Document:

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                                                                    EXHIBIT 10.1

                          THE NEIMAN-MARCUS GROUP, INC.

                            1987 STOCK INCENTIVE PLAN

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                          THE NEIMAN-MARCUS GROUP, INC.
                            1987 STOCK INCENTIVE PLAN

1.       Purposes of the Plan.

         The purposes of The Neiman-Marcus Group, Inc. 1987 Stock Incentive Plan
are to provide a means to attract and retain competent personnel and to provide
to participating officers and other key employees long-term incentive for high
levels of performance and for unusual efforts to improve the financial
performance of The Neiman-Marcus Group, Inc. These purposes may be achieved
through the grant of options to purchase Common Stock of The Neiman-Marcus
Group, Inc., the grant of Stock Appreciation Rights, and the grant of other
Stock-Based Awards. This Plan also shall apply to outstanding stock options
granted under the Prior Stock Option Plans which, in the Restructuring, are
converted, in whole or in part, into Stock Options for shares of Common Stock.

2.       Definitions.

         (a) "Affiliate" means any corporation or other entity which is not a
parent or subsidiary corporation (as defined in Section 425 of the Code) and (i)
with respect to which the Company possesses a direct or indirect ownership
interest in, and has the power to exercise management control over, such
corporation or entity, or (ii) which posses a direct or indirect ownership
interest in, and has the power to exercise management control over, the Company.

         (b) "Board" means the Board of Directors of the Company or the
Executive Committee thereof.

         (c) "Carter Hawley" Means Carter Hawley Hale Stores, Inc.

         (d) "Committee" means the Compensation Committee of the Board, or any
other committee the Board may subsequently appoint to administer the Plan, as
herein defined. The Committee shall be composed entirely of members of the Board
who meet the requirements of Section 4(a) hereof.

         (e) "Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.

         (f) "Common Stock" means the common stock of the Company having a par
value of $0.01 per share.

         (g) "Company" means The Neiman-Marcus Group, Inc., and any present or
future parent or subsidiary corporations (as defines in Section 425 of the Code)
or any successor to such corporations.

         (h) "Employee" means any employee of the Company or its Affiliates.

         (i) "Fair Market Value" means the closing price of Common Stock as
quoted on the composite Tape as published in The Wall Street Journal on the date
as of which fair market value is to be determined, or if there is no trading of
Common Stock on such date, the closing price of Common Stock as quoted on such
Composite Tape on the next preceding date on which there was trading in such
shares.

         (j) "Incentive Award" means a Stock Option, Stock Appreciation Right or
Stock-Based Award granted under the Plan, as herein defined.

         (k) "Incentive Award" means a Stock Option that is intended to meet the
requirements of Section 422A of the Code and regulations thereunder.

         (l) "Nonstatutory Stock Option" means a Stock Option other than an
Incentive Stock Option.

         (m) "Participant" means any key Employee selected to receive an
Incentive Award under the Plan.

         (n) "Plan" means The Neiman-Marcus Group, Inc. 1987 Stock Incentive
Plan as set forth herein, as it may be amended from time to time.

         (o) "Prior Stock Option Plans" means the Long-Term Incentive
Compensation Plan, Nonqualified Stock Option Plan and 1985 Stock Incentive Plan
of Carter Hawley.

         (p) "Restructuring" means the restructuring of Carter Hawley pursuant
to a plan of restructuring adopted by the Board of Directors of Carter Hawley
and approved by the stockholders of Carter Hawley at Carter Hawley's 1987 annual
meeting.

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         (q) "Stock Appreciation Right" means the right to receive an amount up
to the excess of the Fair Market Value of a share of Common Stock (as determined
on the date of exercise), over (i) if the Stock Appreciation Right is granted
without relationship to a Stock Option, the Fair Market Value of a share of
Common Stock on the date the Stock Appreciation Right was granted, or (ii) if
the Stock Appreciation Right is related to a Stock Option, the purchase price of
a share of Common Stock specified in the related Stock Option.

         (r) "Stock-Based Award" means any award granted under Section 8.

         (s) "Stock Option" means a right to purchase Common Stock.

3.       Shares of Common Stock Subject to the Plan.

         (a) Subject to the provisions of Section 3 (c) and Section 9 of the
Plan, the aggregate number of shares of Common Stock that may be issued or
transferred pursuant to Incentive Awards under the Plan will not exceed
1,250,000 shares, plus the number of shares issued upon exercises of outstanding
stock options granted under the Prior Stock Option Plans or under any other plan
whose outstanding stock options are assumed under this Plan.

         (b) The common Stock to be delivered under the Plan will be made
available, at the discretion of the Board of the Committee, either from
authorized but unissued shares of Common Stock or from previously issued shares
of Common Stock reacquired by the Company, including shares purchased on the
open market.

         (c) If any Incentive Award shall expire or terminate for any reason,
without being exercised or paid, shares of Common Stock subject to such
Incentive Award shall again be available for grant under subsequent Incentive
Awards. Shares of Common Stock reserved for issuance upon payment of a
Stock-Based Award when payment of the Stock-Based Award is made in cash shall be
available for grant under subsequent Incentive Awards. Shares as to which a
Stock Option has been surrendered in connection with the exercise of a related
Stock Appreciation Right will not be available for grant under subsequent
Incentive Award.

         (d) Subject to the general limitations contained in Sections 6, 7, 9
and 11, the Committee may make any adjustment in the exercise price, the number
of shares subject to, or the terms of a Nonstatutory Stock Option or Stock
Appreciation Right by cancellation of an outstanding Nonstatutory Stock Option
or Stock Appreciation Right and a subsequent regranting of a Nonstatutory Stock
Option or Stock Appreciation Right, by amendment or by substitution of an
outstanding Nonstatutory Stock Option or Stock Appreciation Right. Such
amendment, substitution, or regrant may result in an exercise price that is
higher or lower than the exercise price of the Nonstatutory Stock Option or
Stock Appreciation Right, provide for a greater or lesser number of shares
subject to the Nonstatutory Stock Option or Stock Appreciation Right, or provide
for a longer or shorter term than the prior Nonstatutory Stock Option or Stock
Appreciation Right, or provide for a longer or shorter term than the prior
Nonstatutory Stock Option or Stock Appreciation Right; provided, however, that
the Committee may not adversely affect the rights of any Participant to
previously granted Incentive Awards without the consent of such Participant. If
such action is effected by amendment, the effective date of such amendment may
be the date of the original grant.

4.       Administration of the Plan.

         (a) The Plan will be administered by the Committee, which will consist
of three or more persons (i) who are not eligible to receive Incentive Awards
under the Plan, and (ii) who have not been eligible within one year before
appointment to the Committee, for selection as persons to whom Incentive Awards
may be granted pursuant to the Plan, or to whom shares may be allocated or stock
options, stock appreciation rights or other stock-based awards may be granted
pursuant to an other plan of the Company entitling the participants to acquire
stock, stock appreciation rights, stock options or stock-based rights in the
Company.

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         (b) The Committee has and may exercise such powers and authority of the
Board as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. The Committee has authority in its
discretion to determine the key Employees to whom and the time or times at which
Incentive Awards may be granted or sold, to determine the number of shares of
Common Stock, Stock Appreciation Rights or the number and type of Stock-Based
Awards that make up each Incentive Award and to grant Incentive Awards. Each
Incentive Award will be evidenced by a written instrument and may include any
other terms and conditions consistent with the Plan, as the Committee may
determine. The Committee also has authority to interpret the Plan, to determine
the terms and provisions of the respective Incentive Award agreements and to
make all other determinations necessary or advisable for Plan administration.
The Committee has authority to prescribe, amend, and rescind rules and
regulations relating to the Plan. All interpretations, determinations and
actions by the Committee will be final, conclusive and binding upon all parties.
Any action of the Committee with respect to the administration of the Plan shall
be taken pursuant to a majority vote or by the unanimous written consent of its
members.

         (c) No member of the Board or the Committee and no Employee will be
liable for any action taken, or determination or omission made, in good faith by
the Board, the Committee or any Employee with respect to the Plan or any
Incentive Award granted under it.

5.       Participation.

         (a) The Committee shall from time to time designate those key
Employees, if any, to be granted Incentive Awards under the Plan, the type of
awards granted, the number of shares, options, rights or units, as the case may
be, which shall be granted to each such Employee, and any other terms or
conditions relating to the awards as it may deep appropriate, consistent with
the provisions of the Plan. Participants may be designated at any time, and it
shall not be necessary that all Participants be designated at the same meeting
of the Committee. An individual who has been granted an Incentive Award may, if
otherwise eligible, be granted additional Incentive Awards if the Committee so
determines.

         (b) No person will be eligible for the grant of an Incentive Stock
Option who owns or would own immediately before the grant of such Stock Option,
directly or indirectly, stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company. This restriction
does not apply if, at the time such Incentive Stock Option is granted, the
Incentive Stock Option exercise price is at least 110% of the Fair Market Value
on the date of grant and the Incentive Stock Option by its terms is not
exercisable after the expiration of five years from the date of grant.

         (c) In no event may any member of the Board who is not an officer or
other Employee be granted an incentive Award under the Plan.

6.       Terms and Conditions of Stock Options.

         (a) Nonstatutory Stock Options may be granted to any key employee
selected by the Committee. Incentive Stock Options may be granted only to key
employees of the Company as selected by the Committee.

         (b) The purchase price of Common Stock under each Stock Option will be
determined by the Committee, but may not be less than the Fair Market Value on
the date of grant.

         (c) Stock Options may be exercised as determined by the Committee but
in no event after ten years from the date of grant in the case of Incentive
Stock Options, or after ten years and one day from the date of grant in the case
of Nonstatutory Stock Options.

         (d) Upon the exercise of a Stock Option, this purchase price will be
payable in full in cash or its equivalent acceptable to the Company. To the
extent provided by the Stock Option, the purchase price may be paid by the
assignment and delivery to the Company of shares of Common Stock or a
combination of cash and such shares equal in value to the exercise price. Any
shares so assigned and

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delivered to the Company in payment or partial payment of the purchase price
will be valued at their Fair Market Value on the exercise date.

         (e) Notwithstanding any other provision of the Plan, any Participant
who disposes of shares of Common Stock acquired on the exercise of an Incentive
Stock Option by sale or exchange either (i) within two years after the date of
the grant of the Stock Option which the stock was acquired or (ii) within one
year after the transfer of such shares to him pursuant to exercise shall notify
the Company of such disposition and of the amount realized and of his adjusted
basis in such shares; and

                  (i) in the case of any Incentive Stock Option granted under
         any of t he Prior Stock Option Plans through December 31, 1986, (A) the
         aggregate Fair Market Value (determined as of the time the Stock Option
         was granted) of the shares of Common Stock for which any Employee was
         granted Incentive Stock Options in any calendar year shall not have
         exceeded $100,000 plus any unused carryover, computed in accordance
         with Section 422(c)(4) of the Internal Revenue Code of 1954, as such
         Section read prior to its deletion by the Tax Reform Act of 1986; and
         (B) no such Stock Option shall have been or shall be exercisable while
         there was or is outstanding any Incentive Stock Option which was
         granted to the Participant before the grant of such Stock Option (and,
         for this purpose, an Incentive Stock Option shall be treated as
         outstanding until it is exercised in full or expires by reason of lapse
         of time); and

                  (ii) in the case of any Incentive Stock Option granted under
         the Plan, the Fair Market Value (determined at the time the Incentive
         Stock Option is granted) of the shares of Common Stock with respect to
         which Incentive Stock Options are exercisable for the first time by an
         Employee during any calendar year under this Plan or any other stock
         option plan of the Company will not exceed $100,000.

         (f) No fractional shares will be issued pursuant to the exercise of a
Stock Option; payment for the fractional shares will be made in cash. Upon the
exercise of a Stock Option, not less than 50 shares may be purchased at one time
unless the number then available for purchase is less than 50 in which case the
full number available must be purchased.

         (g) A Stock Option granted under this Plan shall, by its terms, be
non-transferable by a Participant other than by will or the laws of descent and
distribution, and shall be exercisable during the Participant's lifetime solely
by the Participant or the Participant's duly appointed guardian or personal
representative.

         (h) Outstanding stock options granted under the Prior Stock Option
Plans which, in the Restructuring, are converted, in whole or in part, into
Stock Options for shares of Common Stock, will be subject to the same terms and
conditions as were in effect immediately prior to the Restructuring.

7.       Terms and Conditions of Stock Appreciation Rights.

         (a) A Stock Appreciation Right may be granted in connection with a
Stock Option, either at the time of grant or at any time thereafter during the
term of the Stock Option, or may be granted unrelated to a Stock Option.

         (b) A Stock Appreciation Right related to a Stock Option shall require
the holder, upon exercise, to surrender such Stock Option with respect to the
number of shares as to which such Stock Appreciation Right is exercised, in
order to receive payment of an amount computed pursuant to Section 7(e). Such
Stock Option will, to the extent surrendered, then cease to be exercisable.

         (c) In the case of Stock Appreciation Rights granted in relation to
Stock Options, if the Stock Appreciation Right covers as many shares as the
related Stock Option, the exercise of a related Stock Option shall cause the
number of shares covered by the Stock Appreciation Right to be reduced by the
number of shares with respect to which the related Stock Option is exercised. If
the Stock Appreciation Right covers fewer shares than the related Stock Option,
when a portion of the related Stock Option is

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exercised, the number of shares subject to the unexercised Stock Appreciation
Right shall be reduced only to the extent necessary so that the number of
remaining shares subject to the Stock Appreciation Right is not more than the
remaining shares subject to the Stock Option.

         (d) Subject to Section 7(k), a Stock Appreciation Right granted in
connection with a Stock Option will be exercisable at such time or times, and
only to the extent that a related Stock Option is exercisable, and will not be
transferable except to the extent that such related Stock Option may be
transferable.

         (e) Upon exercise of a Stock Appreciation Right related to a Stock
Option, the holder will be entitled to receive payment of an amount determined
by multiplying:

                  (i) The difference obtained by subtracting the purchase price
         of a share of Common Stock specified in the related Stock Option from
         the Fair Market Value of a share of Common Stock on the date of
         exercise of such Stock Appreciation Right, by

                  (ii) The number of shares as to which each Stock Appreciation
         Right will have been exercised.

         (f) A Stock Appreciation Right granted without relationship to a Stock
Option will be exercisable as determined by the Committee but in no event after
ten years from the date of grant.

         (g) A Stock Appreciation Right granted without relationship to a Stock
Option will entitle the holder, upon exercise of the Stock Appreciation Right,
to receive payment of an amount determined by multiplying:

                  (i) The difference obtained by subtracting the Fair Market
         Value of a share of Common Stock on the date the Stock Appreciation
         Right is granted from the Fair Market Value of a share of Common Stock
         on the date of exercise of such Stock Appreciation Right, by

                  (ii) The number of shares as to which such Stock Appreciation
         Right will have been exercised.

         (h) Notwithstanding subsections (e) and (g) above, the Committee may
place a limitation on the amount payable upon exercise of a Stock Appreciation
Right. Any such limitation must be determined as of the date of grant and noted
on the instrument evidencing the Participant's Stock Appreciation Right granted
hereunder.

         (i) Payment of the amount determined under subsections (e) and (g)
above made be made solely in whole shares of Common Stock valued at their Fair
Market Value on the date of exercise of the Stock Appreciation Right or
alternatively, in the sole discretion of the Committee, solely in cash or a
combination of cash and shares as the Committee deems advisable. If the
Committee decides to make full payment in shares of Common Stock, and the amount
payable results in a fractional share, payment for the fractional share will be
made in cash.

         (j) A Stock Appreciation Right granted under this Plan shall, by its
terms, be non-transferable by a Participant other than by will or the laws of
descent and distribution and shall be exercisable during the Participant's
lifetime solely by the Participant or the Participant's duly appointed guardian
or personal representative.

         (k) So long as required by the federal securities laws, no Stock
Appreciation Right granted to an Employee subject to Section 16 of the
Securities Exchange Act of 1934, as amended, may be exercised before six months
after the date of grant except in the event of death or disability of such
Employee occurs before the expiration of the six-month period; any exercise of a
Stock Appreciation Right for cash will be made only during the period beginning
on the third business day following the date of release for publication of the
Company's regular quarterly or annual summary statement of revenues

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and income (assuming such financial data appears on a wire service, in a
financial news service, or in a newspaper of general circulation, or is
otherwise made publicly available) and ending on the twelfth business date
following such date.

         (l) The Committee may impose such additional conditions or limitations
on the exercise of a Stock Appreciation Right as it may deem necessary or
desirable to secure for holders of Stock Appreciation Rights the benefits of
Rule 18b-3 promulgated under Section 16(b) of the Securities Exchange Act of
1934, as amended, or any successor provision in effect at the time of grant or
exercise of a Stock Appreciation Right or as it may otherwise deem advisable.

         (m) The Committee may, in it discretion, defer payment with respect to
an exercise of a Stock Appreciation Right to some later time, but in no event
later than 12 months after the exercise of the Stock Appreciation Right;
provided, however, the Committee may not defer payment with respect to a Stock
Appreciation Right which is related to an Incentive Stock Option.

8.       Stock-Based Awards.

         The Committee may grant awards of shares, share units, or cash payments
valued with reference to the Fair Market Value of Common Stock, including
(without limitation) restricted shares, restricted share units, performance
shares, performance share units, and tax-offset payments. Subject to the
provisions of the Plan, the Committee shall have complete discretion to
determine the terms and conditions applicable to such awards. Such terms and
conditions may require, among other things, continued employment and/or the
attainment of specified performance objectives. The Committee shall determine
whether awards granted under this Section 8 shall be settled in cash, Common
Stock or a combination of cash and Common Stock.

9.       Adjustment Provisions

         (a) 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, an appropriate and proportionate adjustment may be
made in (i) the maximum number and kind of shares provided in Section 3, (ii)
the number and kind of shares or other securities subject to the
then-outstanding Incentive Awards, and (iii) the price for each share or other
unit of any other securities subject to then-outstanding Incentive Awards
without change in the aggregate purchase price or value as to which such
Incentive Awards remain exercisable or subject to restrictions.

         (b) Adjustments under paragraph (b) will be made by the Committee,
whose determination as to what adjustments will be made and the extent thereof
will be made and the extent thereof will be final, binding, and conclusive. No
fractional interest will be issued under the Plan on account of any such
adjustments.

10.      General Provisions.

         (a) Nothing in the Plan or in any instrument executed pursuant to the
Plan will confer upon any Participant any right to continue in the employ of the
Company or its Affiliates or affect the right of the Company or its Affiliates
to terminate the employment of any Participant at any time for any reason.

         (b) No shares of Common Stock will be issued or transferred pursuant to
an Incentive Award unless and until all then-applicable requirements imposed by
federal and state securities and other laws, rules and regulations and by any
regulatory agencies having jurisdiction and by any stock exchanges upon which
the Common Stock may be listed, have been fully met. As a condition precedent to
the

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issuance of shares pursuant to the grant or exercise of an Incentive Award, the
Company may require the Participant to take any reasonable action to meet such
requirements.

         (c) No Participant and no beneficiary or other person claiming under or
through such Participant will have any right, title or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
Incentive Award except as to such shares of Common Stock, if any, that have been
issued or transferred to such Participant, beneficiary or other person.

         (d) The Company may make such provisions as it deems appropriate to
withhold any taxes the Company determines it is required to withhold in
connection with any Incentive Award. The Company may require the Participant to
satisfy any relevant tax requirements before authorizing any issuance of Common
Stock to the Participant.

         (e) No Incentive Award and no right under the Plan, contingent or
otherwise, will be assignable or subject to any encumbrance, pledge or charge of
any nature except that, under such rules and regulations as the Company may
establish pursuant to the terms of the Plan, a beneficiary may be designated
with respect to an Incentive Award in the event of death of a Participant. If
such beneficiary is the executor or administrator of the estate of the
Participant, any rights with respect to such Incentive Award may be transferred
to the person or persons or entity (including a trust) entitled thereto under
the will of the holder of such Incentive Award.

         (f) The Committee shall have sole discretion to determine the time or
times and conditions under which Stock Options or Stock Appreciation Rights may
be exercised and, as provided in Section 8, the terms and conditions of
Stock-Based Awards and the extent to which Participants or their beneficiaries
may exercise Stock Options and Stock Appreciation Rights and receive payment
with respect to, or otherwise obtain the benefits of Stock-Based Awards upon
such Participant's retirement, death or other termination of the Participant's
employment with the Company of its affiliates. The provisions applicable to the
Stock Options, Stock Appreciation Rights and/or Stock-Based Awards of a
particular Participant upon the Participant's termination of employment with the
Company of its Affiliates will be set forth in each agreement under which an
Incentive Award is made.

         (g) (i) If the Committee in its sole discretion to determine that as a
matter of law such procedure is or may be desirable, it may require the
Participant, on any exercise or payment of an Incentive Award, or any portion
thereof, and as a condition to the Company's obligation to deliver to the
Participant certificates representing shares of Common Stock, to execute and
deliver to the Company a written statement, in form satisfactory to the Company,
representing and warranting that his purchase or receipt of shares of Common
Stock is for his own account for investment and not with a view to resale or
distribution thereof and that any subsequent sale or offer for sale of any of
such shares shall be made pursuant to either (A) a Registration Statement on an
appropriate form under the Securities Act of 1933, as amended, which has become
effective and is current with respect to the shares being offered and sold or
(B) a specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption the Participant shall, before any sale or
offer of sale of such shares, obtain a favorable written opinion from counsel
for or approved by the Company as to the availability of such exemption.

             (ii) The Company may endorse an appropriate legend referring to the
foregoing restrictions or other restrictions which may be applied under the Plan
on the certificate or certificates representing any shares of Common Stock
issued or transferred to a Participant under any Incentive Award granted under
the Plan.

         (h) If at any time the Board shall determine in its discretion that the
listing, registration or qualifications of the shares of Common Stock covered by
the Plan on any national securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body is necessary or
desirable as a condition to or in connection with the sale or transfer of shares
of Common Stock under the Plan, no shares will be delivered unless and until
such listing, registration, qualification,

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consent or approval shall have been effected or obtained or otherwise provided
for, free of any conditions not acceptable to the Board.

11.      Amendment and Termination of Plan; Amendment of Incentive Awards.

         (a) The Board or the Committee will have the power, in it s discretion,
to amend, suspend or terminate the Plan at any time. No such amendment will,
without approval of the shareholders of the Company:

                  (i) Change the class of persons eligible to receive Incentive
         Awards under the Plan;

                  (ii) Materially increase the benefits accruing to Participants
         under the Plan;

                  (iii) Increase the number of shares of Common Stock subject to
         the Plan; or

                  (iv) Transfer the administration of the Plan to any person who
         is not a "disinterested administrator" under rule 16b.

         (b) Except as otherwise provided by Section 3(d) and Section 9, the
Committee may not, without the consent of a Participant, make modifications in
the terms and conditions of an Incentive Award which may adversely affect the
Participant's Incentive Award.

         (c) No amendment, suspension or termination of the Plan will, without
the consent of the Participant, alter, terminate or adversely affect any right
or obligation under any Incentive Award previously granted under the Plan.

         (d) The Committee may refrain from designating any participants or may
refrain from making any Incentive Awards, but such action shall not be deemed a
termination of the Plan. No Employee shall have any claim or right to be granted
Incentive Awards under the Plan.

12.     Effective Date of Plan and Duration of Plan.

         This Plan will become effective upon adoption by the Board of Directors
of Carter Hawley, subject to approval by the shareholders of Carter Hawley of
the Restructuring, of which approval of this Plan is a part. No grants of
Incentive Awards will be made under the Plan until after the effective time of
the Restructuring. The Plan will terminate, unless sooner terminated under
Section 11, the day before the tenth anniversary of the day on which the Plan
was adopted by the Board of Directors.

                                       9<PAGE>
                                                                    EXHIBIT 10.5

                          THE NEIMAN MARCUS GROUP, INC.

                             SUPPLEMENTAL EXECUTIVE

                                 RETIREMENT PLAN

                  Amended and Restated Effective August 1, 1993

<PAGE>
                          THE NEIMAN MARCUS GROUP, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                TABLE OF CONTENTS

<Table>
<Caption>

ARTICLE                                                                                          PAGE
-------                                                                                          ----

<S>                                                                                              <C>
Article 1.-DEFINITIONS..............................................................................5
         1.1. "Augmentation Plan" ..................................................................5
         1.2. "Basic Plan" .........................................................................5
         1.3. "Board of Directors" .................................................................5
         1.4. "CHH Plan" ...........................................................................5
         1.5. "Code" ...............................................................................5
         1.6. "Committee" ..........................................................................5
         1.7. "Company" ............................................................................5
         1.8  "Compensation.........................................................................6
         1.9. "Effective Date" .....................................................................6
         1.10. "Eligible Employee" .................................................................6
         1.11. "Individual Pension Agreement" ......................................................7
         1.12. "Minimum Salary" ....................................................................7
         1.13. "Normal Form" .......................................................................7
         1.14  "Participant" .......................................................................7
         1.15. "Participating Employer" ............................................................7
         1.16. "Plan" ..............................................................................7
         1.17. "Plan Year" .........................................................................7
         1.18. "Service" ...........................................................................8
         1.19. "Social Security Benefit" ...........................................................8
         1.20. "Spouse" ............................................................................9

Article 2.-PARTICIPATION ...........................................................................10
         2.1. Commencement of Participation ........................................................10
         2.2. Duration of Participation ............................................................10
         2.3. Reduction in Participants ............................................................10

Article 3.-S0URCE OF BENEFIT PAYMENTS ..............................................................12

Article 4.-RETIREMENT BENEFITS .....................................................................13
         4.1. Normal or Late Retirement Benefit ....................................................13
         4.2. Early Retirement Benefit .............................................................13
         4.3. Vested Termination Benefit ...........................................................15
         4.4. Other Termination of Employment; Death................................................15
         4.5. Optional Forms of Benefits ...........................................................16
         4.6. Forfeiture of Benefits ...............................................................17
</Table>

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<Table>
<S>                                                                                                 <C>
         4.7. Surviving Spouse Benefit .............................................................17
         4.8. Disability ...........................................................................17
         4.9. No Reduction in Accrued Benefit Under CHH Plan........................................18
         4.10. Lump Sum Settlements ................................................................18
         4.11. Reemployment After Retirement .......................................................18

Article 5.-COMMITTEE................................................................................20
         5.1. Plan Administration and Interpretation................................................20
         5.2. Powers, Duties, Procedures, etc. .....................................................20
         5.3. Information ..........................................................................21
         5.4. Indemnification of Committee .........................................................21

Article 6. -AMENDMENT AND TERMINATION...............................................................22
         6.1. Amendments ...........................................................................22
         6.2. Termination of Plan...................................................................22

Article 7.-MISCELLANEOUS ...........................................................................23
         7.1. Nonassignability .....................................................................23
         7.2. Limitation on Participants' Rights ...................................................23
         7.3. Participants Bound ...................................................................23
         7.4. Receipt and Release...................................................................23
         7.5. Governing Law ........................................................................24
         7.6. Headings and Subheadings .............................................................24
</Table>

                                       3
<PAGE>

                          THE NEIMAN MARCUS GROUP, INC.

                             SUPPLEMENTAL EXECUTIVE

                                 RETIREMENT PLAN

                                     Purpose

         The Company originally adopted this Plan, effective August 7, 1987, for
a select group of management personnel in order to:

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

                  (b) facilitate the retirement of management personnel; and

                  (c) provide survivor income for the spouses of management
         personnel.

         The Company hereby amends and restates the Plan to make certain changes
and clarifications. The Plan is intended to be "a plan which is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees"
within the meaning of Sections 201(2) and 301(a)(3) of ERISA, and shall be
interpreted and administered to the extent possible in a manner consistent with
that intent.

                                       4
<PAGE>

                            Article 1. - Definitions

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

         1.1. "Augmentation Plan" means the Augmentation to Pension Plan for
Employees of Carter Hawley Hale Stores, Inc.

         1.2. "Basic Plan" means The Neiman Marcus Group, Inc. Retirement Plan
as amended from time to time. Reference to any Article or Section of the Basic
Plan shall include reference to any comparable or successor provisions of the
Basic Plan as amended from time to time.

         1.3. "Board of Directors" means the Board of Directors of the Company.

         1.4. "CHH Plan" means the Supplemental Executive Retirement Plan of
Carter Hawley Hale Stores, Inc, as in effect on the day before the Effective
Date.

         1.5. "Code" means the Internal Revenue Code of 1986, as amended from
time to time. Reference to any Section or subsection of the Code includes
reference to any comparable or succeeding provisions of any legislation which
amends, supplements or replaces such Section or subsection.

         1.6. "Committee" means the Employee Benefits Committee appointed by the
Board of Directors or its Executive Committee.

         1.7. "Company" means The Neiman Marcus Group, Inc., a Delaware
corporation and any successor to all or substantially all of its assets or
business which assumes the obligations of the Company.

                                       5
<PAGE>

         1.8. "Compensation" means, with respect to any given period, the
aggregate compensation, exclusive of any bonuses, paid to an Eligible Employee
by one or more Participating Employers during such period, whether before or
after he or she becomes an Eligible Employee. "Compensation" shall be determined
before any reduction under Section 125 or 40 1 (k) of the Code or under any
other deferred compensation plan or arrangement, but shall not otherwise include
any Participating Employer contributions under retirement or other benefit plans
or arrangements, or any expense reimbursements, imputed compensation, property,
or payments of compensation previously deferred. In the case of an Eligible
Employee who was, immediately prior to the Effective Date, employed by Carter
Hawley Hale Stores, Inc. ("CHH") or any of its affiliates, the term
"Participating Employer" shall, for purposes of this Section 1.7, include CHH
and its affiliates.

         1.9. "Effective Date" means August 2, 1987.

         1.10. "Eligible Employee" means each employee 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)(I) of the Fair Labor
         Standards Act, as amended, and the regulations thereunder,

                  (b) participates in the Basic Plan,

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

                  (d) is not employed as a salesperson.

                                       6
<PAGE>

         1.11. "Individual Pension Agreement" means a deferred compensation
agreement between a Participating Employer and an Eligible Employee which
provides for payment by the Participating Employer of supplementary retirement
benefits, but shall not include any agreement to defer compensation under The
Neiman Marcus Group, Inc. Key Employee Deferred Compensation Plan or any similar
plan or arrangement.

         1.12. "Minimum Salary" means:

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

                  (b) for December 31, 1996, and each December 31 thereafter,
         $100,000.

         1.13. "Normal Form" means a form of benefit payable monthly to an
individual during his or her lifetime, the first payment to be due on the date
of the commencement of his or her benefits under the Plan, and the last payment
to be due for the calendar month in which his or her death occurs.

         1.14. "Participant" means any individual who participates in the Plan
in accordance with Article 2.

         1.15. "Participating Employer" means the Company and any affiliate or
subsidiary of the Company which is a Participating Employer as defined in the
Basic Plan.

         1.16. "Plan" means The Neiman Marcus Group, Inc. Supplemental Executive
Retirement Plan as set forth herein and in all subsequent amendments hereto.

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

                                       7
<PAGE>

         1.18. "Service" means the period measured in years equal to years of
Vesting Service determined under the Basic Plan, subject to the following
special rules:

                           (a) Years of Vesting Service, if any, prior to the
                  Effective Date shall be determined in accordance with the
                  rules of the Pension Plan for Employees of Carter Hawley Hale
                  Stores, Inc. that applied on August 1, 1987 to employees hired
                  after June 30, 1980; and

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

         1.19. "Social Security Benefit" means, in the case of each Participant,
the estimated amount of the monthly primary old age insurance benefit available
to him at age 65 under the Social Security Act as in effect on the earliest of
his or her Normal Retirement Date, Termination of Employment or death. The
amount shall be computed upon the assumption that the Participant has been
continuously covered under said Act since the later of 1951 or his or her 21st
birthday, and that his or her remuneration for employment for the calendar year
preceding the date of his or her Normal Retirement, Termination of Employment or
death, whichever is earliest, was equal to that portion of his compensation for
such year that would be subject to tax under Section 3101(a) of the Code without
the dollar limitation of Code Section 3121(a)(1), and his or her remuneration
for each prior calendar year was equal to the assumed remuneration for the
subsequent year divided by 1.06. If a Participant has a Termination of
Employment

                                       8
<PAGE>
for any reason, or becomes Totally and Permanently Disabled, prior to his or her
Normal Retirement Date, in determining his or her Social Security Benefit,
earnings for the calendar year of such termination or disability and each
subsequent calendar year prior to his or her Normal Retirement Date shall be
assumed to be equal to that portion of his or her compensation for the calendar
year prior to the year of termination or disability that would be subject to tax
under Section 3101(a) of the Code without the dollar limitation of Code Section
3121(a)(1).

         1.20. "Spouse" means the lawfully married husband or wife of a
Participant, determined at the time of the Participant's death or, if earlier,
as of the first day of the first month for which benefits are payable under the
Plan.

Unless defined herein, any capitalized word, phrase or term used in this Plan
shall have the meaning given to it in the Basic Plan.

                                       9
<PAGE>
                           Article 2. - PARTICIPATION

         2.1. Commencement of Participation. Any individual who was a
Participant in the Plan on July 31, 1993 will, subject to Sections 2.2 and 2.3,
continue to be a Participant under this restatement of the Plan. Any other
individual who is an Eligible Employee on August 1, 1993 or any subsequent
August 1 shall become a Participant on such August 1.

         2.2. Duration of Participation. Subject to Section 2.3, an individual
who has become a Participant in the Plan shall continue to be a Participant as
long as he or she remains an employee of a Participating Employer or is entitled
to a benefit under the Plan, even though his or her base salary after becoming a
Participant later falls below the then applicable base salary level specified in
Section 1.10. A Participant will cease to be a Participant when he or she is
neither employed by a Participating Employer nor entitled to receive a benefit
under the Plan.

         2.3. Reduction in Participant. Notwithstanding any other provision of
the Plan to the contrary, the Committee may terminate the right of any
Participant or Eligible Employee to participate in the Plan if the Committee
deems such action to be necessary to preserve the status of the Plan as "a plan
which is unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees" within the meaning of Sections 201 (2) and 301(a)(3) of
ERISA. In the event a Participant's participation is terminated under this
Section 2.3, the Participant shall not be entitled to any benefits under the
Plan except to the extent such benefits would be protected under Section 6.2 if
the Plan were then terminated.

                                       10
<PAGE>

The Committee may, in its discretion, direct the Participant's Participating
Employer to pay to the Participant the present value of any such protected
benefits, or to provide for payment of such benefits through another plan, or
may direct a combination of the foregoing, in lieu of providing such benefits
under this Plan, and such payment or provision (or both) shall be in complete
satisfaction of the Participant's rights under this Plan.

                                       11
<PAGE>
                     Article 3. - SOURCE OF BENEFIT PAYMENTS

         Nothing in this Plan will be construed to create a trust or to obligate
the Participating Employers 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
employee or any other person rights to any specific assets of the Participating
Employers or of any other person. Any benefits which become payable hereunder
shall be paid from the general assets of the Participating Employers.

                                       12
<PAGE>

                        Article 4. - RETIREMENT BENEFITS

         4.1. Normal or Late Retirement Benefit. The amount of the monthly
retirement benefit payable under the Plan to a Participant who retires on or
after his or her Normal Retirement Date, commencing on the first day of the
month coinciding with or next following his or her retirement and payable in the
Normal Form, will be equal to (a) minus (b), but not less than zero, where:

                  (a) is 50% of the Participant's average monthly Compensation
         for the highest sixty consecutive months preceding retirement, less 60%
         of the Participant's Social Security Benefit, the result multiplied by
         a fraction the numerator of which is the Participant's years of Service
         (not in excess of 25) and the denominator of which is 25; and

                  (b) is the monthly normal or late retirement benefit payable
         to the Participant under the Basic Plan (increased by his or her
         monthly benefit, if any, under the Augmentation Plan and any Individual
         Pension Agreement), calculated as though payable in the Normal Form.

         4.2. Early Retirement Benefit.

                  (a) The amount of the monthly retirement benefit under this
         Plan payable in the Normal Form to a Participant who has attained age
         55 with at least 10 years of Service, and who retires thereafter (but
         prior to his or her Normal Retirement Date), shall equal (1) minus (2),
         but not less than zero, where:

                           (1) is the amount determined under Section 4.1(a)
                  above, unreduced for early commencement if the benefit
                  starting date is on or after the Participant's 62nd birthday,
                  reduced by 1/600th for each month

                                       13
<PAGE>

                  between the Participant's 60th and 62nd birthday by which the
                  benefit starting date precedes the month in which the
                  Participant attains age 62, and reduced further by 1/240th for
                  each month by which the benefit starting date precedes the
                  month in which the Participant attains age 60; and

                           (2) is the Participant's monthly early retirement
                  benefit, if any, under the Basic Plan (increased by his or her
                  monthly early retirement benefit, if any, under the
                  Augmentation Plan and any Individual Pension Agreement),
                  calculated as though payable in the Normal Form.

         If the Participant is not eligible for an early retirement benefit
under the Basic Plan (or, if applicable, the Augmentation Plan or any Individual
Pension Agreement) at the time a benefit becomes payable under this Plan, the
monthly benefit under this Plan will be determined without reduction for such
early retirement benefit until such time as the Participant could begin to
receive a benefit under the Basic Plan (or Augmentation Plan or Individual
Pension Agreement), and will then be reduced by the amount of each such benefit
calculated as though payable in the Normal Form.

         (b) The monthly benefit payable to a Participant under this Section 4.2
shall commence at the same time as the early retirement benefit payable under
the Basic Plan. However, if no benefit is payable to a Participant under the
Basic Plan before his or her Normal Retirement Date, the benefit payable under
this Section 4.2 shall commence on the first day of the month coinciding with or
next following the Participant's retirement, or such later month (up to the
Participant's Normal Retirement Date) as the Participant may elect. Such
election must be made at least 90 days before

                                       14
<PAGE>
benefits would otherwise commence. In each case the reductions applicable under
paragraph (a)(1) shall reflect the actual date as of which benefits commence.

         4.3. Vested Termination Benefit. Any Participant who has a Termination
of Employment after he or she has completed at least 5 years of Service, but
before he or she has satisfied the requirements for early retirement hereunder,
shall be entitled to a monthly benefit payable in the Normal Form, commencing at
the same time as the Participant's vested benefit under the Basic Plan, in an
amount equal to (a) below (reduced by the applicable factor set forth in Section
4.2(a)(1) above) minus (b) below, but not less than zero, where:

                  (a) is 50% of the Participant's average monthly Compensation
         for the highest sixty consecutive months preceding the Termination of
         Employment, less 60% of the Participant's Social Security Benefit, the
         result multiplied by a fraction the numerator of which is the
         Participant's years of Service and the denominator of which is the
         greater of 25 years or the number of years of Service the Participant
         would have had if he or she continued employment with a Participating
         Employer without interruption until his or her Normal Retirement Date;
         and

                  (b) is the Participant's monthly benefit under the Basic Plan
         (increased by his or her monthly benefit, if any, under the
         Augmentation Plan and any Individual Pension Agreement), calculated as
         though payable in the Normal Form.

         4.4. Other Termination of Employment; Death. If a Participant has a
Termination of Employment for any reason prior to the time he or she is eligible
for a retirement or

                                       15
<PAGE>

vested benefit under Section 4.1, 4.2 or 4.3, no benefit shall be payable under
this Plan. In the event a Participant dies prior to the commencement of benefit
payments hereunder, then except as provided in Section 4.7 no benefits shall be
payable hereunder following the Participant's death. In the event a Participant
dies after the commencement of benefit payments hereunder, payments shall
continue to be made following his or her death only if the Participant has
chosen an optional form of benefit under Section 4.5 and then only to the
extent, if any, provided under such optional form of benefit.

         4.5. Optional Forms of Benefits. A Participant may elect to receive, in
lieu of the retirement benefit otherwise payable to him or her in the Normal
Form pursuant to Section 4.1, 4.2 or 4.3, retirement benefits of Actuarial
Equivalent value payable in any of the optional forms available under the Basic
Plan, provided that no optional form of benefit shall be available to a married
Participant, other than a 50% contingent annuity form protecting the
Participant's Spouse, without the written consent of such Spouse. The Committee
shall notify each Participant of the options available to him and shall provide
forms for election of such options. The Participant shall be entitled to elect
one of the foregoing options (or to revoke any such election) within the 90-day
period prior to the commencement of benefits. The election of one of the options
provided for in this Section 4.5 shall become effective as of the first day of
the first month for which benefits are payable to the Participant under the
Plan, and may not be rescinded or modified thereafter. Should the Participant's
Spouse or other beneficiary die prior to such effective date, the Participant's
election will be void and the Participant's retirement benefit will be paid to
him as though he or she had made no election unless the

                                       16
<PAGE>

Participant makes a new election prior to such effective date.

         4.6. Forfeiture of Benefits. Notwithstanding any provision of this Plan
to the contrary, no benefits shall be payable under this Plan with respect to
any Participant who confesses to, or is convicted of, any act of fraud, theft or
dishonesty arising in the course of, or in connection with, his or her
employment with a Participating Employer. The Committee's decision as to the
applicability of this Section 4.6 in any case shall be fixed and binding on all
persons.

         4.7. Surviving Spouse Benefit. In the event a Participant dies on or
after the earliest date as of which he or she becomes eligible for a benefit
under Section 4.1, 4.2 or 4.3 but prior to the first day of the first month for
which benefits are payable to him or her under this Plan, and such Participant
is survived by a Spouse, a monthly surviving spouse benefit shall be payable to
such Spouse commencing as of the month the pre-retirement death benefit under
the Basic Plan commences to be paid to the Spouse (the "survivor benefit
commencement date") and ending with the month in which the Spouse's death
occurs. The monthly surviving spouse benefit shall be computed as though the
Participant had terminated employment on the date of his or her death (if not
already terminated), had chosen to have benefit payments commence in the 50%
contingent annuity form described in Section 4.5 on the survivor benefit
commencement date, and had survived to and died on the day following such
commencement date.

         4.8. Disability. Any Participant who becomes Totally and Permanently
Disabled at a time when he or she has ten or more years of Service but before
Normal Retirement Age shall continue to have Service credited on his or her
behalf until the earlier of his or her Normal Retirement Date or the date on
which he or she is no longer

                                       17
<PAGE>
Totally and Permanently Disabled (or, if he or she returns to work at that time
for a Participating Employer, until his or her subsequent retirement or other
termination of employment).

         4.9. No Reduction in Accrued Benefit Under CHH Plan. Notwithstanding
any other provision of the Plan, in the case of a Participant who was a
participant in the CHH Plan on the day before the Effective Date, any benefit
payable to the Participant under Section 4.1, 4.2, or 4.3 in the Normal Form
will not be less than the benefit that would have been payable to the
Participant in the Normal Form, commencing at the same time, under the CHH Plan
as in effect on the day before the Effective Date if the Participant's
employment had terminated on that date. For purposes of the preceding sentence,
a Participant will be deemed to have satisfied the age and service requirements
for entitlement to benefits under the CHH Plan and from the Pension Plan for
Employees of Carter Hawley Hale Stores, Inc. on the day before the Effective
Date, but the Participant's actual age and Service will be taken into account in
computing the amount of benefit that would have been payable to the Participant
under the CHH Plan.

         4.10. Lump Sum Settlements. Notwithstanding any other provisions of the
Plan to the contrary, if any benefit payable under the Plan is less than $50 per
month, such benefit shall instead be paid in a single lump sum of Actuarial
Equivalent value.

         4.11. Reemployment After Retirement. Any benefit payable under the Plan
to a Participant shall cease as of the date of rehire if the Participant is
reemployed by a Participating Employer and shall resume following subsequent
retirement or other Termination of Employment in accordance with the applicable
provisions of this Article 4. The retirement benefit subsequently payable shall
be computed in accordance with

                                       18
<PAGE>

this Article 4 on the basis of service and compensation to the time of such
subsequent Termination of Employment, but shall be reduced by the Actuarial
Equivalent of any payments previously made under the Plan, including lump sum
payments or amounts applied to purchase annuity contracts. In no event shall the
aggregate benefits of any rehired Participant be greater than the benefit he or
she would have received if all his or her service had been one continuous period
of employment.

                                       19
<PAGE>

                             Article 5. - COMMITTEE

         5.1. Plan Administration and Interpretation. The Committee shall have
complete control over 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, beneficiary, deceased Participant, or other person having or
claiming to have any interest under the Plan. All rules and decisions of the
Committee shall be uniformly and consistently applied to all Participants and
other claimants in similar circumstances. When making a determination or
calculation, the Committee shall be entitled to rely on information furnished by
a Participant, a beneficiary, the Participating Employers, the legal counsel of
a Participating Employer or the Committee, or the Actuary. Subject to applicable
laws and regulations, for all purposes of administration and interpretation of
the Plan, the Committee shall consider the Plan as if it were maintained by a
single employer for the benefit of all Participants by whomever employed. The
Committee shall be deemed to be the Plan administrator with responsibility for
complying with any reporting and disclosure requirements of ERISA.

         5.2. 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, may delegate such powers
and duties, may receive such reimbursements and compensation, and shall follow
such claims and appeal procedures with respect to the Plan as are permitted or
required under the terms of the Basic Plan.

                                       20
<PAGE>

         5.3. Information. To enable the Committee to perform its functions, the
Participating Employers shall supply full and timely information to 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. Indemnification of Committee. The Company agrees to indemnify and
to defend to the fullest extent permitted by law any officer or employee of any
Participating Employer who serves as a member of the Committee (including any
such individual who formerly served as a member of the Committee) against all
liabilities, damages, costs and expenses (including attorneys' fees and amounts
paid in settlement of any claims approved by the Company) occasioned by any act
or omission to act in connection with the Plan, if such act or omission is in
good faith.

                                       21
<PAGE>
                     Article 6. - AMENDMENT AND TERMINATION

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

         6.2. Termination of Plan. This 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 Eligible Employee (or any other employee) or a
consideration for, or an inducement or condition of employment for, the
performance of services by any Eligible Employee (or other employee). The
Company reserves the right to terminate this Plan at any time and, in the event
of such termination, to pay no benefits to any Participant who has neither
completed 5 years of Service nor attained age 65. No such termination shall
result in the reduction of (a) benefits that have commenced before the date of
termination, (b) benefits accrued as of that date by any Participant who has
completed at least 5 years of Service or attained age 65 by that date, or (c)
benefits accrued under the CHH Plan as of the day before the Effective Date by
any Participant who was a participant in the CHH Plan on that day.

                                       22
<PAGE>
                           Article 7. - MISCELLANEOUS

         7.1. Nonassignability. None of the benefits, payments, proceeds or
claims of any Participant or beneficiary 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, nor shall any Participant or
beneficiary have any right to alienate, anticipate, commute, pledge, encumber or
assign any of the benefits or payments or proceeds which he or she may expect to
receive, contingently or otherwise, under this Plan.

         7.2. Limitation on Participants' Rights. Participation in this Plan
shall not give any Eligible Employee the right to be retained in the employ of a
Participating Employer or any right or interest in the Plan other than as herein
provided. Each Participating Employer reserves the right to dismiss any Eligible
Employee without any liability for any claim against the Participating Employer,
except to the extent provided herein.

         7.3. Participants Bound. Any action with respect to this Plan taken by
the Committee, the Company, or any other Participating Employer, or any action
authorized by or taken at the direction of the Committee, the Company, or any
other Participating Employer, shall be conclusive upon all Participants and
beneficiaries entitled to benefits under the Plan.

         7.4. Receipt and Release. Any payment to any Participant or beneficiary
in accordance with the provisions of this Plan shall, to the extent thereof, be
in full satisfaction of all claims against the Company, any other Participating
Employer, and the Committee, and the Committee may require such Participant or
beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect. If

                                       23
<PAGE>

any Participant or beneficiary is determined by the Committee to be incompetent
by reason of physical or mental disability (including minority) 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 Company, or any other
Participating Employer to follow the application of such funds.

         7.5. Governing Law. This 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.

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

         IN WITNESS WHEREOF, the Company has caused this Plan to be executed by
its duly authorized officer, effective as of the first day of August, 1993.

                                          THE NEIMAN MARCUS GROUP, INC.

                                          By: /s/ (signature illegible)
                                              ---------------------------------

                                       24

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