SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 22, 2005
SAKS INCORPORATED
(Exact name of registrant as specified in its charter)
TENNESSEE | 1-13113 | 62-0331040 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
750 Lakeshore Parkway Birmingham, Alabama | 35211 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (205) 940-4000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On April 22, 2005 Saks Incorporated (the “Company”) and James S. Scully, the Company’s Executive Vice President–Human Resources and Strategic Planning (the “Executive”), entered into an Employment Agreement dated April 22, 2005 (the “Employment Agreement”).
The following is a brief description of the terms and conditions of the Employment Agreement that are material to the Company: (1) The Employment Agreement has no term; (2) base salary of not less than $425,000 per year; (3) the Executive is eligible for a yearly cash bonus, which at the target level is 40% of base salary; (4) the Company’s stock incentive plans will govern the vesting of stock incentive awards if a change in control occurs; (5) the Company may terminate the Employment Agreement at any time without cause and the Executive may terminate the Employment Agreement for good reason after a change in control; (6) “good reason” is defined as (i) a mandatory relocation of the Executive’s principal place of employment from the Birmingham, Alabama area, (ii) a reduction in the Executive’s duties or status, or (iii) the Executive’s termination of the Executive’s employment at any time following the first anniversary of a change in control; (7) to receive severance benefits the Executive must sign and deliver to the Company a written release in form and substance reasonably satisfactory to the Company; (8) if termination without cause occurs prior to, and not in anticipation of, a change in control the Company will pay the Executive an amount equal to two times the Executive’s base salary; (9) if termination without cause occurs in anticipation of, or on or after, a change of control the Company will pay the Executive an amount equal to three times the Executive’s base salary and Executive’s target bonus potential (prorated to the date of termination); (10) if termination without cause occurs in anticipation of, or on or after, a change in control, the Executive is entitled to participate at the Company’s expense in the Company’s health plans with family coverage for three years from the date of termination; (11) if the Company terminates the Employment Agreement without cause the Executive will be entitled to a severance payment under the Company’s 2000 Change of Control and Material Transaction Severance Plan if that plan provides for a larger severance payment and if the Executive waives the Executive’s rights to a severance payment under the Employment Agreement; (12) if the Executive violates the Employment Agreement’s non-solicitation/non-competition requirements the Company’s obligation to make a severance payment would terminate; (13) if any severance payment would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code then the Company will make a gross up payment to the Executive with respect to such tax; (14) the Company may terminate the Employment Agreement for cause in which event no base salary, bonus, or severance payment will be paid to the Executive following termination; (15) for purposes of the Employment Agreement “cause” means (i) conviction of the Executive, after all applicable rights of appeal have been exhausted or waived, for any crime that materially discredits the Company or is materially detrimental to the reputation or goodwill of the Company; (ii) commission of any material act of fraud or dishonesty by the Executive against the Company or commission of an immoral or unethical act that materially reflects negatively on the Company; or (iii) the Executive’s continual and material breach of the Executive’s obligations under the Agreement to serve the Company diligently, as determined by the Human Resources/Option Committee of the Board of Directors after the Executive has been given written notice of the breach and a reasonable opportunity to cure the breach; (16) the Executive will maintain the confidentiality of the Company’s proprietary and confidential information; (17) for one year following termination the Executive will not engage in specified categories of associations with specified competitors, will not disparage the Company, and will not solicit any employee of the Company to leave that employment; (18) if the Executive brings any action to enforce the Executive’s rights under the Employment Agreement after a change in control, the Company will reimburse the Executive for the Executive’s reasonable costs, including attorney’s fees, incurred; and (19) the Company may assign its obligation under the Employment Agreement to any person, including any purchaser of all or any part of the Company’s business.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SAKS INCORPORATED | ||
Date: April 25, 2005 | /s/ CHARLES J. HANSEN | |
Executive Vice President and General Counsel |
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