{"id":38147,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1981-stock-option-plan-kmart-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1981-stock-option-plan-kmart-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1981-stock-option-plan-kmart-corp.html","title":{"rendered":"1981 Stock Option Plan &#8211; Kmart Corp."},"content":{"rendered":"<pre>                                KMART CORPORATION\n                             1981 STOCK OPTION PLAN\n\n     1. Purpose. The Kmart Corporation 1981 Stock Option Plan (the \"Plan\") is\nintended as an incentive and to encourage ownership in the Company's Common\nstock (the \"Stock\") by certain key employees of Kmart Corporation (the\n\"Company\") and its Subsidiaries (corporations of which a majority of the stock\nis owned directly or indirectly by the Company) in order to increase their\nproprietary interest in the Company's success and to assure their continuation\nas employees.\n\n     2. Administration. The Plan shall be administered by the Compensation and\nIncentives Committee (the \"Committee\") consisting of not less than two directors\nof the Company appointed by its Board of Directors. Members of the Committee\nshall serve at the pleasure of, and vacancies occurring in the membership of the\nCommittee shall be filled through appointment by, the Board of Directors. No\nperson may be a member of the Committee if he or she has been within one year\nprior to his or her appointment to the Committee or at any time during service\non the Committee allocated Stock or granted Stock options or Stock appreciation\nrights pursuant to the Plan or any other plan of the Company or any of its\nSubsidiaries to the extent such allocation or grant would cause such person to\nfail to be \"disinterested person\" under subsection (c)(2) of Rule 16-b-3 under\nthe Securities Exchange Act of 1934, as amended, as such Rule may be amended\nfrom time to time (\"Rule 16b-3\"); provided, however, that membership on the\nCommittee shall not affect or impair any rights of a member with respect to any\nStock allocated or Stock options or Stock appreciation rights granted to him\nwhen he was not a member of the Committee.\n\n     The Committee shall keep minutes of its meetings. A majority of the\nCommittee shall constitute a quorum thereof and the acts of a majority of the\nmembers present at any meeting of the Committee at which a quorum is present,\nor acts approved in writing by the entire Committee, shall be the acts of the\nCommittee.\n\n     The Committee may make such rules and regulations and establish such\nprocedure for the administration of the Plan as it deems appropriate. The\ninterpretation and application of the Plan or of any term or condition of an\noption granted under the Plan or of any rule, regulation or procedure, and any\nother matter relating to or necessary to the administration of the Plan, shall\nbe determined by the Committee, and any such determinations shall be final and\nbinding upon all persons.\n\n     3. Stock. Shares of Stock to be optioned or issued under the Plan may be\neither authorized and unissued shares or issued shares which shall have been\nreacquired by the Company, provided that the total amount of Stock on which\noptions may be granted or which may be issued under the Plan shall not exceed\n12,000,000 shares. Such number of shares is subject to adjustment in accordance\nwith the provisions of Section 6 hereof. No option may be granted under the Plan\nto an employee who owns more than five percent (5%) of the Company's outstanding\nStock. In the event that any outstanding option or portion thereof expires or is\nterminated for any reason, the shares of Stock allocable to the unexercised\nportion of such option may again be subjected to an option or be issued under\nthe Plan.\n\n     4. Award of Options. The Committee may grant options to purchase Stock to\nofficers and other key employees of the Company or its Subsidiaries, including\ndirectors who are full time employees. The Committee shall have the discretion,\nin accordance with the provisions of the Plan, to determine to whom an option is\ngranted, the number of shares of Stock optioned and the terms and conditions of\nthe option. In making such determinations, the Committee shall consider the\nposition and responsibilities of the employee, the nature and value to the\nCompany of his services and accomplishments, his present and potential\ncontribution to the success of the Company, and such other factors as the\nCommittee may deem relevant.\n\n     Each option granted under the Plan shall be designated by the Committee at\nthe time of grant as either an incentive stock option (an \"Incentive\" option) or\na non-qualified stock option (a \"Non-Qualified\" option). An Incentive option is\nintended to meet the requirements of Section 422A of the Internal Revenue Code.\nThe aggregate Fair Market Value (determined at the time the option is granted)\nof the Stock as to which Incentive options granted after 1986 are exercisable\nfor the first time by the optionee during any calendar year shall not exceed\n$100,000 (within the meaning of Section 422A of the Internal Revenue Code).\n\n\n                                       1\n\n   2\n\n     Options granted under the Plan shall be subject to and governed by the\nprovisions of the Plan and by the terms and conditions set forth in Section 5\nhereof and by such other terms and conditions, not inconsistent with the Plan,\nas shall be determined by the Committee.\n\n     The date on which an option shall be granted shall be the date that the\noptionee, the number or shares of Stock optioned and the terms and conditions of\nthe option are determined by the Committee, provided, however, that if an option\nor any term or condition of an option is rejected or not accepted by an optionee\nor if an option is not granted in accordance with the provisions of the Plan,\nsuch option shall be deemed to have not been granted and shall be of no effect.\nEach option shall be evidenced by a Stock Option Agreement in such form as the\nCommittee may from time to time approve.\n\n     5. Terms and Conditions of Options. \n        A. Option Price. In the case of each option granted under the Plan, the\noption price shall not be less than the Fair Market Value of the Stock on the\ndate of grant of such option. (Fair Market Value for purposes of the Plan shall\nbe deemed to be the mean of the highest price and lowest price at which the\nStock shall have been sold, regular way, on the date in question or on the next\npreceding day on which there were such sales of Stock if no such sales shall\nhave been made on the date in question, as reported on the Composite\nTransactions reporting system.)\n\n        B, Period of Option and When Exercisable.\n          (i)   An option granted under the Plan may not be exercised after the \nearlier of (a) the date specified by the Committee, which shall he a maximum of \nten years from date of grant as to an Incentive option and a maximum of ten \nyears and two days from date of grant as to a Non-Qualified option, or (b) the \napplicable time limit specified in paragraph (iii) of this Section 5B. Any \noption not exercised within the aforementioned time periods shall automatically \nterminate at the expiration of such period.\n\n          (ii)  An option granted with a maximum exercise period of more than \ntwo years to an optionee who is less than 63 years of age, may not be exercised\nprior to two years from the date of grant, except that this limitation shall be\nremoved if termination of employment of the optionee results from death or\ntotal and permanent disability as defined in the Company's Retirement Pension\nPlan, or in the event of a Change of Control of the Company, or if and to the\nextent the Committee may so determine in its discretion. An option granted to an\noptionee who is 63 years of age or older, or the maximum exercise period of\nwhich is two years or less, is not subject to the limitation contained in this\nparagraph (ii). Change of Control shall be deemed to have occurred if: (a) any\nparty or group acquires (or obtains the right to acquire) beneficial ownership\nof 33% or more of the Company's outstanding Stock, (b) there shall occur a\nchange in the composition of a majority of the Company's Board of Directors\nwithin any period of three consecutive years which change was not approved by a\nmajority of the Board of Directors as constituted immediately prior to the\ncommencement of such three-year period, or (c) the stockholders of the Company\napprove an agreement or plan of consolidation or merger under which the Company\nwould not be the surviving corporation, or approve a transfer or disposition of\nall or substantially all of the Company's assets or a plan of complete\nliquidation or dissolution of the Company.\n\n          (iii) An option may he exercised by an optionee only while such\noptionee is in the employ of the Company or a Subsidiary or within three months\nthereafter, and only if any limitation upon the right to exercise such option\nunder paragraph (ii) of this Section 5B has expired or been removed prior to\ntermination of employment and exercise is not otherwise precluded hereunder;\nprovided, however if at the date of termination of employment (other than\ntermination due to death) the optionee has ten or more years of full-time\nservice with the Company or a Subsidiary or if termination of employment results\nfrom total and permanent disability as defined in the Company's Employee Pension\nPlan, such three-month period shall be extended to three years (except that for\noptions granted prior to May 27, 1986. The three-month period shall only be\nextended in the event of total and permanent disability and then only to twelve\nmonths); and provided further, if termination of employment results from death,\nsuch three-month period shall be extended to twelve months.\n\n          (iv)  In the event of the total and permanent disability of an\noptionee as defined in the Company's Employee Pension Plan, an option which is\notherwise exercisable may be exercised by the optionee's legal representative or\nguardian. In the event of the death of the optionee, either before or after\ntermination of employment, an option which is otherwise exercisable may be\nexercised by the person or persons whom the optionee shall have designated in\nwriting on forms prescribed by and filed with the Committee (\"Beneficiaries\"),\nor, if no such designation has been made, by the person or persons to whom the\noptionee's rights shall have passed by Will or the laws of descent and\ndistribution (\"Successors\"). The Committee may require an indemnity and\/or such\nevidence or other assurances as it may deem necessary in connection with an\nexercise by a legal representative, guardian, Beneficiary or Successor.\n\n          (v)   Notwithstanding anything contained herein to the contrary, all\nrights with respect to all options of an optionee are subject to the conditions\nthat the optionee not engage or have engaged (a) in fraud, \n\n\n                                       2\n   3\n\ndishonesty, conduct in violation of Company policy or similar acts at any time\nwhile in the employ of the Company or a Subsidiary, or (b) in activity directly\nor indirectly in competition with any business of the Company or a Subsidiary,\nor in other conduct inimical to the best interests of the Company or a\nSubsidiary, following the optionee's termination of employment. If it is\ndetermined by the Committee (either before or after termination of employment of\nan optionee) that there has been a failure of any such conditions, all options\nand all rights with respect to all options granted to such optionee shall\nimmediately terminate and be null and void.\n\n        C.  Exercise and Payment. Subject to the provisions of Section 5B, an\noption may he exercised by notice (in the form prescribed by the Committee) to\nthe Company specifying the number of shares to be purchased. Payment for the\nnumber of shares of Stock purchased upon the exercise of an option shall be made\nin full at the price provided for in the applicable Stock Option Agreement. Such\npurchase price shall be paid by the delivery to the Company of cash (including\ncheck or similar draft) in United States dollars or whole shares of Stock, or a\ncombination thereof. Shares of Stock used in payment of the purchase price shall\nbe valued at their Fair Market Value as of the date notice of exercise is\nreceived by the Company. Any shares of Stock delivered to the Company shall be\nin such form as is acceptable to the Company.\n\n        D.  Successive Options. An Incentive Option granted prior to 1987 shall\nnot be exercisable while there is outstanding any prior Incentive option granted\nto the same optionee.\n\n        E.  Transferability. Except as otherwise determined by the Committee in\nits discretion, no option or any rights with respect thereto shall be subject to\nany debts or liabilities of an optionee. Options may, however, be transferred or\nassigned to charitable trusts, family members, or family trusts by the\noptionee's execution of such form and at such time as prescribed by the\nCommittee. Additionally, any Stock issued to an optionee hereunder may at the\nrequest of the optionee be issued in the name of the optionee and one other\nperson, as joint tenants with right of survivorship and not as tenants in\ncommon, or in the name of a trust for the benefit of the optionee or for the\nbenefit of the optionee and others. An option may, after the death or total and\npermanent disability as defined in the Company's Employee Pension Plan of an\noptionee, also be exercised pursuant to paragraph (iv) of Section 5B herein. In\norder to continue to meet the requirements of Code Section 422A, however,\nIncentive options may not be assignable or transferable except by will or the\nlaws of descent and distribution, nor be exercisable during the optionee's\nlifetime other than by him or her, nor shall Stock be issued in the name of one\nother than the optionee.\n\n        F.  Employment. No provision of the Plan, nor any term or condition of\nany option, nor any action taken by the Committee, the Company or a Subsidiary\npursuant to the Plan, shall give or be construed as giving an optionee any right\nto be retained in the employ at the Company or any Subsidiary, or affect or\nlimit in any way the right of the Company or any Subsidiary to terminate the\nemployment of any optionee.\n\n         G. Termination of Option by Optionee. An optionee may at any time \nelect, in a written notice filed with the Committee, to terminate a\nNon-Qualified option with respect to any number of shares as to which such\noption shall not have been exercised.\n\n     6.  Recapitalization. The aggregate number of shares of Stock on which\noptions may be granted or which may be issued under the Plan, the number of\nshares covered by each outstanding option, and the price per share in each\noption, shall all be proportionately adjusted for any increase or decrease in\nthe number of issued shares of Stock of the Company resulting from a subdivision\nor consolidation of shares or any other capital adjustment, the payment of a\nstock dividend, or other increase or decrease in such shares effected without\nreceipt of consideration by the Company. Subject to any required action by\nstockholders, if a new option is substituted (or the option granted hereunder,\nor an assumption of the option granted hereunder is made, by reason of a\ncorporate merger, consolidation, acquisition of property or stock, separation,\nreorganization or liquidation, the option granted hereunder shall pertain to and\napply to the securities to which a holder of the number of shares of Stock\nsubject to the option would have been entitled.\n\n     7.  Term of Plan. No Stock option shall be granted under the Plan after\nAugust 17, 1991. Options granted prior thereto, however, may extend beyond such\ndate and the provisions of the Plan shall continue to apply thereto.\n\n     8.  Application of Funds. The proceeds received by the Company from the \nsale of Stock pursuant to options granted under the Plan will be used for\ngeneral corporate purposes.\n\n     9.  No Obligation to Exercise Option. The granting or acceptance of an\noption shall impose no obligation upon the optionee to exercise such an option.\n\n     10. Rights as a Stockholder. An optionee shall have no rights as a\nstockholder with respect to shares of \n\n\n                                       3\n   4\n\nStock covered by his option until the date of issuance to him of a certificate\nevidencing such shares of Stock after the exercise of such option and payment in\nfull of the purchase price. No adjustment will be made for dividends or other\nrights for which the record date is prior to the date such certificate is\nissued.\n\n        11. Amendments. The Board of Directors of the Company may from time to\ntime alter, amend, suspend or discontinue the Plan, except that stockholder\napproval is required with respect to any amendment which would (i) increase the\nnumber of shares of Stock on which options may be granted or which may be issued\nunder the Plan, (ii) materially increase the benefits accruing to optionees\nunder the Plan, or (iii) materially modify the provisions of the Plan relating\nto eligibility to be granted an option.\n\n        The Plan, each option under the Plan and the grant and exercise thereof,\nand the obligation of the Company to sell and issue shares under the Plan shall\nbe subject to all applicable laws, rules, regulations and governmental and\nstockholder approvals, and the Committee may make such amendment or modification\nthereto as it shall deem necessary to comply with any such laws, rules and\nregulations or to obtain any such approvals.\n\n        12. Effectiveness of Plan. The Plan was adopted by the Board of\nDirectors on August 18, 1981 and became effective on May 25, 1982 upon approval\nby stockholders. The Plan was amended by action of the Board of Directors on\nMatch 25, 1986, which action was approved by stockholders on May 27, 1986. The\nPlan was further amended by action of the Board of Directors on July 21, 1987\nand September 1, 2000.\n\n        13. Severability. If any provision of the Plan, or any term or condition\nof any option granted or Stock Option Agreement or form executed or to be\nexecuted thereunder, or any application thereof to any person or circumstances\nis invalid or would result in an Incentive option failing to meet the\nrequirements of Section 422A of the Internal Revenue Code, such provision, term,\ncondition or application shall to that extent be void (or, in the discretion of\nthe Committee, such provision, term or condition may be amended so as to avoid\nsuch invalidity or failure), and shall not affect other provisions, terms or\nconditions or applications thereof, and to this extent such provisions, terms\nand conditions are severable.\n\n\n\n\n                                       4\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7994],"corporate_contracts_industries":[9495],"corporate_contracts_types":[9539,9545],"class_list":["post-38147","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-kmart-corp","corporate_contracts_industries-retail__department","corporate_contracts_types-compensation","corporate_contracts_types-compensation__esp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38147","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38147"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38147"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38147"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38147"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}