Employment Agreement - Maytag Corp. and Jerry A. Schiller
October 27, 1993
Mr. J. A. Schiller
Maytag's letter to you dated July 20, 1993, as supplemented by my letter
of August 3, 1993, documented the future employment arrangement between you
and Maytag Corporation, the terms of which you have accepted. Since that
time, it has been determined that there will be greater demand on your
services than was contemplated on July 20, 1993. In recognition of this
changed condition and because that greater performance by you will delay your
hip replacement until Spring 1994, it has been agreed that the letter of July
20, 1993 will be revised and restated as follows:
1. You will continue in your present position until October 31, 1993 at
your current base salary and benefits.
2. You will resign your position as Director and Executive Vice
President/Chief Financial Officer (CFO) of Maytag Corporation and all
other director, trustee, and officer positions you presently hold in
subsidiary and associated companies, effective November 1, 1993,
except you will continue to serve as Maytag's representative on the
Maytag Corporation Foundation Board through March 31, 1994, and on
the AMAC and Amerivend boards through December 31, 1994, unless you
are relieved of these assignments earlier at the election of Maytag's
CEO. You may be asked to continue Board Committee involvement until
a new Chief Financial Officer is employed.
3. Effective November 1, 1993, you will be employed by Maytag
Corporation as a salaried consultant, working under the supervision
and direction of the Chief Executive Officer, Maytag Corporation,
until May 31, 1995, at which time you will retire from the
Corporation. We anticipate that your services as a consultant and
acting CFO will be required on an approximately full-time basis until
no later than March 31, 1994, and thereafter on a part-time basis
until no later than May 31, 1995. After March 31, 1994, reasonable
notice will be given before consulting assignments so as not to
conflict with plans you may have already made. Thirty days' notice
will be given for extensive assignments, such as trips overseas.
Maytag will provide you with appropriate office and secretarial
support reasonably required to perform your duties.
October 27, 1993
4. In your position as consultant, you will receive your present base
salary through December 31, 1993. Effective January 1, 1994, your
base salary will increase to $334,500 per annum, payable monthly,
through May 31, 1995. Should you die prior to June 1, 1995, your
base salary will cease as of the date of death. During the period in
which you are employed as a consultant, your salary and benefits will
not be reduced should you be unable to perform your duties due to
disability. Your accrued but unused vacation entitlement as of
October 31, 1993 will be paid to you within ten days following that
date. No vacation will accrue during the consulting period.
Bonus for 1993, computed and payable under the terms of the
Corporation's 1993 Annual Management Incentive Plan, using your
current base salary and an individual performance rating of 100%,
will be paid at the time of the normal bonus payout (subject to
You will not participate in the Corporation's 1994 or 1995 Annual
Management Incentive Plans; however, you will be entitled to receive
a bonus for 1994 computed and paid as if it were under the terms of
the 1994 Plan, using $334,500 as your base salary and an individual
performance rating of 100% pro-rated through June 30, 1994 and
payable at the time of the normal bonus payout (subject to applicable
You will not participate in the Corporation's 1993 and 1994 Stock
Incentive Award Plans; however, you will be paid a cash amount equal
to the amount you would have received had you participated in such
Plans, pro-rated through June 30, 1994. These payments, including
dividend equivalents, will be made at the normal payout dates
according to the plans subject to normal withholding.
5. You will receive the Corporation's normal benefits package through
May 31, 1995, subject to normal employee contributions. Effective
June 1, 1995, you will be provided with post-retirement medical
coverage as outlined in the 'Medical Coverage for 'Grandfathered'
Retirees' furnished to you on July 20, 1993.
October 27, 1993
6. Your retirement benefits, effective June 1, 1995, will not be reduced
due to your age but will be calculated as though you were then 65 and
will be based on the average of the highest three years of qualified
earnings from the four years, 1991, 1992, 1993, and 1994, including
consulting compensation from October 31 through December 31, 1994.
Benefits normally accrued under the Pension Plan will be paid monthly
from the Plan. The difference between the amount paid from the
Pension Plan Trust Fund and benefits provided by this paragraph will
be paid by Maytag Corporation.
7. If there is a stock option granted by Maytag Corporation in 1993 to
executive officers of Maytag Corporation, you will be included under
the terms of such grant. You will have until the time specified in
the option agreements for retirees to exercise those stock options
currently granted to you, but in no event can such options be
exercised after the expiration date of the option and rights
specified in the applicable option agreement.
8. The Corporation will also:
a. pay for the services of a retirement consultant of your choosing
up to $5,000,
b. pay for the service of an outplacement firm of your choice to
assist you in search for director and/or consultant positions, at
a cost of up to $25,000,
c. provide, at its expense, its standard individual, foundations and
trusts tax returns preparation by Ernst & Young for you for the
tax years 1993, 1994, and 1995.
d. allow you to replace your appliances under the Executive Appliance
Test Program, subject to applicable tax withholdings, at anytime
prior to May 31, 1995, and make no payment to the Corporation for
such appliances when you retire.
e. maintain the current Executive Severance Agreement using 1993 as a
base year, between you and the Corporation until December 31,
1994, at which time it will terminate if it has not been activated
as a result of a 'change in control.' For the purposes of this
paragraph 'using 1993 as a base year' means that all of your
salary and benefits in place on January 1, 1994 will be included
on an annual basis as though you had not changed employment status
on October 31, 1993; i.e., full annual consideration.
October 27, 1993
f. at your request, recommend to the Compensation Committee that you
be authorized to receive a lump-sum payment of your balance in the
Capital Accumulation Plan anytime after May 31, 1995.
If the foregoing accurately reflects your understanding and agreement,
and after consulting with your attorney, please ratify and confirm the
Agreement which accompanied my letter of July 20, 1993, which you previously
executed and delivered, by signing and returning a copy of this letter to me.
Agreed ______________________, 1993
Jerry A. Schiller