October 27, 1993 CONFIDENTIAL HAND DELIVERED Mr. J. A. Schiller Dear Jerry: 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. Page 2 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 applicable withholdings). 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 withholdings). 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. Page 3 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. Page 4 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. Sincerely, JON/jb Agreed ______________________, 1993 ___________________________________ Jerry A. Schiller
Employment Agreement - Maytag Corp. and Jerry A. Schiller
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