10.(iv)(G)(1)
WARDS EXECUTIVE COMMITTEE
SEVERANCE PLAN
PURPOSE
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The purpose of the Executive Committee Severance Plan is to provide eligible
participants with a greater sense of security in taking the business risks
necessary to achieve our objectives.
ELIGIBILITY
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All Wards Senior Executives who are members of the Montgomery Ward Executive
Committee.
PROVISIONS OF THE PLAN
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SEVERANCE BENEFITS
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If the participant's employment is terminated by Montgomery Ward for any reason
other than "Cause" as defined below or the participant's voluntary resignation,
the participant will receive a lump sum payment equal to the greater of the
participant's base salary for the remainder of any employment agreement period;
or the participant's base salary for a twenty-four month period.
In addition, the participant will receive Executive Outplacement Services and
will continue to participate in Executive Benefits Plans which includes the
Health Care Plan along with the Annual Physical Exam Program, Executive Accident
Insurance and Executive Medical Coverage.
"Cause" shall mean (i) the participant's willful failure to substantially
perform the participant's duties hereunder, (ii) the participant's willful
failure to follow a written, lawful order or written directive from the Board of
Directors or Chief Executive Officer of the company, or (iii) the participant's
conviction of any kind of felony or any misdemeanor involving moral turpitude.
For purposes of this paragraph, no act, or failure to act, on the participant's
part will be considered "willful" unless such act, or failure to act by the
participant was not in good faith and was without reasonable belief that the
participant's action or omission was in the best interest of the Company.
For purposes of this severance plan, any diminution of the participant's job
title, executive committee membership, base salary, target bonus, other
compensation or benefits, or a reduction in the participant's job
responsibilities, or a relocation of the participant's job location of greater
than 50 miles from the present location without the participant's prior written
approval will allow the participant to elect the terms of this section as if the
participant were terminated without "Cause". However, such election must be
done in writing to the Chairman & CEO within sixty (60) days of the triggering
event.
CHANGE OF CONTROL
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After a Change of Control Event as defined below, and for a period of three
years after such date, if the participant is separated from the Company under
the provisions above (including any of the diminutions, reductions or relocation
provisions under which the participant may elect to leave the Company), the lump
sum severance payment will be three years base salary, plus three times the
participant's target bonus amount. In addition, the participant's Executive
Benefits will be extended to three years from the participant's separation date.
A "Change of Control" shall mean:
(i) any sale, lease, license, exchange, or other transfer (in one transaction or
a series of related transactions) of all, or substantially all, of the business
and/or assets of the Company or Holding (without regard to Signature); (ii) the
possession by any person or entity (other than Holding, General Electric Capital
Corporation or an affiliate of either of them) of beneficial ownership (as such
term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of either (A) a number of securities carrying a greater voting power
than General Electric Capital Corporation and its affiliates taken together
or (B) over 50% of the then outstanding voting securities of the Company
(entitled to vote generally in the election of directors) ("Outstanding Company
Voting Securities"); or (iii) merger, consolidation or reorganization ("Business
Combination") unless following such Business Combination all or substantially
all of the individuals and entities who were the beneficial owners of the
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own more than 50% of the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors of the entity resulting from the Business Combination in substantially
the same relative proportions as their ownership immediately prior to the
Business Combination of the Outstanding Company Voting Securities; provided that
a Change of Control shall not be construed to include any transaction that
occurs solely as a result of transfer of equity to holders of claims against the
Company or Holding or any affiliate on account of such claims in connection with
the consummation of a plan of reorganization for the Company or Holding or any
affiliate in connection with the proceedings under Chapter 11 of the United
States Bankruptcy Code pending at the date of hereof.
Except as provided in the following sentence, payments pursuant to this
severance plan ("Payments") shall not exceed the largest sum ("Parachute
Limitation") which will not result, directly or indirectly, in the treatment of
any amount paid or payable by the Company or any successor to the participant
(whether or not pursuant to this severance plan, and including the Payments) as
an Excess Parachute Payment. Notwithstanding the preceding sentence, the
participant shall receive the full amount of the Payments without regard to the
Parachute Limitation if the participant would realize a greater aftertax amount
receiving the full amount of the Payments without regard to the Parachute
Limitation than the participant would realize by receiving the Payments limited
to the Parachute Limitation as provided in the preceding sentence.
All computations and determinations required by the preceding paragraph shall be
made by the participant's accountant, acting in good faith. The computations
and determinations made any time by the participant's accountant shall affect
only those Payments not yet made pursuant to this severance plan. For purposes
of this severance plan, the term "Excess Parachute Payment" shall have the same
meaning as the term "excess parachute payment" has under section 280G of the
Internal Revenue Code of 1986, as amended and the regulations thereunder.
GENERAL
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SEVERANCE PAYMENT OFFSET
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In the event of the participant's separation from Montgomery Ward for reasons
other than "Cause" or voluntary resignation, to the extent that the participant
is eligible to receive a guaranteed payment under the participant's employment
contract from General Electric Capital Corporation of base salary and/or bonus
amounts or to the extent that any Montgomery Ward employment agreement or any
other severance plan pays any severance benefits to the participant, the
obligation of the Company under this Plan shall be reduced dollar for dollar of
any amount representing base salary or bonus payable under the participant's
employment contract or other severance plan.
NON-COMPETE
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In the event that the participant voluntarily leaves Montgomery Ward, the
participant will be bound by a non-compete agreement that provides that the
participant will not be directly employed by nor perform work as a director,
officer, independent contractor, partner, or consultant for Sears, K-Mart
Corporation, WalMart Stores Inc., Dayton Hudson Corporations or J.C. Penney or
any of their affiliates for a period of one (1) year following the participant's
termination date.
I have read the Wards Executive Committee Severance Plan and understand its
terms and have voluntarily signed this Agreement thereby agreeing to participate
in this Plan and accept its provisions.
_________________________________________
Print Executive's Name
_________________________________________
Executive's Signature
_________________________________________ ____________________________________
Date Approved