BARNEYS TO PAY SHULL $85K PER MONTH; BONUS POSSIBLE
NEW YORK — Barneys’ bill for the services of its new president, Thomas C. Shull, will come to $85,000 a month, plus a performance-based bonus of up to $400,000.
The bankrupt retailer will submit the payments to Meridian Ventures, the turnaround company headed by Shull, according to the employment agreement detailed in court papers filed in Manhattan Bankruptcy Court this month.
John Brincko, the turnaround expert brought in by Barneys soon after it filed Chapter 11 in January 1996, got $65,000 a month. Brincko left Barneys on Aug. 31. Shull, Meridian’s chief executive officer and co-founder, was named president and chief operating officer in charge of day-to-day operations at Barneys on the following day.
Under the agreement submitted to Judge James L. Garrity for his approval, Meridian Ventures will get a fee of $8,500 to cover its costs, and Barneys will also pay up to $6,000 per month in out-of-pocket expenses for Shull and a part-time senior consultant from Meridian.
The employment pact runs to Feb. 28, 1998, with three automatic two-month extensions, provided neither party has ended the deal. It also provides for severance pay of $85,000 for each month remaining on the contract, up to $255,000.
Meridian will reap a performance-based bonus of at least $75,000 if Barneys exceeds its goal for earnings before interest, taxes, depreciation and amortization. The bonus could run as high as $400,000, depending on how well the company does.
Shull will report to the Barneys executive committee, which consists of Phyllis, Gene and Robert Pressman. Shull will share merchandise planning and marketing responsibilities with Gene Pressman, Barneys’ co-chairman and co-ceo.
Meanwhile, a Barneys affiliate, Preen Realty, is seeking bankruptcy court approval to sell its Sikorsky helicopter to RTS Helicopter Services Corp. for $700,000, according to court papers.
A spokesman for Barneys said, “Preen purchased for investment purposes only a helicopter in 1978 and simultaneously entered into a sale-leaseback transaction to a nonrelated third party in the off-shore oil services business for their sole use in connection with their business. When the lease expired recently, Preen decided to sell the helicopter to the oil services company.”
A hearing on the matter has been set for Oct. 9.