Document:

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                                                                   Exhibit 10.12

                         Annual Incentive Plans Summary

The Spiegel Group
The Spiegel Group annual incentive plan is designed to provide compensation in
addition to base pay for certain eligible associates based upon The Spiegel
Group financial results. Payment under the plan is based consolidated Earnings
Before Taxes (EBT) results on a blended basis as follows:

         Spiegel Group Component                     Relative Weighting
         Eddie Bauer                                        30%
         Spiegel Catalog                                    25%
         First Consumers National Bank                      25%
         Newport News, Inc.                                 20%

The plan establishes a minimum, target and maximum EBT goals the achievement of
which results in a payout ranging from 50% to 150% of the participant's
incentive percentage. Each division's EBT is calculated independently and may
provide payment despite other divisions not meeting their designated targets.
Executives eligible for payout under this plan include but are not limited to
Mr. Zoepfell, Vice Chairman, President and Chief Executive Officer of The
Spiegel Group and Mr. Cannaturo, Executive Vice President, Chief Financial
Officer of The Spiegel Group.

Spiegel Catalog
The Spiegel Catalog annual incentive plan is designed to provide compensation in
addition to base pay for certain eligible associates based solely upon Spiegel
Catalog financial performance. Payment under the plan occurs when the Company
reaches designated Earnings Before Taxes (EBT) targets. The plan establishes a
minimum, target and maximum EBT goals the achievement of which results in a
payout ranging from 50% to 150% of the participant's incentive percentage.
Executives eligible for a payment under this plan include but are not limited to
Ms. Payner, President and Chief Executive Officer of Spiegel Catalog.

Eddie Bauer Eddie Bauer's annual incentive plan is designed to provide
compensation in addition to base salary for certain eligible associates. Both
individual performance and company results impact payment under the plan. The
company must meet their threshold EBT performance before eligible associates may
receive payment under the portion of the plan that relates to company
performance. Increased payment of up to 150% occurs if the company meets target
or maximum EBT performance levels. Participant's performance is measured against
the deliverables and key objectives established in the participants annual
performance plan. The individual performance component provides increasing
payment using a rating scale of 0-5 to evaluate performance results achieved
against a participants performance plan.

Distribution Fulfillment Services (DFS)
The DFS Management Bonus plan is designed to provide compensation in addition to
base salary for certain eligible associates. Payout is based on a combination of
the financial results for Operating and Transportation. Operating financial
results account for 75% of the bonus and are measured by EBT targets established
annually. Transportation earnings account for the remaining 25% of the bonus
payout. The plan establishes a minimum, target and maximum EBT goals the
achievement of which results in a payout ranging from 50% to 150% of the
participant's incentive percentage.

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Long Term Incentive Plan Summary
The Spiegel Group Long-Term Incentive Plan (LTIP) is intended to emphasize and
reward total corporate performance over the long term. Participants are assigned
a Target Opportunity Value expressed as a percentage of their base salary. The
Target Opportunity Value is allocated between two separate but related
components: stock option grants and a cash based Long-Term Incentive Plan.
Approximately 80% is allocated to cash with the remaining 20% allocated through
a fixed number of stock options based on level.

The current plan covers the financial periods, 2000-2001 and 2000-2002. The plan
cycles overlap, providing financial targets and award opportunities each year.
The cash component is based on a measurement of adjusted Earnings Before Taxes
(EBT) for The Spiegel Group.<PAGE>

                                                                   Exhibit 10.13

                                SPIEGEL, INC.

                       CLASS A NON-VOTING COMMON STOCK
                              OPTION AGREEMENT

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                                SPIEGEL, INC.

                       CLASS A NON-VOTING COMMON STOCK

                      OPTION AGREEMENT NO.______________

     This Option Agreement No._________entered into this_____________day
of__________,20____, by and between Spiegel, Inc., a Delaware corporation
("Spiegel"), and____________________________________________("Optionee").
     WHEREAS, Spiegel desires to grant the Optionee an Option to purchase
shares of its $1.00 par value per share Class A Non-Voting Common Stock ("Class
A Stock") subject to the terms and conditions hereinafter set forth, pursuant
to the provisions of the Spiegel Group Incentive Stock Option Plan (the "Plan")
which was adopted by Spiegel on November 17, 1998 and which was subsequently
approved by the Class B Voting Common Stockholders of Spiegel.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree
as follows:

       1.   Grant of Option.
            ---------------
            Spiegel, pursuant to the Plan, hereby grants to the Optionee the
       option ("Option") to purchase--------shares of Class A Stock, subject to
       the terms and conditions hereinafter set forth. The date of the grant
       of the Option is the date of this Stock Option Agreement.

       2.   Purchase Price.
            --------------
            The purchase price of the Class A Stock covered by the Option
       shall be_____________________________ ($______________) per share.

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       3.   Period of Exercise and Terms and Conditions of Option.
            -----------------------------------------------------
            This Option may be exercised between the date hereof and the date
       ten (10) years after the date hereof from time to time, in whole or in
       part as to one or more whole shares of Class A Stock covered by the
       Option, subject to the terms and conditions set forth below. Anything
       contained herein to the contrary notwithstanding, the Option granted
       hereunder shall not be exercisable in whole or in part after the
       expiration of ten (10) years after the date of grant thereof. The Option
       granted hereby shall be subject to the following terms and conditions:
          (a)   Period of Exercise of Options.
                ------------------------------
          Except as otherwise specifically provided herein:

                (1)  No portion of the Option granted hereby shall be
                exercisable until the first anniversary of the grant
                thereof, when the Option shall become and remain exercisable
                for 20% of the shares covered thereby. The Option granted
                hereby shall become and remain exercisable for an additional
                20% of the shares covered thereby on the second, third,
                fourth and fifth anniversaries of the grant thereof;

                (2)  An Optionee may exercise a portion of the Option from
                the date that portion first becomes exercisable until the
                Option expires or is otherwise terminated; (3) In the case
                of any fractional share resulting from any calculation under
                the Plan, the shares available for exercise shall be
                determined to the nearest lower number of whole shares.

          (b)   Maximum Value of Stock with Respect to Which Incentive Stock
                ------------------------------------------------------------
          Options are Exercisable for First Time in Any Calendar Year
          -----------------------------------------------------------
                Anything contained herein to the contrary notwithstanding, to
          the extent the aggregate fair market value (determined at the time
          the option is granted) of stock with respect to which options are
          exercisable for the first time by Optionee during any one calendar
          year (under this Plan and all other incentive stock option plans of
          Spiegel or any parent or subsidiary corporations of Spiegel) shall
          exceed One Hundred Thousand Dollars ($100,000.00), such excess
          options shall be treated as options which are not incentive stock
          options as determined under the Plan.

          (c)   Transfer of Option.
                ------------------
          Neither the whole nor any part of this Option shall be
          transferable by the Optionee or by operation of law during the
          Optionee's

                                      -2-

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          lifetime and at the Optionee's death this Option or any part
          thereof shall only be transferable by the Optionee's will or by the
          laws of descent and distribution. This Option may be exercised
          during the lifetime of the Optionee only by the Optionee. This
          Option, and any and all rights granted to the Optionee hereby, to
          the extent not therefore effectively exercised shall automatically
          terminate and expire upon any sale, transfer or hypothecation or
          any attempted sale, transfer or hypothecation of the Option or such
          rights, or upon the bankruptcy or insolvency of the Optionee.

          (d)   Termination of Employment.
                -------------------------
          This Option may not be exercised after the termination of the
          employment of the Optionee with Spiegel and its "subsidiary
          corporations" as that term is defined in the Plan (collectively,
          the "Corporation") except as hereinafter provided, specifically
          subject, however, to the provisions of the second sentence of the
          first paragraph of this Section 3:

                    (1)  Retirement.
                         ----------
                    This Option may be exercised within three (3) months after
                the retirement (as hereinafter defined) of the Optionee and
                the Option shall be exercisable for all of the shares covered
                thereby, notwithstanding the provisions of paragraph (a)(1)
                of this Section 3. For purposes of this Option Agreement,
                "Retirement" shall mean any termination of employment with
                the Corporation occurring after (i) the completion of ten
                (10) years of service with the Corporation, and (ii) the date
                on which the Optionee's age and years of service with the
                Corporation add up to seventy (70).

                    (2)  Disability.

                         ----------
                    This Option may be exercised within three (3) months after
                the termination of the employment of the Optionee by reason
                of the Disability (as hereinafter defined) of the Optionee
                and the Option shall be exercisable for all of the shares
                covered thereby, notwithstanding the provisions of paragraph
                (a)(1) of this Section 3. For purposes of this Option
                Agreement, the Optionee shall be deemed to have incurred a
                "Disability" if a disinterested duly licensed medical doctor
                appointed by the Corporation determines that the Optionee is
                totally and permanently prevented, as a result of physical
                or mental infirmity, injury, or disease, either occupational
                or nonoccupational in cause, from holding the job or
                position with the Corporation or engaging in the employment
                activity, or a comparable job or employment activity with
                the Corporation, which the Optionee held or customarily
                engaged in prior to the occurrence of the disability
                (provided, however, that disability hereunder shall not
                include any

                                      -3-

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                disability incurred or resulting from the Optionee's having
                engaged in a criminal act or enterprise, or any disability
                consisting of or resulting from the Optionee's chronic
                alcoholism, addiction to narcotics or an intentionally
                self-inflicted injury).

                    (3)  Death.
                         -----
                       (i)   If the Optionee shall die while employed by the
                 Corporation or within three (3) months after termination
                 of employment with the Corporation by reason of Retirement
                 or Disability, the Option granted hereby to such deceased
                 Optionee shall be exercisable within one (1) year after the
                 date of the Optionee's death and the Option shall be
                 exercisable for all of the shares covered hereby,
                 notwithstanding the provisions of paragraph (a)(1) of this
                 Section 3.

                       (ii)  If the Optionee shall die within three (3) months
                 after termination of employment with the Corporation for a
                 reason other than Retirement or Disability, the Option
                 granted hereby to such deceased Optionee shall be
                 exercisable within one (1) year after the date of the
                 Optionee's death but the Option may not be exercised for
                 more than the number of shares, if any, as to which the
                 Option was exercisable by the Optionee immediately prior to
                 his death.

                       (iii) The legal representative, if any, of the deceased
                 Optionee's estate, or the appropriate legatees or
                 distributees of the deceased Optionee's estate may exercise
                 this Option on behalf of the Optionee.

                    (4)  Involuntary Termination of Employment.
                         -------------------------------------
                    This Option may be exercised within three (3) months after
                 the Involuntary Termination of Employment (as hereinafter
                 defined) of the Optionee with the Corporation and the
                 Option shall be exercisable for all of the shares covered
                 thereby, notwithstanding the provisions of paragraph (a)(1)
                 of this Section 3. For purposes of this Option Agreement,
                 "Involuntary Termination of Employment" shall mean any
                 termination of the Optionee's employment with the
                 Corporation by reason of the discharge, firing or other
                 involuntary termination of the Optionee's employment by
                 action of the Corporation other than an involuntary
                 termination for cause as described in subparagraph (6) of
                 this paragraph (d).

                    (5)  Voluntary Termination of Employment.
                         -----------------------------------
                    This Option may be exercised, if otherwise timely, within
                 three (3) months after the Voluntary Termination of
                 Employment (as hereinafter defined) of the Optionee with

                                      -4-

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                 the Corporation but the Option may not be exercised for
                 more than the number of shares, if any, as to which the
                 Option was exercisable by the Optionee immediately prior to
                 such termination of employment as determined under the
                 provisions of paragraph (a)(1) of this Section 3. For
                 purposes of this Option Agreement, "Voluntary Termination
                 of Employment" shall mean any voluntary termination of
                 employment with the Corporation by reason of the Optionee's
                 quitting or otherwise voluntarily leaving the Corporation's
                 employ other than a voluntary termination of employment by
                 reason of Retirement or a voluntary termination of
                 employment constituting a termination for cause as
                 described in subparagraph (6) of this paragraph (d).

                    (6)  Termination For Cause.
                         ---------------------

                    Anything contained herein to the contrary notwithstanding,
                 if the termination of the Optionee's employment with the
                 Corporation is as a result of or caused by the Optionee's
                 theft or embezzlement from the Corporation, the violation
                 of a material term or condition of his employment, the
                 disclosure by the Optionee of confidential information of
                 the Corporation, conviction of the Optionee of a crime of
                 moral turpitude, the Optionee's stealing trade secrets or
                 intellectual property owned by the Corporation, any act by
                 the Optionee in competition with the Corporation or any
                 other act, activity or conduct of the Optionee which in the
                 opinion of the Board Committee of the Board of Directors of
                 Spiegel is adverse to the best interests of the
                 Corporation, then this Option and any and all rights
                 granted to such Optionee hereunder, to the extent not yet
                 effectively exercised, shall become null and void effective
                 as of the date of the occurrence of the event which results
                 in the Optionee ceasing to be an employee of the
                 Corporation and any purported exercise of the Option by or
                 on behalf of the Optionee following such date shall be of
                 no effect.

          (e)   Acceleration.
                ------------

                The Stock Option Committee (the "Committee"), which administers
          the Plan, may, subject to the provisions of paragraph (b) of this
          Section 5, in the case of merger, consolidation, dissolution or
          liquidation of Spiegel, accelerate the expiration date of this
          Option for any or all of the shares covered thereby (but still
          giving the Optionee a reasonable period of time to exercise the
          Option with respect to any portion thereof outstanding prior to the
          accelerated expiration date) and may, in the case of merger,
          consolidation, dissolution or liquidation of Spiegel, or in any
          other case in which it feels it is in the Corporation's best
          interest,

                                      -5-

<PAGE>

          the date or dates on which this Option or any part this Option
          shall be exercisable for any or all of the shares covered thereby.

          (f)   Rights as a Stockholder.
                -----------------------

                The Optionee shall have no rights as a stockholder with
          respect to any shares covered by this Option until the date that
          Spiegel receives payment in full for the purchase of said shares
          pursuant to the effective exercise of this Option. No adjustment
          shall be made for dividends or distributions or other rights for
          which the record date is prior to the date such payment is received
          by Spiegel, except as provided in Section 7 of the Plan. Spiegel
          shall not be required to issue or deliver any certificate for shares
          of its Class A Stock purchased upon the exercise of all or any part
          of this Option before (1) the admission of such shares to listing on
          any stock exchange on which such stock may then be listed, or, if
          applicable, approved for inclusion on the National Market System of
          the NASD and (2) completion of any registration or other
          qualification of such shares under any state or federal law or
          ruling or regulation of any governmental regulatory body that
          Spiegel shall, in its sole discretion, determine is necessary or
          advisable.

          (g)   Compliance with Securities Exchange Act.
                ---------------------------------------
                Notwithstanding anything herein to the contrary, this
          Option shall always be exercised in such a manner as to conform to
          the provisions of Rule 16b-3, or any replacement rule, adopted
          pursuant to the provisions of the Securities Exchange Act of 1934 as
          the same now exists or may, from time to time, be amended.

          (h)   Option Subject to Terms of Plan.
                -------------------------------

                The exercise of this Option shall be additionally conditioned
          and limited as provided in the Plan.

       4. Method of Exercise.
          ------------------
          Subject to the terms and conditions of this Stock Option
       Agreement and the Plan, the Optionee, in order to exercise the Option,
       must notify the Committee in writing in a form acceptable to the
       Committee to that effect at Spiegel, Inc., Stock Option Committee, c/o
       Robert H. Sorensen, 3500 Lacey Road, Downers Grove, Illinois
       60515-5432. Such written notice must state the election to exercise
       the Option granted under this Stock Option Agreement, and specify the
       number of shares of Class A Stock to be purchased. Such notice must be
       accompanied by cash, or a check payable to Spiegel, Inc. in the amount
       of the full purchase price in United States Dollars for the shares of
       Class A Stock to be purchased. The Option shall be considered as having
       been effectively exercised only upon the receipt by the Committee of the
       written notice of the exercise of the Option and the payment of the full
       purchase price for the shares of Class A Stock to be purchased in
       accordance with the preceding provisions of this Section 4.

                                      -6-

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       5.   General Provisions.
            ------------------
               (a)   Spiegel shall make available such number of shares of
            Class A Stock as will be sufficient to satisfy the requirements
            of this Option Agreement, shall pay any original issue and
            transfer taxes with respect to the issue and transfer of shares
            pursuant hereto and all other fees and expenses necessarily
            incurred by Spiegel in connection herewith, and will from time to
            time use its best efforts to comply with all laws and regulations
            which, in the opinion of independent counsel for Spiegel shall be
            applicable thereto.

                (b)   This Option Agreement shall be subject to such amendment
            and modification from time to time as the Committee shall deem
            necessary to comply with applicable law or regulation.

                (c)   The Optionee, in executing this Stock Option Agreement,
            acknowledges that he has received from the Committee a copy of
            the provisions of the Plan and the prospectus describing the
            Option granted hereby and the Class A Stock covered by the Option.

     IN WITNESS THEREOF, Spiegel, Inc., and the Optionee have caused this
Option Agreement as first numbered above to be duly executed, all on the day
and year first above written.
                                        SPIEGEL, INC.

                                     BY: _______________________________________

                                         Chairman of Spiegel, Inc., Stock
                                         Option Committee
                                         _______________________________________
                                         Optionee

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