Exhibit 10.4
EMPLOYMENT AGREEMENT
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This Employment Agreement is made as of July 1, 2001 between Spiegel,
Inc., a Delaware corporation ("Spiegel") and Xxxxxx Xxxxxxx, of Xxxx Ridge,
Illinois ("Xxxxxxx").
Spiegel and Xxxxxxx hereby agree as follows:
1. EMPLOYMENT
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Spiegel agrees to employ Xxxxxxx in the greater Chicago metropolitan area
until the effective date of the termination of the employment period, as
hereinafter provided, and Xxxxxxx agrees to continue such employment.
Xxxxxxx will serve faithfully and to the best of his ability as Vice
Chairman, President, and Chief Executive Officer of Spiegel reporting to
the Chairman of the Board of Directors of Spiegel/Chairman of Xxxx
Versand Executive Board. Xxxxxxx will have managerial responsibility for
Spiegel and its assigned activities. Notwithstanding anything herein to
the contrary, there are certain transactions, a list of which has been
provided to Xxxxxxx, that require the approval of the Board of Directors
of Spiegel.
2. BEST EFFORTS
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During the employment period, Xxxxxxx will devote his best efforts and
all his business time and attention to the business of Spiegel and will
faithfully perform his duties subject to the direction of the Board of
Directors or its designee and generally subject to the employment
policies of Spiegel as may be promulgated from time to time.
3. TERM OF EMPLOYMENT
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The term of this Employment Agreement shall be a period of five (5) years
(Initial Term) commencing July 1, 2001, and terminating June 30, 2006,
subject, however, to prior termination as in after provided Section 8
(Termination for Cause) below.
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If Spiegel elects to terminate this Employment Agreement prior to June
30, 2006, then Spiegel will pay Xxxxxxx at time of termination an amount
equal to Xxxxxxx'x entire compensation and benefit package (including
pro-rated Annual and Long Term Incentives) then in effect as provided on
Schedule A and Schedule B and Paragraph 6 herein calculated for a period
of twenty-four (24) months but shall not exceed Five Million Dollars
($5,000,000.00).
This Employment Agreement shall be automatically renewed and continue in
full force and effect for additional one year terms without limitation,
unless either party gives the other party six (6) months' written notice of
its or his election to terminate this Employment Agreement at the end of
the then current calendar year. No severance payment shall be due if
termination is after June 30, 2006.
4. COMPENSATION
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Spiegel shall pay Xxxxxxx an annual base salary in accordance with
Schedule A payable in the manner as is done in the ordinary course of
business for upper level executives of Spiegel. The Board of Directors
or its designee shall review this base salary annually and shall have the
right to increase it at any time during the employment period. An
increase in base salary shall be evidenced by the Board of Directors or
its designee approving an amended Schedule A to this Employment
Agreement, which shall give the amount of the increase in base salary,
the new total base salary and the period for which the increase shall be
effective.
5. BONUS
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Xxxxxxx shall be entitled to an annual cash bonus no later than February
28th of each year based upon the performance of Spiegel for the most
recently ended calendar year. The bonus will be in accordance with
Schedule A. The bonus opportunity shall be determined based upon
performance criteria mutually and reasonably developed by Spiegel or its
designee and Xxxxxxx and agreed to by the Board of Directors with the
understanding that such criteria will
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provide a fair and professionally challenging achievement rewarding good
performance. The predetermined performance criteria, and any changes
mutually agreed upon by Spiegel or its designee and Xxxxxxx and agreed to
by the Board of Directors.
6. BENEFITS
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Xxxxxxx shall be eligible for all medical and dental benefits, disability
benefits, long term incentive plans, stock options, profit sharing,
savings plans, automobile allowance, paid vacation, paid-up split dollar
and whole life insurance policies then in effect, a membership at a
country club and other benefits which are or shall be adopted by Spiegel
covering its senior executive management staff, provided he meets the
qualification requirements for such benefits. Additional benefits may be
added during the term of this Agreement by Spiegel.
7. DISABILITY OF XXXXXXX
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If, during the term of this Employment Agreement, Xxxxxxx shall become
disabled by accident, illness, or otherwise, and such disability shall
continue for a period of six (6) successive months following which he is
unable to resume his duties hereunder, Spiegel shall have the right to
terminate the employment period by giving written notice to Xxxxxxx of
its intention to do so at least thirty (30) days prior to the effective
date of such termination, provided, however, Spiegel agrees to pay a lump
sum at the time of termination in an amount equal to the fair value of
his entire compensation and benefits package in place at that time
calculated for a period of six (6) months commencing from the effective
date of such termination in lieu of continuing to provide such benefits
in periodic amounts. Any dispute as to whether such a disability has
occurred shall be resolved by a physician reasonably satisfactory to both
parties, whose determination shall be final and binding on both parties,
8. TERMINATION FOR CAUSE
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Spiegel may terminate the employment period for cause for the following
reasons other than innocent acts: repetitive and offensive public
intoxication, a felony conviction, the
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intentional perpetration of a dishonest act of fraud against Spiegel or
an affiliate or subsidiary thereof, which is significantly injurious in a
material respect to the financial condition, business, or reputation of
Spiegel or any of its affiliates or subsidiaries. Spiegel shall have the
right to terminate the employment period for any above reason by giving
written notice to Xxxxxxx of its intention to do so and specifying
therein the reason and the effective date of termination. In this case a
severance payment will be reasonably appropriate to the reason for
termination, and this Agreement will have no further effect.
9. OTHER EMPLOYMENT
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Xxxxxxx covenants and agrees that during the employment period, he will
not directly or indirectly (except with the written consent of Spiegel)
become engaged in, be employed by, render services to or for, or permit
his name to be used in connection with any business other than the
business of Spiegel and its subsidiaries and affiliates, whether such
other business is or is not competitive with that business. After
termination of this Agreement, Xxxxxxx agrees that for a period of one
year he will not solicit for engagement or as an employee any person who
has been employed by the Company within the preceding twelve months as a
senior level executive.
10. TRADE SECRETS
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Xxxxxxx shall not at any time while this Employment Agreement is in
force, and for a period of two (2) years after its termination, unless
authorized by Spiegel, divulge or disclose to any person or corporation
any confidential or proprietary information relating to the business of
Spiegel or its subsidiaries and affiliates including, but not in
limitation, customer list, supplier lists, prices of products, services
or operational processes. A breach of this confidentiality clause will
result in no compensation and benefits being paid at the time of
termination.
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11. TOTAL AGREEMENT
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This contract contains the complete agreement concerning the employment
arrangement between the parties and, as of the effective date of this
agreement, supersedes all other agreements, whether oral or in
writing, between the parties. This agreement may be modified or added to
only if evidenced in writing signed by the party to be liable.
12. GENERAL
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The headings of all the sections are inserted for convenience of
reference only and will not affect the construction or interpretation of
this agreement.
13. GOVERNING LAW
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This agreement shall be governed by the laws of the State of Illinois
without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of July 1,2001.
Spiegel, Inc.
____________________ ____________________________
Director Xxxxxx Xxxxxxx
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EMPLOYMENT AGREEMENT
SCHEDULE A
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This Schedule A is made a part of the Employment Agreement between Spiegel,
Inc. and Xxxxxx Xxxxxxx dated July 1, 2001.
Annual compensation effective July 1, 2001 will be One Million Two Hundred
Thousand Dollars ($1,200,000.00)
Bonus opportunity for each year of this contract shall be 80% of base salary.
Dated: July 1, 2001
________________________ ______________________________
Spiegel, Inc. Xxxxxx Xxxxxxx
EMPLOYMENT AGREEMENT
SCHEDULE B
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This Schedule B is made part of the Employment Agreement between Spiegel, Inc.
and Xxxxxx Xxxxxxx dated ______________________
Bonus is determined by the Executive Committee and the Board of Directors each
year.
The bonus opportunity will be calculated on the weighted average of bonus
achievement of the Company's major businesses as follows:
Xxxxx Xxxxx 30%
Spiegel Catalog 25%
FCNB 25%
Newport News 20%
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100%
Dated:__________________________
___________________________________ __________________________
Spiegel, Inc. Xxxxxx Xxxxxxx
