryRegulation Section 1.409A-3(j)(4)(ix) (or other similar applicableguidance issued by the Internal Revenue Service) that does not subject theParticipant’s benefit under the Plan to the tax imposed by Code Section 409A.

 

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# Article 7.- MISCELLANEOUS

 

7.1.          Nonassignability.  None of the benefits, payments, proceeds orclaims of any Participant or beneficiary shall be subject to any claim of anycreditor and, in particular, the same shall not be subject to attachment orgarnishment or other legal process by any creditor, nor shall any Participantor beneficiary have any right to alienate, anticipate, commute, pledge,encumber or assign any of the benefits or payments or proceeds which he or shemay expect to receive, contingently or otherwise, under this Plan.

 

7.2.          Limitationon Participant’s Rights. Participation in this Plan shall not give any Eligible Employee theright to be retained in the employ of a Participating Employer or any right orinterest in the Plan other than as herein provided.  Each Participating Employer reserves theright to dismiss any Eligible Employee without any liability for any claimagainst the Participating Employer, except to the extent provided herein.

 

7.3.          ParticipantsBound.  Any action with respect tothis Plan taken by the Committee, the Company, or any other ParticipatingEmployer, or any action authorized by or taken at the direction of theCommittee, the Company, or any other Participating Employer, shall beconclusive upon all Participants and beneficiaries entitled to benefits underthe Plan.

 

7.4.          Receiptand Release.  Any payment to anyParticipant or beneficiary in accordance with the provisions of this Planshall, to the extent thereof, be in full satisfaction of all claims against theCompany, any other Participating Employer, and the Committee, and the Committeemay require such Participant or beneficiary, as a condition precedent to suchpayment, to execute a receipt and release to such effect.  If any Participant or beneficiary isdetermined by the Committee to be incompetent by reason of physical or mentaldisability (including minority) to give a valid receipt and release, theCommittee may cause the payment or 

 

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payments becomingdue to such person to be made to another person for his or her benefit withoutresponsibility on the part of the Committee, the Company, or any otherParticipating Employer to follow the application of such funds.

 

7.5.          No Guarantee ofTax Consequences.  No personconnected with the Plan in any capacity, including, but not limited to, theEmployers and any Affiliate and their respective directors, officers, agentsand employees, makes any representation, commitment or guarantee that any taxtreatment, including, but not limited to, federal, state and local income,estate and gift tax treatment, will be applicable with respect to any amountsdeferred or payable under the Plan or that such tax treatment will apply to orbe available to a Participant on account of participation in the Plan.

 

7.6.          GoverningLaw.  This Plan shall be construed,administered, and governed in all respects under and by the internal laws (andnot principles relating to conflict of laws) of the State of Texas except whensuperseded by federal law.  If anyprovision shall be held by a court of competent jurisdiction to be invalid orunenforceable, the remaining provisions hereof shall continue to be fullyeffective.

 

7.7.          Headingsand Subheadings.  Headings andsubheadings in this Plan are inserted for convenience only and are not to beconsidered in the construction of the provisions hereof.

 

IN WITNESS WHEREOF, the Company has causedthis amended and restated Plan to be executed by its duly authorized officer onthis 22nd day of December,2008, to be effective as of the first day of January, 2009.

 

|   | ** ** | ** ** |    **THE NEIMAN  MARCUS GROUP, INC.** |
|--------|------------|------------|------------------------------------------------------|
|   |       |       |                                                 |
|   |       | By:        |    /s/  Marita  O’Dea  |
|   |       | Its:       |    Senior Vice President and          |
|   |       |       |    Chief Human Resource  Officer      |

 

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