Exhibit 10.7
EMPLOYMENT AGREEMENT
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This Employment Agreement is made as of September 1, 2000, between Newport
News, Inc., a Delaware corporation ("Newport News") and Xxxxxx X. Xxxxxx, of
Darien, Connecticut ("Xxxxxx").
Newport News and Xxxxxx hereby agree as follows:
1. EMPLOYMENT
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Newport News agrees to continue to employ Xxxxxx in the greater New York
City metropolitan area until the effective date of the termination of
the employment period, as hereinafter provided, and Xxxxxx agrees to
continue such employment. Xxxxxx will serve faithfully and to the best of
his ability as President and Chief Executive Officer (CEO) of Newport News,
reporting to the Board of Directors of Newport News or its designee. Xxxxxx
will have managerial responsibility for Newport News and its assigned
activities. Notwithstanding anything herein to the contrary, there are
certain transactions, a list of which has been provided to Xxxxxx, that
require the approval of the Board of Directors of Newport News. For
purposes of this contract, anywhere herein where a designee of the Board of
Directors is permissible, Newport News hereby so designates the Office of
the President of Spiegel, Inc.
2. BEST EFFORTS
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During the employment period, Xxxxxx will devote his best efforts and all
his business time and attention to the business of Newport News 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 Newport News 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 three (3) years
(Initial Term) commencing September 1, 2000, and terminating December
31,2003, subject, however, to prior termination as in after provided
Section 8 (Termination for Cause) below. 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. If
Newport News elects to terminate this Employment Agreement in accordance
with this Paragraph 3, then Newport News will pay Xxxxxx at time of
termination an amount equal to Itter's 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 unless termination is
after Xxxxxx'x 62nd birthday.
4. COMPENSATION
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Newport News shall pay Xxxxxx 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 Newport News. 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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Xxxxxx shall be entitled to an annual cash bonus no later than February
28th of each year based upon the performance of Newport News 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 Newport News or its designee
and Xxxxxx and agreed to by the Board of Directors with the understanding
that such criteria will provide a fair and professionally challenging
achievement rewarding good performance. The predetermined performance
criteria, and any changes mutually agreed upon by Newport News or its
designee and Xxxxxx and agreed to by the Board of Directors, shall be as
set forth on Schedule B, attached to this Agreement.
6. BENEFITS
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Xxxxxx 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 Newport News 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 Newport News.
7. DISABILITY OF XXXXXX
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If, during the term of this Employment Agreement, Xxxxxx 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, Newport News shall have the right to
terminate the employment period by giving written notice to Xxxxxx of its
intention to do so at least thirty (30) days prior to the effective date
of such termination, provided however, Newport News 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
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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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Newport News may terminate the employment period for cause for the
following reasons other than innocent acts: repetitive and offensive public
intoxication, a felony conviction, the intentional perpetration of a
dishonest act or fraud against Newport News or an affiliate or subsidiary
thereof, which is significantly injurious in a material respect to the
financial condition, business or reputation of Newport News or any of its
affiliates or subsidiaries. Newport News shall have the right to terminate
the employment period for any above reason by giving written notice to
Xxxxxx 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
paid in accordance with Paragraph 3 above, and this Agreement will have no
further effect.
9. OTHER EMPLOYMENT
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Xxxxxx covenants and agrees that during the employment period, he will not
directly or indirectly (except with the written consent of Newport News)
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
Newport News and its subsidiaries and affiliates, whether such other
business is or is not competitive with that business. After termination of
this Agreement, Xxxxxx 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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Xxxxxx 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 Newport News, divulge or disclose to any person or corporation any
confidential or proprietary information relating to the business of Newport
News 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.
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.
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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 New York
without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of SEPTEMBER 20,
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2000
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NEWPORT NEWS, INC.
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxx, Director Xxxxxx X. Xxxxxx
XXXX VERSAND GmbH
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, Deputy Chairman
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EMPLOYMENT AGREEMENT
SCHEDULE A
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Annual compensation for 2000 will be Four Hundred Fifty Thousand Dollars
($450,000.00).
Bonus opportunity for each year of this contract shall be 75% of base salary.
Dated: September 1, 2000
/s/ /s/ Xxxxxx X. Xxxxxx
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Newport News, Inc. Director Xxxxxx X. Xxxxxx
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EMPLOYMENT AGREEMENT
SCHEDULE B
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This Schedule B is made part of the Employment Agreement between Newport News
and Xxxxxx Xxxxxx dated September 1,2000.
Bonus is determined by the Executive Committee and the Board of Directors each
year. Historically the criteria has been a pre-tax profit range stating the
amount of pre-tax profit that Spiegel has to reach.
For the year 2000, the pre-tax profit range is as follows:
50% of Bonus Opportunity at an EBT of $12.0 million
100% of Bonus Opportunity at an EBT of $18.0 million
150% of Bonus Opportunity at an EBT of $24.0 million
Dated: September 1, 2000
/s/ /s/ Xxxxxx X. Xxxxxx
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Newport News, Inc. Director Xxxxxx X. Xxxxxx
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EMPLOYMENT AGREEMENT
SCHEDULE B
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This Schedule B is made part of the Employment Agreement between Newport News
and Xxxxxx lttner dated September 1,2000.
Bonus is determined by the Executive Committee and the Board of Directors each
year. Historically the criteria has been a pre-tax profit range stating the
amount of pre-tax profit that Spiegel has to reach.
For the year 2001, the pre-tax profit range is as follows:
50% of Bonus Opportunity at an EBT of $14.1 million
100% of Bonus Opportunity at an EBT of $20.2 million
150% of Bonus Opportunity at an EBT of $26.2 million
Dated: January 1, 2001
/s/ /s/ Xxxxxx X. Xxxxxx
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Newport News, Inc. Director Xxxxxx X. Xxxxxx
SCHEDULE A
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Annual compensation effective March 1, 2001 will be Four Hundred Seventy
Thousand Dollars ($470,000.00).
Dated: January 1, 2001
/s/ /s/ Xxxxxx X. Xxxxxx
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Newport News, Inc. Director Xxxxxx X. Xxxxxx
